tion, except that such term shall not include revenue 
expended for advertising and promotion activities, 
excessive administrative expenses including excessive 
executive compensation, recruiting, lobbying ex-
penses, or payments to shareholders.’’; and 
(2) by adding at the end the following new sub-
section: 
‘‘(k) IMPLEMENTATION OF REBATE REQUIREMENT 
FOR INSUFFICIENT EDUCATIONAL EXPENDITURES.— 
‘‘(1) CALCULATION OF REBATE AMOUNT FOR 
EACH
STUDENT.—For 
purposes 
of 
subsection 
(a)(30), the amount of a rebate for each student at 
an institution subject to subparagraph (B) of such 
subsection shall be calculated by— 
‘‘(A) determining the difference between 
80 percent and the percentage of the institu-
tion’s revenues expended on educational and re-
lated expenses (as defined in subsection (i)(4)); 
and 
‘‘(B) applying the percentage determined 
under subparagraph (A) to the total amount of 
tuition, fees, and institutional charges provided 
to the institution by the student, or on the stu-
dent’s behalf, from all sources for the applicable 
period of enrollment. 
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‘‘(2) DISTRIBUTION OF INDIVIDUAL STUDENT 
REBATES.—Each rebate issued for a student by an 
institution described in subsection (a)(30)(B) shall 
be distributed as follows: 
‘‘(A) To the Secretary, an amount that 
bears the same ratio to the total rebate for such 
student as the amount of tuition, fees, and in-
stitutional charges provided to the institution 
for the student from sources under this title 
bears to the total amount of tuition, fees, and 
institutional charges provided to the institution 
for the applicable period of enrollment by or on 
behalf of the student from all sources, which 
shall be credited, in a manner consistent with 
section 484B(b)(3), to outstanding balances on 
loans, to awards, and to other assistance made 
under this title to the student or on behalf of 
the student for the period of enrollment for 
which a rebate is required. 
‘‘(B) To each third party who provided an 
amount to the institution for tuition, fees, and 
institutional charges on the student’s behalf, in-
cluding the Secretary of Defense, the Secretary 
of Veterans Affairs, or an employer, an amount 
that bears the same ratio to the total rebate for 
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such student as the amount of tuition, fees, and 
institutional charges provided to the institution 
for the student from such third party bears to 
the total amount of tuition, fees, and institu-
tional charges provided to the institution for the 
applicable period of enrollment by or on behalf 
of the student from all sources. 
‘‘(C) To the student, the amount of the 
total rebate for such student remaining after 
payment to the Secretary and each third party 
under subparagraphs (A) and (B). 
‘‘(3) STUDENT REBATE FEE PROHIBITED.—An 
institution that is required to issue a rebate for a 
student under subsection (a)(30) may not assess a 
new student fee, increase an existing student fee, 
withhold or reduce any portion of financial assist-
ance provided to any student, or otherwise increase 
the cost of attendance for any student, to satisfy 
such rebate requirement. 
‘‘(4) NO CHANGE IN 90/10 CALCULATIONS.—Re-
bates required under subsection (a)(30) and issued 
in accordance with this subsection shall in no way 
affect or be considered in the calculation of revenue 
requirements under subsection (a)(24). 
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‘‘(5) CALCULATION
OF
INSTITUTION’S
REVE-
NUES.—In making calculations under subsection 
(a)(30) and this subsection, an institution’s revenues 
for an institutional fiscal year shall be calculated in 
accordance with subsection (d)(1), except that an in-
stitution shall not be required to use the cash basis 
of accounting.’’. 
SEC. 3. EFFECTIVE DATE. 
This Act and the amendments made by this Act shall 
take effect on July 1, 2014. 
Æ 
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