I 
119TH CONGRESS 
1ST SESSION H. R. 2899 
To provide for accountability in higher education. 
IN THE HOUSE OF REPRESENTATIVES 
APRIL 10, 2025 
Mr. TAKANO (for himself, Ms. LEE of Nevada, Mr. KRISHNAMOORTHI, Ms. 
WATERS, and Ms. ADAMS) introduced the following bill; which was re-
ferred to the Committee on Education and Workforce, and in addition 
to the Committee on the Judiciary, for a period to be subsequently deter-
mined by the Speaker, in each case for consideration of such provisions 
as fall within the jurisdiction of the committee concerned 
A BILL 
To provide for accountability in higher education. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Preventing Risky Op-
erations from Threatening the Education and Career Tra-
jectories of Students Act of 2025’’ or the ‘‘PROTECT 
Students Act of 2025’’. 
SEC. 2. TABLE OF CONTENTS. 
The table of contents for this Act is as follows: 
Sec. 1. Short title. 
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Sec. 2. Table of contents. 
Sec. 3. References. 
TITLE I—STUDENT AND TAXPAYER PROTECTIONS 
Sec. 101. Gainful employment and financial value transparency. 
Sec. 102. Borrower defense and substantial misrepresentations. 
Sec. 103. Closed school discharge. 
Sec. 104. Prohibition on institutions limiting student legal action. 
Sec. 105. Incentive compensation. 
TITLE II—ENSURING INTEGRITY AT INSTITUTIONS OF HIGHER 
EDUCATION AND INSTITUTIONAL CONTRACTORS 
Sec. 201. Updating Federal oversight of third-party servicers. 
Sec. 202. Job placement rates. 
Sec. 203. Allocation of tuition and fee revenue by title IV institutions. 
Sec. 204. Past performance. 
Sec. 205. Recoupment. 
TITLE III—IMPROVING OVERSIGHT 
Sec. 301. Enforcement in the Office of Federal Student Aid. 
Sec. 302. For-Profit Education Oversight Coordination Committee. 
Sec. 303. Establishment and maintenance of complaint resolution and tracking 
system. 
Sec. 304. Reforms to eligibility and certification procedures. 
Sec. 305. State oversight. 
Sec. 306. Accrediting agency oversight. 
Sec. 307. Mandatory spending for administrative costs of operating the student 
aid programs. 
TITLE IV—IMPROVING ACCESS TO STUDENT AND TAXPAYER 
INFORMATION 
Sec. 401. Reporting and disclosures from institutions of higher education. 
Sec. 402. Transparency of oversight activities. 
SEC. 3. REFERENCES. 
Except as otherwise expressly provided in this Act, 
wherever in this Act an amendment or repeal is expressed 
in terms of an amendment to, or a repeal of, a section 
or other provision, the reference shall be considered to be 
made to that section or other provision of the Higher Edu-
cation Act of 1965 (20 U.S.C. 1001 et seq.). 
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TITLE I—STUDENT AND 
TAXPAYER PROTECTIONS 
SEC. 101. GAINFUL EMPLOYMENT AND FINANCIAL VALUE 
TRANSPARENCY. 
(a) DEFINING GAINFUL EMPLOYMENT PROGRAMS.— 
(1) 
ADDITIONAL
INSTITUTIONS.—Section 
101(b) (20 U.S.C. 1001(b)) is amended in para-
graph (1), by inserting ‘‘, including that meets the 
standards for debt-to-earnings and earnings pre-
mium in section 498C,’’ after ‘‘gainful employment 
in a recognized occupation’’. 
(2) PROPRIETARY
INSTITUTION
OF
HIGHER 
EDUCATION.—Section 102(b)(1)(A)(i) (20 U.S.C. 
1002(b)(1)(A)(i)) is amended, by inserting ‘‘, includ-
ing that meets the standards for debt-to-earnings 
and earnings premium in section 498C’’ after ‘‘gain-
ful employment in a recognized occupation’’. 
(3) POSTSECONDARY
VOCATIONAL
INSTITU-
TION.—Section 
102(c)(1)(A) 
(20 
U.S.C. 
1002(c)(1)(A)) is amended, by inserting ‘‘, including 
that meets the standards for debt-to-earnings and 
earnings premium in section 498C’’ after ‘‘gainful 
employment in a recognized occupation’’. 
(4) 
ELIGIBLE
PROGRAM.—Section 
481(b)(1)(A)(i) (20 U.S.C. 1088(b)(1)(A)(i)) is 
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amended, by inserting ‘‘, including that meets the 
standards for debt-to-earnings and earnings pre-
mium in section 498C’’ after ‘‘gainful employment in 
a recognized profession’’. 
(b) DEBT-TO-EARNINGS AND EARNINGS PREMIUM.— 
Subpart 3 of part H of title IV (20 U.S.C. 1099c et seq.) 
is amended by adding at the end the following: 
‘‘SEC. 498C. DEBT-TO-EARNINGS AND EARNINGS PREMIUM. 
‘‘(a) DEFINITIONS.—In this section: 
‘‘(1) ANNUAL DEBT-TO-EARNINGS RATE.—The 
term ‘annual debt-to-earnings rate’ means the rate 
that is calculated for a cohort of students by taking 
the annual loan payment for such cohort, as cal-
culated by the Secretary, divided by the median an-
nual earnings for such cohort. 
‘‘(2) ANNUAL LOAN PAYMENT.—The term ‘an-
nual loan payment’ means, for a cohort of students, 
as defined by the Secretary, who completed an eligi-
ble program, their total annual payment on loans 
borrowed to enroll in the institution that offered the 
eligible program, measured not less than 2 and not 
more than 4 years after their completion. 
‘‘(3) 
DISCRETIONARY
DEBT-TO-EARNINGS 
RATE.—The term ‘discretionary debt-to-earnings 
rate’ means the rate that is calculated for a cohort 
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for gainful employment in a recognized oc-
cupation or a graduate or professional de-
gree program offered by an institution of 
higher education described in section 
101(a), issue a notice of determination not 
later than 45 days after completing the 
data match described in paragraph (1), in-
forming the institution that provides the 
program— 
‘‘(I) of the final discretionary 
debt-to-earnings 
rate, 
the 
annual 
debt-to-earnings rate, and the earn-
ings premium for the program, which 
may not be appealed by the institution 
unless the institution believes that the 
Secretary erred in the calculation of 
any such measure; 
‘‘(II) of the final determination 
regarding whether the program fails 
the debt-to-earnings rates or fails the 
earnings premium, as described in 
subsection (b)(2); 
‘‘(III) whether the program does 
not meet the standards for debt-to- 
earnings or earnings premium as de-
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scribed in subsection (b)(1) or could 
not meet such standards in the next 
year if it fails the debt-to-earnings 
rates or fails the earnings premium, 
as described in subsection (b)(2), in 
such next year; and 
‘‘(IV) whether the institution is 
required to provide warnings to en-
rolled students and prospective stu-
dents of the program’s failure, or risk 
of failure, to meet the standards, as 
determined under subclause (III); and 
‘‘(iii) for each eligible program that is 
a program of training to prepare students 
for gainful employment in a recognized oc-
cupation that does not meet the standards 
for debt-to-earnings and earnings premium 
as described in subsection (b)(1), enforce 
the consequences under subsection (d); and 
‘‘(B) develop processes to verify, on an an-
nual calendar year basis— 
‘‘(i) that each eligible program that is 
a program of training to prepare students 
for gainful employment in a recognized oc-
cupation or a graduate or professional de-
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gree program offered by an institution of 
higher education described in section 
101(a), provides the warning described in 
subparagraph (A)(ii)(IV), if applicable; 
and 
‘‘(ii) that each eligible program that is 
a program of training to prepare students 
for gainful employment in a recognized oc-
cupation that does not meet the standards 
for debt-to-earnings or earnings premium 
as described in subsection (b)(1), does not 
receive funds as described in subsection 
(d). 
‘‘(d) CONSEQUENCES
OF NOT MEETING STAND-
ARDS.— 
‘‘(1) NO DISBURSEMENT OF FUNDS FOR EN-
ROLLMENT IN INELIGIBLE PROGRAMS.—An institu-
tion may not disburse program funds under this title 
to students enrolled in a program of training to pre-
pare students for gainful employment in a recog-
nized occupation that does not meet the standards 
for debt-to-earnings and earnings premium as de-
scribed in this section. 
‘‘(2) TIME
PERIOD
TO
REESTABLISH
ELIGI-
BILITY.—An institution may not seek to reestablish 
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the eligibility of a program of training to prepare 
students for gainful employment in a recognized oc-
cupation that does not meet the standards for debt- 
to-earnings and earnings premium as described in 
this section or establish the eligibility of a program 
of training to prepare students for gainful employ-
ment in a recognized occupation that is substantially 
similar to the program that did not meet such stand-
ards until the date that is 3 years after the date of 
the notice of determination issued under subsection 
(c)(2)(A)(ii) that the program of training to prepare 
students for gainful employment in a recognized oc-
cupation does not meet the standards. 
‘‘(e) REGULATIONS.—The Secretary shall issue regu-
lations to carry out this section not later than 1 year after 
the date of enactment of the Preventing Risky Operations 
from Threatening the Education and Career Trajectories 
of Students Act of 2025, except that such regulations shall 
not be subject to the requirements of sections 482 or 
492.’’. 
SEC. 102. BORROWER DEFENSE AND SUBSTANTIAL MIS-
REPRESENTATIONS. 
(a) BORROWER DEFENSE TO REPAYMENT.—Section 
455(h) (20 U.S.C. 1087e(h)) is amended to read as fol-
lows: 
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‘‘(h) BORROWER DEFENSES.— 
‘‘(1) IN GENERAL.—Notwithstanding any other 
provision of State or Federal law, the Secretary shall 
discharge a covered loan in repayment made to a 
borrower with a defense to repayment of the loan, as 
described in this section. 
‘‘(2) DEFINITIONS.—In this subsection: 
‘‘(A) REPAYMENT.—The term ‘repayment’ 
means the period after any in-school deferment 
or grace period and before a loan is paid in full 
other than by a consolidation loan made under 
this title, including, without limitation, a loan 
in default. 
‘‘(B) COVERED LOAN.—The term ‘covered 
loan’ means a loan made, insured, or guaran-
teed under this title that has an outstanding 
balance comprised in whole or in part by repay-
ment obligations incurred to cover the cost of 
attendance at an institution of higher edu-
cation. 
‘‘(3) BASIS FOR DEFENSE TO REPAYMENT.— 
‘‘(A) IN GENERAL.—For purposes of dis-
charge under this section, a borrower defense to 
repayment is established when the Secretary 
concludes by a preponderance of the evidence 
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that a qualifying act, omission, or event oc-
curred, and the student whose cost of attend-
ance was paid in whole or in part by the pro-
ceeds of a covered loan suffered detriment in 
the nature and degree warranting a borrower 
defense discharge. 
‘‘(B) QUALIFYING
ACTS, OMISSIONS, OR 
EVENTS.—A qualifying act, omission, or event 
includes without limitation any of the following: 
‘‘(i) The institution, one of its rep-
resentatives, or a third-party servicer of 
the institution made a substantial mis-
representation (as described in section 
481(g)), directly or indirectly, to the bor-
rower in connection with the borrower’s de-
cision to attend, or to continue attending, 
the institution or the borrower’s decision to 
take out a covered loan. 
‘‘(ii) The institution failed to perform 
its obligations under the terms of a con-
tract with the student and such obligation 
was undertaken as consideration or in ex-
change for the borrower’s decision to at-
tend, or to continue attending, the institu-
tion, for the borrower’s decision to take 
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out a covered loan, or for funds disbursed 
in connection with a covered loan. 
‘‘(iii) The institution engaged in ag-
gressive and deceptive recruitment conduct 
or tactics in connection with the borrower’s 
decision to attend, or to continue attend-
ing, the institution or the borrower’s deci-
sion to take out a covered loan. Aggressive 
and deceptive recruitment tactics or con-
duct include actions by the institution, any 
of its representatives, or any entity, orga-
nization, or person with whom the institu-
tion has an agreement to provide edu-
cational programs, marketing, recruitment, 
or lead generation services that pressure a 
student to make enrollment or loan-related 
decisions, take unreasonable advantage of 
a student’s lack of knowledge, discourage a 
student or prospective student from con-
sulting an advisor prior to making enroll-
ment or loan-related decisions, use threat-
ening or abusive language, or repeatedly 
engage in unsolicited contact. 
‘‘(iv) The borrower, whether as an in-
dividual or as a member of a class, or a 
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governmental agency has obtained against 
the institution a favorable judgment based 
on State or Federal law in a court or ad-
ministrative tribunal of competent jurisdic-
tion based on the institution’s act or omis-
sion relating to the making of a covered 
loan, or the provision of educational serv-
ices for which the loan was provided, not-
withstanding any possible appeal. 
‘‘(v) The Secretary sanctioned or oth-
erwise took adverse action against the in-
stitution at which the borrower enrolled, 
based on the institution’s acts or omissions 
that could give rise to a borrower defense 
under clause (i), (ii), or (iii). 
‘‘(vi) The institution committed any 
act or omission that relates to the making 
of the covered loan for enrollment at the 
institution or the provision of educational 
services for which the covered loan was 
provided that would give rise to a cause of 
action against the institution under appli-
cable State law without regard to any stat-
ute of limitations. 
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‘‘(C) DETERMINATION
WHETHER
DET-
RIMENT
WARRANTS
DISCHARGE.—In deter-
mining whether the nature and degree of det-
riment warrants a borrower defense discharge, 
the Secretary shall consider the totality of the 
circumstances, including the nature and degree 
of detriment shown by previous recipients of 
borrower defense discharge, and drawing all in-
ferences and presumptions warranted by the 
evidence under the circumstances. 
‘‘(4) EFFECT OF DISCHARGE.—To effectuate a 
borrower defense discharge of a covered loan in re-
payment, the Secretary shall carry out the following: 
‘‘(A) Discharge all amounts owed to the 
Secretary, including interest and fees, on the 
covered loan, subject to the limitation in para-
graph (5). In the case of a covered loan that is 
a Federal Direct Consolidation Loan or a Fed-
eral Consolidation Loan under section 428C 
comprised only in part of repayment obligations 
incurred to cover the cost of attendance at the 
institution whose acts or omissions are the basis 
of the discharge, the Secretary may discharge 
less than the total amount of the covered loan 
when loan account records clearly establish the 
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portion of the covered loan not subject to the 
defense to repayment. 
‘‘(B) Reimburse all payments previously 
made to the Secretary on the covered loan, sub-
ject to the limitation in paragraph (5). 
‘‘(C) For borrowers in default, determine 
that the borrower is not in default on the cov-
ered loan and therefore not ineligible to receive 
assistance under this title on the basis of de-
fault on the covered loan. 
‘‘(D) Update or delete adverse reports the 
Secretary previously made to consumer report-
ing agencies regarding the covered loan. 
‘‘(E) Remove the discharged covered loan 
and any grant made under this title related to 
the student’s attendance at the institution 
whose acts are omissions are the basis of the 
discharge from the borrower’s loan history for 
purposes of calculating eligibility for further 
grants and loans under this title. 
‘‘(5) LIMITATION
ON
DISCHARGE
AND
REIM-
BURSEMENT.—The 
Secretary 
may 
reduce 
the 
amount of discharge and reimbursement provided 
for in paragraph (4) if the borrower received a 
money payment from the institution or related entity 
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in compensation for the acts or omissions forming 
the basis of the borrower defense. In deciding wheth-
er a reduction is warranted, and in what amount, 
the Secretary shall consider the extent to which the 
payment received by the borrower compensated for 
non-economic damages, out-of-pocket expenses, or 
payments previously made directly to the institution, 
and whether the borrower has non-Federal student 
loans as a result of attending the institution. The 
Secretary may not reduce the amount of discharge 
and reimbursement provided for in a covered loan in 
paragraph (4) because the borrower received funds 
from a State tuition recovery fund. 
‘‘(6) FINALITY.—A borrower defense discharge 
is final upon the Secretary’s notification to the bor-
rower. The Secretary may not thereafter revoke or 
reduce the amount of discharge or reimbursement, 
absent a finding of fraud on the part of the bor-
rower. 
‘‘(7) GROUP PROCESS.—Where substantial mis-
representations are widespread, the Secretary shall 
seek to assess the eligibility of all potentially af-
fected borrowers as a group or in multiple groups to 
expedite the process. If such discharges are ap-
proved, the Secretary shall discharge the covered 
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loans of all eligible borrowers in the group, in ac-
cordance with the processes in this section and with-
out requiring application materials, to the extent 
practicable. 
‘‘(8) REGULATIONS.—The Secretary may pro-
mulgate regulations or otherwise prescribe proce-
dures in relation to borrower defense discharge, con-
sistent with the provisions of this section. Nothing in 
this section modifies or displaces existing powers, 
authorities, and obligations of the Secretary, includ-
ing obligations imposed under chapter 5 of title 5, 
United States Code (commonly known as the ‘Ad-
ministrative Procedures Act’).’’. 
(b) SUBSTANTIAL
MISREPRESENTATION.—Section 
481 (20 U.S.C. 1088) is amended by adding at the end 
the following: 
‘‘(g) SUBSTANTIAL MISREPRESENTATION.—In this 
title, the term ‘substantial misrepresentation’, when used 
with respect to an institution of higher education, in-
cludes— 
‘‘(1) any statement about the nature of the in-
stitution’s 
educational 
program, 
its 
financial 
charges, or the employability or earnings of its grad-
uates that is false, erroneous, or has the likelihood 
or tendency to mislead under the circumstances, on 
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which the person to whom it was made could reason-
ably be expected to rely, or has reasonably relied, to 
that person’s detriment; and 
‘‘(2) any omission of fact, such as the conceal-
ment, suppression, or absence of material informa-
tion about the nature of the institution’s educational 
program, its financial charges, the employability or 
earnings of its graduates, the availability of enroll-
ment openings in the student’s desired program, the 
factors that would prevent an applicant from meet-
ing the legal or other requirements to be employed, 
licensed, or certified in the field for which the train-
ing is provided which a reasonable person would 
have considered in making a decision to attend, or 
to continue attending, the institution or to take out 
a covered loan.’’. 
SEC. 103. CLOSED SCHOOL DISCHARGE. 
Section 437(c)(1) (20 U.S.C. 1087(c)(1)) is amended 
to read as follows: 
‘‘(1) IN GENERAL.— 
‘‘(A) IN GENERAL.—If a borrower who re-
ceived, on or after January 1, 1986, a loan 
made, insured, or guaranteed under this part 
and the student borrower, or the student on 
whose behalf a parent borrowed, is unable to 
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complete the program in which such student is 
enrolled due to the closure of the institution or 
if such student’s eligibility to borrow under this 
part was falsely certified by the eligible institu-
tion or was falsely certified as a result of a 
crime of identity theft, or if the institution 
failed to make a refund of loan proceeds which 
the institution owed to such student’s lender, 
then the Secretary shall discharge the bor-
rower’s liability on the loan (including interest 
and collection fees) by repaying the amount 
owed on the loan. 
‘‘(B) ADDITIONAL DISCHARGE.— 
‘‘(i) IN GENERAL.—In addition to the 
authorization of discharge under subpara-
graph (A), the Secretary shall discharge a 
borrower’s (including an endorser’s) liabil-
ity on a Federal Direct Loan made under 
part D if— 
‘‘(I) the institution at which the 
borrower who took the loan (or on 
whose behalf it was taken or en-
dorsed) was enrolled, ceased to pro-
vide educational instruction as a 
whole, or ceased to provide instruction 
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in the programs in which more than 
50 percent of the students were en-
rolled; or 
‘‘(II) the borrower who took the 
loan (or on whose behalf it was taken 
or endorsed) was enrolled in an insti-
tution at any time within the period 
not earlier than 180 days before the 
date of the closure of the institution. 
‘‘(ii) EXTENSION OF 180 DAYS.—The 
Secretary may extend the 180 day period 
described in clause (i)(II) in cases where 
exceptional 
circumstances 
are 
dem-
onstrated, including if— 
‘‘(I) the institution was placed on 
probation or order to show cause or 
approval was withdrawn or terminated 
by an accrediting agency or associa-
tion or an institution’s institutional 
accreditor, or a State authorizing or 
licensing authority; 
‘‘(II) the institution was placed 
on Heightened Cash Monitoring sta-
tus by the Department or was placed 
on Provisional Program Participation 
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Approval status, or the institution’s 
participation in a program under this 
title was terminated by the Depart-
ment; 
‘‘(III) the institution was found 
to have violated Federal or State law 
related to enrolling or providing edu-
cation services to students by a Fed-
eral or State Government agency, or 
is the subject of a Federal or State 
court judgment that the institution 
violated laws related to enrolling or 
providing education services to stu-
dents; 
‘‘(IV) the teach-out plan (as re-
quired under section 487(f)) of the 
borrower’s educational program ex-
ceeds the 180 day period described in 
clause (i)(II); 
‘‘(V) the institution responsible 
for the teach-out of the borrower’s 
educational program fails to perform 
the material terms of the teach-out 
plan 
(as 
required 
under 
section 
487(f)), such that the borrower does 
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not have a reasonable opportunity to 
complete the borrower’s program of 
study; and 
‘‘(VI) the institution permanently 
closed all or most of its in-person lo-
cations while maintaining online pro-
grams or permanently closed many 
programs. 
‘‘(C) NO APPLICATION REQUIREMENT.—A 
borrower who took a loan (or on whose behalf 
it was taken or endorsed) that is eligible for 
discharge under this paragraph due to institu-
tional closure is entitled to discharge without an 
application or statement from the borrower 1 
year after the institution’s closure date if the 
student did not complete the program at the in-
stitution. 
‘‘(D) PURSING CLAIMS.—After discharging 
liability on a loan under this paragraph, the 
Secretary shall pursue any claim available to a 
borrower against the institution and its affili-
ates and principals or settle the loan obligation 
pursuant to the financial responsibility author-
ity under subpart 3 of part H.’’. 
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SEC. 104. PROHIBITION ON INSTITUTIONS LIMITING STU-
DENT LEGAL ACTION. 
(a) 
ENFORCEMENT
OF
ARBITRATION
AGREE-
MENTS.— 
(1) IN GENERAL.—Chapter 1 of title 9, United 
States Code, (relating to the enforcement of arbitra-
tion agreements) shall not apply to an enrollment 
agreement made between a student and an institu-
tion of higher education. 
(2) DEFINITION.—In this section, the term ‘‘in-
stitution of higher education’’ has the meaning given 
such term in section 102 of the Higher Education 
Act of 1965 (20 U.S.C. 1002). 
(b) PROHIBITION ON LIMITATIONS ON ABILITY OF 
STUDENTS TO PURSUE CLAIMS AGAINST CERTAIN INSTI-
TUTIONS OF HIGHER EDUCATION.—Section 487(a) (20 
U.S.C. 1094(a)) is amended by adding at the end the fol-
lowing: 
‘‘(30) The institution— 
‘‘(A) will not require any student to agree 
to, and will not enforce, any limitation or re-
striction (including a limitation or restriction on 
any available choice of applicable law, a jury 
trial, or venue) on the ability of a student to 
pursue a claim, individually or with others, 
against an institution in court; and 
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‘‘(B) will provide written notification to 
students enrolled at the institution that any 
limitation or restriction on the ability of a stu-
dent to pursue a claim, individually or with oth-
ers, against an institution in court contained in 
any enrollment or other agreement with a stu-
dent will not be enforced.’’. 
(c) PRIVATE RIGHT OF ACTION.— 
(1) IN GENERAL.— 
(A) PRIVATE RIGHT OF ACTION.—A viola-
tion described in subparagraph (B) shall be 
subject to a private right of action enforceable 
by a student or former student of an institution 
of higher education, on behalf of such individual 
or such individual and a class, in an appro-
priate district court of the United States or any 
other court of competent jurisdiction that also 
has jurisdiction over the defendant. The student 
or former student may seek any relief provided 
under section 455(h) for such violation, or any 
remedies otherwise available to the individual 
under law and equity. 
(B) VIOLATIONS.—A violation described in 
this subparagraph is any of the following: 
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(i) A substantial misrepresentation, 
including a substantial omission of fact. 
(ii) A violation of section 487(a)(20) 
of the Higher Education Act of 1965 (20 
U.S.C. 1094(a)(20)). 
(iii) A violation of the default rate 
regulations promulgated by the Secretary 
under section 435(m)(3) of the Higher 
Education 
Act 
of 
1965 
(20 
U.S.C. 
1085(m)(3)). 
(iv) A violation of the program integ-
rity regulations promulgated by the Sec-
retary under the Higher Education Act of 
1965 (20 U.S.C. 1001 et seq.), including 
regulations promulgated to carry out sec-
tion 102, section 455, and part H of such 
Act. 
(2) AMOUNT OF DAMAGES.— 
(A) IN GENERAL.—Any institution of high-
er education, third party servicer that contracts 
with such institution, or third party contractor 
that commits a substantial misrepresentation 
may be held liable to a student or former stu-
dent of that institution in an amount equal to 
the sum of— 
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(i) any actual damage sustained by 
such individual as a result of each substan-
tial misrepresentation; 
(ii) any additional damages as the 
court may allow; and 
(iii) in the case of any successful ac-
tion to enforce the foregoing liability, the 
costs of the action, together with a reason-
able attorney’s fee as determined by the 
court. 
(B) ABILITY
TO
ASSESS
PUNITIVE
DAM-
AGES.— 
(i) IN GENERAL.—On a finding by the 
court that an institution of higher edu-
cation, third party servicer that contracts 
with such institution, or third party con-
tractor has committed a violation described 
in paragraph (1)(B) with actual or con-
structive knowledge or reckless disregard 
for such violation, the court may assess 
punitive damages not to exceed threefold 
the sum of actual damages sustained by 
the plaintiff or class, including court costs 
and a reasonable attorney’s fee. 
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(ii) FACTORS
CONSIDERED
BY
THE 
COURT.—In determining the amount of li-
ability in any action under clause (i), the 
court shall consider, among other relevant 
factors— 
(I) in any individual action under 
this subsection, the frequency and 
persistence of noncompliance by the 
institution of higher education, third 
party servicer that contracts with 
such institution, or third party con-
tractor and the nature of such non-
compliance; or 
(II) in any class action under 
this subsection, in addition to the fac-
tors listed in subclause (I), the finan-
cial resources of the institution of 
higher education, third party servicer 
that contracts with such institution, 
or third party contractor and the 
number of persons adversely affected. 
(3) JURISDICTION.—An action to enforce any 
liability created by this subsection may be brought 
in any appropriate United States district court with-
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out regard to the amount in controversy, or in any 
other court of competent jurisdiction. 
(d) PROHIBITION ON TRANSCRIPT WITHHOLDING.— 
Section 487(a) (20 U.S.C. 1094(a)), as amended by sub-
section (b), is further amended by adding at the end the 
following: 
‘‘(31) The institution— 
‘‘(A) will not withhold official transcripts 
related to a balance owed by the student to the 
institution; and 
‘‘(B) will provide an official transcript to a 
student upon request by the student.’’. 
SEC. 105. INCENTIVE COMPENSATION. 
(a) INCENTIVE COMPENSATION.— 
(1) REVOCATION.—Example 2–B of Question 2 
of the Department of Education Dear Colleague 
Letter GEN–11–05 (March 17, 2011) is revoked. 
(2) PROHIBITION.—The Department of Edu-
cation may not issue a regulation or subregulatory 
guidance that would establish an exception to the 
prohibition provided in section 487(a)(20) of the 
Higher 
Education 
Act 
of 
1965 
(20 
U.S.C. 
1094(a)(20)). 
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(b) INSTITUTIONAL COMPLIANCE WITH THE INCEN-
TIVE
COMPENSATION
BAN.—Section 487(a)(20) (20 
U.S.C. 1094(a)(20)) is amended— 
(1) by striking ‘‘The institution’’ and inserting 
‘‘(A) The institution’’; and 
(2) by adding at the end the following: 
‘‘(B) Not later than 1 year after the date of en-
actment of the Preventing Risky Operations from 
Threatening the Education and Career Trajectories 
of Students Act of 2025, the institution shall attest 
to the Secretary that the institution is in compliance 
with subparagraph (A) notwithstanding the guidance 
provided in Department of Education Example 2–B 
of Question 2 of Dear Colleague Letter GEN–11–05 
(March 17, 2011), in such form as required by the 
Secretary. If the institution is not in compliance as 
of the date of enactment of the Preventing Risky 
Operations from Threatening the Education and Ca-
reer Trajectories of Students Act of 2025, the Sec-
retary shall revoke the institution’s program partici-
pation agreement under this section. 
‘‘(C) Following the attestation required under 
subparagraph (B), the institution shall annually pro-
vide verification from an independent auditor that 
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the institution is in compliance with subparagraph 
(A).’’. 
TITLE II—ENSURING INTEGRITY 
AT INSTITUTIONS OF HIGHER 
EDUCATION 
AND 
INSTITU-
TIONAL CONTRACTORS 
SEC. 201. UPDATING FEDERAL OVERSIGHT OF THIRD- 
PARTY SERVICERS. 
Section 481(c)(1) (20 U.S.C. 1088(c)(1)) is amended 
by inserting ‘‘, including related to the delivery of funds 
under this title, recruitment or retention of students, com-
pliance with cohort default rate (as defined in section 
435(m)) requirements, the development and delivery of in-
structional content, and other applicable activities as de-
scribed by the Secretary’’ after ‘‘title’’. 
SEC. 202. JOB PLACEMENT RATES. 
(a) DEFINITION.—Section 481 (20 U.S.C. 1088), as 
amended by section 102(b), is further amended by adding 
at the end the following: 
‘‘(h) JOB PLACEMENT RATES.—The Secretary shall 
establish a single definition of ‘job placement rate’ for pur-
poses of this Act that ensures consistent determinations 
across institutions and accrediting agencies regarding 
when students are placed in a job, to improve accuracy 
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and minimize the opportunity for misleading or deceptive 
information.’’. 
(b) PROGRAM PARTICIPATION AGREEMENT.—Section 
487(a)(8) (20 U.S.C. 1094(a)(8)) is amended to read as 
follows: 
‘‘(8) In the case of an institution that adver-
tises or discloses job placement rates to prospective 
students or that is required to provide regular re-
porting of job placement rates to an accrediting 
agency, State authorizer, or other regulator, the in-
stitution will utilize the definition provided under 
section 481(h), and shall make available to prospec-
tive students, at or before the time of application— 
‘‘(A) the most recent available data con-
cerning employment statistics, graduation sta-
tistics, the methodology used by the institution 
to calculate the job placement rate, and any 
other information necessary to substantiate the 
truthfulness of the advertisements or disclo-
sures, and 
‘‘(B) relevant State licensing requirements 
of the State in which such institution is located 
for any job for which the course of instruction 
is designed to prepare such prospective stu-
dents.’’. 
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(c) ACCREDITING AGENCY RECOGNITION.—Section 
496(a)(5)(A) (20 U.S.C. 1099b(a)(5)(A)) is amended by 
inserting ‘‘, as defined pursuant to section 481(h)’’ before 
the semicolon. 
(d) NONAPPLICABILITY OF RULEMAKING REQUIRE-
MENTS.—The amendments made under this section shall 
not be subject to the requirements provided under section 
492 (20 U.S.C. 1098a). 
SEC. 203. ALLOCATION OF TUITION AND FEE REVENUE BY 
TITLE IV INSTITUTIONS. 
Section 498(c) (20 U.S.C. 1099c(c)) is amended by 
inserting at the end the following: 
‘‘(7) REQUIREMENT TO SPEND REVENUE.— 
‘‘(A) IN GENERAL.— 
‘‘(i) Beginning in academic year 2026– 
2027 and in each academic year thereafter 
through 2031–2032, each institution of higher 
education, in order to be eligible to participate 
in programs under this title, shall spend an 
amount equal to not less than 30 percent of 
their tuition and fee revenue (net of allowances 
and discounts) on instruction. 
‘‘(ii) Beginning in academic year 2027– 
2028 and in each academic year thereafter 
through 2030–2031, the Secretary shall assess 
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the data described in subparagraph (B) and 
issue a report that identifies the following: 
‘‘(I) The total amount of spending on 
instruction for each institution. 
‘‘(II) The total amount of spending on 
student services for each institution, ex-
cluding advertising, recruiting, marketing, 
compensation of executives or officers, lob-
bying, and other pre-enrollment expenses, 
consistent with section 132(l). 
‘‘(III) Tuition and fee revenue (net of 
allowances and discounts) for each institu-
tion. 
‘‘(IV) The median increase in total 
spending on student services and instruc-
tion combined relative to spending on in-
struction relative to tuition and fee revenue 
(net of allowances and discounts). 
‘‘(V) Other relevant information the 
Secretary determines appropriate to in-
clude. 
‘‘(iii) In academic year 2031–2032, the 
Secretary shall issue a regulation that estab-
lishes a minimum threshold percentage for in-
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stitutional spending on instruction and student 
services combined that shall be— 
‘‘(I) not less than 30 percent; and 
‘‘(II) consistent with the median in-
crease in total spending, as identified 
under clause (ii)(IV) averaged across aca-
demic years 2028–2029, 2029–2030, and 
2030–2031. 
‘‘(iv) Beginning in academic year 2031– 
2032 and in each academic year thereafter, 
each institution of higher education, in order to 
be eligible to participate in programs under this 
title, shall spend an amount equal to not less 
than the threshold percentage established under 
clause (iii) of their tuition and fee revenue (net 
of allowances and discounts) on instruction and 
student services combined. 
‘‘(B) REPORTING
FROM
INSTITUTIONS.—The 
Secretary shall use data from reports received and 
definitions established under section 132(l) to carry 
out this paragraph. 
‘‘(C) WARNINGS.—The Secretary shall— 
‘‘(i) establish through regulation appro-
priate thresholds for an institution of higher 
education that meets the spending requirements 
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under clauses (i) and (iv) of subparagraph (A), 
but which is at risk of missing such thresholds; 
and 
‘‘(ii) require each institution of higher edu-
cation that is at risk of missing such thresholds 
to provide warnings to prospective students and 
enrolled students of the institution regarding 
the low instructional spending. 
‘‘(D) REGULATIONS.—The Secretary shall issue 
such regulations as determined necessary by the Sec-
retary to ensure compliance with the requirements of 
this paragraph, taking into consideration cost and 
convenience.’’. 
SEC. 204. PAST PERFORMANCE. 
Section 487(a)(16) (20 U.S.C. 1094(a)(16)) is 
amended by inserting at the end the following: 
‘‘(C) The institution will not knowingly employ 
an individual who was an owner, director, officer, or 
employee who exercised substantial control over an 
institution that owes a liability. 
‘‘(D) The institution will not knowingly— 
‘‘(i) employ an individual who was— 
‘‘(I) an owner, director, officer, or em-
ployee of an institution that has— 
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‘‘(aa) been found to have en-
gaged in fraud, misuse of funds, or 
any material violation of law; or 
‘‘(bb) had its participation in 
programs under this title terminated, 
its certification revoked, or its applica-
tion for certification or recertification 
for participation in such programs de-
nied; or 
‘‘(II) a 10 percent-or-higher equity 
owner, director, officer, principal, or execu-
tive of, or contractor affiliated with, an-
other institution in any year in which the 
other institution incurred a loss of Federal 
funds, as determined by the Secretary, in 
excess of 5 percent of the other institu-
tion’s annual funds under this title; or 
‘‘(ii) contract with any institution, third- 
party servicer, individual, agency, or organiza-
tion that has, or whose owners, officers, or em-
ployees have— 
‘‘(I) been found to have engaged in 
fraud, misuse of funds, or any material 
violation of law; 
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‘‘(II) had its participation in pro-
grams under this title terminated, its cer-
tification revoked, or its application for 
certification or recertification for participa-
tion in such programs denied; or 
‘‘(III) been a 10 percent-or-higher eq-
uity owner, director, officer, principal, ex-
ecutive of, or contractor affiliated with, an-
other institution in any year in which the 
other institution incurred a loss of Federal 
funds, as determined by the Secretary, in 
excess of 5 percent of the other institu-
tion’s annual funds under this title.’’. 
SEC. 205. RECOUPMENT. 
(a) CLARIFYING THE AUTHORITY TO RECOUP LI-
ABILITIES
FROM
TITLE
IV INSTITUTIONS.—Section 
487(c)(1) (20 U.S.C. 1094(c)(1)) is amended by striking 
subparagraph (F) and inserting the following: 
‘‘(F) the limitation, suspension, or termi-
nation of the participation in any program 
under this title of an eligible institution, the 
recoupment of liabilities established pursuant to 
section 493E, or the imposition of a civil pen-
alty under paragraph (3)(B) whenever the Sec-
retary has determined, after reasonable notice 
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and opportunity for hearing, that such institu-
tion has violated or failed to carry out any pro-
vision of this title, any regulation prescribed 
under this title, or any applicable special ar-
rangement, agreement, or limitation, except 
that no period of suspension under this section 
shall exceed 60 days unless the institution and 
the Secretary agree to an extension or unless 
limitation or termination proceedings are initi-
ated by the Secretary within that period of 
time.’’. 
(b) RECOUPMENT OF LIABILITIES.—Part G of title 
IV (20 U.S.C. 1088 et seq.) is amended by adding at the 
end the following: 
‘‘SEC. 493E. RECOUPMENT. 
‘‘(a) IN GENERAL.—The Secretary shall assess liabil-
ities and seek to recoup funds provided under this title 
from an institution of higher education as a result of stu-
dent loan discharges, findings from program reviews or 
compliance audits, or due to other forms of misconduct 
or noncompliance. 
‘‘(b) WAIVER
AUTHORITY.—The Secretary may 
waive some or all of the liabilities described in subsection 
(a) based on the individual circumstances of the institu-
tion.’’. 
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(c) OWNER SIGNATURES.—Section 498(b) of the 
Higher Education Act of 1965 (20 U.S.C. 1099c(b)) is 
amended— 
(1) in paragraph (4), by striking ‘‘and’’ after 
the semicolon; 
(2) in paragraph (5), by striking the period at 
the end and inserting ‘‘; and’’; and 
(3) by adding at the end the following: 
‘‘(6) requires both an authorized representative 
of the institution and, if applicable, an authorized 
representative of any entity with ownership and sub-
stantial control over the institution to sign the pro-
gram participation agreement, as described under 
section 487, for the institution, which shall ensure 
that the institution and its owner, if applicable, 
agree to repay any liabilities assessed against the in-
stitution by the Secretary.’’. 
TITLE III—IMPROVING 
OVERSIGHT 
SEC. 301. ENFORCEMENT IN THE OFFICE OF FEDERAL STU-
DENT AID. 
(a) ENFORCEMENT UNIT ESTABLISHED IN THE OF-
FICE
OF FEDERAL STUDENT AID.—Section 141 (20 
U.S.C. 1018) is amended— 
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(1) by redesignating subsections (g) through (i) 
as subsections (h) through (j), respectively; and 
(2) by inserting after subsection (f) the fol-
lowing: 
‘‘(g) ENFORCEMENT UNIT.— 
‘‘(1) IN GENERAL.—The Chief Operating Offi-
cer, in consultation with the Secretary, shall estab-
lish an enforcement unit within the PBO (referred 
to in this section as the ‘enforcement unit’). 
‘‘(2) APPOINTMENT.— 
‘‘(A) CHIEF
ENFORCEMENT
OFFICER.— 
The Chief Operating Officer, in consultation 
with the Secretary, shall appoint a Chief En-
forcement Officer as a senior manager, in ac-
cordance with subsection (e), to perform the 
functions described in this subsection. The 
Chief Enforcement Officer shall report solely 
and directly to the Chief Operating Officer. 
‘‘(B) BONUS.—Notwithstanding subsection 
(e), the Chief Enforcement Officer may receive 
a bonus, separately determined from the meth-
odology which applies to the calculation of bo-
nuses for other senior managers, based upon 
the Chief Operating Officer’s evaluation of the 
Chief Enforcement Officer’s performance in re-
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lation to the goals set forth in a performance 
agreement related to the specific duties of the 
enforcement unit. 
‘‘(3) DUTIES.—The enforcement unit shall— 
‘‘(A) receive, process, and analyze allega-
tions and complaints regarding the potential 
violation of Federal or State law (including civil 
and criminal law) or other unfair, deceptive, or 
abusive acts or practices, by institutions of 
higher education, third-party servicers that con-
tract with such institutions, and loan servicers; 
‘‘(B) investigate and coordinate investiga-
tions of potential or actual misconduct of insti-
tutions 
of 
higher 
education, 
third-party 
servicers that contract with such institutions, 
and loan servicers, including engaging in a reg-
ular program of secret shopping at online and 
campus-based institutions of higher education; 
‘‘(C) develop and implement a written pol-
icy for the enforcement of the ban on prohibited 
incentive compensation not less than annually, 
which may include automatic triggers for in-
quiries by the Department or regular ‘secret 
shopper’ or audit-based investigations, and shall 
update such policy as needed; and 
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‘‘(D) enforce compliance with laws gov-
erning Federal student financial assistance pro-
grams under title IV, including through the use 
of an emergency action in accordance to section 
487(c)(1)(I), the limitation, suspension, or ter-
mination of the participation of an eligible insti-
tution in a program under title IV, or the impo-
sition of a civil penalty in accordance with sec-
tion 487(c)(3)(B). 
‘‘(4) COORDINATION AND STAFFING.—The en-
forcement unit shall— 
‘‘(A) coordinate with relevant Federal and 
State agencies and oversight bodies, including 
the For-Profit Education Oversight Coordina-
tion Committee established under section 124; 
and 
‘‘(B) hire staff, (including by appointing 
not more than 10 individuals in positions of ex-
cepted service, as described in subsection 
(h)(3)) with such expertise as is necessary to 
conduct investigations, respond to allegations 
and complaints, and enforce compliance with 
laws governing Federal student financial assist-
ance programs under title IV. 
‘‘(5) DIVISIONS.— 
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‘‘(A) IN GENERAL.—The enforcement unit 
shall have separate divisions with the following 
focus areas: 
‘‘(i) An investigations division to in-
vestigate potential or actual misconduct at 
institutions of higher education, third- 
party servicers that contract with such in-
stitutions, and loan servicers. 
‘‘(ii) A division focused on evaluating 
the claims of borrowers who assert a de-
fense to repayment of Federal student 
loans, or groups of borrowers who qualify 
to assert such a defense to repayment, 
under section 455(h). 
‘‘(iii) A division focused on oversight 
of the Jeanne Clery Disclosure of Campus 
Security Policy and Campus Crime Statis-
tics Act, the reporting of crime and fire 
statistics by institutions of higher edu-
cation, and the oversight and enforcement 
of section 120 (relating to drug and alco-
hol abuse prevention). 
‘‘(iv) A division to administer the Sec-
retary’s authority to fine, limit, suspend, 
terminate, or take action against institu-
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tions of higher education, and third-party 
servicers that contract with such institu-
tions, participating in the Federal student 
financial assistance programs under title 
IV. 
‘‘(v) A division that administers a pro-
gram of compliance monitoring and over-
sight of institutions of higher education, 
and third-party servicers that contract with 
such institutions, including systems and 
procedures to support the eligibility, cer-
tification, and oversight of program par-
ticipants, for all institutions of higher edu-
cation participating in the Federal student 
financial assistance programs under title 
IV. 
‘‘(vi) Any other division that the Chief 
Enforcement Officer, in coordination with 
the Chief Operating Officer and the Sec-
retary, determines is necessary. 
‘‘(B) REPORTING.—The staff of each divi-
sion described in subparagraph (A) shall report 
to the Chief Enforcement Officer. 
‘‘(6) ACTIONS RECOMMENDED.—The Chief En-
forcement Officer may recommend, as appropriate to 
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the particular circumstance, that the Chief Oper-
ating Officer— 
‘‘(A) terminate, suspend, or limit an insti-
tution of higher education or a third-party 
servicer that contracts with such institution 
from participation in 1 or more programs under 
title IV (in accordance with section 487), or 
provisionally certify such participation (in ac-
cordance with section 498(h)); 
‘‘(B) impose a civil penalty in accordance 
with section 487(c)(3)(B); 
‘‘(C) for a student loan servicer, obtain all 
relief, including any penalties and suspension or 
termination of the agreement, provided in the 
loan servicer agreement to the contract of the 
servicer; or 
‘‘(D) make a recommendation to the Sec-
retary about whether to approve or deny the 
claims of borrowers, including groups of bor-
rowers, who assert a defense to repayment in 
accordance with section 455(h).’’. 
(b) EXTEND SUBPOENA POWER TO ASSIST WITH IN-
VESTIGATIONS.—Section 490A(a) (20 U.S.C. 1097a(a)) is 
amended to read as follows: 
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‘‘(a) AUTHORITY.—To assist the Secretary in the 
conduct of investigations of possible violations of the provi-
sions of this title, the Secretary is authorized to— 
‘‘(1) require by subpoena the production of in-
formation, documents, reports, answers, records, ac-
counts, papers, and other documentary evidence per-
taining to participation in any program under this 
title, the production of which may be required from 
any place in a State; and 
‘‘(2) require by subpoena oral testimony by any 
person, including any legal entity, concerning infor-
mation pertaining to participation in any title IV 
program, the appearance for which may be required 
at any place in a State.’’. 
(c) PROGRAM REVIEWS.—Section 498A of the High-
er Education Act of 1965 (20 U.S.C. 1099c–1) is amend-
ed— 
(1) in subsection (a)— 
(A) in the matter preceding paragraph (1), 
by striking ‘‘and financial responsibility’’ and 
inserting ‘‘, financial responsibility, and other 
eligibility-related’’; and 
(B) in paragraph (2)— 
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(i) by redesignating subparagraphs 
(A) through (F) as subparagraphs (B) 
through (G), respectively; 
(ii) by inserting before subparagraph 
(B), as so redesignated, the following: 
‘‘(A) identified as ‘high-risk’ institutions 
based on a risk-review process developed by the 
Department that shall include risk factors, in-
cluding— 
‘‘(i) significant changes in enrollment; 
‘‘(ii) high volumes of student com-
plaints or borrower defense claims; 
‘‘(iii) indicators of issues related to fi-
nancial capability; 
‘‘(iv) low completion rates; 
‘‘(v) indications of misleading or de-
ceptive practices, aggressive recruiting, or 
substantial misrepresentation; 
‘‘(vi) significant completion gaps be-
tween students of different demographic 
groups; or 
‘‘(vii) other indicators of risk to stu-
dents or taxpayers;’’; and 
(iii) in subparagraph (G), as so redes-
ignated, by striking ‘‘or financial responsi-
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bility’’ and inserting ‘‘, financial responsi-
bility, or other eligibility-related’’; 
(2) in subsection (d), by striking ‘‘criminal in-
vestigative training’’ and inserting ‘‘criminal and 
civil investigative training (including training in 
identifying misrepresentations in marketing and re-
cruitment materials)’’; 
(3) by redesignating subsection (e) as sub-
section (f); and 
(4) by inserting after subsection (d) the fol-
lowing: 
‘‘(e) PROGRAM REVIEWS.—Program reviews shall, at 
minimum, include a review of all— 
‘‘(1) recruiting and marketing materials, includ-
ing scripts and training materials provided to insti-
tution and third-party servicer staff involved in re-
cruiting, admissions, or financial aid; 
‘‘(2) consumer complaints held by the institu-
tion and consumer agencies, borrower defense 
claims, the institution’s response to such complaints 
or claims, and any related investigative materials; 
‘‘(3) actions against the institution by State or 
Federal regulators or enforcement agencies, includ-
ing State authorizing agencies and State attorneys 
general, or through qui tam actions; and 
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‘‘(4) 
actions 
against 
the 
institution 
by 
accreditors.’’. 
(d) 
ENHANCED
CIVIL
PENALTIES.—Section 
487(c)(3)(B) of the Higher Education Act (20 U.S.C. 
1094(c)(3)(B)) is amended— 
(1) in clause (i)— 
(A) by inserting ‘‘or its third-party 
servicer’’ after ‘‘eligible institution’’; and 
(B) by striking ‘‘$25,000 for each violation 
or misrepresentation’’ and inserting ‘‘$100,000 
for each violation or misrepresentation, or— 
‘‘(I) in the case of an institution, 
1.0 percent of the amount of funds 
the institution received through this 
title in the most recent award year 
prior to the determination for each 
such violation; and 
‘‘(II) in the case of a third-party 
servicer that contracts with such insti-
tution, the amount of the contract 
with the institution.’’; 
(2) by redesignating clause (ii) as clause (iii); 
(3) by inserting after clause (i) the following: 
‘‘(ii) The Secretary may consider each time a 
substantial misrepresentation is viewed or experi-
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enced, including static or standing misrepresenta-
tions, as a separate violation or misrepresentation.’’; 
and 
(4) by adding at the end the following: 
‘‘(iv) For the purpose of determining the 
amount of civil penalties under this subsection, any 
violation by a particular institution will accrue 
against all institutions or affiliates with common 
ownership.’’. 
SEC. 302. FOR-PROFIT EDUCATION OVERSIGHT COORDINA-
TION COMMITTEE. 
Part B of title I (20 U.S.C. 1011 et seq.) is amended 
by adding at the end the following: 
‘‘SEC. 124. FOR-PROFIT EDUCATION OVERSIGHT COORDINA-
TION COMMITTEE. 
‘‘(a) ESTABLISHMENT OF COMMITTEE.— 
‘‘(1) IN GENERAL.—There is established in the 
executive branch a committee to be known as the 
‘For-Profit Education Oversight Coordination Com-
mittee’ (referred to in this section as the ‘Com-
mittee’) and to be composed of the head (or the des-
ignee of such head) of each of the following Federal 
entities: 
‘‘(A) The Department of Education. 
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‘‘(B) The Bureau of Consumer Financial 
Protection. 
‘‘(C) The Department of Justice. 
‘‘(D) The Securities and Exchange Com-
mission. 
‘‘(E) The Department of Defense. 
‘‘(F) The Department of Veterans Affairs. 
‘‘(G) The Federal Trade Commission. 
‘‘(H) The Department of Labor. 
‘‘(I) The Internal Revenue Service. 
‘‘(J) The enforcement unit of the Perform-
ance-Based Organization established under sec-
tion 141(g). 
‘‘(K) At the discretion of the Chairperson 
of the Committee, any other relevant Federal 
agency or department. 
‘‘(2) PURPOSES.—The Committee shall have 
the following purposes: 
‘‘(A) Coordinate Federal oversight of for- 
profit institutions of higher education to— 
‘‘(i) improve enforcement of applicable 
Federal laws; 
‘‘(ii) increase accountability of for- 
profit institutions of higher education to 
students and taxpayers; and 
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‘‘(iii) ensure the promotion of quality 
education programs. 
‘‘(B) Coordinate Federal activities to pro-
tect students from unfair, deceptive, abusive, 
unethical, fraudulent, or predatory practices, 
policies, or procedures of for-profit institutions 
of higher education. 
‘‘(C) 
Encourage 
information 
sharing 
among agencies related to Federal investiga-
tions, audits, program reviews, inquiries, com-
plaints, financial statements, and other infor-
mation relevant to the oversight of for-profit in-
stitutions of higher education. 
‘‘(D) Develop binding memoranda of un-
derstanding that the Federal entities rep-
resented on the Committee will use regarding 
the sharing of information to exercise the over-
sight described in this section. 
‘‘(E) Increase coordination and cooperation 
between Federal and State agencies (including 
State authorizing agencies, State attorneys gen-
eral, and State approving agencies designated 
under section 3671 of title 38, United States 
Code) with respect to improving oversight and 
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accountability of for-profit institutions of higher 
education. 
‘‘(F) Develop best practices and consist-
ency among Federal and State agencies in the 
dissemination of consumer information regard-
ing for-profit institutions of higher education to 
ensure that students, parents, and other stake-
holders have easy access to such information. 
‘‘(3) CHAIRPERSON.—The Secretary of Edu-
cation or the designee of the Secretary shall serve as 
the Chairperson of the Committee. 
‘‘(b) MEETINGS.— 
‘‘(1) COMMITTEE MEETINGS.—The members of 
the Committee shall meet regularly, but not less 
than once during each quarter of each fiscal year, to 
carry out the purposes described in subsection 
(a)(2). 
‘‘(2) MEETINGS
WITH
STATE
AGENCIES
AND 
STAKEHOLDERS.—The Committee shall meet not 
less than once each fiscal year, and shall otherwise 
interact regularly, with State authorizing agencies, 
State attorneys general, State approving agencies 
designated under section 3671 of title 38, United 
States Code, veterans service organizations, and con-
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sumer advocates to carry out the purposes described 
in subsection (a)(2). 
‘‘(c) DIRECTOR.—The Chairperson shall appoint a 
full-time executive director to support the Committee and 
may appoint and fix the pay of additional staff as the 
Chairperson considers appropriate.’’. 
SEC. 303. ESTABLISHMENT AND MAINTENANCE OF COM-
PLAINT RESOLUTION AND TRACKING SYS-
TEM. 
(a) COMPLAINT TRACKING SYSTEM.—Title I (20 
U.S.C. 1001 et seq.) is amended by adding at the end 
the following: 
‘‘PART F—COMPLAINT TRACKING SYSTEM 
‘‘SEC. 161. COMPLAINT TRACKING SYSTEM. 
‘‘(a) DEFINITIONS.—In this section: 
‘‘(1) COMPLAINANT.—The term ‘complainant’ 
means an individual making a complaint, or report 
of suspicious activity, through the complaint track-
ing system. 
‘‘(2) COMPLAINT
TRACKING
SYSTEM.—The 
term ‘complaint tracking system’ means the tracking 
system established under subsection (b). 
‘‘(3) 
THIRD-PARTY
SERVICER.—The 
term 
‘third-party servicer’ has the meaning given the term 
in section 481(c). 
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‘‘(b) IN GENERAL.—The Secretary shall— 
‘‘(1) establish and operate, in coordination with 
the Student Loan Ombudsman, a complaint tracking 
system that includes a single, toll-free telephone 
number and a website to facilitate the centralized 
collection of, monitoring of, and response to com-
plaints or reports of suspicious activity regarding— 
‘‘(A) Federal student financial aid and the 
servicing of postsecondary education loans by 
loan servicers; 
‘‘(B) educational practices and services of 
institutions of higher education or third-party 
servicers; and 
‘‘(C) the recruiting and marketing prac-
tices of institutions of higher education or 
third-party servicers; and 
‘‘(2) ensure that— 
‘‘(A) complaints or reports submitted by 
students, borrowers of student loans, staff of 
loan servicers, institutions of higher education, 
or third-party servicers, or the general public— 
‘‘(i) may remain anonymous if the 
complainant so chooses, including by pro-
viding complainants with an option for the 
individual complaint to not be reported to 
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the loan servicer, institution, or third-party 
servicer, as the case may be; and 
‘‘(ii) may describe problems that are 
systematic in nature and not associated 
with a particular student or institution; 
‘‘(B) complaints and reports are provided 
to the loan servicers, institutions of higher edu-
cation, or third-party servicers that are the sub-
ject of such complaints or reports; 
‘‘(C) such loan servicer, institution of high-
er education, or third-party servicer provides a 
timely response to the complainant; and 
‘‘(D) the complaint tracking system has 
the capacity to retrieve, search, and categorize 
complaints or reports for purposes of identi-
fying problematic trends and systemic practices. 
‘‘(c) HANDLING OF COMPLAINTS OR REPORTS.— 
‘‘(1) IN GENERAL.—The Secretary shall estab-
lish, in consultation with the heads of appropriate 
agencies (including the Director of the Bureau of 
Consumer Financial Protection), reasonable proce-
dures to provide a timely response to individuals who 
file a complaint or report of suspicious activity in 
the complaint tracking system. 
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‘‘(2) TIMELY RESPONSE TO COMPLAINTS.—The 
Secretary shall provide a response to a complainant 
not more than 90 days after receiving the complaint, 
or report of suspicious activity, through the system, 
in writing where appropriate. Each response shall 
include a description of— 
‘‘(A) the steps that have been taken by the 
Secretary in response to the complaint or re-
port; 
‘‘(B) any responses received by the Sec-
retary from the loan servicer, institution of 
higher education, or third-party servicer; and 
‘‘(C) any additional actions that the Sec-
retary has taken, or plans to take, in response 
to the complaint or report. 
‘‘(3) TIMELY RESPONSE TO SECRETARY BY IN-
STITUTION OF HIGHER EDUCATION OR SERVICER.— 
‘‘(A) NOTICE.—If the Secretary deter-
mines that it is necessary, the Secretary shall— 
‘‘(i) notify a loan servicer, institution 
of higher education, or third-party servicer 
that is the subject of a complaint, or re-
port of suspicious activity, through the 
complaint tracking system regarding the 
complaint or report; and 
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‘‘(ii) directly address and resolve the 
complaint or report in the system. 
‘‘(B) INSTITUTION
OR
SERVICER
RE-
SPONSE.—Not later than 60 days after receiv-
ing a notice under subparagraph (A), a loan 
servicer, institution of higher education, or 
third-party servicer shall provide a response to 
the Secretary concerning the complaint or re-
port, including— 
‘‘(i) the steps that have been taken by 
the loan servicer, institution, or third-party 
servicer to respond to the complaint or re-
port; 
‘‘(ii) all responses received by the loan 
servicer, institution, or third-party servicer 
from the complainant; and 
‘‘(iii) any additional actions that the 
loan servicer, institution, or third-party 
servicer has taken, or plans to take, in re-
sponse to the complaint or report. 
‘‘(C) FURTHER
INVESTIGATION.—In the 
event that a complaint or report received by the 
complaint tracking system is not adequately re-
solved or addressed by the responses of the loan 
servicer, institution of higher education, or 
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third-party servicer under subparagraph (B), 
the Secretary may— 
‘‘(i) ask additional questions of such 
loan servicer, institution, or third-party 
servicer; or 
‘‘(ii) seek additional information from 
or action by the loan servicer, institution, 
or third-party servicer. 
‘‘(4) PROVISION OF INFORMATION.— 
‘‘(A) IN GENERAL.—A loan servicer, insti-
tution of higher education, or third-party 
servicer shall, in a timely manner, comply with 
a request by the Secretary for information in 
the control or possession of such loan servicer, 
institution, or third-party servicer, respectively, 
concerning a complaint or report of suspicious 
activity received by the Secretary under the 
complaint tracking system, including supporting 
written documentation, subject to subparagraph 
(B). 
‘‘(B) EXCEPTIONS.—A loan servicer, insti-
tution of higher education, or third-party 
servicer shall not be required to make available 
under this paragraph— 
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‘‘(i) any nonpublic or confidential in-
formation, including any confidential com-
mercial information; 
‘‘(ii) any information collected by the 
loan servicer, institution, or third-party 
servicer for the purpose of preventing 
fraud or detecting or making any report 
regarding other unlawful or potentially un-
lawful conduct; or 
‘‘(iii) any information required to be 
kept confidential by any other provision of 
law. 
‘‘(5) COMPLIANCE.—A loan servicer, institution 
of higher education, or third party servicer shall 
comply with the requirements to provide responses 
and information, in accordance with this subsection, 
as a condition of receiving funds under title IV or 
as a condition of the contract with the Department, 
as applicable. 
‘‘(d) TRANSPARENCY.— 
‘‘(1) DATA PUBLICATION.—The Secretary shall, 
on an annual basis, publish data on the website of 
the Department that shall include, for each loan 
servicer, institution, and third-party servicer— 
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‘‘(A) the number of complaints and reports 
received; 
‘‘(B) the types of complaints and reports 
received; 
‘‘(C) information about the resolution of 
the complaints and reports; and 
‘‘(D) if the complainant consents, the nar-
rative content of the complaint or report. 
‘‘(2) REPORT.—Each year, the Secretary shall 
prepare and submit to the authorizing committees a 
report describing— 
‘‘(A) the types and nature of complaints or 
reports the Secretary has received under the 
complaint tracking system; 
‘‘(B) the extent to which complainants are 
receiving adequate resolution pursuant to this 
section; 
‘‘(C) whether particular types of com-
plaints or reports are more common in a given 
sector of institutions of higher education or 
with particular loan servicers or third-party 
servicers; 
‘‘(D) any concerning trends or systemic 
practices identified; 
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‘‘(E) any legislative recommendations that 
the Secretary determines are necessary to bet-
ter assist students and families regarding the 
activities described in subsection (c)(1); and 
‘‘(F) the loan servicers, institutions of 
higher education, and third-party servicers with 
the highest volume of complaints and reports, 
as determined by the Secretary.’’. 
(b) PROGRAM
PARTICIPATION
AGREEMENT
RE-
QUIREMENT.—Section 487(a) (20 U.S.C. 1094(a)) is 
amended by adding at the end the following: 
‘‘(32) The institution will comply with any re-
quirement under section 161, or any other require-
ment by the Department, to provide information or 
responses with respect to a complaint or report of 
suspicious activity about the institution.’’. 
SEC. 304. REFORMS TO ELIGIBILITY AND CERTIFICATION 
PROCEDURES. 
(a) 
ELIGIBILITY
AND
CERTIFICATION
PROCE-
DURES.—Section 498 (20 U.S.C. 1099c) is amended— 
(1) in subsection (a)— 
(A) by striking ‘‘For purposes’’ and insert-
ing the following: 
‘‘(1) IN GENERAL.—For purposes’’; 
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(B) by striking ‘‘status, and’’ and inserting 
‘‘status,’’; 
(C) by inserting ‘‘, and the institution’s 
compliance with all other eligibility require-
ments in accordance with paragraph (2),’’ after 
‘‘an institution of higher education’’; and 
(D) by adding at the end the following: 
‘‘(2) COMPLIANCE.— 
‘‘(A) IN
GENERAL.—In making a deter-
mination of institutional eligibility under this 
section, the Secretary shall— 
‘‘(i) require that an institution dem-
onstrate compliance with each provision re-
quired under this title in order to receive 
a full, non-provisional certification of eligi-
bility for purposes of this section; 
‘‘(ii) reflect that an institution is not 
entitled to continued participation in pro-
grams under this title absent a demonstra-
tion of full compliance; and 
‘‘(iii) determine that an institution is 
not eligible for participation in programs 
under this title if it is not in full compli-
ance with section 487(a)(16).’’; and 
(2) in subsection (f)— 
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(A) by striking ‘‘The Secretary shall en-
sure’’ and inserting the following: 
‘‘(1) IN
GENERAL.—The Secretary shall en-
sure’’; and 
(B) by striking ‘‘The personnel’’ and in-
serting the following: ‘‘The Secretary shall not 
automatically certify or recertify an institution 
for participation in a program under this title 
as a result of delay in conducting a full review 
of the institution’s application. 
‘‘(2) SITE VISITS.—The personnel’’. 
(b) PROVISIONAL CERTIFICATION OF HIGH-RISK IN-
STITUTIONS.—Section 498 (20 U.S.C. 1099c) is amend-
ed— 
(1) in subsection (h)— 
(A) in paragraph (1)(B)— 
(i) in clause (ii), by striking ‘‘or’’ 
after the semicolon; 
(ii) in clause (iii), by striking the pe-
riod at the end and inserting a semicolon; 
and 
(iii) by adding at the end the fol-
lowing: 
‘‘(iv) the institution has violated any 
requirement of this title; 
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‘‘(v) the institution has violated the 
terms of its program participation agree-
ment under section 487; or 
‘‘(vi) the Secretary determines that 
the institution’s continued participation in 
programs under this title poses a signifi-
cant risk to students and taxpayers.’’; 
(B) by redesignating paragraphs (2) and 
(3) as paragraphs (3) and (4), respectively; and 
(C) by inserting after paragraph (1) the 
following: 
‘‘(2) ADDITIONAL CONDITIONS.—The Secretary 
shall require a provisionally certified institution to 
comply with such additional conditions as the Sec-
retary determines necessary or appropriate based on 
the circumstances of the institution, as specified in 
the institution’s program participation agreement 
under section 487.’’; 
(2) by redesignating subsections (i), (j), and (k) 
as subsections (j), (k), and (l), respectively; and 
(3) by inserting after subsection (h) the fol-
lowing: 
‘‘(i) TERMINATION ACTION.—If an institution that is 
provisionally certified under subsection (h) is unable to 
meet its responsibilities under its program participation 
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agreement or is in violation of any requirement established 
under this title (including if the institution has engaged 
in substantial misrepresentations), or if a final adminis-
trative finding or judicial judgment determines that the 
institution violated a State or Federal consumer protection 
law or regulation, the Secretary may terminate the institu-
tion’s participation in the programs under this title.’’. 
(c) 
PROGRAM
PARTICIPATION
AGREEMENT 
CLAIMS.— 
(1) FALSE CLAIMS.—Section 487(c) (20 U.S.C. 
1094(c)) is amended by adding at the end the fol-
lowing: 
‘‘(8) FALSE CLAIMS.— 
‘‘(A) IN GENERAL.—An institution that submits 
a misrepresentation or false claim on an application 
for funds under this title, or knowingly (as defined 
in section 3729 of title 31, United States Code) fails 
to comply with the requirements of the program par-
ticipation agreement under this section, shall be sub-
ject to sections 3729 through 3733 of such title. 
‘‘(B) AMOUNT OF DAMAGES.—For purposes of 
section 3729(a) of title 31, United States Code, the 
amount of damages that the Government sustains 
because of the act of the institution described in 
subparagraph (A) shall be the total amount of funds 
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distributed to the institution for loans made to stu-
dents under part D during the period beginning on 
the date of the submission of the application or the 
failure to comply (as the case may be) and ending 
on the date on which a final decision finding a viola-
tion of section 3729 of such Code is made.’’. 
(2) CERTIFICATION
OF
COMPLIANCE.—Para-
graph 
(21) 
of 
section 
487(a) 
(20 
U.S.C. 
1094(a)(21)) is amended to read as follows: 
‘‘(21) The institution— 
‘‘(A) acknowledges that the agreement cer-
tifies the institution’s compliance with all terms 
of the program participation agreement and all 
applicable Federal laws and regulations that 
govern an institution’s eligibility to receive 
funds under this title; 
‘‘(B) agrees that any violation of the terms 
of a program participation agreement or any 
other Federal law or regulation described in 
subparagraph (A) constitutes material non-
compliance with a condition of payment; and 
‘‘(C) will meet the requirements estab-
lished by the Secretary and accrediting agencies 
or associations, and will provide evidence to the 
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Secretary that the institution has the authority 
to operate within a State.’’. 
SEC. 305. STATE OVERSIGHT. 
(a) IN GENERAL.—Section 101 (20 U.S.C. 1001) is 
amended— 
(1) in subsection (a)— 
(A) by redesignating paragraphs (3), (4), 
and (5) as paragraphs (4), (5), and (6), respec-
tively; and 
(B) by inserting after paragraph (2) the 
following: 
‘‘(3) if providing education through distance 
education or correspondence in a State in which the 
institution is not located— 
‘‘(A) meets the requirements of such State 
for offering postsecondary education; or 
‘‘(B) if the institution is authorized by a 
State pursuant to an interstate reciprocity 
agreement— 
‘‘(i) the institution must have fewer 
than 200 students in such State enrolled 
annually; 
‘‘(ii) the agreement must allow States 
to enforce all non-registration and non-fee 
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laws with respect to out-of-State institu-
tions; and 
‘‘(iii) decisions regarding eligibility to 
participate in the reciprocity agreement 
and the standards that apply to partici-
pating institutions shall be made exclu-
sively by representatives of member State 
regulatory agencies or State attorneys gen-
eral offices;’’; and 
(2) in subsection (b)(1), by striking ‘‘para-
graphs (1), (2), (4), and (5) of subsection (a)’’ and 
inserting ‘‘paragraphs (1), (2), (3), (5), and (6) of 
subsection (a)’’. 
(b) CONFORMING AMENDMENTS.—Section 102 (20 
U.S.C. 1002) is amended— 
(1) in subsection (a)(2)(A), by striking ‘‘section 
101(a)(4)’’ each place the term appears and insert-
ing ‘‘section 101(a)(5)’’; 
(2) in subsection (b)(1)— 
(A) in subparagraph (B), by striking 
‘‘paragraphs (1) and (2) of section 101(a)’’ and 
inserting ‘‘paragraphs (1), (2), and (3) of sec-
tion 101(a)’’; and 
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(B) in subparagraph (C), by striking 
‘‘paragraph (4) of section 101(a)’’ and inserting 
‘‘paragraph (5) of section 101(a)’’; and 
(3) in subsection (c)(1)(B), by striking ‘‘re-
quirements of paragraphs (1), (2), (4), and (5) of 
section 101(a)’’ and inserting ‘‘requirements of 
paragraphs (1), (2), (3), (5), and (6) of section 
101(a)’’. 
SEC. 306. ACCREDITING AGENCY OVERSIGHT. 
Section 496(c) (20 U.S.C. 1099b(c)) is amended— 
(1) in paragraph (8), by striking ‘‘and’’ after 
the semicolon; 
(2) in paragraph (9)(B), by striking the period 
at the end and inserting ‘‘; and’’; and 
(3) by adding at the end the following: 
‘‘(10)(A) assesses the risk to students of any 
institution or program, including assessing the risk 
to students and institutions of any program man-
aged by a third-party servicer, in accordance with 
factors provided by the Secretary; 
‘‘(B) effectively determines whether each such 
institution or program warrants additional oversight 
or action; and 
‘‘(C) provides adequate monitoring of the qual-
ity and risk of such institutions or programs.’’. 
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SEC. 307. MANDATORY SPENDING FOR ADMINISTRATIVE 
COSTS OF OPERATING THE STUDENT AID 
PROGRAMS. 
Paragraph (3) of section 458(a) (20 U.S.C. 
1087h(a)(3)) is amended to read as follows: 
‘‘(3) FUNDS FOR ADMINISTRATIVE COSTS.— 
‘‘(A) IN GENERAL.—Each fiscal year, there 
shall be available to the Secretary from funds 
not otherwise appropriated, funds to be obli-
gated for administrative costs under this part, 
including the costs of the student loan program 
under this part, except that the total expendi-
tures by the Secretary under this subparagraph 
shall not exceed 5 percent of the amount of the 
average outstanding Federal student loan port-
folio under this part for the preceding fiscal 
year. 
‘‘(B) AVAILABILITY.—Funds made avail-
able under subparagraph (A) shall remain avail-
able until expended. The Secretary is author-
ized to use funds available under this para-
graph for a fiscal year for a subsequent fiscal 
year. 
‘‘(C) BUDGET.—No funds may be ex-
pended under this paragraph unless the Sec-
retary includes in the annual budget request of 
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the Department to Congress a detailed descrip-
tion of— 
‘‘(i) the specific activities for which 
the funds made available by this paragraph 
have been used in the most recent fiscal 
year; 
‘‘(ii) the activities and costs planned 
for the fiscal year for which the request is 
made; and 
‘‘(iii) the projection of activities and 
costs for the fiscal year immediately fol-
lowing the fiscal year for which adminis-
trative expenses under this paragraph are 
made available.’’. 
TITLE IV—IMPROVING ACCESS 
TO STUDENT AND TAXPAYER 
INFORMATION 
SEC. 401. REPORTING AND DISCLOSURES FROM INSTITU-
TIONS OF HIGHER EDUCATION. 
(a) GAINFUL EMPLOYMENT AND FINANCIAL VALUE 
TRANSPARENCY DISCLOSURES AND WARNINGS.—Section 
498C, as added by section 101(b), is amended— 
(1) by redesignating subsection (e) as sub-
section (f); and 
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(2) by inserting after subsection (d) the fol-
lowing: 
‘‘(e) DISCLOSURES AND WARNINGS.— 
‘‘(1) IN GENERAL.—For each gainful employ-
ment program or graduate or professional degree 
program of an institution that does not meet the 
standards described in subsection (b), the institution 
shall— 
‘‘(A) provide warnings to prospective stu-
dents and enrolled students of the institution 
regarding the failing program status in a man-
ner specified by the Secretary; and 
‘‘(B) shall require prospective students to 
acknowledge receipt of the warning. 
‘‘(f) DISCLOSURE.—An institution of higher edu-
cation shall provide the link to the website described in 
subsection (c)(2)(A)(ii) to prospective and enrolled stu-
dents in a manner specified by the Secretary.’’. 
(b) INSTRUCTIONAL SPENDING DATA AND DISCLO-
SURES.—Section 132 (20 U.S.C. 1015a) is amended— 
(1) by redesignating subsection (l) as subsection 
(n); and 
(2) by inserting after subsection (k) the fol-
lowing: 
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‘‘(l) INVESTMENTS IN INSTRUCTION AND STUDENT 
SERVICES.— 
‘‘(1) INSTITUTIONAL EXPENDITURES.— 
‘‘(A) IN
GENERAL.—The Secretary shall 
establish definitions for calculating instructional 
expenditures that shall separately account for 
the expenditures of an institution of higher edu-
cation on each of the following: 
‘‘(i) Instruction. 
‘‘(ii) Student services. 
‘‘(iii) Marketing. 
‘‘(iv) Recruitment. 
‘‘(v) Advertising. 
‘‘(vi) Lobbying. 
‘‘(B) EXCLUSIONS.—Expenditures on in-
struction and student services, as defined in ac-
cordance with clauses (i) and (ii) of subpara-
graph (A), shall not include expenditures on 
marketing, recruitment, advertising, compensa-
tion of executives or officers, or lobbying, or 
other pre-enrollment expenditures. 
‘‘(2) REPORTING.—Each institution of higher 
education receiving Federal funds under title IV 
shall report to the Secretary— 
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‘‘(A) the total dollar amount of title IV 
funds received by the institution; 
‘‘(B) the proportion of title IV funds spent 
on recruitment activities and marketing activi-
ties; 
‘‘(C) the proportion of title IV funds spent 
on instruction and student services; and 
‘‘(D) for each program of education or di-
vision of the institution for which the tuition is 
charged, the price of tuition relative to the in-
stitution’s allocation of revenues to spending on 
instruction and student services. 
‘‘(3) DISCLOSURES BY THE DEPARTMENT OF 
EDUCATION.—The Secretary shall make the disclo-
sures reported under paragraph (2) publicly avail-
able on the College Navigator website.’’. 
(c) TRANSPARENCY OF ONLINE PROGRAMS.—Section 
132 (20 U.S.C. 1015a), as amended by subsection (b), is 
further amended by inserting after subsection (l), as 
added by subsection (b)(2), the following: 
‘‘(m) IMPROVING TRANSPARENCY FOR ONLINE AND 
CONTRACTED PROGRAMS.— 
‘‘(1) ANNUAL REPORTING REQUIREMENTS FOR 
THIRD-PARTY SERVICER ACTIVITIES.—Each institu-
tion of higher education that receives Federal funds 
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under title IV shall report annually to the Sec-
retary— 
‘‘(A) the name of each third-party servicer 
with which the institution contracts; and 
‘‘(B) for each such third-party servicer— 
‘‘(i) the names of any programs for 
which each such third-party servicer is con-
tracted to provide support; 
‘‘(ii) the services each such third- 
party servicer is contracted to offer for 
each program; 
‘‘(iii) the number of students enrolled 
in any program for which the third-party 
servicer is contracted to provide services; 
‘‘(iv) whether the third-party servicer 
administers or provides any private or in-
stitutional student loan products; and 
‘‘(v) the third-party servicer’s total ex-
penditures on advertising, marketing, and 
recruiting on behalf of the institution. 
‘‘(2) DISCLOSURE REQUIREMENTS.—If an insti-
tution of higher education receiving Federal funds 
under title IV contracts with a third-party servicer 
to offer one or more programs of education, and 
such third-party servicer provides recruitment activi-
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ties, retention activities, or similar activities (as 
specified by the Secretary) for the program— 
‘‘(A) 
the 
institution 
and 
third-party 
servicer shall prominently disclose for each such 
program of education, in a manner specified by 
the Secretary and using language developed by 
the Secretary, the nature of the relationship be-
tween the institution and third-party servicer— 
‘‘(i) in advertisements; 
‘‘(ii) in marketing materials; and 
‘‘(iii) on the website of the institution; 
and 
‘‘(B) individuals who are employed by the 
third-party servicer to provide admissions, re-
cruitment, retention, or advising activities shall 
prominently disclose to prospective or enrolled 
students that the individuals are employees of 
that third-party servicer and not the institution, 
including in any communication about the pro-
gram of education. 
‘‘(3) ANNUAL REPORTING REQUIREMENTS FOR 
ONLINE
EDUCATION.—Each institution of higher 
education receiving Federal funds under title IV 
shall report annually to the Secretary— 
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‘‘(A) the institution’s expenditures on ac-
tivities to secure enrollments for each online, 
on-campus, and hybrid program, and its total 
expenditures for all activities of the institution; 
‘‘(B) the status of each student receiving 
Federal student aid as enrolled online, on-cam-
pus, or in a combination of both modalities, suf-
ficient for the Secretary to calculate the total 
student enrollment, retention and completion 
rates, student loan borrowing levels, student 
loan repayment outcomes, and median earnings 
for each such program; and 
‘‘(C) the annual net price charged for each 
such program.’’. 
(d) DISCLOSURE OF MATERIAL FACTS FOR PROPRI-
ETARY
INSTITUTIONS.—Section 
498(c) 
(20 
U.S.C. 
1099c(c)), as amended by section 203, is further amended 
by adding at the end the following: 
‘‘(8)(A) The Secretary shall require each proprietary 
institution of higher education (as defined in section 
102(c)) to file promptly with the Secretary— 
‘‘(i) all public filings that the institution files 
with the Securities and Exchange Commission that 
include references to matters that affect students, 
including— 
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