I 

115TH CONGRESS 

2D SESSION H. R. 7112 

To improve the Higher Education Act of 1965, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

OCTOBER 30, 2018 

Mr. TAKANO (for himself, Mr. GARAMENDI, and Mr. AGUILAR) introduced the 

following bill; which was referred to the Committee on Education and the 

Workforce 

A BILL 

To improve the Higher Education Act of 1965, 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; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Protections and Regulation for Our Students Act’’ or 

6 ‘‘PRO Students Act’’. 

7 (b) TABLE OF CONTENTS.—The table of contents for 

8 this Act is as follows: 

Sec. 1. Short title; table of contents. 

Sec. 2. 85–15 revenue source requirement for proprietary institutions. 

Sec. 3. Definitions. 

Sec. 4. Restriction on marketing with Federal educational assistance funds. 


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Sec. 5. Whistleblower protections for persons associated with institutions of 

higher education. 

Sec. 6. Establishment of complaint resolution and tracking system. 

Sec. 7. Improved determination of cohort default rates; publication of default 

prevention plan. 

Sec. 8. Amendments to terms and conditions of borrower defenses. 

Sec. 9. Improved student loan servicing and debt collection practices. 

Sec. 10. Improved disclosures, counseling, and financial assistance information 

for students. 

Sec. 11. Program participation agreements. 

Sec. 12. Improved disclosures for clinical training programs. 

Sec. 13. Civil penalties. 

Sec. 14. Requirements for accrediting agencies or associations. 

Sec. 15. Program review and data. 

Sec. 16. Consumer protections for students. 

1 SEC. 2. 85–15 REVENUE SOURCE REQUIREMENT FOR PRO2 PRIETARY INSTITUTIONS. 

3 (a) CHANGE FROM 90–10 TO 85–15.—Section 

4 487(a)(24) of the Higher Education Act of 1965 (20 

5 U.S.C. 1094(a)(24)) is amended by striking ‘‘ten percent’’ 

6 and inserting ‘‘15 percent’’. 

7 (b) REVISIONS TO ACCOUNTING.—Section 487(d)(1) 

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

9 1094(d)(1)) is amended— 

10 (1) in subparagraph (A), by striking ‘‘account11 ing,’’ and all that follows and inserting ‘‘account12 ing;’’; 

13 (2) in subparagraph (B), by striking clause (iii) 

14 and inserting the following new clause: 

15 ‘‘(iii) a contractual arrangement with 

16 a Federal agency for the purpose of pro17 viding job training to low-income individ18 uals who are in need of such training;’’; 


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1 (3) in subparagraph (C)— 

2 (A) by striking clauses (i) through (iii) and 

3 inserting the following new clause: 

4 ‘‘(i) grant funds provided by a source 

5 that has no affiliation with the institution 

6 and shares no employees with the institu7 tion;’’; and 

8 (B) by redesignating clause (iv) as clause 

9 (ii); and 

10 (4) by striking subparagraphs (D) and (E) and 

11 inserting the following new subparagraphs: 

12 ‘‘(D) include no loans made by an institu13 tion of higher education as revenue to the 

14 school, except for payments made by students 

15 on such loans; 

16 ‘‘(E) include a scholarship provided by the 

17 institution— 

18 ‘‘(i) only if the scholarship is in the 

19 form of monetary aid based upon the aca20 demic achievements or financial need of 

21 students, disbursed to qualified student re22 cipients during each fiscal year from an es23 tablished restricted account; and 

24 ‘‘(ii) only to the extent that funds in 

25 that account represent designated funds, 


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1 or income earned on such funds, from a 

2 source that has no affiliation with the in3 stitution and shares no employees with the 

4 institution; and’’. 

5 SEC. 3. DEFINITIONS. 

6 (a) IN GENERAL.—Section 103 of the Higher Edu7 cation Act of 1965 (20 U.S.C. 1003) is amended— 

8 (1) by redesignating paragraphs (4) through 

9 (9), (10) through (14), and (15) through (24), as 

10 paragraphs (5) through (10), (12) through (16), and 

11 (18) through (26), respectively; 

12 (2) by inserting after paragraph (3) the fol13 lowing new paragraph: 

14 ‘‘(4) DEFAULT MANIPULATION.—The term ‘de15 fault manipulation’ means engaging in a device or 

16 practice, including branching, consolidation of cam17 puses, consolidation or manipulation of the identi18 fication codes used by the Office of Postsecondary 

19 Education to designate campuses and institutions, 

20 change of ownership or control, serial forbearance, 

21 or any similar device or practice (as determined by 

22 the Secretary) when, but for the device or practice, 

23 one or more campuses of an institution of higher 

24 education would be at risk of cohort default rate 


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1 sanctions under section 435 or student default risk 

2 sanctions under section 489A.’’; 

3 (3) by inserting after paragraph (10), as redes4 ignated by paragraph (1) of this section, the fol5 lowing new paragraph: 

6 ‘‘(11) FEDERAL EDUCATIONAL ASSISTANCE

7 FUNDS.—The term ‘Federal educational assistance 

8 funds’ means funds provided directly to an institu9 tion or to a student attending such institution under 

10 any of the following provisions of law: 

11 ‘‘(A) Title IV. 

12 ‘‘(B) Section 477 of the Social Security 

13 Act. 

14 ‘‘(C) Chapter 30, 31, 32, 33, 34, or 35 of 

15 title 38, United States Code. 

16 ‘‘(D) Chapter 101, 105, 106A, 1606, 

17 1607, or 1608 of title 10, United States Code. 

18 ‘‘(E) Section 1784a, 2005, or 2007 of title 

19 10, United States Code. 

20 ‘‘(F) Title I of the Workforce Innovation 

21 and Opportunity Act (29 U.S.C. 3101 et seq.). 

22 ‘‘(G) The Adult Education and Family Lit23 eracy Act (29 U.S.C. 3101 et seq.).’’; and 


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1 (4) by inserting after paragraph (16), as redes2 ignated by paragraph (1) of this section, the fol3 lowing new paragraph: 

4 ‘‘(17) RECRUITING AND MARKETING ACTIV5 ITY.— 

6 ‘‘(A) IN GENERAL.—Except as provided in 

7 subparagraph (B), the term ‘recruiting and 

8 marketing activity’ means an activity that con9 sists of any of the following: 

10 ‘‘(i) Any advertising or promotion ac11 tivity, including a paid announcement in 

12 newspapers, magazines, radio, television, 

13 billboards, electronic media, naming rights, 

14 or any other public medium of communica15 tion, including paying for a display or pro16 motion at a job fair, military installation, 

17 or postsecondary education recruiting 

18 event. 

19 ‘‘(ii) Any effort to identify and attract 

20 prospective students, directly or through a 

21 contractor or other third party, including 

22 any contact concerning a prospective stu23 dent’s potential enrollment or application 

24 for grant, loan, or work assistance under 


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1 title IV or participation in preadmission or 

2 advising activities, including— 

3 ‘‘(I) paying employees responsible 

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

6 by phone, by email, by internet com7 munications, or by other means, re8 garding enrollment; 

9 ‘‘(II) compensating a person to 

10 provide to an institution of higher 

11 education contact information regard12 ing prospective students, including in13 formation obtained through websites 

14 established for such purpose; and 

15 ‘‘(III) providing funds to a third 

16 party to create or maintain a website 

17 for the purpose of obtaining contact 

18 information regarding prospective stu19 dents. 

20 ‘‘(iii) Any other activity as the Sec21 retary may determine. 

22 ‘‘(B) EXCEPTION.—An activity that is re23 quired as a condition of receipt of funds by an 

24 institution under title IV, or under another ap25 plicable Federal law, shall not be considered to 


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1 be a recruiting and marketing activity under 

2 subparagraph (A).’’. 

3 (b) TITLE IV PROGRAMS.—Section 481 of the Higher 

4 Education Act of 1965 (20 U.S.C. 1088) is amended by 

5 adding at the end the following new subsection: 

6 ‘‘(g) STUDENT DEFAULT RISK.—In this title, the 

7 term ‘student default risk’ means the percentage that is 

8 calculated by taking an institution’s cohort default rate 

9 (as defined in section 435(m)) for the most recent fiscal 

10 year available, and multiplying it by the percentage of stu11 dents enrolled at such institution receiving a loan made, 

12 insured, or guaranteed under this title during the previous 

13 academic year.’’. 

14 SEC. 4. RESTRICTION ON MARKETING WITH FEDERAL EDU15 CATIONAL ASSISTANCE FUNDS. 

16 (a) REPEAL OF EXISTING PROVISION.—The Higher 

17 Education Opportunity Act is amended by striking section 

18 119 (20 U.S.C. 1011m). 

19 (b) INSERTION IN HIGHER EDUCATION ACT OF 1965 

20 AND AMENDMENTS.—Part B of title I of the Higher Edu21 cation Act of 1965 (20 U.S.C. 1011 et seq.) is amended 

22 by adding at the end the following new section: 


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1 ‘‘SEC. 124. CERTIFICATION REGARDING THE USE OF CER2 TAIN FEDERAL FUNDS AND RESTRICTIONS 

3 ON SOURCES OF FUNDS FOR RECRUITING 

4 AND MARKETING ACTIVITIES. 

5 ‘‘(a) PROHIBITION.—No Federal funds received 

6 under this Act by an institution of higher education or 

7 other postsecondary educational institution may be used 

8 to pay any person for influencing or attempting to influ9 ence an officer or employee of any agency, a Member of 

10 Congress, an officer or employee of Congress, or an em11 ployee of a Member of Congress in connection with any 

12 Federal action described in subsection (b). 

13 ‘‘(b) APPLICABILITY.—The prohibition in subsection 

14 (a) applies with respect to the following Federal actions: 

15 ‘‘(1) The awarding of any Federal contract. 

16 ‘‘(2) The making of any Federal grant. 

17 ‘‘(3) The making of any Federal loan. 

18 ‘‘(4) The entering into of any Federal coopera19 tive agreement. 

20 ‘‘(5) The extension, continuation, renewal, 

21 amendment, or modification of any Federal contract, 

22 grant, loan, or cooperative agreement. 

23 ‘‘(c) LOBBYING AND EARMARKS.—No Federal stu24 dent aid funding under this Act may be used to hire a 

25 registered lobbyist or pay any person or entity for securing 

26 an earmark. 


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1 ‘‘(d) RESTRICTIONS ON SOURCES OF FUNDS FOR RE2 CRUITING AND MARKETING ACTIVITIES.— 

3 ‘‘(1) IN GENERAL.—An institution of higher 

4 education, or other postsecondary educational insti5 tution, may not use revenues derived from Federal 

6 educational assistance funds for recruiting or mar7 keting activities. 

8 ‘‘(2) RULE OF CONSTRUCTION.—Nothing in 

9 this section shall be construed as a limitation on the 

10 use by an institution of revenues derived from 

11 sources other than Federal educational assistance 

12 funds. 

13 ‘‘(3) REPORTS.—Each institution of higher 

14 education, or other postsecondary educational insti15 tution, that derives 65 percent or more of revenues 

16 from Federal educational assistance funds shall re17 port annually to the Secretary and to Congress and 

18 shall include in such report— 

19 ‘‘(A) a statement of the institution’s ex20 penditures on advertising, marketing, and re21 cruiting; and 

22 ‘‘(B) a verification from an independent 

23 auditor that the institution is in compliance 

24 with the requirements of this subsection. 


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1 ‘‘(e) CERTIFICATION.—Each institution of higher 

2 education or other postsecondary educational institution 

3 receiving Federal funding under this Act, as a condition 

4 for receiving such funding, shall annually certify to the 

5 Secretary of Education that the requirements of sub6 sections (a) through (d) have been met. 

7 ‘‘(f) ACTIONS TO IMPLEMENT AND ENFORCE.—The 

8 Secretary shall take such actions as are necessary to en9 sure that the provisions of this section are implemented 

10 and enforced.’’. 

11 SEC. 5. WHISTLEBLOWER PROTECTIONS FOR PERSONS AS12 SOCIATED WITH INSTITUTIONS OF HIGHER 

13 EDUCATION. 

14 (a) WHISTLEBLOWER PROTECTION PROGRAM.—Title 

15 I of the Higher Education Act of 1965 is amended by in16 serting after section 123 (20 U.S.C. 1011l) the following 

17 new section: 

18 ‘‘SEC. 124. PROTECTION FROM RETALIATION FOR DISCLO19 SURE OF CERTAIN INFORMATION BY PER20 SONS ASSOCIATED WITH INSTITUTIONS OF 

21 HIGHER EDUCATION. 

22 ‘‘(a) PROHIBITION OF RETALIATION.— 

23 ‘‘(1) IN GENERAL.—An institution of higher 

24 education participating in programs under title IV 

25 (in this section referred to as an ‘institution’) may 


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1 not discharge, demote, or otherwise discriminate 

2 against any person as retaliation for— 

3 ‘‘(A) such person disclosing to an indi4 vidual or entity described in paragraph (2) in5 formation such person reasonably believes evi6 dences a violation of any law, rule, or regulation 

7 by the institution; or 

8 ‘‘(B) assisting a person disclosing such in9 formation or providing information or docu10 ments for use in disclosing such information. 

11 ‘‘(2) INDIVIDUALS AND ENTITIES COVERED.— 

12 The individuals and entities described in this para13 graph are: 

14 ‘‘(A) A Member of Congress or a rep15 resentative of a committee of Congress. 

16 ‘‘(B) An Executive agency (as defined in 

17 section 105 of title 5, United States Code). 

18 ‘‘(C) The Government Accountability Of19 fice. 

20 ‘‘(D) A law enforcement agency. 

21 ‘‘(E) A court or grand jury. 

22 ‘‘(F) A management official or other em23 ployee of an institution who has the responsi24 bility to investigate, discover, or address mis25 conduct. 


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1 ‘‘(b) INVESTIGATION OF COMPLAINTS.— 

2 ‘‘(1) SUBMISSION OF COMPLAINT.—A person 

3 who believes that they have been subjected to a re4 taliation prohibited by subsection (a) may submit a 

5 complaint to the Inspector General of the Depart6 ment of Education (in this section referred to as the 

7 ‘Inspector General’). Unless the Inspector General 

8 determines that the complaint is frivolous, fails to 

9 allege a violation of subsection (a), or has previously 

10 been addressed in another Federal or State judicial 

11 or administrative proceeding initiated by the com12 plainant, the Inspector General shall investigate the 

13 complaint and, upon completion of such investiga14 tion, submit a report of the findings of the investiga15 tion to the complainant, the institution concerned, 

16 and the Secretary. 

17 ‘‘(2) INSPECTOR GENERAL ACTION.— 

18 ‘‘(A) DETERMINATION OR SUBMISSION OF

19 REPORT ON FINDINGS.—Except as provided 

20 under subparagraph (B), the Inspector General 

21 shall make a determination that a complaint is 

22 frivolous, fails to allege a violation of subsection 

23 (a), or has previously been addressed in another 

24 Federal or State judicial or administrative pro25 ceeding initiated by the complainant or submit 


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1 a report under paragraph (1) not later than 

2 180 days after receiving the complaint. 

3 ‘‘(B) EXTENSION OF TIME.—If the Inspec4 tor General is unable to complete an investiga5 tion in time to submit a report within the 180- 

6 day period specified in subparagraph (A) and 

7 the complainant agrees to an extension of time, 

8 the Inspector General shall submit a report 

9 under paragraph (1) within such additional pe10 riod of time, up to 180 days, as shall be agreed 

11 upon between the Inspector General and the 

12 complainant. 

13 ‘‘(3) PROHIBITION ON DISCLOSURE.—The In14 spector General may not respond to any inquiry or 

15 disclose any information from or about any person 

16 alleging retaliation, except to the extent that such 

17 response or disclosure is— 

18 ‘‘(A) made with the consent of the person 

19 alleging the retaliation; 

20 ‘‘(B) made in accordance with the provi21 sions of section 552a of title 5, United States 

22 Code, or as required by any other applicable 

23 Federal law; or 

24 ‘‘(C) necessary to conduct an investigation 

25 of the alleged retaliation. 


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1 ‘‘(4) TIME LIMITATION.—A complaint may not 

2 be brought under this subsection more than three 

3 years after the date on which the alleged retaliation 

4 took place. 

5 ‘‘(c) REMEDY AND ENFORCEMENT AUTHORITY.— 

6 ‘‘(1) IN GENERAL.—Not later than 30 days 

7 after receiving an Inspector General report pursuant 

8 to subsection (b), the Secretary shall determine 

9 whether there is sufficient basis to conclude that the 

10 institution has violated subsection (a) and shall ei11 ther issue an order denying relief or shall take one 

12 or more of the following actions: 

13 ‘‘(A) Order the institution to take action to 

14 abate the retaliation. 

15 ‘‘(B) Order the institution to reinstate the 

16 complainant to the position that the complain17 ant held before the retaliation, together with 

18 compensatory damages (including back pay) 

19 and any other benefits, terms, or conditions 

20 that would apply to the complainant in that po21 sition if the retaliation had not occurred. 

22 ‘‘(C) Order the institution to pay the com23 plainant an amount equal to the aggregate 

24 amount of all costs and expenses (including at25 torneys’ fees and expert witness fees) that were 


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1 reasonably incurred by the complainant for, or 

2 in connection with, bringing the complaint re3 garding the retaliation, as determined by the 

4 Secretary. 

5 ‘‘(2) EXHAUSTION OF REMEDIES.—If the Sec6 retary issues an order denying relief under para7 graph (1) or has not issued an order within 210 

8 days after the submission of a complaint under sub9 section (b), or in the case of an extension of time 

10 under subsection (b)(2)(B), not later than 30 days 

11 after the expiration of the extension of time, and 

12 there is no showing that such delay is due to the bad 

13 faith of the complainant, the complainant shall be 

14 deemed to have exhausted all administrative rem15 edies with respect to the complaint, and the com16 plainant may bring a de novo action at law or equity 

17 against the institution to seek compensatory dam18 ages and other relief available under this section in 

19 the appropriate district court of the United States, 

20 which shall have jurisdiction over such an action 

21 without regard to the amount in controversy. Such 

22 an action shall, at the request of either party to the 

23 action, be tried by the court with a jury. An action 

24 under this paragraph may not be brought more than 


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1 two years after the date on which remedies are 

2 deemed to have been exhausted. 

3 ‘‘(3) ADMISSIBILITY OF EVIDENCE.—The In4 spector General determination and order of the Sec5 retary denying relief under paragraph (2) shall be 

6 admissible in evidence in any de novo action at law 

7 or equity brought pursuant to this subsection. 

8 ‘‘(4) ENFORCEMENT OF ORDERS.—Whenever a 

9 person fails to comply with an order issued under 

10 paragraph (1), the Secretary shall file an action for 

11 enforcement of such order in the United States dis12 trict court for a district in which the retaliation was 

13 found to have occurred. In any action brought under 

14 this paragraph, the court may grant appropriate re15 lief, including injunctive relief, compensatory and ex16 emplary damages, and attorneys’ fees and costs. The 

17 person upon whose behalf an order was issued may 

18 also file such an action or join in an action filed by 

19 the Secretary. 

20 ‘‘(5) JUDICIAL REVIEW.—Any person adversely 

21 affected or aggrieved by an order issued under para22 graph (1) may obtain review of the order’s conform23 ance with this subsection, and any regulations issued 

24 to carry out this section, in the United States court 

25 of appeals for a circuit in which the retaliation is alVerDate Sep 11 2014 23:16 Oct 30, 2018 Jkt 089200 PO 00000 Frm 00017 Fmt 6652 Sfmt 6201 E:\BILLS\H7112.IH H7112

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1 leged in the order to have occurred. No petition 

2 seeking such review may be filed more than 60 days 

3 after issuance of the order by the head of the execu4 tive agency. Such review shall conform to chapter 7 

5 of title 5, United States Code. Filing such an appeal 

6 shall not act to stay the enforcement of the order of 

7 the Secretary, unless a stay is specifically entered by 

8 the court. 

9 ‘‘(6) BURDENS OF PROOF.—The legal burdens 

10 of proof specified in section 1221(e) of title 5, 

11 United States Code, shall be controlling for the pur12 poses of any investigation conducted by the Inspec13 tor General, decision by the Secretary, or judicial or 

14 administrative proceeding to determine whether dis15 crimination prohibited under this section has oc16 curred. 

17 ‘‘(7) RIGHTS AND REMEDIES NOT WAIVABLE.— 

18 The rights and remedies provided for in this section 

19 may not be waived by any agreement, policy, form, 

20 or condition of employment. 

21 ‘‘(d) NOTIFICATION OF PERSONS ASSOCIATED WITH

22 INSTITUTION.—The Secretary shall ensure that each insti23 tution informs the employees, students, and contractors 

24 of the institution in writing of the rights and remedies 

25 provided under this section. 


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1 ‘‘(e) CONSTRUCTION.—Nothing in this section may 

2 be construed to authorize the discharge of, demotion of, 

3 or discrimination against a person for a disclosure other 

4 than a disclosure protected by subsection (a) or to modify 

5 or derogate from a right or remedy otherwise available 

6 such person.’’. 

7 (b) PROHIBITION OF RETALIATION.—Section 487(a) 

8 of the Higher Education Act of 1965 (20 U.S.C. 1094(a)) 

9 is amended by adding at the end the following new para10 graph: 

11 ‘‘(30) The institution will comply with the re12 quirements of section 124.’’. 

13 SEC. 6. ESTABLISHMENT OF COMPLAINT RESOLUTION AND 

14 TRACKING SYSTEM. 

15 Title I of the Higher Education Act of 1965 (20 

16 U.S.C. 1001 et seq.) is amended by adding at the end 

17 the following new part: 

18 ‘‘PART F—COMPLAINT TRACKING SYSTEM 

19 ‘‘SEC. 161. COMPLAINT TRACKING SYSTEM. 

20 ‘‘(a) ESTABLISHMENT OF COMPLAINT TRACKING

21 SYSTEM.— 

22 ‘‘(1) ESTABLISHMENT OF COMPLAINT TRACK23 ING SYSTEM.—Not later than 1 year after the enact24 ment of the PRO Students Act, the Secretary shall 

25 complete the establishment of a complaint tracking 


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1 system that includes a single, toll-free telephone 

2 number and a website to facilitate the centralized 

3 collection of, monitoring of, and response to com4 plaints or inquiries regarding the educational prac5 tices and services, and recruiting and marketing 

6 practices, of all postsecondary educational institu7 tions. 

8 ‘‘(2) ESTABLISHMENT OF COMPLAINT TRACK9 ING OFFICE.—The Secretary shall establish within 

10 the Department an office whose functions shall in11 clude establishing, administering, and disseminating 

12 widely information about the complaint tracking sys13 tem established under paragraph (1). The Secretary 

14 shall— 

15 ‘‘(A) to the extent necessary, combine and 

16 consolidate the other offices and functions of 

17 the Department to ensure that the office estab18 lished under this paragraph is the single point 

19 of contact for students and borrowers with com20 plaints; and 

21 ‘‘(B) to the extent practicable, ensure that 

22 the office established in this paragraph will 

23 work with the Student Loan Ombudsman ap24 pointed in accordance with section 141(f) to as25 sist borrowers that have complaints regarding 


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1 the educational practices and services, and re2 cruiting and marketing practices, of postsec3 ondary educational institutions. 

4 ‘‘(b) HANDLING OF COMPLAINTS.— 

5 ‘‘(1) TIMELY RESPONSE TO COMPLAINTS.—The 

6 Secretary shall establish, in consultation with the 

7 heads of appropriate agencies, reasonable procedures 

8 to provide a timely response to complainants, in 

9 writing where appropriate, to complaints against, or 

10 inquiries concerning, an institution of higher edu11 cation that receives funds under this Act. Each re12 sponse shall include a description of— 

13 ‘‘(A) the steps that have been taken by the 

14 Secretary in response to the complaint or in15 quiry; 

16 ‘‘(B) any responses received by the Sec17 retary from the institution of higher education; 

18 and 

19 ‘‘(C) any additional actions that the Sec20 retary has taken, or plans to take, in response 

21 to the complaint or inquiry. 

22 ‘‘(2) TIMELY RESPONSE TO SECRETARY BY IN23 STITUTION OF HIGHER EDUCATION.—The Secretary 

24 shall notify each institution of higher education that 

25 receives funds under this Act and that is the subject 


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1 of a complaint or inquiry under this section regard2 ing the complaint or inquiry. Not later than 60 days 

3 after receiving such notice, such institution shall 

4 provide a response to the Secretary concerning the 

5 complaint or inquiry, including— 

6 ‘‘(A) the steps that have been taken by the 

7 institution to respond to the complaint or in8 quiry; 

9 ‘‘(B) all responses received by the institu10 tion from the complainant; and 

11 ‘‘(C) any additional actions that the insti12 tution has taken, or plans to take, in response 

13 to the complaint or inquiry. 

14 ‘‘(3) FURTHER INVESTIGATION.—The Secretary 

15 may, in the event that the complaint is not ade16 quately resolved or addressed by the responses of the 

17 institution of higher education receiving funds under 

18 this Act under paragraph (2), ask additional ques19 tions of such institution or seek additional informa20 tion from or action by the institution. 

21 ‘‘(4) PROVISION OF INFORMATION.— 

22 ‘‘(A) IN GENERAL.—An institution of high23 er education that receives funds under this Act 

24 shall, in a timely manner, comply with a re25 quest by the Secretary for information in the 


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1 control or possession of such institution con2 cerning a complaint or inquiry received by the 

3 Secretary under subsection (a), including sup4 porting written documentation, subject to sub5 paragraph (B). 

6 ‘‘(B) EXCEPTIONS.—An institution of 

7 higher education that receives funds under this 

8 Act shall not be required to make available 

9 under this subsection— 

10 ‘‘(i) any nonpublic or confidential in11 formation, including any confidential com12 mercial information; 

13 ‘‘(ii) any information collected by the 

14 institution for the purpose of preventing 

15 fraud or detecting or making any report 

16 regarding other unlawful or potentially un17 lawful conduct; or 

18 ‘‘(iii) any information required to be 

19 kept confidential by any other provision of 

20 law. 

21 ‘‘(5) COMPLIANCE.—An institution of higher 

22 education that receives funds under this Act shall 

23 comply with the requirements to provide responses 

24 and information, in accordance with this subsection, 

25 as a condition of receiving such funds. 


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1 ‘‘(c) TRANSPARENCY.— 

2 ‘‘(1) SHARING INFORMATION WITH FEDERAL

3 AND STATE AGENCIES.—As appropriate and in ac4 cordance with section 444 of the General Education 

5 Provisions Act (20 U.S.C. 1232g) (commonly re6 ferred to as the ‘‘Family Educational Rights and 

7 Privacy Act of 1974’’) and other laws, the Secretary 

8 shall coordinate with the heads of relevant Federal 

9 and State agencies to— 

10 ‘‘(A) collect complaints related to the com11 plaint tracking system described in subsection 

12 (b) from such agencies; and 

13 ‘‘(B) when appropriate, route such com14 plaints to the Department of Education, the 

15 Department of Justice, the Department of De16 fense, the Department of Veterans Affairs, the 

17 Federal Trade Commission, the Consumer Fi18 nancial Protection Bureau, or any equivalent 

19 State agency. 

20 ‘‘(2) INTERACTION WITH EXISTING COMPLAINT

21 SYSTEMS.—To the extent practicable, all procedures 

22 established under this section, and all coordination 

23 carried out under paragraph (1), shall be done in ac24 cordance with the complaint tracking systems estab25 lished under Executive Order 13607 (77 Fed. Reg. 


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1 25861; relating to establishing principles of excel2 lence for educational institutions serving 

3 servicemembers, veterans, spouses, and other family 

4 members). 

5 ‘‘(3) PUBLIC INFORMATION.— 

6 ‘‘(A) IN GENERAL.—The Secretary shall 

7 regularly publish on the website of the Depart8 ment information on the complaints and inquir9 ies received for each postsecondary educational 

10 institution under this section, including— 

11 ‘‘(i) the number of complaints and in12 quiries received; 

13 ‘‘(ii) the types of complaints and in14 quiries received; and 

15 ‘‘(iii) where applicable, information 

16 about the resolution of the complaints and 

17 inquiries. 

18 ‘‘(B) DATA PRIVACY.—In carrying out sub19 paragraph (A), the Secretary shall— 

20 ‘‘(i) comply with applicable data pri21 vacy laws and regulations; and 

22 ‘‘(ii) ensure that personally identifi23 able information is not shared. 


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1 ‘‘(4) REPORTS.—Each year, the Secretary shall 

2 prepare and submit to the authorizing committees a 

3 report describing— 

4 ‘‘(A) the types and nature of complaints 

5 the Secretary has received under this section; 

6 ‘‘(B) the extent to which complainants are 

7 receiving relief pursuant to this section; 

8 ‘‘(C) whether particular types of com9 plaints are more common in a given sector of 

10 postsecondary educational institutions; 

11 ‘‘(D) any legislative recommendations that 

12 the Secretary determines are necessary to bet13 ter assist students and families; and 

14 ‘‘(E) the schools with the highest volume 

15 of complaints, as determined by the Secretary. 

16 ‘‘(d) COMPLAINANT DEFINED.—In this section, the 

17 term ‘complainant’ means a person with a complaint 

18 against, or inquiry concerning, an institution of higher 

19 education that receives funds under this Act who is— 

20 ‘‘(1) a student of a postsecondary educational 

21 institution; 

22 ‘‘(2) a family member of a student of a postsec23 ondary educational institution; 

24 ‘‘(3) a third party acting on behalf of a student 

25 of a postsecondary educational institution; or 


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1 ‘‘(4) a staff member or employee of a postsec2 ondary educational institution.’’. 

3 SEC. 7. IMPROVED DETERMINATION OF COHORT DEFAULT 

4 RATES; PUBLICATION OF DEFAULT PREVEN5 TION PLAN. 

6 Section 435 of the Higher Education Act of 1965 (20 

7 U.S.C. 1085) is amended— 

8 (1) in subsection (a)— 

9 (A) in paragraph (2), by adding at the end 

10 the following new subparagraph: 

11 ‘‘(D) In any case where the Secretary has de12 termined that the institution has engaged in default 

13 manipulation, the Secretary— 

14 ‘‘(i) shall recalculate the cohort default 

15 rate for the institution under this section using 

16 corrected data and information, for all fiscal 

17 years for which the default manipulation has 

18 occurred; and 

19 ‘‘(ii) using the recalculated cohort default 

20 rate, shall redetermine under subsection (a)(2) 

21 whether the institution is ineligible to partici22 pate in a program under this title.’’; and 

23 (B) in paragraph (7)(A), by adding at the 

24 end the following new clause: 


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1 ‘‘(iii) SUMMARY OF DEFAULT PRE2 VENTION PLAN.—Upon receiving technical 

3 assistance from the Secretary under clause 

4 (ii), each institution subject to this sub5 paragraph shall— 

6 ‘‘(I) prepare a summary of the 

7 plan described under clause (i) that is 

8 directed to a student audience; 

9 ‘‘(II) make the summary publicly 

10 available; and 

11 ‘‘(III) provide the summary to 

12 students at the institution.’’; and 

13 (2) in subsection (m)(3), by striking ‘‘through 

14 the use of’’ and all that follows through the period 

15 at the end and inserting ‘‘through default manipula16 tion’’. 

17 SEC. 8. AMENDMENTS TO TERMS AND CONDITIONS OF BOR18 ROWER DEFENSES. 

19 Section 455(h) of the Higher Education Act of 1965 

20 (20 U.S.C. 1087e(h)) is amended to read as follows: 

21 ‘‘(h) BORROWER DEFENSES.— 

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

23 provision of State or Federal law, a defense to re24 payment of a loan under this title includes— 


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1 ‘‘(A) a substantial misrepresentation under 

2 section 487(c)(3); 

3 ‘‘(B) an act or omission that would give 

4 rise to a cause of action against the school 

5 under applicable State law; or 

6 ‘‘(C) such further acts or omissions that 

7 the Secretary determines appropriate. 

8 ‘‘(2) PROCEDURES.— 

9 ‘‘(A) IN GENERAL.—The Secretary shall, 

10 with respect to a borrower defense under this 

11 subsection— 

12 ‘‘(i) determine the entitlement of a 

13 borrower to relief based on all evidence 

14 available to the Department; and 

15 ‘‘(ii) provide an expeditious and fair 

16 process to consider applications provided 

17 by individuals, groups, and representatives 

18 on behalf of groups. 

19 ‘‘(B) INDEPENDENT DETERMINATION.—A 

20 determination under subparagraph (A)(i) shall 

21 be independent of any action that the Depart22 ment may take to recoup from the school re23 lated to the borrower defense. 

24 ‘‘(C) CANCELLATION OF DEBT.—If the 

25 Secretary determines under subparagraph 


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1 (A)(i) that a borrower is entitled to relief, the 

2 Secretary shall cancel all outstanding debt, and 

3 return any payments made on the loans of such 

4 borrower. 

5 ‘‘(3) REGULATIONS.—The Secretary shall speci6 fy in regulations which acts or omissions of an insti7 tution of higher education a borrower may assert as 

8 a defense to repayment of a loan made under this 

9 part, except that in no event may a borrower recover 

10 from the Secretary, in any action arising from or re11 lating to a loan made under this part, an amount in 

12 excess of the amount such borrower has repaid on 

13 such loan.’’. 

14 SEC. 9. IMPROVED STUDENT LOAN SERVICING AND DEBT 

15 COLLECTION PRACTICES. 

16 Section 456 of the Higher Education Act of 1965 (20 

17 U.S.C. 1087f) is amended by adding at the end the fol18 lowing new subsection: 

19 ‘‘(c) NO PREDISPUTE ARBITRATION CLAUSES.—A 

20 contract entered into under this section for the servicing 

21 of loans made or purchased under this part shall include 

22 a provision that any rights and remedies available to bor23 rowers against the servicer may not be waived by any 

24 agreement, policy, or form, including by a predispute arbi25 tration agreement.’’. 


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1 SEC. 10. IMPROVED DISCLOSURES, COUNSELING, AND FI2 NANCIAL ASSISTANCE INFORMATION FOR 

3 STUDENTS. 

4 Section 485(l) of the Higher Education Act of 1965 

5 (20 U.S.C. 1092(l)) is amended— 

6 (1) by striking paragraph (1) and inserting the 

7 following new paragraph: 

8 ‘‘(1) DISCLOSURE REQUIRED PRIOR TO SIGNING

9 MASTER PROMISSORY NOTE.—Each eligible institu10 tion shall, prior to obtaining or arranging execution 

11 of a master promissory note for a loan under part 

12 D (other than a Federal Direct Consolidation Loan) 

13 by a first-time borrower at such institution, ensure 

14 that the borrower receives comprehensive informa15 tion on the terms and conditions of the loan and of 

16 the responsibilities the borrower has with respect to 

17 such loan in accordance with paragraph (2). Such 

18 information— 

19 ‘‘(A) shall be provided through the use of 

20 interactive programs that include mechanisms 

21 to check the borrower’s comprehension of the 

22 terms and conditions of the borrower’s loans 

23 under part D, using simple and understandable 

24 language and clear formatting; and 

25 ‘‘(B) shall be provided— 


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1 ‘‘(i) during an entrance counseling 

2 session conducted in person; or 

3 ‘‘(ii) online.’’; and 

4 (2) in paragraph (2), by adding at the end the 

5 following new subparagraph: 

6 ‘‘(L) Information relating to the institu7 tion’s cohort default rate, including— 

8 ‘‘(i) the cohort default rate, as defined 

9 in section 435(m), of the institution; 

10 ‘‘(ii) an easy to understand expla11 nation of the cohort default rate; 

12 ‘‘(iii) the percentage of students at 

13 the institution of higher education who 

14 borrow Federal student loans under this 

15 title; 

16 ‘‘(iv) the national average cohort de17 fault rate (as determined by the Secretary 

18 in accordance with section 435(m)); 

19 ‘‘(v) in the case of an institution with 

20 a cohort default rate that is greater than 

21 the national average cohort default rate (as 

22 described in clause (iv)), a disclosure to the 

23 student that the institution’s cohort de24 fault rate is above the national average; 

25 and 


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1 ‘‘(vi) in the case of an institution with 

2 a cohort default rate that is greater than 

3 30 percent, a disclosure to the students 

4 that if the cohort default rate remains 

5 greater than 30 percent for the 3 consecu6 tive years— 

7 ‘‘(I) the institution will lose insti8 tutional eligibility for the purposes of 

9 programs authorized under this title; 

10 and 

11 ‘‘(II) the student will no longer 

12 be able to receive Federal financial aid 

13 at that institution.’’. 

14 SEC. 11. PROGRAM PARTICIPATION AGREEMENTS. 

15 (a) SENSE OF CONGRESS REGARDING INCENTIVE

16 COMPENSATION.—It is the sense of Congress that— 

17 (1) incentive compensation is an inappropriate 

18 mechanism in the delivery of higher education for in19 stitutions of higher education wishing to participate 

20 in programs under title IV of the Higher Education 

21 Act of 1965 (20 U.S.C. 1001 et seq.); and 

22 (2) the ban on incentive compensation under 

23 section 487(a)(20) of the Higher Education Act of 

24 1965 (20 U.S.C. 1094(a)(20)), as amended by sub25 section (b), is intended to preclude its use by instituVerDate Sep 11 2014 23:16 Oct 30, 2018 Jkt 089200 PO 00000 Frm 00033 Fmt 6652 Sfmt 6201 E:\BILLS\H7112.IH H7112

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1 tions wishing to participate in such programs, at any 

2 point in the recruitment, enrollment, education, or 

3 employment placement of students. 

4 (b) AMENDMENTS.—Section 487 of the Higher Edu5 cation Act of 1965 (20 U.S.C. 1094) is amended— 

6 (1) in subsection (a)— 

7 (A) in paragraph (19), by inserting ‘‘hous8 ing facilities,’’ after ‘‘libraries,’’; 

9 (B) by striking paragraph (20) and insert10 ing the following: 

11 ‘‘(20)(A) The institution or any third party act12 ing on the institution’s behalf, including an institu13 tion affiliate or service provider to the institution, 

14 will not provide any commission, bonus, or other in15 centive payment to any person or entity at any 

16 phase of the academic process based directly or indi17 rectly on success in— 

18 ‘‘(i) securing enrollments or securing or award19 ing financial aid; 

20 ‘‘(ii) performance in educational coursework; 

21 ‘‘(iii) graduation; 

22 ‘‘(iv) job placement; or 

23 ‘‘(v) any other academic facet of a student’s en24 rollment in an institution of higher education. 


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1 ‘‘(B) The requirements of subparagraph (A) shall not 

2 apply to the recruitment of foreign students residing in 

3 foreign countries who are not eligible to receive Federal 

4 student assistance.’’; and 

5 (C) by adding at the end the following new 

6 paragraphs: 

7 ‘‘(30)(A) The institution— 

8 ‘‘(i) shall not include a predispute arbitra9 tion agreement in any contract with a student 

10 or prospective student for enrollment at the in11 stitution; and 

12 ‘‘(ii) shall agree that, in any case where a 

13 contract for enrollment at the institution en14 tered into by a student before the date of enact15 ment of the Protections and Regulation for Our 

16 Students Act included a predispute arbitration 

17 agreement, such agreement shall be invalid and 

18 unenforceable by the institution. 

19 ‘‘(B) In this paragraph, the term ‘predispute 

20 arbitration agreement’ means any agreement to arbi21 trate a dispute that had not yet arisen at the time 

22 of the making of the agreement. 

23 ‘‘(31)(A) If the institution has a student default 

24 risk for a fiscal year, as calculated by the Secretary, 


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1 of 0.1 or greater, the institution will, for such 

2 year— 

3 ‘‘(i) provide an individual accepted for en4 rollment at the institution with a waiting pe5 riod, beginning on the date that the individual 

6 receives notification of the acceptance and last7 ing for not less than 2 weeks, before the indi8 vidual is required to enroll in the institution, 

9 pay tuition charges, or sign a master promis10 sory note for a loan under this title, in order to 

11 give the individual time to consider, and com12 pare among postsecondary options, program 

13 costs at the institution and employment pros14 pects upon completion of a program of study; 

15 ‘‘(ii) ensure that the receipt of financial 

16 aid, incentives, or other benefits is not made 

17 contingent on an individual confirming enroll18 ment before the end of the individual’s waiting 

19 period; 

20 ‘‘(iii) inform the individual, in writing and 

21 in a manner determined by the Secretary at the 

22 time of the acceptance notification, of— 

23 ‘‘(I) the individual’s right to the 2- 

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1 ning on the date that the individual re2 ceives notification of the acceptance; and 

3 ‘‘(II) the reason why the institution is 

4 required to provide such waiting period; 

5 ‘‘(iv) notify an individual accepted for en6 rollment at the institution of all financial aid 

7 determinations by not less than 1 week before 

8 the enrollment confirmation deadline, if all re9 quested application forms are received from the 

10 individual on time; and 

11 ‘‘(v) disclose to an individual accepted for 

12 enrollment, in a manner determined by the Sec13 retary, that the individual may file a complaint 

14 through the complaint tracking system estab15 lished under section 161 if the individual be16 lieves that the institution has violated any pro17 vision of this paragraph. 

18 ‘‘(B) If an institution described in subpara19 graph (A) fails to meet the requirements of this 

20 paragraph, the institution shall be subject to a civil 

21 penalty in accordance with section 489A. 

22 ‘‘(C) Notwithstanding subparagraph (A), the 

23 Secretary may, after providing notice and an oppor24 tunity to comment, elect to replace the use of the 

25 student default risk percentage threshold established 


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1 under subparagraph (A) with a loan repayment rate 

2 threshold calculated in accordance with section 

3 483D(b).’’; and 

4 (2) in subsection (c)(1)(A)(i), by striking 

5 ‘‘available’’ and inserting ‘‘made publicly available 

6 and provided’’. 

7 SEC. 12. IMPROVED DISCLOSURES FOR CLINICAL TRAIN8 ING PROGRAMS. 

9 Section 485 of the Higher Education Act of 1965 (20 

10 U.S.C. 1092) is amended by adding at the end the fol11 lowing new subsection: 

12 ‘‘(n) REPORTS RELATING TO CLINICAL TRAINING

13 PROGRAMS.— 

14 ‘‘(1) REPORT ON CLINICAL TRAINING PROGRAM

15 AGREEMENTS.— 

16 ‘‘(A) IN GENERAL.—Beginning in the year 

17 in which the Protections and Regulation for 

18 Our Students Act is enacted, an eligible institu19 tion that participates in any program under this 

20 title shall prepare and submit a report to the 

21 Secretary containing the information described 

22 in subparagraph (C), for every year in which 

23 the eligible institution has an agreement with a 

24 hospital or health facility, through which— 


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1 ‘‘(i) the eligible institution agrees to 

2 provide funding or other benefits to the 

3 hospital or health facility; and 

4 ‘‘(ii) that hospital or health facility 

5 provides opportunities for students at the 

6 institution to participate in a clinical train7 ing program. 

8 ‘‘(B) TIMING.—Following the year in 

9 which the Protections and Regulation for Our 

10 Students Act is enacted, the report described in 

11 this paragraph shall be submitted not more 

12 than 30 days after the end of any year for 

13 which a report is required to comply with sub14 paragraph (A). 

15 ‘‘(C) CONTENTS OF REPORT.—The report 

16 described in this paragraph shall include the 

17 following: 

18 ‘‘(i) The amount of any payments 

19 from the institution of higher education to 

20 a hospital or health facility during the pe21 riod covered by the report, and the precise 

22 terms of any agreement under which such 

23 amounts are determined. 

24 ‘‘(ii) Any conditions associated with 

25 the transfer of money or the provision of 


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1 clinical training program opportunities 

2 that are part of the agreement described in 

3 subparagraph (A). 

4 ‘‘(iii) Any memorandum of under5 standing between the institution of higher 

6 education, or an alumni association or 

7 foundation affiliated with or related to 

8 such institution, and a hospital or health 

9 facility, that directly or indirectly relates to 

10 any aspect of any agreement referred to in 

11 subparagraph (A) or controls or directs 

12 any obligations or distribution of benefits 

13 between or among any such entities. 

14 ‘‘(iv) For each hospital or health facil15 ity that has an agreement described in 

16 subparagraph (A) with the institution, the 

17 number of clinical training positions at the 

18 hospital or health facility that are reserved 

19 for students at that institution. 

20 ‘‘(2) REPORT ON CHARITABLE DONATIONS.— 

21 ‘‘(A) IN GENERAL.—Beginning in the year 

22 in which the Protections and Regulation for 

23 Our Students Act is enacted, and annually 

24 thereafter, an eligible institution shall prepare 

25 and submit to the Secretary a report containing 


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1 the information described in subparagraph (C) 

2 if— 

3 ‘‘(i) the eligible institution made a 

4 charitable donation to a hospital or health 

5 facility in any of the previous 3 years; and 

6 ‘‘(ii) the number of students from the 

7 eligible institution who participate in any 

8 clinical training program at the hospital or 

9 health facility where such a donation was 

10 made increases by more than 5 students or 

11 10 percent, whichever is less, as compared 

12 to the number of such students who par13 ticipated in a clinical training program at 

14 that hospital or health facility during the 

15 first year in the previous 3-year period. 

16 ‘‘(B) TIMING.—Following the year in 

17 which the Protections and Regulation for Our 

18 Students Act is enacted, the report described in 

19 subparagraph (A) shall be submitted not more 

20 than 30 days after the end of any year for 

21 which a report is required to comply with sub22 paragraph (A). 

23 ‘‘(C) CONTENTS OF REPORT.—The report 

24 described in this paragraph shall include the 

25 following: 


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1 ‘‘(i) The amount of each charitable 

2 donation that was made in the previous 3- 

3 year period by the eligible institution to a 

4 hospital or health facility. 

5 ‘‘(ii) The number of students from the 

6 eligible institution who participate in any 

7 clinical training program at the hospital or 

8 health facility where each such donation 

9 was made— 

10 ‘‘(I) during the year in which the 

11 report is submitted; and 

12 ‘‘(II) during the first year in the 

13 previous 3-year period covered by the 

14 report. 

15 ‘‘(3) AGGREGATION BY INSTITUTION.—The in16 formation required to be reported in this subsection 

17 shall include, and shall be aggregated with respect 

18 to, each institution of higher education and each 

19 alumni association or foundation affiliated with or 

20 related to such institution. For any year in which an 

21 institution is required to submit a report described 

22 under paragraph (1) and a report described under 

23 paragraph (2), the institution may submit a single 

24 report for that year containing all of the information 

25 required under paragraphs (1) and (2). 


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1 ‘‘(4) REPORT TO CONGRESS.—The Secretary, in 

2 conjunction with the Secretary of Health and 

3 Human Services, shall submit to Congress, and 

4 make available to the public, an annual report that 

5 lists the reports submitted to the Secretary by each 

6 institution of higher education in accordance with 

7 this subsection. 

8 ‘‘(5) PUBLIC DISCLOSURE.—Each eligible insti9 tution described in paragraph (1) or (2) of this sub10 section shall make readily available the reports de11 scribed in such paragraph (as applicable), through 

12 appropriate publications, mailings, and electronic 

13 media to the general public. 

14 ‘‘(6) DEFINITIONS.—In this subsection: 

15 ‘‘(A) CLINICAL TRAINING PROGRAM.—The 

16 term ‘clinical training program’ means any pro17 gram at, or associated or affiliated with, a hos18 pital or health facility (or any of a hospital’s af19 filiates or health facility’s affiliates), the com20 pletion of which fulfills a requirement that is 

21 necessary to receive a license, certificate, spe22 cialized accreditation, or other academically re23 lated pre-condition necessary under Federal or 

24 State law for a health profession. 


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1 ‘‘(B) HEALTH FACILITY.—The term 

2 ‘health facility’ has the meaning given that 

3 term in section 804(d). 

4 ‘‘(C) HOSPITAL.—The term ‘hospital’ has 

5 the meaning given that term in section 1861 of 

6 the Social Security Act (42 U.S.C. 1395x).’’. 

7 SEC. 13. CIVIL PENALTIES. 

8 Part G of title IV of the Higher Education Act of 

9 1965 (20 U.S.C. 1088 et seq.) is amended by inserting 

10 after section 489 the following new section: 

11 ‘‘SEC. 489A. CIVIL PENALTIES AND OTHER REMEDIES. 

12 ‘‘(a) SANCTIONS FOR SUBSTANTIAL MISREPRESEN13 TATIONS OR SERIOUS VIOLATIONS.— 

14 ‘‘(1) CIVIL PENALTIES.—The Secretary may 

15 impose a civil penalty upon an eligible institution 

16 upon making a determination, after reasonable no17 tice and opportunity for a hearing, that an eligible 

18 institution has engaged in a substantial misrepresen19 tation or other serious violation. 

20 ‘‘(2) AMOUNT OF CIVIL PENALTIES.—A civil 

21 penalty imposed for a violation under subparagraph 

22 (A) shall be not less than $100,000 or— 

23 ‘‘(A) in the case of a first violation, an 

24 amount equal to the product of $1,000,000 


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1 multiplied by the institution’s student default 

2 risk, whichever is larger; 

3 ‘‘(B) in the case of a second violation, an 

4 amount equal to the product of $2,000,000 

5 multiplied by the institution’s student default 

6 risk, whichever is larger; and 

7 ‘‘(C) in the case of a third or subsequent 

8 violation, an amount equal to the product of 

9 $3,000,000 multiplied by the institution’s stu10 dent default risk, whichever is larger. 

11 ‘‘(3) TREATMENT OF MULTIPLE INSTITU12 TIONS.—For the purpose of determining the number 

13 of violations for subparagraph (B), any violation by 

14 a particular institution will accrue against all identi15 fication codes used by the Office of Postsecondary 

16 Education to designate campuses and institutions 

17 affiliated with the institution, and within the period 

18 of participation for the institution, as defined in sec19 tion 668.13(b) of title 34, Code of Federal Regula20 tions, or any successor regulation. 

21 ‘‘(b) SANCTIONS FOR OTHER VIOLATIONS OF THIS

22 TITLE.—Upon determination, after reasonable notice and 

23 opportunity for a hearing, that an eligible institution has 

24 engaged in a violation of any other provision of this title, 

25 including the failure to carry out any provision of this 


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1 title, that is not a significant misrepresentation or other 

2 serious violation, the Secretary may impose a civil penalty 

3 upon such institution of not more than $100,000 (subject 

4 to such adjustments for inflation as the Secretary may 

5 prescribe by regulation) for each such violation. 

6 ‘‘(c) CIVIL PENALTIES AND SANCTIONS FOR OFFI7 CERS OF INSTITUTIONS.—Upon determination, after rea8 sonable notice and an opportunity for a hearing on the 

9 record, that an officer of an institution of higher education 

10 that participates in a program under this title has know11 ingly and willfully, or with gross negligence, violated a pro12 vision of this title, the Secretary may sanction the officer. 

13 Such sanctions may include the following: 

14 ‘‘(1) Prohibiting the institution of higher edu15 cation that has employed the officer of an institution 

16 of higher education and that participates in a pro17 gram under this title, or any other institution of 

18 higher education that participates in a program 

19 under this title, from employing the officer, except 

20 that any such prohibition under this subsection shall 

21 not be for a period of more than 5 years from the 

22 date of the determination of the violation. 

23 ‘‘(2) Assessing a civil penalty against an officer 

24 of an institution of higher education who has know25 ingly and willfully, or with gross negligence, violated 


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1 a provision of this title, except that any such civil 

2 penalty under this subsection shall not be greater 

3 than the amount of the officer’s compensation for 

4 each year for which the violations are determined to 

5 have occurred. For purposes of this subparagraph, 

6 an officer’s compensation shall include proceeds of 

7 any sales of stock and any incentive-based com8 pensation (including stock options awarded as com9 pensation) based on information required to be re10 ported to the Secretary or any other Federal agency 

11 during the period in which the violations are deter12 mined to have occurred. 

13 ‘‘(d) LIMITATION, SUSPENSION, OR TERMINATION OF

14 ELIGIBILITY STATUS.— 

15 ‘‘(1) IN GENERAL.—Upon determination, after 

16 reasonable notice and opportunity for a hearing, that 

17 an eligible institution has engaged in a violation of 

18 any provision of this title (including the failure to 

19 carry out any provision of this title or any regulation 

20 prescribed under such provision) or a violation of 

21 any applicable special arrangement, agreement, or 

22 limitation, the Secretary may limit, suspend, or ter23 minate the participation in any program under this 

24 title of an eligible institution, subject to the require25 ments of paragraph (2). 


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1 ‘‘(2) SUSPENSION PROCEDURES.—No period of 

2 suspension under this section shall exceed 60 days 

3 unless the institution and the Secretary agree to an 

4 extension or unless limitation or termination pro5 ceedings are initiated by the Secretary within that 

6 period of time. 

7 ‘‘(e) EMERGENCY ACTION.— 

8 ‘‘(1) IN GENERAL.—The Secretary may take an 

9 emergency action against an institution, under which 

10 the Secretary shall, effective on the date on which a 

11 notice and statement of the basis of the action is 

12 mailed to the institution (by registered mail, return 

13 receipt requested), withhold funds from the institu14 tion or its students and withdraw the institution’s 

15 authority to obligate funds under any program 

16 under this title, if the Secretary— 

17 ‘‘(A) receives information, determined by 

18 the Secretary to be reliable, that the institution 

19 is violating any provision of this title, any regu20 lation prescribed under this title, or any appli21 cable special arrangement, agreement, or limita22 tion; 

23 ‘‘(B) determines that immediate action is 

24 necessary to prevent misuse of Federal funds; 

25 and 


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1 ‘‘(C) determines that the likelihood of loss 

2 outweighs the importance of the procedures pre3 scribed in subsection (e) for limitation, suspen4 sion, or termination. 

5 ‘‘(2) TIME LIMITATION.—An emergency action 

6 described in paragraph (1) shall not exceed 30 days 

7 unless limitation, suspension, or termination pro8 ceedings are initiated by the Secretary against the 

9 institution within that period of time. 

10 ‘‘(3) OPPORTUNITY TO SHOW CAUSE.—The Sec11 retary shall provide an institution that is the subject 

12 of an emergency action under this subsection an op13 portunity to show cause, if the institution so re14 quests, that the emergency action is unwarranted 

15 and should be lifted. 

16 ‘‘(f) LIFTING OF SANCTIONS.—Notwithstanding any 

17 other provision of this title, an institution of higher edu18 cation that has been sanctioned by the Secretary under 

19 this section or any other provision of this title may not 

20 have such sanctions lifted until the Secretary has con21 ducted a subsequent program review under section 498A 

22 and has found the institution to be in compliance with this 

23 title. 

24 ‘‘(g) SINGLE COURSE OF CONDUCT; COMPROMISE

25 AUTHORITY AND COLLECTION OF PENALTY.— 


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1 ‘‘(1) SAME COURSE OF CONDUCT.—For pur2 poses of this section, acts and omissions relating to 

3 a single course of conduct shall be treated as a sin4 gle violation. 

5 ‘‘(2) COMPROMISE AUTHORITY.—Any civil pen6 alty under this section may be compromised (but not 

7 eliminated) by the Secretary. In determining the 

8 amount of such penalty, or the amount agreed upon 

9 in compromise, the Secretary shall consider— 

10 ‘‘(A) the appropriateness of the penalty to 

11 the size of the institution of higher education 

12 subject to the determination; and 

13 ‘‘(B) the gravity of the violation, failure, or 

14 misrepresentation. 

15 ‘‘(h) COLLECTION OF PENALTY.—The amount of any 

16 penalty under this section may be deducted from any sums 

17 owing by the United States to the institution charged. 

18 ‘‘(i) DISPOSITION OF AMOUNTS RECOVERED.— 

19 ‘‘(1) IN GENERAL.—Amounts collected under 

20 this section shall be transferred to the Secretary, 

21 who shall determine the distribution of collected 

22 amounts, in accordance with paragraphs (2) and (3). 

23 ‘‘(2) USE FOR PROGRAM INTEGRITY EFFORTS

24 AND PROGRAM REVIEWS.— 


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1 ‘‘(A) IN GENERAL.—For each fiscal year, 

2 an amount equal to not more than 50 percent 

3 of the amounts recovered or collected under this 

4 section— 

5 ‘‘(i) shall be available to the Secretary 

6 to carry out program reviews under section 

7 498A and other efforts by the Secretary 

8 related to program integrity under part H; 

9 and 

10 ‘‘(ii) may be credited, if applicable, for 

11 that purpose by the Secretary to any ap12 propriations and funds that are available 

13 to the Secretary for obligation at the time 

14 of collection. 

15 ‘‘(B) SUPPLEMENT NOT SUPPLANT.— 

16 Amounts made available under subparagraph 

17 (A) shall be used to supplement and not sup18 plant any other amounts available to the Sec19 retary for the purpose described in such sub20 paragraph. 

21 ‘‘(C) AVAILABILITY FOR FUNDS.—Any 

22 amounts collected under this section that are 

23 made available under paragraph (2) shall re24 main available until expended. 


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1 ‘‘(3) USE FOR STUDENT RELIEF FUND.—For 

2 each fiscal year, an amount equal to not less than 

3 50 percent of the amounts recovered or collected 

4 under this section shall be deposited into the Stu5 dent Relief Fund established under subsection (k). 

6 ‘‘(4) REPORT.—The Secretary shall regularly 

7 publish, on the website of the Department, a de8 tailed description that includes— 

9 ‘‘(A) the amount of funds that were dis10 tributed for the purposes described in para11 graph (2) and the amount used for the Student 

12 Relief Fund under paragraph (3); and 

13 ‘‘(B) how funds were distributed among 

14 the purposes described in paragraph (2)(A)(i). 

15 ‘‘(j) STUDENT RELIEF FUND.— 

16 ‘‘(1) ESTABLISHMENT.—The Secretary shall es17 tablish a Student Relief Fund (referred to in this 

18 subsection as the ‘Fund’) that shall be used, subject 

19 to the availability of funds, to provide financial relief 

20 to any student enrolled in an institution of higher 

21 education that— 

22 ‘‘(A) has failed to comply with an eligi23 bility requirement under section 101 or 102 or 

24 an obligation incurred under the terms of the 


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1 program participation agreement under section 

2 487; or 

3 ‘‘(B) has been sanctioned under subsection 

4 (b) or (c). 

5 ‘‘(2) DETERMINATION OF RELIEF.—The Sec6 retary, in consultation with Director of the Bureau 

7 of Consumer Financial Protection— 

8 ‘‘(A) shall determine the manner of relief 

9 to be provided under paragraph (1), which may 

10 include tuition reimbursement, full or partial 

11 loan forgiveness, or loan reinstatement; and 

12 ‘‘(B) may issue regulations regarding how 

13 the amounts in the Fund will be distributed 

14 among students eligible for the funds. 

15 ‘‘(3) TREATMENT AND AVAILABILITY OF

16 FUNDS.— 

17 ‘‘(A) FUNDS THAT ARE NOT GOVERNMENT

18 FUNDS.—Funds obtained by or transferred to 

19 the Fund shall not be construed to be Govern20 ment funds or appropriated monies. 

21 ‘‘(B) AMOUNTS NOT SUBJECT TO APPOR22 TIONMENT.—Notwithstanding any other provi23 sion of law, amounts in the Fund shall not be 

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1 ter 15 of title 31, United States Code, or under 

2 any other authority. 

3 ‘‘(C) NO FISCAL YEAR LIMITATION.—Sums 

4 deposited in the Fund shall remain in the Fund 

5 and be available for expenditure under this 

6 chapter without fiscal year limitation. 

7 ‘‘(4) INVESTMENTS.— 

8 ‘‘(A) AMOUNTS IN FUND MAY BE IN9 VESTED.—The Secretary of Education may re10 quest the Secretary of the Treasury to invest 

11 the portion of the Fund that is not, in the dis12 cretion of the Secretary of Education, required 

13 to meet the current needs of the Fund. 

14 ‘‘(B) ELIGIBLE INVESTMENTS.—Invest15 ments shall be made by the Secretary of the 

16 Treasury in obligations of the United States or 

17 obligations that are guaranteed as to principal 

18 and interest by the United States, with matu19 rities suitable to the needs of the Fund as de20 termined by the Secretary on the record. 

21 ‘‘(C) INTEREST AND PROCEEDS CRED22 ITED.—The interest on, and the proceeds from 

23 the sale or redemption of, any obligations held 

24 in the Fund shall be credited to the Fund. 


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1 ‘‘(5) REGULATIONS.—The Secretary shall pre2 scribe regulations to implement the requirements of 

3 this section within 1 year after the date of enact4 ment of the PRO Students Act. 

5 ‘‘(6) AUTHORIZATION OF APPROPRIATIONS.—In 

6 addition to funds derived from financial penalties as7 sessed pursuant to subsection (j), there are author8 ized to be appropriated such sums as may be nec9 essary to carry out this subsection. 

10 ‘‘(k) STATE ENFORCEMENT.— 

11 ‘‘(1) IN GENERAL.—Any violation of subsection 

12 (b), including the regulations promulgated under 

13 such subsection, shall be a cause of action enforce14 able by the State, through the attorney general (or 

15 the equivalent thereof) of the State, in any district 

16 court of the United States in that State or in a 

17 State court that is located in that State and that 

18 has jurisdiction over the defendant. The State may 

19 seek any relief provided under paragraph (4)(B) for 

20 such violation, or any remedies otherwise provided 

21 under law. 

22 ‘‘(2) NOTICE REQUIRED.— 

23 ‘‘(A) IN GENERAL.—Before initiating any 

24 action in a court or other administrative or reg25 ulatory proceeding against any institution of 


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1 higher education as authorized by paragraph 

2 (1) to enforce any provision of this subsection, 

3 including any regulation promulgated by the 

4 Secretary under this subsection, a State attor5 ney general shall timely provide a copy of the 

6 complete complaint to be filed and written no7 tice describing such action or proceeding to the 

8 Secretary, except as provided in subparagraph 

9 (B). 

10 ‘‘(B) EMERGENCY ACTION.—If prior notice 

11 of the initiation of an action or administrative 

12 or regulatory proceeding required under sub13 paragraph (A) is not practicable, the State at14 torney general shall provide a copy of the com15 plete complaint and the notice to the Secretary 

16 immediately upon instituting the action or pro17 ceeding. 

18 ‘‘(C) CONTENTS OF NOTICE.—The notifi19 cation required under this subparagraph shall 

20 include— 

21 ‘‘(i) the identity of the parties; 

22 ‘‘(ii) the alleged facts underlying the 

23 proceeding; and 

24 ‘‘(iii) whether there may be a need to 

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1 ceeding so as not to interfere with any ac2 tion, including any rulemaking, undertaken 

3 by the Secretary or another Federal agen4 cy. 

5 ‘‘(3) REGULATIONS.—The Secretary shall pre6 scribe regulations to implement the requirements of 

7 this subsection and periodically provide guidance to 

8 further coordinate actions with the State attorneys 

9 general. 

10 ‘‘(4) PRESERVATION OF STATE AUTHORITY.— 

11 ‘‘(A) STATE CLAIMS.—Nothing in this sub12 section shall be construed as altering, limiting, 

13 or affecting the authority of a State attorney 

14 general or any other regulatory or enforcement 

15 agency or authority to bring an action or other 

16 regulatory proceeding arising solely under the 

17 law in effect in that State. 

18 ‘‘(B) RELIEF.— 

19 ‘‘(i) IN GENERAL.—Relief under this 

20 subsection may include, without limita21 tion— 

22 ‘‘(I) rescission or reformation of 

23 contracts; 

24 ‘‘(II) refund of moneys or return 

25 of real property; 


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1 ‘‘(III) restitution; 

2 ‘‘(IV) disgorgement or compensa3 tion for unjust enrichment; 

4 ‘‘(V) payment of damages or 

5 other monetary relief pursuant to the 

6 requirements of paragraph (2); 

7 ‘‘(VI) public notification regard8 ing the violation, including the costs 

9 of notification; and 

10 ‘‘(VII) limits on the activities or 

11 functions of the person. 

12 ‘‘(ii) EXCLUSION.—Relief under this 

13 subsection shall not include the ability to 

14 suspend or terminate the eligibility status 

15 of an institution of higher education for 

16 programs under this title. 

17 ‘‘(l) DEFINITIONS.—In this section: 

18 ‘‘(1) OFFICER OF AN INSTITUTION OF HIGHER

19 EDUCATION.—The term ‘officer of an institution of 

20 higher education’ includes the president, chief execu21 tive officer, and chief financial officer of an institu22 tion of higher education or their equivalents. 

23 ‘‘(2) SUBSTANTIAL MISREPRESENTATION OR

24 OTHER SERIOUS VIOLATION.—The term ‘substantial 


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1 misrepresentation or other serious violation’ means 

2 any of the following: 

3 ‘‘(A) A substantial misrepresentation re4 garding— 

5 ‘‘(i) the nature of the educational pro6 gram of an institution of higher education; 

7 ‘‘(ii) the financial charges of the insti8 tution; 

9 ‘‘(iii) the space availability in a pro10 gram of the institution for which a student 

11 is considering enrollment; 

12 ‘‘(iv) the admission requirements of 

13 the institution; 

14 ‘‘(v) the transferability of credits from 

15 the institution; 

16 ‘‘(vi) whether a program of the insti17 tution meets the necessary standards to 

18 qualify students to sit for licensing exami19 nations, or obtain certification required as 

20 a precondition for employment, in the 

21 State in which the students reside; 

22 ‘‘(vii) the passage rates of students at 

23 the institution in obtaining certification re24 quirements; 


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1 ‘‘(viii) the passage rates of students 

2 who sit for licensing examinations; or 

3 ‘‘(ix) the employability of the grad4 uates of the institution. 

5 ‘‘(B) Failure of an institution subject to 

6 the requirements of section 487(a)(32) to com7 ply with such section. 

8 ‘‘(C) A knowing and willful misuse of Fed9 eral student aid from any source. 

10 ‘‘(D) A violation of section 487(a)(20). 

11 ‘‘(E) A violation of the default manipula12 tion regulations promulgated by the Secretary 

13 under section 435(m)(3). 

14 ‘‘(F) Failure to comply with the program 

15 review process described in section 498A, in16 cluding any disclosure requirement described in 

17 paragraph (2)(C) or (5) of section 498A(b). 

18 ‘‘(G) A violation of the program integrity 

19 regulations promulgated by the Secretary under 

20 this Act. 

21 ‘‘(H) A violation of this Act that the Sec22 retary has determined, by regulation, to be a 

23 serious violation for purposes of this section.’’. 


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1 SEC. 14. REQUIREMENTS FOR ACCREDITING AGENCIES OR 

2 ASSOCIATIONS. 

3 Section 496(a) of the Higher Education Act of 1965 

4 (20 U.S.C. 1099b(a)) is amended— 

5 (1) in paragraph (7), by striking ‘‘and’’ after 

6 the semicolon; 

7 (2) in paragraph (8), by striking the period and 

8 inserting ‘‘; and’’; and 

9 (3) by adding at the end the following new 

10 paragraph: 

11 ‘‘(9) such agency or association does not re12 quire any institution to enter into predispute arbi13 tration agreements with the students of the institu14 tion.’’. 

15 SEC. 15. PROGRAM REVIEW AND DATA. 

16 Section 498A of the Higher Education Act of 1965 

17 (20 U.S.C. 1099c–1) is amended to read as follows: 

18 ‘‘SEC. 498A. PROGRAM REVIEW AND DATA. 

19 ‘‘(a) PROGRAM REVIEWS FOR INSTITUTIONS PAR20 TICIPATING UNDER TITLE IV.— 

21 ‘‘(1) IN GENERAL.—The Secretary— 

22 ‘‘(A) may conduct program reviews, includ23 ing on-site visits, of each institution of higher 

24 education participating in a program authorized 

25 under this title; and 


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1 ‘‘(B) shall conduct a program review under 

2 this subsection of each institution of higher 

3 education that poses a significant risk of failure 

4 to comply with this title, as described in para5 graphs (2) and (3). 

6 ‘‘(2) MANDATORY REVIEWS.— 

7 ‘‘(A) IN GENERAL.—The Secretary shall, 

8 on an annual basis, conduct program reviews of 

9 each institution of higher education partici10 pating in a program authorized under this title 

11 that meets 1 or more of the following criteria: 

12 ‘‘(i) The Secretary determines that— 

13 ‘‘(I) more than 15 percent of the 

14 students enrolled at the institution 

15 have received a Federal Direct Unsub16 sidized Stafford Loan during the pre17 vious year; and 

18 ‘‘(II) the institution has a cohort 

19 default rate, as defined in section 

20 435(m), that is more than 20 percent. 

21 ‘‘(ii) The Secretary determines that— 

22 ‘‘(I) the institution has a cohort 

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1 erage, as determined by the Secretary 

2 in accordance with such section; and 

3 ‘‘(II) the institution has an ag4 gregate amount of defaulted loans, as 

5 determined by the Secretary, that 

6 places the institution in the highest 1 

7 percent of institutions participating in 

8 programs authorized under this title 

9 in terms of the aggregate amount of 

10 defaulted loans. 

11 ‘‘(iii) In the case of proprietary insti12 tutions of higher education, the institution 

13 received more than 80 percent of the insti14 tution’s revenues from Federal funds as 

15 defined in section 166(2), during the 2 

16 most recent years for which data is avail17 able. 

18 ‘‘(iv) The institution is among the top 

19 1 percent of institutions participating in 

20 programs authorized under this title in 

21 terms of numbers or rates of complaints 

22 related to Federal student financial aid, 

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1 ported in the complaint tracking system 

2 established under section 161. 

3 ‘‘(v) As of the date of the determina4 tion, the institution is among the top 1 

5 percent of institutions in terms of low 

6 graduation rates, as determined by the 

7 Secretary, of all institutions participating 

8 in programs authorized under this title. 

9 ‘‘(vi) The institution spends more 

10 than 20 percent of the institution’s reve11 nues on recruiting and marketing activities 

12 and executive compensation. 

13 ‘‘(vii) In the fiscal year immediately 

14 following the most recent cohort default 

15 rate period— 

16 ‘‘(I) the institution’s loan de17 faults increased by 50 percent or 

18 more as compared to the preceding 

19 period; and 

20 ‘‘(II) more than 50 percent of 

21 the students attending the institution 

22 received loans under this title. 

23 ‘‘(viii) The institution, or an executive 

24 of the institution, has publicly acknowl25 edged or disclosed that the institution— 


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1 ‘‘(I) is in violation or noncompli2 ance with any provision of law admin3 istered by a relevant Federal agency 

4 or relevant State entity or agency; or 

5 ‘‘(II) is being investigated re6 garding a potential violation of such 

7 provision of law. 

8 ‘‘(ix) The institution— 

9 ‘‘(I) is a proprietary institution 

10 of higher education that has acquired 

11 a nonprofit institution of higher edu12 cation at any point during the 1-year 

13 period preceding the date of the deter14 mination; or 

15 ‘‘(II) was a proprietary institu16 tion of higher education and has be17 come a nonprofit institution of higher 

18 education at any time during the 1- 

19 year period preceding the date of the 

20 determination. 

21 ‘‘(B) PUBLICATION OF INSTITUTIONS RE22 VIEWED.—The Secretary shall— 

23 ‘‘(i) post, on a publicly available 

24 website, the name of each institution of 


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1 higher education that is reviewed under 

2 subparagraph (A); 

3 ‘‘(ii) indicate, on such website, with 

4 respect to each such institution, which of 

5 the mandatory review criteria, as described 

6 in subparagraph (A), such institution met; 

7 and 

8 ‘‘(iii) indicate on the College Navi9 gator website of the Department, or any 

10 successor website, the name of each insti11 tution of higher education that is reviewed 

12 under subparagraph (A). 

13 ‘‘(C) INSTITUTIONAL DISCLOSURE OF RE14 VIEW.—Each institution of higher education 

15 that is reviewed under subparagraph (A) 

16 shall— 

17 ‘‘(i) post on the home page of the in18 stitution’s website that the institution will 

19 be subject to a mandatory program review 

20 and why the institution is being reviewed 

21 and shall maintain such posting and expla22 nation for 1 year or until the Secretary has 

23 issued its final program review report 

24 under subsection (c)(5)(C), whichever oc25 curs sooner; 


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1 ‘‘(ii) provide a clear, conspicuous dis2 closure of the information described in 

3 clause (i) to students who inquire about 

4 admission to the institution or submit an 

5 application for admission to the institution 

6 prior to the student signing an enrollment 

7 agreement with the institution, for 1 year 

8 or until the Secretary has issued the final 

9 program review report under subsection 

10 (c)(6)(C), whichever occurs sooner; and 

11 ‘‘(iii) include the information de12 scribed in clause (i) on materials of accept13 ance or admission submitted to each stu14 dent before the student enrolls in the insti15 tution, for 1 year or until the Secretary 

16 has issued the final program review report 

17 under subsection (c)(6)(C), whichever oc18 curs sooner. 

19 ‘‘(3) RISK-BASED REVIEWS.— 

20 ‘‘(A) IN GENERAL.—The Secretary shall 

21 use a risk-based approach to select, on an an22 nual basis not less than 2 percent of institu23 tions of higher education participating in a pro24 gram authorized under this title that are not 

25 reviewed under paragraph (2), for a program 


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1 review. Such approach shall prioritize program 

2 reviews of institutions that— 

3 ‘‘(i) have received large increases in 

4 funding under this title during the 5-year 

5 period preceding the date of the determina6 tion; 

7 ‘‘(ii) have a large proportion of overall 

8 revenue from Federal funds, as defined in 

9 section 166(2); 

10 ‘‘(iii) have a significant fluctuation in 

11 Federal Direct Stafford Loan volume, Fed12 eral Pell Grant award volume, or any com13 bination thereof, in the year for which the 

14 selection is made, compared to the year 

15 prior to such year, that is not accounted 

16 for by changes in the Federal Direct Staf17 ford Loan program, the Federal Pell Grant 

18 program, or any combination thereof; 

19 ‘‘(iv) have experienced sharp increases 

20 in enrollment in absolute numbers or rate 

21 of growth; 

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1 ized under this title, for loans issued under 

2 this title over the lifetime of the loans; 

3 ‘‘(vi) have a large aggregate dollar 

4 amount of loans under this title in default, 

5 or a high cohort default rate as described 

6 in section 435(m); 

7 ‘‘(vii) have a high student default 

8 risk, as compared to the student default 

9 risk for all institutions participating in a 

10 program under this title; 

11 ‘‘(viii) have a high proportion or high 

12 rate of complaints related to Federal stu13 dent financial aid, educational practices 

14 and services, or recruiting and marketing 

15 practices, as reported in the complaint 

16 tracking system established under section 

17 161; 

18 ‘‘(ix) have extremely low graduation 

19 rates, as determined by the Secretary; 

20 ‘‘(x) are in poor financial health ac21 cording to financial responsibility stand22 ards described in section 498(c); 

23 ‘‘(xi) are spending a large percentage 

24 of the institution’s revenues on recruiting 


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1 and marketing activities and executive 

2 compensation; 

3 ‘‘(xii) in the case of proprietary insti4 tutions of higher education, have large 

5 profit margins and profit growth; 

6 ‘‘(xiii) have been put on notice, warn7 ing, or probation by, or is subject to a 

8 show cause order from, a nationally recog9 nized accrediting agency or association 

10 that is recognized by the Secretary pursu11 ant to part H of title IV; 

12 ‘‘(xiv) has been found to have compli13 ance problems under this title, or is at sig14 nificant risk of failing to comply with ap15 plicable Federal or State laws, by a rel16 evant Federal agency or a relevant State 

17 entity or agency, including the Comptroller 

18 General of the United States; 

19 ‘‘(xv) has had a large amount of funds 

20 returned under section 484B; or 

21 ‘‘(xvi) in the case of proprietary insti22 tutions of higher education, have experi23 enced a change in ownership or control of 

24 the institution, including a buyout. 


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1 ‘‘(B) CRITERIA FOR RISK-BASED RE2 VIEWS.—The Secretary shall publish, and up3 date as necessary, the specific criteria that the 

4 Secretary will use to determine which institu5 tions of higher education are selected for risk6 based reviews under subparagraph (A). 

7 ‘‘(4) PUBLIC DISCLOSURE OF VIOLATIONS.— 

8 The Secretary shall— 

9 ‘‘(A) post on the College Navigator 

10 website, or any successor website, of the De11 partment, the name of each institution of high12 er education that is found to have violated a 

13 provision of this title knowingly and willfully or 

14 with gross negligence; 

15 ‘‘(B) indicate on such website, with respect 

16 to each such institution, which of the provisions 

17 of this title the institution violated; and 

18 ‘‘(C) maintain such posting until the date 

19 the institution of higher education rectifies the 

20 violation or the date that is 1 year after the 

21 date the Secretary issues the final program re22 view report under subsection (c)(6)(C) with re23 spect to such institution, whichever date is 

24 later. 


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1 ‘‘(5) INSTITUTIONAL DISCLOSURE OF VIOLA2 TIONS.—Each institution of higher education that is 

3 found to have violated a provision of this title know4 ingly and willfully or with gross negligence shall— 

5 ‘‘(A) not later than 15 days after the date 

6 of issuance of the final program review report 

7 containing the finding, post on the home page 

8 of the institution’s website that the institution 

9 has been found to have violated a provision of 

10 this title knowingly and willfully or with gross 

11 negligence, including the provision the institu12 tion was found to have violated; 

13 ‘‘(B) maintain such posting until the date 

14 the institution rectifies the violation or the date 

15 that is 1 year after the date the Secretary 

16 issues the final program review report under 

17 subsection (c)(6)(C) with respect to such insti18 tution, whichever date is later; and 

19 ‘‘(C) include the information described in 

20 subparagraph (A) on materials of acceptance or 

21 admission submitted to each student before the 

22 student enrolls in the institution until the date 

23 the institution rectifies the violation or the date 

24 that is 1 year after the date the Secretary 

25 issues the final program review report under 


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1 subsection (c)(6)(C) with respect to such insti2 tution, whichever date is later. 

3 ‘‘(b) CHARACTERISTICS OF PROGRAM REVIEWS.— 

4 ‘‘(1) NOTICE.—The Secretary may give not 

5 more than 72 hours notice to an institution of high6 er education that will undergo a program review 

7 pursuant to subsection (b) of such review. 

8 ‘‘(2) SHARING OF INFORMATION.—The Sec9 retary shall share all final program review deter10 minations conducted under this section with relevant 

11 Federal agencies and relevant State entities or agen12 cies, and appropriate accrediting agencies and asso13 ciations, to enable such agencies, entities, and asso14 ciations to determine the eligibility of institutions for 

15 funds or accreditation. 

16 ‘‘(3) INTERACTION WITH OTHER FEDERAL

17 AGENCIES AND LAWS.—To the extent practicable, 

18 the Secretary shall coordinate program reviews con19 ducted under this section with other reviews and au20 dits conducted by the Department, and with relevant 

21 Federal agencies and relevant State entities or agen22 cies. 

23 ‘‘(4) VIOLATIONS DISCOVERED THROUGH PRO24 GRAM REVIEW.— 


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1 ‘‘(A) VIOLATIONS OF THIS TITLE.—If, in 

2 the course of conducting a program review, the 

3 Secretary obtains evidence that any institution 

4 of higher education or person has engaged in 

5 conduct that may constitute a violation of this 

6 title, including a failure to fully comply with the 

7 program review process and reporting require8 ments under this section, the Secretary may 

9 sanction such institution or person, pursuant to 

10 section 489A. 

11 ‘‘(B) VIOLATIONS OF OTHER FEDERAL

12 LAWS.—If, in the course of conducting a pro13 gram review, the Secretary obtains evidence 

14 that any institution of higher education or per15 son has engaged in conduct that may constitute 

16 a violation of Federal law, the Secretary shall 

17 transmit such evidence to the Attorney General 

18 of the United States, the Director of the Bu19 reau of Consumer Financial Protection, the 

20 Commissioner of the Federal Trade Commis21 sion, or the head of any other appropriate Fed22 eral agency who may institute proceedings 

23 under appropriate law. 

24 ‘‘(C) RULE OF CONSTRUCTION.—Nothing 

25 in this paragraph shall be constructed to affect 


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1 any other authority of the Secretary to disclose 

2 information. 

3 ‘‘(5) CONDUCT OF REVIEWS.—When conducting 

4 program reviews under this section, the Secretary 

5 shall assess the institution of higher education’s 

6 compliance with the provisions of this title. Each 

7 program review shall include, at a minimum, the fol8 lowing: 

9 ‘‘(A) With regard to the institutional infor10 mation, the Secretary shall assess financial ca11 pability, administrative capability, and program 

12 integrity, including whether the institution— 

13 ‘‘(i) knowingly and willfully misused 

14 Federal student aid from any source; 

15 ‘‘(ii) violated section 487(a)(20); 

16 ‘‘(iii) engaged in any substantial mis17 representation or other serious violation, as 

18 defined in section 489A; or 

19 ‘‘(iv) violated the program integrity 

20 regulations promulgated by the Secretary 

21 under this Act. 

22 ‘‘(B) With regard to student information, 

23 the Secretary shall examine— 


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1 ‘‘(i) graduation rates compared with 

2 all other institutions participating in a pro3 gram authorized under this title; 

4 ‘‘(ii) student complaints, including 

5 interviews with current and former stu6 dents, faculty and staff, and accrediting 

7 agencies; and 

8 ‘‘(iii) information from the complaint 

9 data system established under section 161. 

10 ‘‘(6) ADMINISTRATIVE PROCESS.— 

11 ‘‘(A) TRAINING.—The Secretary shall pro12 vide training, including investigative training, to 

13 personnel of the Department designed to im14 prove the quality of financial and compliance 

15 audits and program reviews conducted under 

16 this section, including instruction about appro17 priately and effectively conducting such audits 

18 and reviews for institutions of higher education 

19 from different sectors of higher education. 

20 ‘‘(B) CARRYING OUT PROGRAM RE21 VIEWS.—In carrying out program reviews under 

22 this section, the Secretary shall— 

23 ‘‘(i) establish guidelines designed to 

24 ensure uniformity of practice in the con25 duct of such reviews; 


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1 ‘‘(ii) make available to each institu2 tion of higher education participating in a 

3 program authorized under this title com4 plete copies of all review guidelines and 

5 procedures used in program reviews, except 

6 that internal training materials for Depart7 ment staff related to identifying instances 

8 of fraud, misrepresentation, or intentional 

9 noncompliance shall not be disclosed; 

10 ‘‘(iii) permit an institution of higher 

11 education to correct or cure an administra12 tive, accounting, or recordkeeping error 

13 within 90 days of the issuance of the final 

14 program review report, if the error is not 

15 part of a pattern of error and there is no 

16 evidence of fraud or misconduct related to 

17 the error; 

18 ‘‘(iv) without sharing personally iden19 tifiable information and in accordance with 

20 section 444 of the General Education Pro21 visions Act (20 U.S.C. 1232g, commonly 

22 known as the ‘Family Educational Rights 

23 and Privacy Act of 1974’), inform the rel24 evant Federal agencies and relevant State 

25 entities or agencies, and accrediting agency 


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1 or association, whenever the Secretary 

2 finds a violation of this title or sanctions 

3 an institution of higher education under 

4 section 432, 489A, or 498; and 

5 ‘‘(v) provide to an institution of high6 er education 90 calendar days to review 

7 and respond to any program review report 

8 and relevant materials related to the report 

9 before any final program review report is 

10 issued. 

11 ‘‘(C) FINAL PROGRAM REVIEW DETER12 MINATION.— 

13 ‘‘(i) IN GENERAL.—Not later than 

14 180 calendar days after issuing a program 

15 review report under this section, the Sec16 retary shall review and consider an institu17 tion of higher education’s response, and 

18 issue a final program review determination 

19 or audit determination. The final deter20 mination shall include— 

21 ‘‘(I) a written statement address22 ing the institution of higher edu23 cation’s response; 

24 ‘‘(II) a written statement of the 

25 basis for such determination; and 


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1 ‘‘(III) a copy of the institution’s 

2 response. 

3 ‘‘(ii) CONFIDENTIALITY.—The Sec4 retary shall maintain and preserve at all 

5 times the confidentiality of any program 

6 review report until a final program review 

7 determination is issued, other than to in8 form the relevant Federal agencies and rel9 evant State entities or agencies, and ac10 crediting agency or association, as required 

11 under this section. 

12 ‘‘(D) REPORTS DISCLOSED TO THE INSTI13 TUTION.—The Secretary shall promptly disclose 

14 each program review report and each final pro15 gram review determination to the institution of 

16 higher education under review. 

17 ‘‘(E) REMOVAL OF PERSONALLY IDENTIFI18 ABLE INFORMATION.—Any personally identifi19 able information from the education records of 

20 students shall be removed from any program re21 view report or final program review determina22 tion before the report is shared with any rel23 evant Federal agency, State entity or agency, or 

24 accrediting agency or association. 


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1 ‘‘(7) FOLLOW-UP REVIEWS AFTER VIOLA2 TIONS.—The Secretary shall conduct follow-up re3 views of each institution of higher education that 

4 has been found in violation of a provision of this 

5 title not later than 1 year after the date of such 

6 finding. Such follow-up reviews may only assess 

7 whether the institution of higher education has cor8 rected violations found in a previous program review 

9 or final program review determination. 

10 ‘‘(c) DEFINITIONS.—In this section: 

11 ‘‘(1) EXECUTIVE COMPENSATION.—The term 

12 ‘executive compensation’, when used with respect to 

13 an institution of higher education, means the wages, 

14 salary, fees, commissions, fringe benefits, deferred 

15 compensation, retirement contributions, options, bo16 nuses, property, and any other form of remuneration 

17 that the Secretary determines is appropriate, given 

18 to the 5 percent of employees at the institution who 

19 are the highest compensated. 

20 ‘‘(2) RELEVANT FEDERAL AGENCY.—The term 

21 ‘relevant Federal agency’ means— 

22 ‘‘(A) the Department of Education; 

23 ‘‘(B) the Department of Veterans Affairs; 

24 ‘‘(C) the Department of Defense; 


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1 ‘‘(D) the Bureau of Consumer Financial 

2 Protection; 

3 ‘‘(E) the Federal Trade Commission; or 

4 ‘‘(F) any other Federal agency that pro5 vides Federal student assistance or that the 

6 Secretary determines appropriate. 

7 ‘‘(3) RELEVANT STATE ENTITY OR AGENCY.— 

8 The term ‘relevant State entity or agency’ means— 

9 ‘‘(A) an appropriate State licensing or au10 thorizing agency; 

11 ‘‘(B) the attorney general (or the equiva12 lent thereof) of the State; or 

13 ‘‘(C) any other State entity or agency that 

14 the Secretary determines appropriate.’’. 

15 SEC. 16. CONSUMER PROTECTIONS FOR STUDENTS. 

16 (a) DEFINITIONS.—In this section: 

17 (1) FEDERAL FINANCIAL ASSISTANCE PRO18 GRAM.—The term ‘‘Federal financial assistance pro19 gram’’ means a program that provides Federal edu20 cation assistance funds, as described in section 103 

21 of the Higher Education Act of 1965 (20 U.S.C. 

22 1003), to any postsecondary educational institution. 

23 (2) POSTSECONDARY EDUCATIONAL INSTITU24 TION.—The term ‘‘postsecondary educational institu25 tion’’ means an educational institution that awards 


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1 a degree or certificate and is located in any State 

2 and includes— 

3 (A) an institution of higher education, as 

4 defined in section 102 of the Higher Education 

5 Act of 1965 (20 U.S.C. 1002); 

6 (B) a postsecondary educational institu7 tion, as defined in section 203 of the Adult 

8 Education and Family Literacy Act (29 U.S.C. 

9 3272); and 

10 (C) an educational institution, as defined 

11 under section 3452 of title 38, United States 

12 Code. 

13 (3) STATE.— 

14 (A) STATE.—The term ‘‘State’’ includes, 

15 in addition to the several States of the United 

16 States, the Commonwealth of Puerto Rico, the 

17 District of Columbia, Guam, American Samoa, 

18 the United States Virgin Islands, the Common19 wealth of the Northern Mariana Islands, and 

20 the freely associated States. 

21 (B) FREELY ASSOCIATED STATES.—The 

22 term ‘‘freely associated States’’ means the Re23 public of the Marshall Islands, the Federated 

24 States of Micronesia, and the Republic of 

25 Palau. 


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1 (b) CONSUMER PROTECTIONS.—Notwithstanding 

2 any other provision of law, a postsecondary educational 

3 institution is not eligible to participate in a Federal finan4 cial assistance program with respect to any program of 

5 postsecondary education or training, including a degree or 

6 certificate program, that is designed to prepare students 

7 for entry into a recognized occupation or profession that 

8 requires licensing or other established requirements as a 

9 pre-condition for entry into such occupation or profession, 

10 unless— 

11 (1) the successful completion of the program 

12 fully qualifies a student, in the Metropolitan Statis13 tical Area in which the student resides, to— 

14 (A) take any examination required for 

15 entry into the recognized occupation or profes16 sion in the Metropolitan Statistical Area in 

17 which the student resides, including satisfying 

18 all State or professionally mandated pro19 grammatic and specialized accreditation re20 quirements, if any; and 

21 (B) be certified or licensed or meet any 

22 other academically related pre-conditions that 

23 are required for entry into the recognized occu24 pation or profession in the Metropolitan Statis25 tical Area in which the student resides; and 


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1 (2) the institution offering the program pro2 vides timely placement for all of the academically re3 lated pre-licensure requirements for entry into the 

4 recognized occupation or profession in the Metropoli5 tan Statistical Area in which the student resides, 

6 such as clinical placements, internships, or appren7 ticeships. 

8 (c) EFFECTIVE DATE.—This section shall take effect 

9 on the date that is 180 days after the date of the enact10 ment of this Act. 

Æ 


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