I 

113TH CONGRESS 

2D SESSION H. R. 4391 

To establish the Proprietary Education Oversight Coordination Committee. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 3, 2014 

Mr. CUMMINGS introduced the following bill; which was referred to the 

Committee on Education and the Workforce 

A BILL 

To establish the Proprietary Education Oversight 

Coordination Committee. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Proprietary Education 

5 Oversight Coordination Improvement Act’’. 

6 SEC. 2. DEFINITIONS. 

7 In this Act: 

8 (1) EXECUTIVE OFFICER.—The term ‘‘executive 

9 officer’’, with respect to a proprietary institution of 

10 higher education that is a publicly traded corpora11 tion, means— 


sroberts on DSK5SPTVN1PROD with BILLS
2 

•HR 4391 IH

1 (A) the president of such corporation; 

2 (B) a vice president of such corporation 

3 who is in charge of a principal business unit, di4 vision, or function of such corporation, such as 

5 sales, administration, or finance; or 

6 (C) any other officer or person who per7 forms a policy-making function for such cor8 poration. 

9 (2) FEDERAL EDUCATION ASSISTANCE.—The 

10 term ‘‘Federal education assistance’’ means any 

11 Federal financial assistance provided under any Fed12 eral law through a grant, a contract, a subsidy, a 

13 loan, a guarantee, an insurance, or any other means 

14 to a proprietary institution of higher education, in15 cluding Federal financial assistance that is disbursed 

16 or delivered to such institution, on behalf of a stu17 dent, or to a student to be used to attend such insti18 tution, except that such term shall not include any 

19 monthly housing stipend provided under chapter 33 

20 of title 38, United States Code. 

21 (3) PRIVATE EDUCATION LOAN.—The term 

22 ‘‘private education loan’’— 

23 (A) means a loan provided by a private 

24 educational lender (as defined in section 140(a) 


sroberts on DSK5SPTVN1PROD with BILLS
3 

•HR 4391 IH

1 of the Truth in Lending Act (15 U.S.C. 

2 1650(a))) that— 

3 (i) is not made, insured, or guaran4 teed under title IV of the Higher Edu5 cation Act of 1965 (20 U.S.C. 1070 et 

6 seq.); 

7 (ii) is issued expressly for postsec8 ondary educational expenses to a borrower, 

9 regardless of whether the loan is provided 

10 through the educational institution that 

11 the subject student attends or directly to 

12 the borrower from the private educational 

13 lender (as so defined); and 

14 (iii) is not made, insured, or guaran15 teed under title VII or title VIII of the 

16 Public Health Service Act (42 U.S.C. 292 

17 et seq. and 296 et seq.); and 

18 (B) does not include an extension of credit 

19 under an open-end consumer credit plan, a re20 verse mortgage transaction, a residential mort21 gage transaction, or any other loan that is se22 cured by real property or a dwelling. 

23 (4) PROPRIETARY INSTITUTION OF HIGHER

24 EDUCATION.—The term ‘‘proprietary institution of 

25 higher education’’ has the meaning given the term in 


sroberts on DSK5SPTVN1PROD with BILLS
4 

•HR 4391 IH

1 section 102(b) of the Higher Education Act of 1965 

2 (20 U.S.C. 1002(b)). 

3 (5) RECRUITING AND MARKETING ACTIVI4 TIES.— 

5 (A) IN GENERAL.—Except as provided in 

6 subparagraph (B), the term ‘‘recruiting and 

7 marketing activities’’ means activities that con8 sist of the following: 

9 (i) Advertising and promotion activi10 ties, including paid announcements in 

11 newspapers, magazines, radio, television, 

12 billboards, electronic media, naming rights, 

13 or any other public medium of communica14 tion, including paying for displays or pro15 motions at job fairs, military installations, 

16 or college recruiting events. 

17 (ii) Efforts to identify and attract 

18 prospective students, either directly or 

19 through a contractor or other third party, 

20 including contact concerning a prospective 

21 student’s potential enrollment or applica22 tion for a grant, a loan, or work assistance 

23 under title IV of the Higher Education Act 

24 of 1965 (20 U.S.C. 1070 et seq.) or parVerDate Mar 15 2010 22:41 Apr 05, 2014 Jkt 039200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H4391.IH H4391

sroberts on DSK5SPTVN1PROD with BILLS
5 

•HR 4391 IH

1 ticipation in preadmission or advising ac2 tivities, including— 

3 (I) paying employees responsible 

4 for overseeing enrollment and for con5 tacting potential students in-person, 

6 by phone, by email, or by other inter7 net communications regarding enroll8 ment; and 

9 (II) soliciting an individual to 

10 provide contact information to an in11 stitution of higher education, includ12 ing through websites established for 

13 such purpose and funds paid to third 

14 parties for such purpose. 

15 (iii) Such other activities as the Sec16 retary of Education may prescribe, includ17 ing paying for promotion or sponsorship of 

18 education or military-related associations. 

19 (B) EXCEPTIONS.—Any activity that is re20 quired as a condition of receipt of funds by an 

21 institution under title IV of the Higher Edu22 cation Act of 1965 (20 U.S.C. 1070 et seq.), is 

23 specifically authorized under such title, or is 

24 otherwise specified by the Secretary of Edu25 cation, shall not be considered to be a recruitVerDate Mar 15 2010 22:41 Apr 05, 2014 Jkt 039200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H4391.IH H4391

sroberts on DSK5SPTVN1PROD with BILLS
6 

•HR 4391 IH

1 ing and marketing activity under subparagraph 

2 (A). 

3 (6) STATE APPROVAL AGENCY.—The term 

4 ‘‘State approval agency’’ means any State agency 

5 that determines whether an institution of higher 

6 education is legally authorized within such State to 

7 provide a program of education beyond secondary 

8 education. 

9 (7) VETERANS SERVICE ORGANIZATION.—The 

10 term ‘‘veterans service organization’’ means an orga11 nization recognized by the Secretary of Veterans Af12 fairs for the representation of veterans under section 

13 5902 of title 38, United States Code. 

14 SEC. 3. ESTABLISHMENT OF COMMITTEE. 

15 (a) ESTABLISHMENT.—There is established a com16 mittee to be known as the ‘‘Proprietary Education Over17 sight Coordination Committee’’ (referred to in this Act as 

18 the ‘‘Committee’’) and to be composed of the head (or the 

19 designee of such head) of each of the following Federal 

20 entities: 

21 (1) The Department of Education. 

22 (2) The Consumer Financial Protection Bu23 reau. 

24 (3) The Department of Justice. 

25 (4) The Securities and Exchange Commission. 


sroberts on DSK5SPTVN1PROD with BILLS
7 

•HR 4391 IH

1 (5) The Department of Defense. 

2 (6) The Department of Veterans Affairs. 

3 (7) The Federal Trade Commission. 

4 (8) The Department of Labor. 

5 (9) The Internal Revenue Service. 

6 (10) At the discretion of the President, any 

7 other relevant Federal agency or department. 

8 (b) PURPOSES.—The Committee shall have the fol9 lowing purposes: 

10 (1) Coordinate Federal oversight of proprietary 

11 institutions of higher education to— 

12 (A) improve enforcement of applicable 

13 Federal laws and regulations; 

14 (B) increase accountability of proprietary 

15 institutions of higher education to students and 

16 taxpayers; and 

17 (C) ensure the promotion of quality edu18 cation programs. 

19 (2) Coordinate Federal activities to protect stu20 dents from unfair, deceptive, abusive, unethical, 

21 fraudulent, or predatory practices, policies, or proce22 dures of proprietary institutions of higher education. 

23 (3) Encourage information sharing among 

24 agencies related to Federal investigations, audits, or 


sroberts on DSK5SPTVN1PROD with BILLS
8 

•HR 4391 IH

1 inquiries of proprietary institutions of higher edu2 cation. 

3 (4) Increase coordination and cooperation be4 tween Federal and State agencies, including State 

5 Attorneys General and State approval agencies, with 

6 respect to improving oversight and accountability of 

7 proprietary institutions of higher education. 

8 (5) Develop best practices and consistency 

9 among Federal and State agencies in the dissemina10 tion of consumer information regarding proprietary 

11 institutions of higher education to ensure that stu12 dents, parents, and other stakeholders have easy ac13 cess to such information. 

14 (c) MEMBERSHIP.— 

15 (1) DESIGNEES.—For any designee described in 

16 subsection (a), the head of the member entity shall 

17 appoint a high-level official who exercises significant 

18 decisionmaking authority for the oversight or inves19 tigatory activities and responsibilities related to pro20 prietary institutions of higher education of the re21 spective Federal entity of such head. 

22 (2) CHAIRPERSON.—The Secretary of Edu23 cation or the designee of such Secretary shall serve 

24 as the Chairperson of the Committee. 


sroberts on DSK5SPTVN1PROD with BILLS
9 

•HR 4391 IH

1 (3) COMMITTEE SUPPORT.—The head of each 

2 entity described in subsection (a) shall ensure appro3 priate staff and officials of such entity are available 

4 to support the Committee-related work of such enti5 ty. 

6 SEC. 4. MEETINGS. 

7 (a) COMMITTEE MEETINGS.—The members of the 

8 Committee shall meet regularly, but not less than once 

9 during each quarter of each fiscal year, to carry out the 

10 purposes described in section 3(b). 

11 (b) MEETINGS WITH STATE AGENCIES AND STAKE12 HOLDERS.—The Committee shall meet not less than once 

13 each fiscal year, and shall otherwise interact regularly, 

14 with State Attorneys General, State approval agencies, 

15 veterans service organizations, and consumer advocates to 

16 carry out the purposes described in section 3(b). 

17 SEC. 5. REPORT. 

18 (a) IN GENERAL.—The Committee shall submit a re19 port each year to the Committee on Health, Education, 

20 Labor, and Pensions of the Senate, the Committee on 

21 Education and the Workforce of the House of Representa22 tives, and any other committee of Congress that the Com23 mittee determines appropriate. 

24 (b) PUBLIC ACCESS.—The report described in sub25 section (a) shall be made available to the public in a manVerDate Mar 15 2010 22:41 Apr 05, 2014 Jkt 039200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H4391.IH H4391

sroberts on DSK5SPTVN1PROD with BILLS
10 

•HR 4391 IH

1 ner that is easily accessible to parents, students, and other 

2 stakeholders in accordance with the best practices devel3 oped under section 3(b)(5). 

4 (c) CONTENTS.— 

5 (1) IN GENERAL.—The report shall include— 

6 (A) an accounting of any action (as de7 fined in paragraph (3)) taken by the Federal 

8 Government, any member entity of the Com9 mittee, or a State— 

10 (i) to enforce Federal or State laws 

11 and regulations applicable to proprietary 

12 institutions of higher education; 

13 (ii) to hold proprietary institutions of 

14 higher education accountable to students 

15 and taxpayers; and 

16 (iii) to promote quality education pro17 grams; 

18 (B) a summary of complaints against each 

19 proprietary institution of higher education re20 ceived by any member entity of the Committee; 

21 (C) the data described in paragraph (2) 

22 and any other data relevant to proprietary insti23 tutions of higher education that the Committee 

24 determines appropriate; and 


sroberts on DSK5SPTVN1PROD with BILLS
11 

•HR 4391 IH

1 (D) recommendations of the Committee for 

2 such legislative and administrative actions as 

3 the Committee determines are necessary to— 

4 (i) improve enforcement of applicable 

5 Federal laws; 

6 (ii) increase accountability of propri7 etary institutions of higher education to 

8 students and taxpayers; and 

9 (iii) ensure the promotion of quality 

10 education programs. 

11 (2) DATA.— 

12 (A) INDUSTRY-WIDE DATA.—The report 

13 shall include data on all proprietary institutions 

14 of higher education that consists of information 

15 regarding— 

16 (i) the total amount of Federal edu17 cation assistance that proprietary institu18 tions of higher education received for the 

19 previous academic year, and the percentage 

20 of the total amount of Federal education 

21 assistance provided to institutions of high22 er education (as defined in section 102 of 

23 the Higher Education Act of 1965 (20 

24 U.S.C. 1002)) for such previous academic 

25 year that reflects such total amount of 


sroberts on DSK5SPTVN1PROD with BILLS
12 

•HR 4391 IH

1 Federal education assistance provided to 

2 proprietary institutions of higher education 

3 for such previous academic year; 

4 (ii) the total amount of Federal edu5 cation assistance that proprietary institu6 tions of higher education received for the 

7 previous academic year, disaggregated 

8 by— 

9 (I) educational assistance in the 

10 form of a loan provided under title IV 

11 of the Higher Education Act of 1965 

12 (20 U.S.C. 1070 et seq.); 

13 (II) educational assistance in the 

14 form of a grant provided under title 

15 IV of the Higher Education Act of 

16 1965 (20 U.S.C. 1070 et seq.); 

17 (III) educational assistance pro18 vided under chapter 33 of title 38, 

19 United States Code; 

20 (IV) tuition assistance provided 

21 under section 2007 of title 10, United 

22 States Code; 

23 (V) assistance provided under 

24 section 1784a of title 10, United 

25 States Code; and 


sroberts on DSK5SPTVN1PROD with BILLS
13 

•HR 4391 IH

1 (VI) Federal education assistance 

2 not described in subclauses (I) 

3 through (V); 

4 (iii) the percentage of the total 

5 amount of Federal education assistance 

6 provided to institutions of higher education 

7 (as defined in section 102 of the Higher 

8 Education Act of 1965 (20 U.S.C. 1002)) 

9 for such previous academic year for each of 

10 the programs described in subclauses (I) 

11 through (V) of clause (ii) that reflects such 

12 total amount of Federal education assist13 ance provided to proprietary institutions of 

14 higher education for such previous aca15 demic year for each of such programs; 

16 (iv) the average retention and gradua17 tion rates for students pursuing a degree 

18 at proprietary institutions of higher edu19 cation; 

20 (v) the average cohort default rate (as 

21 defined in section 435(m) of the Higher 

22 Education Act of 1965 (20 U.S.C. 

23 1085(m)) for proprietary institutions of 

24 higher education, and an annual list of co25 hort default rates (as defined in such secVerDate Mar 15 2010 22:41 Apr 05, 2014 Jkt 039200 PO 00000 Frm 00013 Fmt 6652 Sfmt 6201 E:\BILLS\H4391.IH H4391

sroberts on DSK5SPTVN1PROD with BILLS
14 

•HR 4391 IH

1 tion) for all proprietary institutions of 

2 higher education; 

3 (vi) for careers requiring the passage 

4 of a licensing examination— 

5 (I) the passage rate of individ6 uals who attended a proprietary insti7 tution of higher education taking such 

8 examination to pursue such a career; 

9 and 

10 (II) the passage rate of all indi11 viduals taking such exam to pursue 

12 such a career; and 

13 (vii) the use of private education loans 

14 at proprietary institutions of higher edu15 cation that includes— 

16 (I) an estimate of the total num17 ber of such loans; and 

18 (II) information on the average 

19 debt, default rate, and interest rate of 

20 such loans. 

21 (B) DATA ON PUBLICLY TRADED COR22 PORATIONS.— 

23 (i) IN GENERAL.—The report shall in24 clude data on proprietary institutions of 

25 higher education that are publicly traded 


sroberts on DSK5SPTVN1PROD with BILLS
15 

•HR 4391 IH

1 corporations, consisting of information 

2 on— 

3 (I) any pre-tax profit of such 

4 proprietary institutions of higher edu5 cation— 

6 (aa) reported as a total 

7 amount and an average percent 

8 of revenue for all such propri9 etary institutions of higher edu10 cation; and 

11 (bb) reported for each such 

12 proprietary institution of higher 

13 education; 

14 (II) revenue for such proprietary 

15 institutions of higher education spent 

16 on recruiting and marketing activities, 

17 student instruction, and student sup18 port services, reported— 

19 (aa) as a total amount and 

20 an average percent of revenue for 

21 all such proprietary institutions 

22 of higher education; and 

23 (bb) for each such propri24 etary institution of higher edu25 cation; 


sroberts on DSK5SPTVN1PROD with BILLS
16 

•HR 4391 IH

1 (III) total compensation packages 

2 of the executive officers of each such 

3 proprietary institution of higher edu4 cation; 

5 (IV) a list of institutional loan 

6 programs offered by each such propri7 etary institution of higher education 

8 that includes information on the de9 fault and interest rates of such pro10 grams; and 

11 (V) the data described in clauses 

12 (ii) and (iii). 

13 (ii) DISAGGREGATED BY OWNER14 SHIP.—The report shall include data on 

15 proprietary institutions of higher education 

16 that are publicly traded corporations, 

17 disaggregated by corporate or parent enti18 ty, brand name, and campus, consisting 

19 of— 

20 (I) the total cost of attendance 

21 for each program at each such propri22 etary institution of higher education, 

23 and information comparing such total 

24 cost for each such program to— 


sroberts on DSK5SPTVN1PROD with BILLS
17 

•HR 4391 IH

1 (aa) the total cost of attend2 ance for each program at each 

3 public institution of higher edu4 cation; and 

5 (bb) the average total cost 

6 of attendance for each program 

7 at all institutions of higher edu8 cation, including such institutions 

9 that are public and such institu10 tions that are private; 

11 (II) total enrollment, disaggre12 gated by— 

13 (aa) individuals enrolled in 

14 programs taken online; and 

15 (bb) individuals enrolled in 

16 programs that are not taken on17 line; 

18 (III) the average retention and 

19 graduation rates for students pur20 suing a degree at such proprietary in21 stitutions of higher education; 

22 (IV) the percentage of students 

23 enrolled in such proprietary institu24 tions of higher education who comVerDate Mar 15 2010 22:41 Apr 05, 2014 Jkt 039200 PO 00000 Frm 00017 Fmt 6652 Sfmt 6201 E:\BILLS\H4391.IH H4391

sroberts on DSK5SPTVN1PROD with BILLS
18 

•HR 4391 IH

1 plete a program of such an institution 

2 within— 

3 (aa) the standard period of 

4 completion for such program; and 

5 (bb) a period that is 150 

6 percent of such standard period 

7 of completion; 

8 (V) the total cost of attendance 

9 for each program at such proprietary 

10 institutions of higher education; 

11 (VI) the average cohort default 

12 rate, as defined in section 435(m) of 

13 the Higher Education Act of 1965 (20 

14 U.S.C. 1085(m)), for such proprietary 

15 institutions of higher education, and 

16 an annual list of cohort default rates 

17 (as defined in such section) for all 

18 proprietary institutions of higher edu19 cation; 

20 (VII) the median educational 

21 debt incurred by students who com22 plete a program at such a proprietary 

23 institution of higher education; 

24 (VIII) the median educational 

25 debt incurred by students who start 


sroberts on DSK5SPTVN1PROD with BILLS
19 

•HR 4391 IH

1 but do not complete a program at 

2 such a proprietary institution of high3 er education; 

4 (IX) the job placement rate for 

5 students who complete a program at 

6 such a proprietary institution of high7 er education and the type of employ8 ment obtained by such students; 

9 (X) for careers requiring the pas10 sage of a licensing examination, the 

11 rate of individuals who attended such 

12 a proprietary institution of higher 

13 education and passed such an exam14 ination; and 

15 (XI) the number of complaints 

16 from students enrolled in such propri17 etary institutions of higher education 

18 who have submitted a complaint to 

19 any member entity of the Committee. 

20 (iii) DEPARTMENT OF DEFENSE AND

21 VETERANS AFFAIRS ASSISTANCE.— 

22 (I) IN GENERAL.—To the extent 

23 practicable, the report shall provide 

24 information on the data described in 

25 clause (ii) for individuals using, to pay 


sroberts on DSK5SPTVN1PROD with BILLS
20 

•HR 4391 IH

1 for the costs of attending such a pro2 prietary institution of higher edu3 cation, Federal education assistance 

4 provided under— 

5 (aa) chapter 33 of title 38, 

6 United States Code; 

7 (bb) section 2007 of title 10, 

8 United States Code; and 

9 (cc) section 1784a of title 

10 10, United States Code. 

11 (II) REVENUE.—The report shall 

12 provide information on the revenue of 

13 proprietary institutions of higher edu14 cation that are publicly traded cor15 porations that is derived from the 

16 Federal education assistance described 

17 in subclause (I). 

18 (C) COMPARISON DATA.—To the extent 

19 practicable, the report shall provide information 

20 comparing the data described in subparagraph 

21 (B) for proprietary institutions of higher edu22 cation that are publicly traded corporations 

23 with such data for public institutions of higher 

24 education disaggregated by State. 


sroberts on DSK5SPTVN1PROD with BILLS
21 

•HR 4391 IH

1 (3) ACCOUNTING OF ANY ACTION.—For the 

2 purposes of paragraph (1)(A), the term ‘‘any action’’ 

3 shall include— 

4 (A) a complaint filed by a Federal or State 

5 agency in a local, State, Federal, or tribal 

6 court; 

7 (B) an administrative proceeding by a 

8 Federal or State agency involving noncompli9 ance of any applicable law or regulation; or 

10 (C) any other review, audit, or administra11 tive process by any Federal or State agency 

12 that results in a penalty, suspension, or termi13 nation from any Federal or State program. 

14 SEC. 6. FOR-PROFIT COLLEGE WARNING LIST FOR PAR15 ENTS AND STUDENTS. 

16 (a) IN GENERAL.—Each academic year, the Com17 mittee shall publish a list to be known as the ‘‘For-Profit 

18 College Warning List for Parents and Students’’ to be 

19 comprised of proprietary institutions of higher edu20 cation— 

21 (1) that have engaged in illegal activity during 

22 the previous academic year as determined by a Fed23 eral or State court; 

24 (2) that have entered into a settlement result25 ing in a monetary payment; 


sroberts on DSK5SPTVN1PROD with BILLS
22 

•HR 4391 IH

1 (3) that have had any higher education pro2 gram withdrawn or suspended; or 

3 (4) for which the Committee has sufficient evi4 dence of widespread or systemic unfair, deceptive, 

5 abusive, unethical, fraudulent, or predatory prac6 tices, policies, or procedures that pose a threat to 

7 the academic success, financial security, or general 

8 best interest of students. 

9 (b) DETERMINATIONS.—In making a determination 

10 pursuant to subsection (a)(4), the Committee may con11 sider evidence that includes the following: 

12 (1) Any consumer complaint collected by any 

13 member entity of the Committee. 

14 (2) Any complaint filed by a Federal or State 

15 agency in a Federal, State, local, or tribal court. 

16 (3) Any administrative proceeding by a Federal 

17 or State agency involving noncompliance of any ap18 plicable law or regulation. 

19 (4) Any other review, audit, or administrative 

20 process by any Federal or State agency that results 

21 in a penalty, suspension, or termination from any 

22 Federal or State program. 

23 (5) Data or information submitted by a propri24 etary institution of higher education to any accred25 iting agency or association recognized by the SecVerDate Mar 15 2010 22:41 Apr 05, 2014 Jkt 039200 PO 00000 Frm 00022 Fmt 6652 Sfmt 6201 E:\BILLS\H4391.IH H4391

sroberts on DSK5SPTVN1PROD with BILLS
23 

•HR 4391 IH

1 retary of Education pursuant to section 496 of the 

2 Higher Education Act of 1965 (20 U.S.C. 1099b) or 

3 the findings or adverse actions of any such accred4 iting agency or association. 

5 (6) Information submitted by a proprietary in6 stitution of higher education to any member entity 

7 of the Committee. 

8 (7) Any other evidence that the Committee de9 termines relevant in making a determination pursu10 ant to subsection (a)(4). 

11 (c) PUBLICATION.—Not later than July 1 of each fis12 cal year, the Committee shall publish the list described in 

13 subsection (a) prominently and in a manner that is easily 

14 accessible to parents, students, and other stakeholders in 

15 accordance with any best practices developed under sec16 tion 3(b)(5). 

Æ 


sroberts on DSK5SPTVN1PROD with BILLS