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[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[S. 3368 Introduced in Senate (IS)]

<DOC>

114th CONGRESS
  2d Session
                                S. 3368

To amend the Higher Education Act of 1965 to improve college access and 
                  college completion for all students.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                           September 21, 2016

Mr. Coons (for himself and Mr. Isakson) introduced the following bill; 
     which was read twice and referred to the Committee on Health, 
                     Education, Labor, and Pensions

_______________________________________________________________________

                                 A BILL

 
To amend the Higher Education Act of 1965 to improve college access and 
                  college completion for all students.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Access, Success, and Persistence in 
Reshaping Education Act of 2016'' or the ``ASPIRE Act''.

SEC. 2. IMPROVING COLLEGE ACCESS AND COMPLETION FOR ALL STUDENTS.

    (a) In General.--Part G of title IV of the Higher Education Act of 
1965 (20 U.S.C. 1088 et seq.) is amended by adding at the end the 
following:

``SEC. 493E. IMPROVING COLLEGE ACCESS AND COMPLETION FOR ALL STUDENTS.

    ``(a) Definitions.--Except as otherwise provided in this section:
            ``(1) Average student-related expenditure.--
                    ``(A) In general.--The term `average student-
                related expenditure' means, with respect to the most 
                recent fiscal year ending before the October of an 
                academic year, the total amount of an institution's 
                instructional expenditures, student services 
                expenditures, and the proportion of academic support 
                expenditures that goes towards instruction, divided by 
                the number of full-time equivalent undergraduate 
                students enrolled in the institution for the academic 
                year.
                    ``(B) Instructional expenditures.--The term 
                `instructional expenditures'--
                            ``(i) includes--
                                    ``(I) expenditures for the 
                                colleges, schools, departments, and 
                                other instructional divisions of the 
                                institution and expenses for 
                                departmental research and public 
                                service that are not separately 
                                budgeted;
                                    ``(II) general academic 
                                instruction, occupational and 
                                vocational instruction, community 
                                education, preparatory and adult basic 
                                education, and remedial and tutorial 
                                instruction conducted by the teaching 
                                faculty for the institution's students; 
                                and
                                    ``(III) expenses for both credit 
                                and non-credit activities;
                            ``(ii) may include information technology 
                        expenses related to instructional activities if 
                        the institution separately budgets and expenses 
                        information technology resources; and
                            ``(iii) does not include expenses for 
                        academic administration where the primary 
                        function is administration.
                    ``(C) Student services expenditures.--The term 
                `student services expenditures'--
                            ``(i) includes expenses for admissions, 
                        registrar activities, and activities whose 
                        primary purpose is to contribute to the 
                        emotional and physical well-being of students 
                        and to their intellectual, cultural, and social 
                        development outside the context of the formal 
                        instructional program; and
                            ``(ii) may include information technology 
                        expenses related to student service activities 
                        if the institution separately budgets and 
                        expenses information technology resources, 
                        otherwise these expenses are included in 
                        institutional support.
                    ``(D) Academic support expenditures.--The term 
                `academic support expenditures' includes--
                            ``(i) expenses of activities and services 
                        that support the institution's primary missions 
                        of instruction, research, and public service, 
                        including--
                                    ``(I) the retention, preservation, 
                                and display of educational materials;
                                    ``(II) organized activities that 
                                provide support services to the 
                                academic functions of the institution;
                                    ``(III) media such as audiovisual 
                                services;
                                    ``(IV) academic administration; and
                                    ``(V) formally organized and 
                                separately budgeted academic personnel 
                                development and course and curriculum 
                                development expenses; and
                            ``(ii) information technology expenses 
                        related to academic support activities or, if 
                        an institution does not separately budget and 
                        expense information technology resources, the 
                        costs associated with the three primary 
                        programs shall be applied to this function and 
                        the remainder to institutional support.
                    ``(E) Full-time equivalent undergraduate students 
                enrolled.--The term `full-time equivalent undergraduate 
                students enrolled' means the number of full-time 
                undergraduate students enrolled, plus--
                            ``(i) in the case of an institution of 
                        higher education that is a public, 4-year 
                        institution, the number of part-time 
                        undergraduate students enrolled multiplied by 
                        0.403543;
                            ``(ii) in the case of an institution of 
                        higher education that is a private, nonprofit 
                        or for-profit, 4-year institution, the number 
                        of part-time undergraduate students enrolled 
                        multiplied by 0.392857;
                            ``(iii) in the case of an institution of 
                        higher education that is a public, 2-year 
                        institution, the number of part-time 
                        undergraduate students enrolled multiplied by 
                        0.335737; and
                            ``(iv) in the case of an institution of 
                        higher education that is not described in 
                        clause (i), (ii), or (iii), the number of part-
                        time undergraduate students enrolled multiplied 
                        by 0.397058.
            ``(2) Institution of higher education.--The term 
        `institution of higher education' means an institution of 
        higher education (as defined in section 101(a)) or a 
        proprietary institution of higher education (as defined in 
        section 102(b))--
                    ``(A) that predominately awards more bachelor's 
                degrees than associate's degrees and certificates; and
                    ``(B) that enrolls not less than 30 first-time, 
                full-time, degree- or certificate-seeking undergraduate 
                students.
            ``(3) Low-income or working class student.--The term `low-
        income or working class student' means a student who is 
        eligible to receive a Federal Pell Grant.
            ``(4) Moderate-income student.--The term `moderate-income 
        student' means a student who is eligible to receive a Federal 
        Direct Stafford Loan but not eligible to receive a Federal Pell 
        Grant.
            ``(5) Remedial course.--The term `remedial course' means a 
        course of study that is determined by the institution which 
        offers such course to be necessary to help a student be 
        prepared for the pursuit of a first undergraduate bachelor's 
        degree but does not count for credit toward the degree.
            ``(6) Underrepresented minority.--The term 
        `underrepresented minority' means American Indian, Alaskan 
        Native, Black (not of Hispanic origin), Hispanic (including 
        persons of Mexican, Puerto Rican, Cuban, and Central or South 
        American origin), or Pacific Islander minority group.
    ``(b) Improving College Access.--
            ``(1) In general.--In order for an institution of higher 
        education to participate in any student financial assistance 
        program under this title, the institution shall comply with the 
        improving college access program under this subsection.
            ``(2) Calculation of percentages of federal pell grant 
        recipients.--
                    ``(A) In general.--For academic year 2017-2018 and 
                for each succeeding academic year, the Secretary shall 
                determine, for each institution of higher education, 
                the percentage of bachelor's degree-seeking students 
                who enrolled at the institution for the first time in a 
                full-time capacity for the academic year who received a 
                Federal Pell Grant for such academic year.
                    ``(B) Ranking.--
                            ``(i) In general.--For academic year 2017-
                        2018 and for each succeeding academic year, the 
                        Secretary shall rank the institutions according 
                        to the percentages determined under 
                        subparagraph (A).
                            ``(ii) Threshold mark.--For academic year 
                        2017-2018 and for each succeeding academic 
                        year, the Secretary shall determine, based on 
                        the rankings under this subparagraph, the 
                        percentage, determined under subparagraph (A), 
                        at which and above which marks the top 95 
                        percent of those institutions ranked.
                    ``(C) Floor reached.--
                            ``(i) Floor mark.--For academic year 2017-
                        2018, the Secretary shall determine, based on 
                        the rankings under subparagraph (B)(i) for such 
                        academic year, the percentage, determined under 
                        subparagraph (A), at which and above which 
                        marks the top 90 percent of those institutions 
                        ranked.
                            ``(ii) Comparison of threshold mark to 
                        floor mark.--If the threshold mark determined 
                        under subparagraph (B)(ii) for an academic year 
                        is at or above the floor mark determined under 
                        clause (i), no institution shall be subject to 
                        the provisions of paragraph (3) for such 
                        academic year.
            ``(3) Consequences of low ranking.--
                    ``(A) Notification.--
                            ``(i) In general.--
                                    ``(I) In general.--Subject to 
                                paragraph (2)(C)(ii), for academic year 
                                2017-2018 and for each succeeding 
                                academic year, the Secretary shall 
                                notify each institution of higher 
                                education that is in the bottom 5 
                                percent of those institutions ranked 
                                under paragraph (2)(B)--
                                            ``(aa) that the institution 
                                        is in such bottom 5 percent of 
                                        those institutions ranked;
                                            ``(bb) of the threshold 
                                        mark described in paragraph 
                                        (2)(B)(ii) that such 
                                        institution must meet or rise 
                                        above; and
                                            ``(cc) that the institution 
                                        has 90 days to appeal to the 
                                        Secretary to be removed from 
                                        the bottom 5 percent of those 
                                        institutions ranked.
                                    ``(II) Appeal.--An institution of 
                                higher education that is in the bottom 
                                5 percent of those institutions ranked 
                                under paragraph (2)(B) for an academic 
                                year may appeal to the Secretary, 
                                within 90 days of the notification 
                                under subclause (I), to be removed from 
                                such bottom 5 percent ranking if--
                                            ``(aa) the Secretary's 
                                        calculation of its ranking is 
                                        not accurate, and that 
                                        recalculation of such ranking 
                                        would raise the ranking of the 
                                        institution above the bottom 5 
                                        percent of those institutions 
                                        ranked;
                                            ``(bb) the institution's 
                                        average percentage for the 
                                        academic year and the 2 
                                        preceding academic years of 
                                        bachelor's degree-seeking 
                                        students who enrolled at the 
                                        institution for the first time 
                                        in a full-time capacity for the 
                                        academic year and the 2 
                                        preceding academic years who 
                                        received a Federal Pell Grant 
                                        for the academic year and the 2 
                                        preceding academic years is at 
                                        or above the threshold mark 
                                        described in paragraph 
                                        (2)(B)(ii) for the academic 
                                        year; or
                                            ``(cc) the institution's 
                                        percentage of all bachelor's 
                                        degree-seeking students 
                                        enrolled at the institution who 
                                        received a Federal Pell Grant 
                                        for the academic year is 
                                        sufficiently high, as 
                                        determined by the Secretary.
                            ``(ii) Consumer warning report by the 
                        secretary.--For academic year 2017-2018 and for 
                        each succeeding academic year, the Secretary 
                        shall issue a report, following resolution of 
                        all appeals brought pursuant to the 90-day 
                        appeal period, listing each institution of 
                        higher education that is in the bottom 5 
                        percent of those institutions ranked under 
                        paragraph (2)(B), and not removed from such 
                        ranking in accordance with clause (i)(II), 
                        along with the percentage of bachelor's degree-
                        seeking students who enrolled at each such 
                        institution for the first time in a full-time 
                        capacity for the academic year who received a 
                        Federal Pell Grant for such academic year.
                    ``(B) Plan.--An institution of higher education 
                that is included in the report under subparagraph 
                (A)(ii) shall develop a plan, not later than 1 year 
                after the date of the notification under subparagraph 
                (A)(i)(I) and in consultation with the Secretary, to 
                meet or rise above the threshold mark described in 
                paragraph (2)(B)(ii) applicable for the academic year 
                for which this institution was included in the report 
                under subparagraph (A)(ii) that triggered such 
                determination.
                    ``(C) Calculation of average.--For each institution 
                of higher education that is included in the report 
                under subparagraph (A)(ii) for an academic year, the 
                Secretary shall--
                            ``(i) grant the institution a hold harmless 
                        year for the academic year succeeding the 
                        academic year for which the institution 
                        receives notification under subparagraph 
                        (A)(i)(I); and
                            ``(ii) determine the average percentage 
                        over the 3 succeeding academic years following 
                        the hold harmless academic year described in 
                        clause (i) of bachelor's degree-seeking 
                        students who enrolled at the institution for 
                        the first time in a full-time capacity for each 
                        of such 3 succeeding academic years who 
                        received a Federal Pell Grant for each of such 
                        3 succeeding academic years.
                    ``(D) Failure to improve.--
                            ``(i) In general.--Except as provided in 
                        clause (ii), if an institution of higher 
                        education has an average percentage determined 
                        under subparagraph (C)(ii) that is less than 
                        the threshold mark described in paragraph 
                        (2)(B)(ii) for the academic year for which the 
                        institution was included in the report under 
                        subparagraph (A)(ii) that triggered such 
                        determination, the Secretary shall impose on 
                        such institution a penalty described in 
                        subparagraph (E).
                            ``(ii) Delay of penalty.--
                                    ``(I) In general.--The Secretary 
                                may delay imposing a penalty described 
                                in subparagraph (E) with respect to an 
                                institution that has an average 
                                percentage determined under 
                                subparagraph (C)(ii) that is less than 
                                the threshold mark described in 
                                paragraph (2)(B)(ii) for the academic 
                                year for which the institution was 
                                included in the report under 
                                subparagraph (A)(ii) that triggered 
                                such determination, but whose 
                                percentage determined for the most 
                                recent academic year is at or above 
                                such threshold mark.
                                    ``(II) Period of delay.--The 
                                Secretary may delay imposing a penalty 
                                under subclause (I) for a period of not 
                                more than 2 years.
                                    ``(III) New 3-year average.--With 
                                respect to an institution for which the 
                                Secretary delays imposing a penalty 
                                under this clause for a period of not 
                                more than 2 years, the Secretary, at 
                                the end of such delay period, shall 
                                determine the average percentage over 
                                the 3 preceding years of bachelor's 
                                degree-seeking students who enrolled at 
                                the institution for the first time in a 
                                full-time capacity for each of such 3 
                                preceding academic years and who 
                                received a Federal Pell Grant for each 
                                of such 3 preceding academic years. If 
                                the institution has an average 
                                percentage that is less than the 
                                threshold mark described in paragraph 
                                (2)(B)(ii) for the academic year for 
                                which the institution was included in 
                                the report under subparagraph (A)(ii) 
                                that triggered such determination, the 
                                Secretary shall impose on such 
                                institution a penalty described in 
                                subparagraph (E).
                    ``(E) Penalties.--
                            ``(i) In general.--The Secretary shall 
                        impose a penalty under this paragraph in an 
                        amount determined under this subparagraph.
                            ``(ii) Amount of penalty.--
                                    ``(I) In general.--The penalty to 
                                be imposed under this subparagraph with 
                                respect to an institution shall be a 
                                fee-per-student penalty, in which the 
                                number of additional students 
                                determined with respect to such 
                                institution under subclause (II) for an 
                                academic year is multiplied by the 
                                institution's average student-related 
                                expenditure for the academic year.
                                    ``(II) Number of additional 
                                students to be determined.--With 
                                respect to an institution of higher 
                                education that is subject to the 
                                penalty under this subparagraph, the 
                                Secretary shall determine the number of 
                                additional students the institution 
                                would need to enroll as Federal Pell 
                                Grant recipients to meet the threshold 
                                mark described in paragraph (2)(B)(ii). 
                                Such number shall be calculated by 
                                determining the percentage equal to 
                                subtracting the average percentage 
                                determined under subparagraph (C)(ii) 
                                from the threshold mark described in 
                                paragraph (2)(B)(ii) for the academic 
                                year for which the institution was 
                                included in the report under 
                                subparagraph (A)(ii) that triggered 
                                such determination, and multiplying 
                                such determined percentage by the 
                                average number of bachelor's degree-
                                seeking students who enrolled at the 
                                institution for the first time in a 
                                full-time capacity for an academic year 
                                over the 3 preceding academic years.
                            ``(iii) Collection of penalty fees.--The 
                        Secretary shall--
                                    ``(I) collect penalty fees imposed 
                                under this paragraph not later than 1 
                                year after such penalty is imposed; and
                                    ``(II) use the fees collected under 
                                subclause (I) to fund the completion 
                                improvement program under subsection 
                                (d) and the completion bonus program 
                                under subsection (e).
                            ``(iv) Prohibition on use of institutional 
                        need-based grant aid to pay fees.--An 
                        institution of higher education that is subject 
                        to a penalty under this paragraph may not, in 
                        order to pay such penalty fee--
                                    ``(I) reduce the amount of 
                                institutional need-based grant aid 
                                awarded to students to attend the 
                                institution; or
                                    ``(II) increase tuition or fees.
                    ``(F) Appeals.--
                            ``(i) In general.--An institution of higher 
                        education that is subject to a penalty under 
                        this paragraph may appeal the decision to 
                        impose such penalty or the amount of the 
                        penalty to the Secretary.
                            ``(ii) Content of appeal.--The appeals 
                        process shall permit the institution to 
                        demonstrate, to the satisfaction of the 
                        Secretary--
                                    ``(I) that there was a 
                                miscalculation of the penalty amount; 
                                or
                                    ``(II) that there is some 
                                unforeseen and extreme circumstance 
                                that should warrant a waiver from such 
                                penalty or a reduction in the amount of 
                                such penalty.
    ``(c) Improving Completion.--
            ``(1) In general.--
                    ``(A) In general.--In order for an institution of 
                higher education to participate in any student 
                financial assistance program under this title, the 
                institution shall comply with the improving college 
                completion program under this subsection.
                    ``(B) Election by public or other nonprofit 
                institutions.--An institution of higher education that 
                is a public or other nonprofit institution of higher 
                education may elect for the Secretary not to impose on 
                such institution a penalty described in paragraph 
                (3)(E). An institution that makes such election shall 
                not be eligible to receive a grant under the completion 
                improvement program under subsection (d) or the 
                completion bonus program under subsection (e).
                    ``(C) Definition of institution of higher 
                education.--In this subsection, the term `institution 
                of higher education' means an institution of higher 
                education (as defined in section 101(a)) or a 
                proprietary institution of higher education (as defined 
                in section 102(b))--
                            ``(i) that predominately awards more 
                        bachelor's degrees than associate's degrees and 
                        certificates; and
                            ``(ii) that enrolls not less than 30 first-
                        time, full-time bachelor's degree- or 
                        equivalent-degree-seeking undergraduate 
                        students.
            ``(2) Calculation of percentages of completion.--
                    ``(A) In general.--For academic year 2017-2018 and 
                for each succeeding academic year, the Secretary shall 
                determine, for each institution of higher education 
                that participates in any program under this title, the 
                percentage of first-time, full-time bachelor's degree-
                seeking students who enrolled at the institution who 
                graduate within 6 years.
                    ``(B) Ranking.--
                            ``(i) In general.--For academic year 2017-
                        2018 and for each succeeding academic year, the 
                        Secretary shall rank the institutions according 
                        to the percentages determined under 
                        subparagraph (A).
                            ``(ii) Threshold mark.--For academic year 
                        2017-2018 and for each succeeding academic 
                        year, the Secretary shall determine, based on 
                        the rankings under clause (i), the percentage, 
                        determined under subparagraph (A), at which and 
                        above which marks the top 95 percent of the 
                        institutions ranked.
                            ``(iii) Rankings for peer groups of 
                        institutions.--
                                    ``(I) In general.--For academic 
                                year 2017-2018 and for each succeeding 
                                academic year, the Secretary shall rank 
                                the institutions according to the 
                                percentages determined under 
                                subparagraph (A) in each peer group of 
                                institutions described in subclause 
                                (II).
                                    ``(II) Peer groups.--For academic 
                                year 2017-2018 and for each succeeding 
                                academic year, the Secretary shall 
                                establish peer groups of institutions. 
                                Each peer group shall include 
                                approximately 10 to 15 institutions 
                                that are included in such group based 
                                on similar institutional 
                                characteristics. Such characteristics 
                                shall include the following:
                                            ``(aa) The percentage of 
                                        first-time, full-time students 
                                        enrolled at the institution who 
                                        receive a Federal Pell Grant.
                                            ``(bb) The average SAT or 
                                        ACT score of first-time, full-
                                        time students enrolled at the 
                                        institution.
                                            ``(cc) The average high 
                                        school GPA of first-time, full-
                                        time students enrolled at the 
                                        institution.
                                            ``(dd) The institution's 
                                        average student-related 
                                        expenditure.
                                            ``(ee) Other 
                                        characteristics that the 
                                        Secretary determines are 
                                        appropriate.
                    ``(C) Floor reached.--
                            ``(i) Floor mark.--For academic year 2017-
                        2018, the Secretary shall determine, based on 
                        the rankings under subparagraph (B)(i) for such 
                        academic year, the percentage, determined under 
                        subparagraph (A), at which and above which 
                        marks the top 90 percent of those institutions 
                        ranked.
                            ``(ii) Comparison of threshold mark to 
                        floor mark.--If the threshold mark determined 
                        under subparagraph (B)(ii) for an academic year 
                        is at or above the floor mark determined under 
                        clause (i), no institution shall be subject to 
                        the provisions of paragraph (3) for such 
                        academic year.
                            ``(iii) Consumer warnings.--If the 
                        threshold mark determined under subparagraph 
                        (B)(ii) for an academic year is at or above the 
                        floor mark determined under clause (i)--
                                    ``(I) each institution with a 
                                percentage determined under 
                                subparagraph (A) that is less than the 
                                floor mark shall publish a consumer 
                                warning in a prominent place on the 
                                homepage of the institution's website 
                                of the percentage of first-time, full-
                                time bachelor's degree-seeking students 
                                who enrolled at the institution who 
                                graduate within 6 years for such 
                                academic year and at the beginning of 
                                each subsequent academic year until--
                                            ``(aa) the institution has 
                                        a percentage determined under 
                                        subparagraph (A) that is at or 
                                        above the floor mark; or
                                            ``(bb) the threshold mark 
                                        determined under subparagraph 
                                        (B) is less than the floor 
                                        mark; and
                                    ``(II) the Secretary shall issue a 
                                report that lists each institution 
                                described in subclause (I) along with 
                                the percentage of first-time, full-time 
                                bachelor's degree-seeking students who 
                                enrolled at the institution who 
                                graduate within 6 years for such 
                                academic year.
            ``(3) Consequences of low ranking.--
                    ``(A) In general.--
                            ``(i) In general.--Subject to paragraph 
                        (2)(C)(ii), for academic year 2017-2018 and for 
                        each succeeding academic year, the Secretary 
                        shall notify each institution of higher 
                        education that is in the bottom 5 percent of 
                        those institutions ranked under paragraph 
                        (2)(B)(i)--
                                    ``(I) that the institution is in 
                                such bottom 5 percent of those 
                                institutions ranked and whether the 
                                institution is in the top two-thirds of 
                                institutions ranked in the 
                                institution's peer group described in 
                                paragraph (2)(B)(iii) for the academic 
                                year;
                                    ``(II) of the applicable threshold 
                                mark described in paragraph (2)(B)(ii) 
                                that such institution must meet or rise 
                                above; and
                                    ``(III) that the institution has 90 
                                days to appeal to the Secretary to be 
                                removed from the bottom 5 percent of 
                                those institutions ranked.
                            ``(ii) Appeal.--An institution of higher 
                        education that is in the bottom 5 percent of 
                        those institutions ranked under paragraph 
                        (2)(B)(i) for an academic year may appeal to 
                        the Secretary, within 90 days of the 
                        notification under clause (i), to be removed 
                        from such bottom 5 percent ranking if--
                                    ``(I) the Secretary's calculation 
                                of its ranking is not accurate, and 
                                that recalculation of such ranking 
                                would raise the ranking of the 
                                institution above the bottom 5 percent 
                                of those institutions ranked;
                                    ``(II) the institution's average 
                                percentage for the academic year and 
                                the 2 preceding academic years of 
                                first-time, full-time bachelor's 
                                degree-seeking students who enrolled at 
                                the institution who graduate within 6 
                                years is at or above the threshold mark 
                                described in paragraph (2)(B)(ii) for 
                                the academic year; or
                                    ``(III) the institution is in the 
                                top two-thirds of institutions ranked 
                                in the institution's peer group 
                                described in paragraph (2)(B)(iii) for 
                                the academic year.
                            ``(iii) Consumer warning report by the 
                        secretary.--For academic year 2017-2018 and for 
                        each succeeding academic year, the Secretary 
                        shall issue a report, following resolution of 
                        all appeals brought pursuant to the 90-day 
                        appeal period, listing each institution of 
                        higher education that is in the bottom 5 
                        percent of those institutions ranked under 
                        paragraph (2)(B)(i), and not removed from such 
                        ranking in accordance with clause (ii), along 
                        with the percentage of first-time, full-time 
                        bachelor's degree-seeking students who enrolled 
                        at each such institution who graduate within 6 
                        years.
                    ``(B) Plan and consumer warnings.--For academic 
                year 2017-2018 and for each fifth succeeding academic 
                year, an institution of higher education that is 
                included in the report under subparagraph (A)(iii) 
                shall--
                            ``(i) develop a plan, not later than 1 year 
                        after the date of the notification under 
                        subparagraph (A)(i) and in consultation with 
                        the Secretary, to meet or rise above the 
                        threshold mark described in paragraph 
                        (2)(B)(ii); and
                            ``(ii) publish a consumer warning in a 
                        prominent place on the homepage of the 
                        institution's website to students--
                                    ``(I) of such notification at the 
                                beginning of each academic year until 
                                the institution is no longer in the 
                                bottom 5 percent of those institutions 
                                ranked under paragraph (2)(B)(i); and
                                    ``(II) that if the institution is 
                                subject to a penalty under this 
                                paragraph, an undergraduate student who 
                                enrolls at such institution for the 
                                first time after the date the 
                                institution is subject to such penalty 
                                may lose eligibility to receive 
                                assistance for attendance at that 
                                institution under any program under 
                                this title.
                    ``(C) Calculation of average.--
                            ``(i) In general.--For academic year 2017-
                        2018 and for each fifth succeeding academic 
                        year, for each institution of higher education 
                        that is included in the report under 
                        subparagraph (A)(iii) for an academic year, the 
                        Secretary shall--
                                    ``(I) grant the institution a hold 
                                harmless year for the academic year 
                                succeeding the academic year for which 
                                the institution receives notification 
                                under subparagraph (A)(i); and
                                    ``(II) determine the average 
                                percentage over the 4 succeeding 
                                academic years (as determined under 
                                clause (ii)) following the hold 
                                harmless academic year described in 
                                clause (i) of first-time, full-time 
                                bachelor's degree-seeking students who 
                                enrolled at the institution who 
                                graduate within 6 years.
                            ``(ii) Under-resourced years.--In 
                        determining the 4 succeeding academic years 
                        under clause (i)(II), the Secretary shall skip 
                        any academic year that succeeds an academic 
                        year for which less than $25,000,000 is 
                        collected under subsection (b)(3)(E).
                    ``(D) Failure to improve.--
                            ``(i) In general.--Except as provided in 
                        clause (ii) or paragraph (1)(B), if an 
                        institution of higher education has an average 
                        percentage determined under subparagraph 
                        (C)(i)(II) that is less than the applicable 
                        threshold mark described in paragraph 
                        (2)(B)(ii), the Secretary shall impose on such 
                        institution a penalty described in subparagraph 
                        (E).
                            ``(ii) Delay of penalty.--
                                    ``(I) In general.--The Secretary 
                                may delay imposing a penalty described 
                                in subparagraph (E) with respect to an 
                                institution that has an average 
                                percentage determined under 
                                subparagraph (C)(i)(II) that is less 
                                than the applicable threshold mark 
                                described in paragraph (2)(B)(ii), but 
                                whose percentage determined for the 
                                most recent academic year is at or 
                                above such threshold mark.
                                    ``(II) Period of delay.--The 
                                Secretary may delay imposing a penalty 
                                under subclause (I) for a period of not 
                                more than 2 years.
                                    ``(III) New average.--With respect 
                                to an institution for which the 
                                Secretary delays imposing a penalty 
                                under this clause for a period of not 
                                more than 2 years, the Secretary, at 
                                the end of such delay period, shall 
                                determine the average percentage over 
                                the 4 preceding years of first-time, 
                                full-time bachelor's degree-seeking 
                                students who enrolled at the 
                                institution who graduate within 6 
                                years. If the institution has an 
                                average percentage that is less than 
                                the threshold mark described in 
                                paragraph (2)(B)(ii), the Secretary 
                                shall impose on such institution a 
                                penalty described in subparagraph (E).
                    ``(E) Penalties.--
                            ``(i) First penalty year.--Beginning with 
                        the fifth academic year after which penalty 
                        fees are collected under subsection (b)(3)(E), 
                        an institution of higher education that is 
                        subject to a penalty under this paragraph shall 
                        pay to the Secretary for an academic year an 
                        amount equal to 25 percent of the total amount 
                        of funds made available under subsection (d) to 
                        the institution during the 4 academic years 
                        preceding the academic year for which the 
                        penalty is due under this paragraph. The 
                        Secretary shall use such penalty fees to fund 
                        the completion improvement program under 
                        subsection (d) and the completion bonus program 
                        under subsection (e).
                            ``(ii) Second penalty year.--One year after 
                        the first academic year for which an 
                        institution of higher education is subject to a 
                        penalty under this paragraph, the Secretary 
                        shall determine the average percentage for such 
                        year after such first academic year and the 3 
                        preceding academic years of first-time, full-
                        time bachelor's degree-seeking students who 
                        enrolled at the institution who graduate within 
                        6 years. If such average percentage is less 
                        than the threshold mark described in paragraph 
                        (2)(B)(ii) for such year after such first 
                        academic year, the institution of higher 
                        education shall pay to the Secretary for such 
                        year after such first academic year an amount 
                        equal to 50 percent of the total amount of 
                        funds made available under subsection (d) to 
                        the institution during the 5 academic years 
                        preceding the academic year for which the 
                        penalty is due under this clause. The Secretary 
                        shall use such penalty fees to fund the 
                        completion improvement program under subsection 
                        (d) and the completion bonus program under 
                        subsection (e).
                            ``(iii) Third penalty year.--
                                    ``(I) Determination.--Two years 
                                after the first academic year for which 
                                an institution of higher education is 
                                subject to a penalty under this 
                                paragraph, the Secretary shall 
                                determine the average percentage for 
                                such second year after such first 
                                academic year and the 3 preceding 
                                academic years of first-time, full-time 
                                bachelor's degree-seeking students who 
                                enrolled at the institution who 
                                graduate within 6 years.
                                    ``(II) Ineligibility.--If the 
                                average percentage determined under 
                                subclause (I) is less than the 
                                threshold mark described in paragraph 
                                (2)(B)(ii) for such second year after 
                                such first academic year any 
                                undergraduate student who enrolls at 
                                the institution of higher education for 
                                the first time during the 3-year period 
                                that begins 2 years after the date the 
                                institution is subject to a penalty 
                                under this paragraph shall lose 
                                eligibility to receive assistance for 
                                attendance at such institution under 
                                any program under this title during 
                                such 3-year period.
                            ``(iv) Prohibitions.--An institution of 
                        higher education that is subject to a penalty 
                        under this subparagraph--
                                    ``(I) shall ensure that students 
                                enrolled at the institution receive the 
                                full amount of funding under this title 
                                they would otherwise have received had 
                                the institution not been subject to 
                                such penalty; and
                                    ``(II) may not, in order to pay for 
                                the penalty fee--
                                            ``(aa) reduce the amount of 
                                        institutional need-based grant 
                                        aid awarded to students to 
                                        attend the institution; and
                                            ``(bb) raise tuition or 
                                        fees.
                            ``(v) Waiver.--The Secretary may waive or 
                        reduce a penalty under this subparagraph if the 
                        Secretary determines such a waiver is necessary 
                        to avoid extreme hardship for the students 
                        enrolled at the institution of higher education 
                        on which the penalty would be imposed.
                            ``(vi) Payment plan.--The Secretary may 
                        allow an institution of higher education that 
                        owes a penalty under this subparagraph to enter 
                        into a payment plan to pay such penalty amount.
                    ``(F) Appeals.--
                            ``(i) In general.--An institution of higher 
                        education that is subject to a penalty under 
                        this paragraph may appeal the decision to 
                        impose such penalty to the Secretary.
                            ``(ii) Content of appeal.--The appeals 
                        process shall permit the institution to 
                        demonstrate, to the satisfaction of the 
                        Secretary that there is some unforeseen and 
                        extreme circumstance that should warrant a 
                        waiver from such penalty, a reduction in the 
                        amount of such penalty, or removal of the 
                        institution from the bottom 5 percent of those 
                        institutions ranked under paragraph (2)(B).
                    ``(G) Consumer warning by the secretary.--For 
                academic year 2017-2018 and for each succeeding 
                academic year, the Secretary shall issue a report 
                listing each institution of higher education that is in 
                the bottom 5 percent of those institutions ranked under 
                paragraph (2)(B) for such academic year and, for each 
                such institution, the percentage of first-time, full-
                time bachelor's degree-seeking students who enrolled at 
                the institution who graduate within 6 years, for such 
                academic year.
    ``(d) Completion Improvement Program.--
            ``(1) In general.--From funds available under paragraph 
        (5), the Secretary shall establish a completion improvement 
        program to award grants to eligible institutions of higher 
        education to support reforms to improve completion rates.
            ``(2) Eligible institutions.--An institution of higher 
        education is eligible to receive a grant under this subsection 
        if the institution--
                    ``(A) is a public or other nonprofit institution of 
                higher education that is in the bottom 5 percent of 
                those institutions ranked under subsection (c)(2)(B); 
                and
                    ``(B) has not elected to be exempt under subsection 
                (c)(1)(B).
            ``(3) Determination of grant amount.--
                    ``(A) In general.--In awarding grants under this 
                subsection, the Secretary shall determine a grant 
                amount for each eligible institution according to the 
                formula under subparagraph (B).
                    ``(B) Grant amount formula.--
                            ``(i) In general.--Except as provided in 
                        clause (iii), the grant amount for an eligible 
                        institution described in paragraph (2) for a 
                        fiscal year shall be equal to the Pell weight 
                        of such institution for the fiscal year, 
                        determined under clause (ii), multiplied by the 
                        amount available under paragraph (5) for such 
                        fiscal year.
                            ``(ii) Pell weight.--
                                    ``(I) In general.--The Pell weight 
                                of an eligible institution for a fiscal 
                                year shall be equal to a percentage 
                                that is determined by dividing the 
                                institution's Pell enrollment 
                                determined under subclause (II) for the 
                                fiscal year by the total Pell 
                                enrollment determined under subclause 
                                (III) for the fiscal year.
                                    ``(II) Institution's pell 
                                enrollment.--An eligible institution's 
                                Pell enrollment for a fiscal year shall 
                                be equal to the percentage of 
                                bachelor's degree-seeking students 
                                enrolled at the institution for the 
                                academic year that ended immediately 
                                preceding such fiscal year who received 
                                a Federal Pell Grant for such academic 
                                year.
                                    ``(III) Total pell enrollment.--The 
                                total Pell enrollment for a fiscal year 
                                shall be equal to the sum of the 
                                percentages of bachelor's degree-
                                seeking students enrolled at each 
                                eligible institution, described in 
                                paragraph (2), for the academic year 
                                that ended immediately preceding such 
                                fiscal year who received a Federal Pell 
                                Grant for such academic year.
                            ``(iii) Maximum grant amount.--The maximum 
                        grant amount for an eligible institution 
                        described in paragraph (2) for a fiscal year 
                        shall be $2,000,000. Any amounts available 
                        under paragraph (5) for such fiscal year that 
                        are remaining after awarding grants in 
                        accordance with this subparagraph shall be used 
                        to carry out the completion bonus program under 
                        subsection (e).
            ``(4) Use of funds.--An institution of higher education 
        that receives a grant under this subsection shall use the grant 
        funds for reforms and practices that are part of the 
        improvement plan of the institution, as described under 
        subsection (c)(3)(B)(i), which may include the following:
                    ``(A) Increasing funds available for Federal Work-
                Study Programs for undergraduate students.
                    ``(B) Increasing need-based institutional aid to 
                students who are eligible for Federal Pell Grants.
                    ``(C) Enhancing academic advising and student 
                support services.
                    ``(D) Expanding accelerated learning opportunities.
                    ``(E) Improving remedial course offerings.
                    ``(F) Data- and technology-driven efforts to 
                increase college completion rates.
                    ``(G) Enhancing regular and proactive career 
                advising and loan counseling services, including post-
                enrollment services.
                    ``(H) Efforts to close completion gaps--
                            ``(i) between non-low-income or working 
                        class students and low-income or working class 
                        students; and
                            ``(ii) between non-underrepresented 
                        minority students and underrepresented minority 
                        students.
            ``(5) Available funds.--Funds shall be available to carry 
        out this subsection only from the penalty fees collected under 
        subsections (b)(3)(E) and (c)(3)(E).
    ``(e) Completion Bonus Program.--
            ``(1) In general.--From funds available under paragraph 
        (5), the Secretary shall establish a completion bonus program 
        to award grants on a competitive basis to eligible institutions 
        of higher education to support reforms to improve completion 
        rates.
            ``(2) Eligible institutions.--An institution of higher 
        education is eligible to receive a grant under this subsection 
        if the institution is not in the bottom 5 percent of those 
        institutions ranked under subsection (c)(2)(B).
            ``(3) Application and priority.--
                    ``(A) Application.--An eligible institution that 
                desires a grant under this subsection shall submit an 
                application to the Secretary at such time, in such 
                manner, and containing such information as the 
                Secretary may require.
                    ``(B) Priority.--In awarding grants under this 
                subsection, the Secretary shall give priority to an 
                eligible institution that is a part B institution (as 
                defined in section 322) or a minority-serving 
                institution (as described in section 371(a)).
            ``(4) Use of funds.--An eligible institution that receives 
        a grant under this subsection shall use the grant funds for 
        reforms and practices to improve completion rates, which may 
        include the following:
                    ``(A) Increasing funds available for Federal Work-
                Study Programs for undergraduate students.
                    ``(B) Increasing need-based institutional aid to 
                students who are eligible for Federal Pell Grants.
                    ``(C) Enhancing academic advising and student 
                support services.
                    ``(D) Expanding accelerated learning opportunities.
                    ``(E) Improving remedial course offerings.
                    ``(F) Data- and technology-driven efforts to 
                increase college completion rates.
                    ``(G) Enhancing regular and proactive career 
                advising and loan counseling services, including post-
                enrollment services.
                    ``(H) Efforts to close completion gaps--
                            ``(i) between non-low-income or working 
                        class students and low-income or working class 
                        students; and
                            ``(ii) between non-underrepresented 
                        minority students and underrepresented minority 
                        students.
            ``(5) Available funds.--Funds shall be available to carry 
        out this subsection only from funds from the penalty fees 
        collected under subsections (b)(3)(E) and (c)(3)(E) that are 
        remaining after grants are awarded for the completion 
        improvement program under subsection (d).
    ``(f) Non-Financial Reward Bonus Program.--
            ``(1) In general.--The Secretary shall award non-financial 
        rewards to institutions of higher education that have a proven 
        record of making college more affordable and increasing college 
        access and success for low-income or working class students and 
        moderate-income students.
            ``(2) Institutional eligibility.--An institution of higher 
        education is eligible for a non-financial reward under this 
        subsection for an academic year if--
                    ``(A) the percentage of bachelor's degree-seeking 
                students who enrolled at the institution for the 
                academic year who received a Federal Pell Grant for 
                such academic year falls within the top 50 percent of 
                ranked institutions, as determined by the Secretary for 
                the academic year;
                    ``(B) the percentage of first-time, full-time 
                bachelor's degree-seeking students who enrolled at the 
                institution who graduate within 6 years falls within 
                the top 25 percent of ranked institutions, as 
                determined by the Secretary for the academic year; and
                    ``(C) the institution is not under Federal 
                investigation for a sanction for an academic or 
                financial irregularity.
            ``(3) Applications.--An institution of higher education 
        that desires to receive a non-financial reward under this 
        subsection shall submit an application to the Secretary at such 
        time, in such manner, and containing such information as the 
        Secretary may require.
            ``(4) Priority.--Priority in awarding non-financial rewards 
        under this subsection shall go to institutions of higher 
        education that have small or diminishing gaps in the completion 
        rates--
                    ``(A) between non-low-income or working class 
                students and low-income or working class students; and
                    ``(B) between non-underrepresented minority 
                students and underrepresented minority students.
            ``(5) Non-financial rewards.--Non-financial rewards under 
        this subsection may include the following:
                    ``(A) Reporting less frequently and avoiding 
                duplicative reporting requirements.
                    ``(B) Extra points in Department grant competitions 
                for which institutions of higher education are eligible 
                entities.
                    ``(C) Waiving the multiple disbursement rule or 
                disbursement delays.
                    ``(D) Preferable status for experimental sites.
    ``(g) Best Practices.--The Secretary shall establish a publicly 
available electronic database identifying best practices of--
            ``(1) institutions of higher education that were in the 
        bottom 5 percent of those institutions ranked under the 
        improving college access program under subsection (b) or the 
        improving college completion program under subsection (c) for 
        academic year 2017-2018 or for any succeeding academic year and 
        that have improved their ranking; and
            ``(2) eligible institutions of higher education awarded 
        grants under the completion bonus program under subsection (e) 
        to support reforms to improve completion rates.
    ``(h) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section such sums as may be 
necessary.''.
    (b) Report to Congress.--Not later than 2 years after the date of 
enactment of this Act, the Secretary of Education shall submit a report 
to Congress that provides recommendations on ways to expand section 
493E of the Higher Education Act of 1965, as added by subsection (a), 
to institutions with predominantly associate's degree-seeking students, 
as well as other institutions of higher education not covered by such 
section.
                                 <all>
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