II 

113TH CONGRESS 

2D SESSION S. 2204 

To establish the Proprietary Education Oversight Coordination Committee. 

IN THE SENATE OF THE UNITED STATES 

APRIL 3, 2014 

Mr. DURBIN (for himself, Mr. HARKIN, and Mr. BROWN) introduced the following bill; which was read twice and referred to the Committee on 

Health, Education, Labor, and Pensions 

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 


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1 higher education that is a publicly traded corpora2 tion, means— 

3 (A) the president of such corporation; 

4 (B) a vice president of such corporation 

5 who is in charge of a principal business unit, di6 vision, or function of such corporation, such as 

7 sales, administration, or finance; or 

8 (C) any other officer or person who per9 forms a policy-making function for such cor10 poration. 

11 (2) FEDERAL EDUCATION ASSISTANCE.—The 

12 term ‘‘Federal education assistance’’ means any 

13 Federal financial assistance provided under any Fed14 eral law through a grant, a contract, a subsidy, a 

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

16 to a proprietary institution of higher education, in17 cluding Federal financial assistance that is disbursed 

18 or delivered to such institution, on behalf of a stu19 dent, or to a student to be used to attend such insti20 tution, except that such term shall not include any 

21 monthly housing stipend provided under chapter 33 

22 of title 38, United States Code. 

23 (3) PRIVATE EDUCATION LOAN.—The term 

24 ‘‘private education loan’’— 


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1 (A) means a loan provided by a private 

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

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

4 1650(a))) that— 

5 (i) is not made, insured, or guaran6 teed under title IV of the Higher Edu7 cation Act of 1965 (20 U.S.C. 1070 et 

8 seq.); 

9 (ii) is issued expressly for postsec10 ondary educational expenses to a borrower, 

11 regardless of whether the loan is provided 

12 through the educational institution that 

13 the subject student attends or directly to 

14 the borrower from the private educational 

15 lender (as so defined); and 

16 (iii) is not made, insured, or guaran17 teed under title VII or title VIII of the 

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

19 et seq. and 296 et seq.); and 

20 (B) does not include an extension of credit 

21 under an open-end consumer credit plan, a re22 verse mortgage transaction, a residential mort23 gage transaction, or any other loan that is se24 cured by real property or a dwelling. 


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1 (4) PROPRIETARY INSTITUTION OF HIGHER

2 EDUCATION.—The term ‘‘proprietary institution of 

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

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

5 (20 U.S.C. 1002(b)). 

6 (5) RECRUITING AND MARKETING ACTIVI7 TIES.— 

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

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

10 marketing activities’’ means activities that con11 sist of the following: 

12 (i) Advertising and promotion activi13 ties, including paid announcements in 

14 newspapers, magazines, radio, television, 

15 billboards, electronic media, naming rights, 

16 or any other public medium of communica17 tion, including paying for displays or pro18 motions at job fairs, military installations, 

19 or college recruiting events. 

20 (ii) Efforts to identify and attract 

21 prospective students, either directly or 

22 through a contractor or other third party, 

23 including contact concerning a prospective 

24 student’s potential enrollment or applica25 tion for a grant, a loan, or work assistance 


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1 under title IV of the Higher Education Act 

2 of 1965 (20 U.S.C. 1070 et seq.) or par3 ticipation in preadmission or advising ac4 tivities, including— 

5 (I) paying employees responsible 

6 for overseeing enrollment and for con7 tacting potential students in-person, 

8 by phone, by email, or by other inter9 net communications regarding enroll10 ment; and 

11 (II) soliciting an individual to 

12 provide contact information to an in13 stitution of higher education, includ14 ing through websites established for 

15 such purpose and funds paid to third 

16 parties for such purpose. 

17 (iii) Such other activities as the Sec18 retary of Education may prescribe, includ19 ing paying for promotion or sponsorship of 

20 education or military-related associations. 

21 (B) EXCEPTIONS.—Any activity that is re22 quired as a condition of receipt of funds by an 

23 institution under title IV of the Higher Edu24 cation Act of 1965 (20 U.S.C. 1070 et seq.), is 

25 specifically authorized under such title, or is 


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1 otherwise specified by the Secretary of Edu2 cation, shall not be considered to be a recruit3 ing and marketing activity under subparagraph 

4 (A). 

5 (6) STATE APPROVAL AGENCY.—The term 

6 ‘‘State approval agency’’ means any State agency 

7 that determines whether an institution of higher 

8 education is legally authorized within such State to 

9 provide a program of education beyond secondary 

10 education. 

11 (7) VETERANS SERVICE ORGANIZATION.—The 

12 term ‘‘veterans service organization’’ means an orga13 nization recognized by the Secretary of Veterans Af14 fairs for the representation of veterans under section 

15 5902 of title 38, United States Code. 

16 SEC. 3. ESTABLISHMENT OF COMMITTEE. 

17 (a) ESTABLISHMENT.—There is established a com18 mittee to be known as the ‘‘Proprietary Education Over19 sight Coordination Committee’’ (referred to in this Act as 

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

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

22 entities: 

23 (1) The Department of Education. 

24 (2) The Consumer Financial Protection Bu25 reau. 


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1 (3) The Department of Justice. 

2 (4) The Securities and Exchange Commission. 

3 (5) The Department of Defense. 

4 (6) The Department of Veterans Affairs. 

5 (7) The Federal Trade Commission. 

6 (8) The Department of Labor. 

7 (9) The Internal Revenue Service. 

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

9 other relevant Federal agency or department. 

10 (b) PURPOSES.—The Committee shall have the fol11 lowing purposes: 

12 (1) Coordinate Federal oversight of proprietary 

13 institutions of higher education to— 

14 (A) improve enforcement of applicable 

15 Federal laws and regulations; 

16 (B) increase accountability of proprietary 

17 institutions of higher education to students and 

18 taxpayers; and 

19 (C) ensure the promotion of quality edu20 cation programs. 

21 (2) Coordinate Federal activities to protect stu22 dents from unfair, deceptive, abusive, unethical, 

23 fraudulent, or predatory practices, policies, or proce24 dures of proprietary institutions of higher education. 


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1 (3) Encourage information sharing among 

2 agencies related to Federal investigations, audits, or 

3 inquiries of proprietary institutions of higher edu4 cation. 

5 (4) Increase coordination and cooperation be6 tween Federal and State agencies, including State 

7 Attorneys General and State approval agencies, with 

8 respect to improving oversight and accountability of 

9 proprietary institutions of higher education. 

10 (5) Develop best practices and consistency 

11 among Federal and State agencies in the dissemina12 tion of consumer information regarding proprietary 

13 institutions of higher education to ensure that stu14 dents, parents, and other stakeholders have easy ac15 cess to such information. 

16 (c) MEMBERSHIP.— 

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

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

19 appoint a high-level official who exercises significant 

20 decisionmaking authority for the oversight or inves21 tigatory activities and responsibilities related to pro22 prietary institutions of higher education of the re23 spective Federal entity of such head. 


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1 (2) CHAIRPERSON.—The Secretary of Edu2 cation or the designee of such Secretary shall serve 

3 as the Chairperson of the Committee. 

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

5 entity described in subsection (a) shall ensure appro6 priate staff and officials of such entity are available 

7 to support the Committee-related work of such enti8 ty. 

9 SEC. 4. MEETINGS. 

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

11 Committee shall meet regularly, but not less than once 

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

13 purposes described in section 3(b). 

14 (b) MEETINGS WITH STATE AGENCIES AND STAKE15 HOLDERS.—The Committee shall meet not less than once 

16 each fiscal year, and shall otherwise interact regularly, 

17 with State Attorneys General, State approval agencies, 

18 veterans service organizations, and consumer advocates to 

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

20 SEC. 5. REPORT. 

21 (a) IN GENERAL.—The Committee shall submit a re22 port each year to the Committee on Health, Education, 

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

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1 tives, and any other committee of Congress that the Com2 mittee determines appropriate. 

3 (b) PUBLIC ACCESS.—The report described in sub4 section (a) shall be made available to the public in a man5 ner that is easily accessible to parents, students, and other 

6 stakeholders in accordance with the best practices devel7 oped under section 3(b)(5). 

8 (c) CONTENTS.— 

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

10 (A) an accounting of any action (as de11 fined in paragraph (3)) taken by the Federal 

12 Government, any member entity of the Com13 mittee, or a State— 

14 (i) to enforce Federal or State laws 

15 and regulations applicable to proprietary 

16 institutions of higher education; 

17 (ii) to hold proprietary institutions of 

18 higher education accountable to students 

19 and taxpayers; and 

20 (iii) to promote quality education pro21 grams; 

22 (B) a summary of complaints against each 

23 proprietary institution of higher education re24 ceived by any member entity of the Committee; 


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

2 and any other data relevant to proprietary insti3 tutions of higher education that the Committee 

4 determines appropriate; and 

5 (D) recommendations of the Committee for 

6 such legislative and administrative actions as 

7 the Committee determines are necessary to— 

8 (i) improve enforcement of applicable 

9 Federal laws; 

10 (ii) increase accountability of propri11 etary institutions of higher education to 

12 students and taxpayers; and 

13 (iii) ensure the promotion of quality 

14 education programs. 

15 (2) DATA.— 

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

17 shall include data on all proprietary institutions 

18 of higher education that consists of information 

19 regarding— 

20 (i) the total amount of Federal edu21 cation assistance that proprietary institu22 tions of higher education received for the 

23 previous academic year, and the percentage 

24 of the total amount of Federal education 

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1 er education (as defined in section 102 of 

2 the Higher Education Act of 1965 (20 

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

4 year that reflects such total amount of 

5 Federal education assistance provided to 

6 proprietary institutions of higher education 

7 for such previous academic year; 

8 (ii) the total amount of Federal edu9 cation assistance that proprietary institu10 tions of higher education received for the 

11 previous academic year, disaggregated 

12 by— 

13 (I) educational assistance in the 

14 form of a loan provided under title IV 

15 of the Higher Education Act of 1965 

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

17 (II) educational assistance in the 

18 form of a grant provided under title 

19 IV of the Higher Education Act of 

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

21 (III) educational assistance pro22 vided under chapter 33 of title 38, 

23 United States Code; 


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1 (IV) tuition assistance provided 

2 under section 2007 of title 10, United 

3 States Code; 

4 (V) assistance provided under 

5 section 1784a of title 10, United 

6 States Code; and 

7 (VI) Federal education assistance 

8 not described in subclauses (I) 

9 through (V); 

10 (iii) the percentage of the total 

11 amount of Federal education assistance 

12 provided to institutions of higher education 

13 (as defined in section 102 of the Higher 

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

15 for such previous academic year for each of 

16 the programs described in subclauses (I) 

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

18 total amount of Federal education assist19 ance provided to proprietary institutions of 

20 higher education for such previous aca21 demic year for each of such programs; 

22 (iv) the average retention and gradua23 tion rates for students pursuing a degree 

24 at proprietary institutions of higher edu25 cation; 


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1 (v) the average cohort default rate (as 

2 defined in section 435(m) of the Higher 

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

4 1085(m)) for proprietary institutions of 

5 higher education, and an annual list of co6 hort default rates (as defined in such sec7 tion) for all proprietary institutions of 

8 higher education; 

9 (vi) for careers requiring the passage 

10 of a licensing examination— 

11 (I) the passage rate of individ12 uals who attended a proprietary insti13 tution of higher education taking such 

14 examination to pursue such a career; 

15 and 

16 (II) the passage rate of all indi17 viduals taking such exam to pursue 

18 such a career; and 

19 (vii) the use of private education loans 

20 at proprietary institutions of higher edu21 cation that includes— 

22 (I) an estimate of the total num23 ber of such loans; and 


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1 (II) information on the average 

2 debt, default rate, and interest rate of 

3 such loans. 

4 (B) DATA ON PUBLICLY TRADED COR5 PORATIONS.— 

6 (i) IN GENERAL.—The report shall in7 clude data on proprietary institutions of 

8 higher education that are publicly traded 

9 corporations, consisting of information 

10 on— 

11 (I) any pre-tax profit of such 

12 proprietary institutions of higher edu13 cation— 

14 (aa) reported as a total 

15 amount and an average percent 

16 of revenue for all such propri17 etary institutions of higher edu18 cation; and 

19 (bb) reported for each such 

20 proprietary institution of higher 

21 education; 

22 (II) revenue for such proprietary 

23 institutions of higher education spent 

24 on recruiting and marketing activities, 


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1 student instruction, and student sup2 port services, reported— 

3 (aa) as a total amount and 

4 an average percent of revenue for 

5 all such proprietary institutions 

6 of higher education; and 

7 (bb) for each such propri8 etary institution of higher edu9 cation; 

10 (III) total compensation packages 

11 of the executive officers of each such 

12 proprietary institution of higher edu13 cation; 

14 (IV) a list of institutional loan 

15 programs offered by each such propri16 etary institution of higher education 

17 that includes information on the de18 fault and interest rates of such pro19 grams; and 

20 (V) the data described in clauses 

21 (ii) and (iii). 

22 (ii) DISAGGREGATED BY OWNER23 SHIP.—The report shall include data on 

24 proprietary institutions of higher education 

25 that are publicly traded corporations, 


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1 disaggregated by corporate or parent enti2 ty, brand name, and campus, consisting 

3 of— 

4 (I) the total cost of attendance 

5 for each program at each such propri6 etary institution of higher education, 

7 and information comparing such total 

8 cost for each such program to— 

9 (aa) the total cost of attend10 ance for each program at each 

11 public institution of higher edu12 cation; and 

13 (bb) the average total cost 

14 of attendance for each program 

15 at all institutions of higher edu16 cation, including such institutions 

17 that are public and such institu18 tions that are private; 

19 (II) total enrollment, disaggre20 gated by— 

21 (aa) individuals enrolled in 

22 programs taken online; and 

23 (bb) individuals enrolled in 

24 programs that are not taken on25 line; 


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1 (III) the average retention and 

2 graduation rates for students pur3 suing a degree at such proprietary in4 stitutions of higher education; 

5 (IV) the percentage of students 

6 enrolled in such proprietary institu7 tions of higher education who com8 plete a program of such an institution 

9 within— 

10 (aa) the standard period of 

11 completion for such program; and 

12 (bb) a period that is 150 

13 percent of such standard period 

14 of completion; 

15 (V) the total cost of attendance 

16 for each program at such proprietary 

17 institutions of higher education; 

18 (VI) the average cohort default 

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

20 the Higher Education Act of 1965 (20 

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

22 institutions of higher education, and 

23 an annual list of cohort default rates 

24 (as defined in such section) for all 


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1 proprietary institutions of higher edu2 cation; 

3 (VII) the median educational 

4 debt incurred by students who com5 plete a program at such a proprietary 

6 institution of higher education; 

7 (VIII) the median educational 

8 debt incurred by students who start 

9 but do not complete a program at 

10 such a proprietary institution of high11 er education; 

12 (IX) the job placement rate for 

13 students who complete a program at 

14 such a proprietary institution of high15 er education and the type of employ16 ment obtained by such students; 

17 (X) for careers requiring the pas18 sage of a licensing examination, the 

19 rate of individuals who attended such 

20 a proprietary institution of higher 

21 education and passed such an exam22 ination; and 

23 (XI) the number of complaints 

24 from students enrolled in such propri25 etary institutions of higher education 


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1 who have submitted a complaint to 

2 any member entity of the Committee. 

3 (iii) DEPARTMENT OF DEFENSE AND

4 VETERANS AFFAIRS ASSISTANCE.— 

5 (I) IN GENERAL.—To the extent 

6 practicable, the report shall provide 

7 information on the data described in 

8 clause (ii) for individuals using, to pay 

9 for the costs of attending such a pro10 prietary institution of higher edu11 cation, Federal education assistance 

12 provided under— 

13 (aa) chapter 33 of title 38, 

14 United States Code; 

15 (bb) section 2007 of title 10, 

16 United States Code; and 

17 (cc) section 1784a of title 

18 10, United States Code. 

19 (II) REVENUE.—The report shall 

20 provide information on the revenue of 

21 proprietary institutions of higher edu22 cation that are publicly traded cor23 porations that is derived from the 

24 Federal education assistance described 

25 in subclause (I). 


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1 (C) COMPARISON DATA.—To the extent 

2 practicable, the report shall provide information 

3 comparing the data described in subparagraph 

4 (B) for proprietary institutions of higher edu5 cation that are publicly traded corporations 

6 with such data for public institutions of higher 

7 education disaggregated by State. 

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

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

10 shall include— 

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

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

13 court; 

14 (B) an administrative proceeding by a 

15 Federal or State agency involving noncompli16 ance of any applicable law or regulation; or 

17 (C) any other review, audit, or administra18 tive process by any Federal or State agency 

19 that results in a penalty, suspension, or termi20 nation from any Federal or State program. 

21 SEC. 6. FOR-PROFIT COLLEGE WARNING LIST FOR PAR22 ENTS AND STUDENTS. 

23 (a) IN GENERAL.—Each academic year, the Com24 mittee shall publish a list to be known as the ‘‘For-Profit 

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


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1 comprised of proprietary institutions of higher edu2 cation— 

3 (1) that have engaged in illegal activity during 

4 the previous academic year as determined by a Fed5 eral or State court; 

6 (2) that have entered into a settlement result7 ing in a monetary payment; 

8 (3) that have had any higher education pro9 gram withdrawn or suspended; or 

10 (4) for which the Committee has sufficient evi11 dence of widespread or systemic unfair, deceptive, 

12 abusive, unethical, fraudulent, or predatory prac13 tices, policies, or procedures that pose a threat to 

14 the academic success, financial security, or general 

15 best interest of students. 

16 (b) DETERMINATIONS.—In making a determination 

17 pursuant to subsection (a)(4), the Committee may con18 sider evidence that includes the following: 

19 (1) Any consumer complaint collected by any 

20 member entity of the Committee. 

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

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

23 (3) Any administrative proceeding by a Federal 

24 or State agency involving noncompliance of any ap25 plicable law or regulation. 


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

2 process by any Federal or State agency that results 

3 in a penalty, suspension, or termination from any 

4 Federal or State program. 

5 (5) Data or information submitted by a propri6 etary institution of higher education to any accred7 iting agency or association recognized by the Sec8 retary of Education pursuant to section 496 of the 

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

10 the findings or adverse actions of any such accred11 iting agency or association. 

12 (6) Information submitted by a proprietary in13 stitution of higher education to any member entity 

14 of the Committee. 

15 (7) Any other evidence that the Committee de16 termines relevant in making a determination pursu17 ant to subsection (a)(4). 

18 (c) PUBLICATION.—Not later than July 1 of each fis19 cal year, the Committee shall publish the list described in 

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

21 accessible to parents, students, and other stakeholders in 

22 accordance with any best practices developed under sec23 tion 3(b)(5). 

Æ 


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