I 

118TH CONGRESS 

1ST SESSION H. R. 5042 

To amend the Higher Education Act of 1965 to provide for fiscal accountability, to require institutions of higher education to publish information 

regarding student success, to provide for school accountability for student 

loans, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JULY 27, 2023 

Mr. ROY introduced the following bill; which was referred to the Committee 

on Education and the Workforce 

A BILL 

To amend the Higher Education Act of 1965 to provide 

for fiscal accountability, to require institutions of higher 

education to publish information regarding student success, to provide for school accountability for student 

loans, and for other purposes. 

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 ‘‘Higher Education Re5 form and Opportunity Act’’. 


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1 TITLE I—FISCAL 

2 ACCOUNTABILITY 

3 SEC. 101. SIMPLIFICATION OF FEDERAL STUDENT LOANS. 

4 (a) TERMINATION.—Section 451 of the Higher Edu5 cation Act of 1965 (20 U.S.C. 1087a) is amended— 

6 (1) in subsection (a), by adding at the end the 

7 following: ‘‘No sums may be expended after Sep8 tember 30, 2028, with respect to loans under this 

9 part for which the first disbursement is after such 

10 date, except Federal Direct simplification loans 

11 under section 460A.’’; and 

12 (2) by adding at the end, the following: 

13 ‘‘(d) TERMINATION OF AUTHORITY TO MAKE NEW

14 LOANS.—Notwithstanding subsection (a) or any other 

15 provision of law— 

16 ‘‘(1) no new loans may be made under this part 

17 after September 30, 2028, except Federal Direct 

18 simplification loans under section 460A; and 

19 ‘‘(2) no funds are authorized to be appro20 priated, or may be expended, under this Act, or any 

21 other Act to make loans under this part for which 

22 the first disbursement is after September 30, 2028, 

23 except Federal Direct simplification loans under sec24 tion 460A, or as expressly authorized by an Act of 


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1 Congress enacted after the date of enactment of the 

2 Higher Education Reform and Opportunity Act. 

3 ‘‘(e) STUDENT ELIGIBILITY BEGINNING WITH

4 AWARD YEAR 2024.— 

5 ‘‘(1) NEW BORROWERS.—No loan may be made 

6 under this part to a new borrower for which the first 

7 disbursement is after June 30, 2024, except Federal 

8 Direct simplification loans under section 460A. 

9 ‘‘(2) BORROWERS WITH OUTSTANDING BAL10 ANCES.—Subject to paragraph (3), with respect to a 

11 borrower who, as of July 1, 2024, has an out12 standing balance of principal or interest owing on a 

13 loan made under this part that is not a Federal Di14 rect simplification loan under section 460A, such 

15 borrower may— 

16 ‘‘(A) in the case of such a loan made to 

17 the borrower for enrollment in a program of un18 dergraduate education, borrow loans made 

19 under this part that are not Federal Direct 

20 simplification loans under section 460A for any 

21 program of undergraduate education through 

22 the close of September 30, 2028; 

23 ‘‘(B) in the case of such a loan made to 

24 the borrower for enrollment in a program of 

25 graduate or professional education, borrow 


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1 loans made under this part that are not Federal 

2 Direct simplification loans under section 460A 

3 for any program of graduate or professional 

4 education through the close of September 30, 

5 2028; and 

6 ‘‘(C) in the case of such a loan made to 

7 the borrower on behalf of a dependent student 

8 for the student’s enrollment in a program of 

9 undergraduate education, borrow loans made 

10 under this part that are not Federal Direct 

11 simplification loans under section 460A on be12 half of such student through the close of Sep13 tember 30, 2028. 

14 ‘‘(3) LOSS OF ELIGIBILITY.—A borrower de15 scribed in paragraph (2) who borrows a Federal Di16 rect simplification loan made under section 460A for 

17 which the first disbursement is made before Sep18 tember 30, 2028, shall lose the borrower’s eligibility 

19 to borrow a loan under this part that is not a Fed20 eral Direct simplification loan under section 460A in 

21 accordance with paragraph (2).’’. 

22 (b) FEDERAL DIRECT SIMPLIFICATION LOANS.— 

23 Part D of title IV of the Higher Education Act of 1965 

24 (20 U.S.C. 1087a et seq.) is amended by adding at the 

25 end the following: 


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1 ‘‘SEC. 460A. FEDERAL DIRECT SIMPLIFICATION LOANS. 

2 ‘‘(a) IN GENERAL.—Beginning on July 1, 2024, ex3 cept as provided in section 451(e), the Secretary shall 

4 make loans to borrowers under this section. Loans made 

5 under this section shall be known as Federal Direct sim6 plification loans. 

7 ‘‘(b) FEDERAL DIRECT SIMPLIFICATION LOANS.— 

8 The provisions of this part shall apply with respect to Fed9 eral Direct simplification loans, except that Federal Direct 

10 simplification loans shall be made in accordance with the 

11 following: 

12 ‘‘(1) The applicable rate of interest on a loan 

13 made under this section shall— 

14 ‘‘(A) in the case of such loans issued to 

15 undergraduate students, for loans disbursed 

16 during any 12-month period beginning on July 

17 1 and ending on June 30, be determined on the 

18 preceding June 1 and be equal to the lesser 

19 of— 

20 ‘‘(i) a rate equal to the high yield of 

21 the 10-year Treasury note auctioned at the 

22 final auction held prior to such June 1 

23 plus 2.05 percent; or 

24 ‘‘(ii) 8.25 percent; and 

25 ‘‘(B) in the case of such loans issued to 

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1 bursed during any 12-month period beginning 

2 on July 1 and ending on June 30, be deter3 mined on the preceding June 1 and be equal to 

4 the lesser of— 

5 ‘‘(i) a rate equal to the high yield of 

6 the 10-year Treasury note auctioned at the 

7 final auction held prior to such June 1 

8 plus 3.6 percent; or 

9 ‘‘(ii) 9.5 percent. 

10 ‘‘(2) Interest on a loan made under this section 

11 shall begin to accrue on the date the loan is dis12 bursed. 

13 ‘‘(3) The maximum— 

14 ‘‘(A) annual amount of loans under this 

15 section a dependent undergraduate student may 

16 borrow in any academic year (as defined in sec17 tion 481(a)(2)) or its equivalent shall be equal 

18 to $7,500; and 

19 ‘‘(B) aggregate amount of loans under this 

20 section a dependent undergraduate student may 

21 borrow shall be equal to $30,000. 

22 ‘‘(4) The maximum— 

23 ‘‘(A) annual amount of loans under this 

24 section an independent undergraduate student 

25 may borrow in any academic year (as defined in 


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1 section 481(a)(2)) or its equivalent shall be 

2 equal to $15,000; and 

3 ‘‘(B) aggregate amount of loans under this 

4 section an undergraduate independent student 

5 may borrow shall be equal to $60,000. 

6 ‘‘(5) The maximum— 

7 ‘‘(A) annual amount of loans under this 

8 section a graduate or professional student may 

9 borrow in any academic year (as defined in sec10 tion 481(a)(2)) or its equivalent shall be equal 

11 to $18,500; and 

12 ‘‘(B) aggregate amount of loans under this 

13 section a graduate or professional student may 

14 borrow shall be equal to $74,000. 

15 ‘‘(6) The only length of repayment— 

16 ‘‘(A) for a loan borrowed by an under17 graduate student shall be 15 years; and 

18 ‘‘(B) for a loan borrowed by a graduate or 

19 professional student shall be 25 years. 

20 ‘‘(7) Repayment on a loan made under this sec21 tion shall begin— 

22 ‘‘(A) after 125 percent of the normal time 

23 for completion of the program of study for 

24 which the borrower receives the loan under this 

25 section; or 


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1 ‘‘(B) if the borrower withdraws from the 

2 program of study before the borrower completes 

3 the program, 6 months after the date the bor4 rower withdraws. 

5 ‘‘(8) The Secretary shall not repay or cancel 

6 any outstanding balance of principal or interest due 

7 on a Federal Direct simplification loan as part of a 

8 student loan forgiveness program, including such a 

9 program under section 455(m) and section 493C. 

10 ‘‘(c) AUTHORIZATION TO LIMIT LOAN AMOUNTS.— 

11 An institution of higher education that is required under 

12 State law to enroll all eligible applicants for an academic 

13 year may limit the amount of loans under this section that 

14 a student may borrow for such academic year to not more 

15 than the tuition and fees at such institution for such aca16 demic year. 

17 ‘‘(d) LOAN FEE.—The Secretary shall not charge the 

18 borrower of a loan made under this part an origination 

19 fee. 

20 ‘‘(e) REPAYMENT.—A borrower of a loan made under 

21 this section may accelerate without penalty repayment of 

22 the whole or any part of the loan.’’. 

23 SEC. 102. PHASING OUT LOAN FORGIVENESS. 

24 The Higher Education Act of 1965 (20 U.S.C. 1001 

25 et seq.) is amended— 


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1 (1) in section 455— 

2 (A) in subsection (d)(1), in the matter pre3 ceding subparagraph (A), by inserting ‘‘(except 

4 a Federal Direct simplification loan)’’ after 

5 ‘‘borrower of a loan made under this part’’; 

6 (B) in subsection (e), by adding at the end 

7 the following: 

8 ‘‘(9) FEDERAL DIRECT SIMPLIFICATION

9 LOANS.—Income contingent repayment shall not be 

10 available for a Federal Direct simplification loan.’’; 

11 and 

12 (C) in subsection (m), by adding at the 

13 end the following: 

14 ‘‘(5) ELIMINATION OF LOAN FORGIVENESS.— 

15 ‘‘(A) IN GENERAL.—Notwithstanding any 

16 other provision of this Act and subject to sub17 paragraph (B), with respect to any loan made 

18 on or after July 1, 2024, the Secretary may not 

19 cancel any outstanding balance of principal and 

20 interest due on the loan for the borrower of the 

21 loan pursuant to this subsection. 

22 ‘‘(B) LOANS FOR CONTINUING PROGRAM

23 OF STUDY.—In the case of a borrower whose 

24 first loan for a program of study is made prior 

25 to July 1, 2024, the Secretary may repay or 


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1 cancel any outstanding balance of principal and 

2 interest due on the subsequent loans for that 

3 borrower for the same program of study pursu4 ant to this subsection for— 

5 ‘‘(i) loans made during the time it 

6 takes to complete that program of study; 

7 or 

8 ‘‘(ii) loans made before July 1, 2028; 

9 whichever occurs earlier.’’; and 

10 (2) in section 493C, by adding at the end the 

11 following: 

12 ‘‘(f) ELIMINATION OF LOAN FORGIVENESS.— 

13 ‘‘(1) IN GENERAL.—Notwithstanding any other 

14 provision of this Act and subject to paragraph (2), 

15 with respect to any loan made on or after July 1, 

16 2024, the Secretary may not repay or cancel any 

17 outstanding balance of principal and interest due on 

18 the loan for the borrower of the loan pursuant to 

19 this section. 

20 ‘‘(2) LOANS FOR CONTINUING PROGRAM OF

21 STUDY.—In the case of a borrower whose first loan 

22 for a program of study is made prior to July 1, 

23 2024, the Secretary may repay or cancel any out24 standing balance of principal and interest due on the 


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1 subsequent loans for that borrower for the same pro2 gram of study pursuant to this section for— 

3 ‘‘(A) loans made during the time it takes 

4 to complete that program of study; or 

5 ‘‘(B) loans made before July 1, 2028; 

6 whichever occurs earlier.’’. 

7 TITLE II—ACCREDITATION 

8 REFORM 

9 SEC. 201. ACCREDITATION REFORM. 

10 (a) DEFINITION OF INSTITUTION OF HIGHER EDU11 CATION.—Section 102(a)(1) of the Higher Education Act 

12 of 1965 (20 U.S.C. 1002(a)(1)) is amended— 

13 (1) by redesignating subparagraphs (B) and 

14 (C) as subparagraphs (C) and (D), respectively; and 

15 (2) by inserting after subparagraph (A) the fol16 lowing: 

17 ‘‘(B) if accredited by an authorized accred18 itation authority in a State that has an alter19 native accreditation agreement with the Sec20 retary, as described in section 498C— 

21 ‘‘(i) an institution that provides post22 secondary education; 

23 ‘‘(ii) a postsecondary apprenticeship 

24 program; or 


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1 ‘‘(iii) a postsecondary education 

2 course or program provided by an institu3 tion of postsecondary education, a non4 profit organization, or a for-profit organi5 zation or business;’’. 

6 (b) STATE ALTERNATIVE ACCREDITATION.—Part H 

7 of title IV of the Higher Education Act of 1965 (20 U.S.C. 

8 1099a et seq.) is amended by adding at the end the fol9 lowing: 

10 ‘‘Subpart 4—State Alternative Accreditation 

11 ‘‘SEC. 498C. STATE ALTERNATIVE ACCREDITATION. 

12 ‘‘(a) IN GENERAL.—Notwithstanding any other pro13 vision of law, a State may establish an alternative accredi14 tation system for the purpose of establishing institutions 

15 that provide postsecondary education and postsecondary 

16 education courses or programs as eligible for funding 

17 under title IV if the State submits a plan to the Secretary 

18 for the establishment of the alternative accreditation sys19 tem. Such institutions, courses, or programs may in20 clude— 

21 ‘‘(1) institutions that provide postsecondary 

22 education that culminates in a certification, creden23 tial, or degree; 


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1 ‘‘(2) postsecondary apprenticeship programs 

2 that culminate in a certification, credential, or de3 gree; 

4 ‘‘(3) any other postsecondary education course 

5 or program offered at an institution of postsec6 ondary education, a nonprofit organization, or a for7 profit organization or business, that culminates in a 

8 certification, credential, or degree; and 

9 ‘‘(4) any of the entities described in paragraphs 

10 (1) through (3) that do not award a postsecondary 

11 certification, credential, or degree, provided that 

12 such entity provides credit that will be accepted to13 ward a postsecondary certification, credential, or de14 gree at one or more of the entities described in para15 graphs (1) through (3). 

16 ‘‘(b) ALTERNATIVE ACCREDITATION NOTIFICA17 TION.—The alternative accreditation plan described in 

18 subsection (a) shall include the following: 

19 ‘‘(1) The State’s plan for designating one or 

20 more authorized accrediting entities within the 

21 State, such as the State Department of Education, 

22 another State agency, an industry-specific accred23 iting agency, or another entity, and an explanation 

24 of the process through which the State will select 

25 such authorized accrediting entities. 


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1 ‘‘(2) The standards or criteria that an institu2 tion that provides postsecondary education and a 

3 postsecondary education course or program must 

4 meet in order to— 

5 ‘‘(A) receive an initial accreditation as part 

6 of the alternative accreditation system; and 

7 ‘‘(B) maintain such accreditation. 

8 ‘‘(3) A description of the appeals process 

9 through which an institution that provides postsec10 ondary education or a postsecondary education 

11 course or program may appeal to an authorized ac12 crediting entity if such institution, course, or pro13 gram is denied accreditation under the State alter14 native accreditation system. 

15 ‘‘(4) Any State policy regarding public accessi16 bility to certain information relating to institutions 

17 that provide postsecondary education and postsec18 ondary education courses and programs accredited 

19 under the State alternative accreditation system, in20 cluding— 

21 ‘‘(A) the information described in sub22 section (e)(1); and 

23 ‘‘(B) information about the rates of job 

24 placement for individuals that have graduated 

25 from an institution or completed a course or 


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1 program that is accredited under the State al2 ternative accreditation system, if available. 

3 ‘‘(5) An assurance by the State that under the 

4 State alternative accreditation system, only institu5 tions that provide postsecondary education and post6 secondary education courses or programs that pro7 vide a postsecondary certification, credential, or de8 gree, or credits toward a postsecondary certification, 

9 credential, or degree (as defined by the State in ac10 cordance with paragraph (6)) will be accredited. 

11 ‘‘(6) The State’s definition of a postsecondary 

12 certification, credential, or degree, as such term ap13 plies to the requirement described in paragraph (5). 

14 ‘‘(7) A description of the agreements that the 

15 State will enter into with institutions that provide 

16 postsecondary education and postsecondary edu17 cation courses or programs that are accredited 

18 under the alternative accreditation system for pur19 poses of accreditation regarding requirements for 

20 learning outcomes or labor market outcomes, in lieu 

21 of the requirements described under section 

22 496(a)(5). 

23 ‘‘(8) A description of the agreements that the 

24 State will enter into with institutions that provide 

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1 cation courses or programs that are accredited 

2 under the alternative accreditation system for pur3 poses of accreditation regarding requirements for in4 structional time, in lieu of the requirements de5 scribed under section 481(a)(2). 

6 ‘‘(9) A description of the agreements that the 

7 State will enter into with institutions that provide 

8 postsecondary education and postsecondary edu9 cation courses or programs that are accredited 

10 under the alternative accreditation system regarding 

11 requirements for credit hours or clock hours, or 

12 other measures of student learning, in lieu of the re13 quirements described under section 481(b). 

14 ‘‘(c) REVIEW AND APPROVAL.—Not later than 30 

15 days after the Secretary receives a plan from a State re16 garding an alternative accreditation system, the Secretary 

17 shall submit to the State and Congress, and make publicly 

18 available, a response to the State’s plan. The Secretary 

19 shall approve the plan and allow the State to establish the 

20 alternative accreditation system if the plan meets the re21 quirements described in subsection (b). 

22 ‘‘(d) TIME LIMIT.—Each plan approved under sub23 section (c) shall allow a State to carry out an alternative 

24 accreditation system in the State for a period of 5 years. 


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1 ‘‘(e) REPORTING REQUIREMENTS.—States that es2 tablish an alternative accreditation system shall submit a 

3 report to the Secretary every 3 years following the imple4 mentation of the alternative accreditation system. The re5 port shall include— 

6 ‘‘(1) in the case of a postsecondary education 

7 course or program that is accredited through the 

8 State alternative accreditation system— 

9 ‘‘(A) the number and percentage of stu10 dents who successfully complete each such post11 secondary education course or program; and 

12 ‘‘(B) for postsecondary education courses 

13 or programs that lead to a certification, creden14 tial, or degree, the number of students in such 

15 course or program; 

16 ‘‘(2) in the case of an institution that provides 

17 postsecondary education that is accredited through 

18 the State alternative accreditation system— 

19 ‘‘(A) the number and percentage of stu20 dents who successfully obtain a postsecondary 

21 certification, credential, or degree from such in22 stitution; and 

23 ‘‘(B) the number and percentage of stu24 dents who do not successfully obtain a postsec25 ondary certification, credential, or degree from 


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1 such institution but do obtain credit from such 

2 institution toward a postsecondary degree, cre3 dential, or certification; and 

4 ‘‘(3) a description of any requirements for 

5 third-party verification of information contained in 

6 the report.’’. 

7 (c) TITLE IV ELIGIBILITY REQUIREMENTS.—Part G 

8 of title IV of the Higher Education Act of 1965 (20 U.S.C. 

9 1088 et seq.) is amended by adding at the end the fol10 lowing: 

11 ‘‘SEC. 494A. STATE ACCREDITED INSTITUTIONS, PRO12 GRAMS, OR COURSES. 

13 ‘‘Notwithstanding any other provision of law, an in14 stitution, program, or course that is eligible for funds 

15 under this title in accordance with section 102(a)(1)(B) 

16 and meets the requirements of section 498C— 

17 ‘‘(1) shall not be required to meet the require18 ments of section 496; and 

19 ‘‘(2) shall not be required to meet the require20 ments described in subsections (a)(2) and (b) of sec21 tion 481.’’. 


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1 TITLE III—TRANSPARENCY IN 

2 HIGHER EDUCATION 

3 SEC. 301. TIME FOR TRANSPARENCY IN HIGHER EDU4 CATION. 

5 (a) IN GENERAL.—Title IV of the Higher Education 

6 Act of 1965 (20 U.S.C. 1070 et seq.) is amended— 

7 (1) in section 487(a), by adding at the end the 

8 following: 

9 ‘‘(30) The institution will publish information 

10 in compliance with section 494B.’’; and 

11 (2) in part G, by adding at the end the fol12 lowing: 

13 ‘‘SEC. 494B. INSTITUTIONAL PUBLICATION OF INFORMA14 TION. 

15 ‘‘(a) PUBLICATION OF INFORMATION.— 

16 ‘‘(1) IN GENERAL.—Each institution of higher 

17 education participating in a program under this title 

18 shall publish on the institution’s website and in an 

19 alternative format, on an annual basis, the informa20 tion described in paragraphs (2) and (3). To the ex21 tent that such data is available, an institution may 

22 use data that the institution is already collecting in 

23 accordance with other Federal requirements. 

24 ‘‘(2) INFORMATION.—Each institution of higher 

25 education described in paragraph (1) shall publish, 


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1 with respect to the institution as a whole and with 

2 respect to each program of study offered by the in3 stitution, the following information for the most re4 cent fiscal year for which the information is avail5 able, to the extent the information is available: 

6 ‘‘(A) For each of the following, the per7 centage and number of students enrolled at the 

8 institution or in the program of study, as appli9 cable, who receive the following: 

10 ‘‘(i) Federal grant aid, including Fed11 eral Pell Grants under subpart 1 of part 

12 A, Federal Supplemental Educational Op13 portunity Grants under subpart 3 of part 

14 A, or any other Federal postsecondary edu15 cation grant aid or subsidy. 

16 ‘‘(ii) Federal student loans, including 

17 Federal loans under part D. 

18 ‘‘(iii) State grant aid. 

19 ‘‘(iv) Institutional grants. 

20 ‘‘(v) A student loan from a State. 

21 ‘‘(B) Student body enrollment status, in22 cluding as a— 

23 ‘‘(i) first-time, full-time student; 

24 ‘‘(ii) first-time, part-time student; 


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1 ‘‘(iii) non-first-time, full-time student; 

2 and 

3 ‘‘(iv) non-first-time, part-time student. 

4 ‘‘(C) Information about students that in5 cludes the following: 

6 ‘‘(i) The percentage of students who 

7 do not complete the program of study the 

8 student initially started upon enrollment. 

9 ‘‘(ii) The percentage of students who 

10 transfer. 

11 ‘‘(iii) The percentage of students who 

12 complete the program of study the student 

13 initially started upon enrollment. 

14 ‘‘(iv) The average length of time for a 

15 student to complete the program of study. 

16 ‘‘(v) The percentage of students who 

17 continue on to higher levels of education. 

18 ‘‘(vi) The percentage of former stu19 dents who received financial aid who are 

20 employed at 2, 4, and 6 years after grad21 uating, disaggregated by program of study. 

22 ‘‘(vii) The median earnings of former 

23 students who earned a degree or credential 

24 and received financial aid on the date that 

25 is 5, 10, and 15 years after the date the 


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1 students first enrolled in a program of 

2 study at the institution, disaggregated by 

3 program of study. 

4 ‘‘(viii) The median earnings of former 

5 students who received financial aid on the 

6 date that is 5, 10, and 15 years after the 

7 date the students first enrolled in a pro8 gram of study at the institution, 

9 disaggregated by program of study. 

10 ‘‘(3) PUBLICATION OF DEFAULT AND NON-RE11 PAYMENT RATES.—In addition to the information 

12 described in paragraph (2), each institution of high13 er education described in paragraph (1) shall pub14 lish, with respect to the institution as a whole and 

15 with respect to each program of study offered by the 

16 institution, the following information for the most 

17 recent fiscal year for which the information is avail18 able: 

19 ‘‘(A) The average amount of total Federal 

20 student loan debt accrued upon graduation. 

21 ‘‘(B) The average amount of total Federal 

22 student loan debt accrued by students who 

23 leave the institution without having graduated. 

24 ‘‘(C) Federal student loan default rate. 


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1 ‘‘(D) Federal student loan non-repayment 

2 rate. 

3 ‘‘(E) Default and non-repayment rate, in4 cluding as a— 

5 ‘‘(i) first-time, full-time student; 

6 ‘‘(ii) first-time, part-time student; 

7 ‘‘(iii) non-first-time, full-time student; 

8 and 

9 ‘‘(iv) non-first-time, part-time student. 

10 ‘‘(F) Default and non-repayment rate, of— 

11 ‘‘(i) students who complete a program 

12 of study; 

13 ‘‘(ii) students who transfer; and 

14 ‘‘(iii) students who do not complete a 

15 program of study. 

16 ‘‘(b) PRIVACY.— 

17 ‘‘(1) COMPLIANCE WITH FERPA.—In carrying 

18 out this section, an institution of higher education 

19 and any personnel of the institution shall not share 

20 any personally identifiable information and shall act 

21 in accordance with section 444 of the General Edu22 cation Provisions Act (20 U.S.C. 1232g, commonly 

23 known as the ‘Family Educational Rights and Pri24 vacy Act of 1974’). 


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1 ‘‘(2) PROHIBITION ON USE OF INFORMATION.— 

2 Information published pursuant to this section shall 

3 not be used by a Federal employee, agency, or offi4 cer, or an institution of higher education to take ac5 tion against an individual. 

6 ‘‘(3) PENALTIES.—The Secretary shall establish 

7 penalties for a violation of paragraph (1) or (2) that 

8 includes both a monetary fine and up to 5 years in 

9 prison. 

10 ‘‘(c) RULE OF CONSTRUCTION.—Nothing in this sec11 tion shall be construed to authorize or permit the Sec12 retary or any employee or contractor of the Department 

13 to mandate, direct, or control the selection of practices or 

14 curriculum by an institution of higher education.’’. 

15 (b) GAO REPORT.— 

16 (1) STUDY.—The Comptroller General of the 

17 United States shall conduct a study that compiles all 

18 the institutional publication of information pursuant 

19 to section 494B of the Higher Education Act of 

20 1965, as added by subsection (a) of this section. 

21 (2) REPORT.—Not later than October 1 of the 

22 fourth fiscal year after the date of enactment of this 

23 Act, the Comptroller General of the United States 

24 shall submit a report containing the results of the 


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1 study under paragraph (1) to the appropriate com2 mittees of Congress. 

3 TITLE IV—SCHOOL ACCOUNT4 ABILITY FOR STUDENT 

5 LOANS 

6 SEC. 401. SCHOOL ACCOUNTABILITY FOR STUDENT LOANS. 

7 (a) DEFAULT RATE FINE.—Section 487 of the High8 er Education Act of 1965 (20 U.S.C. 1094), as amended 

9 by section 201, is further amended— 

10 (1) in subsection (a), by adding at the end the 

11 following: 

12 ‘‘(31) The institution will pay a default rate 

13 fine that is determined pursuant to subsection (k).’’; 

14 and 

15 (2) by adding at the end the following: 

16 ‘‘(k) DEFAULT RATE FINE.— 

17 ‘‘(1) IN GENERAL.—Each institution shall pay 

18 to the Secretary an annual default rate fine in ac19 cordance with this subsection in an amount deter20 mined under paragraph (2). 

21 ‘‘(2) FINE.— 

22 ‘‘(A) IN GENERAL.—Each institution shall 

23 pay a default rate fine for a fiscal year in an 

24 amount that is equal to the applicable percent25 age of outstanding loans. 


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•HR 5042 IH

1 ‘‘(B) APPLICABLE PERCENTAGE.—In this 

2 paragraph the term ‘applicable percentage’ 

3 means a percentage equal to— 

4 ‘‘(i) 15 percent; minus 

5 ‘‘(ii) the average rate of total unem6 ployment in the United States, as deter7 mined by the Secretary of Labor. 

8 ‘‘(C) OUTSTANDING LOANS.—In this para9 graph the term ‘outstanding loans’ means the 

10 total amount of loans issued to students for at11 tendance at the institution, for which regular 

12 on-time payments are not being made. 

13 ‘‘(D) REGULAR ON-TIME PAYMENTS.—In 

14 this paragraph the term ‘regular on-time pay15 ments’ means payments that are, at a min16 imum, equal to the fixed monthly amount nec17 essary to pay off the total amount of Federal 

18 student loans of the borrower within the allot19 ted repayment time based on the borrower’s re20 payment plan. 

21 ‘‘(3) CREDIT FOR CERTAIN INSTITUTIONS.— 

22 Each institution shall receive a $400 credit for a fis23 cal year for each graduate of the institution who re24 ceived a Federal Pell Grant while enrolled at the in25 stitution during such fiscal year. 


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•HR 5042 IH

1 ‘‘(4) FLEXIBILITY IN COUNSEL AND ADVICE.— 

2 Notwithstanding any other provision of the Act, the 

3 Secretary shall grant institutions of higher education 

4 flexibility under this Act to counsel and advise stu5 dents on Federal financial aid, including granting 

6 flexibility for institutions to award less than the 

7 maximum amount of Federal student aid for which 

8 an individual is eligible if the cost of tuition, room, 

9 and board at the institution is less than such max10 imum amount.’’. 

11 (b) FLEXIBILITY IN COUNSELING AND ADVICE.— 

12 Section 485(l) of the Higher Education Act of 1965 (20 

13 U.S.C. 1092(l)) is amended by adding at the end the fol14 lowing: 

15 ‘‘(3) FLEXIBILITY IN COUNSELING AND AD16 VICE.—In addition to the entrance counseling under 

17 paragraph (1), an eligible institution may require 

18 any borrower, at or prior to the time of a disburse19 ment to the borrower of a loan made under part D, 

20 to receive the information described in paragraph 

21 (2) with respect to such loan, or any other financial 

22 counseling, including financial literacy counseling.’’. 

Æ 


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