I 
112TH CONGRESS 
2D SESSION 
H. R. 4207 
To award grants in order to establish longitudinal personal college readiness 
and savings online platforms for low-income students. 
IN THE HOUSE OF REPRESENTATIVES 
MARCH 19, 2012 
Mr. FATTAH introduced the following bill; which was referred to the 
Committee on Education and the Workforce 
A BILL 
To award grants in order to establish longitudinal personal 
college readiness and savings online platforms for low- 
income students. 
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 ‘‘American Dream Ac-
counts Act of 2012’’. 
SEC. 2. FINDINGS. 
Congress finds the following: 
(1) Only 9.8 out of every 100 individuals from 
low-income families will graduate from an institution 
of higher education before reaching the age of 24. 
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(2) Lack of knowledge about how to apply to, 
and pay for, an institution of higher education is a 
barrier for many low-income students and students 
who would be in the first generation in their families 
to attend an institution of higher education. 
(3) According to Public Agenda, most young 
adults give secondary school counselors fair or poor 
ratings for advice about attending an institution of 
higher education, including advice about how to de-
cide what institution of higher education to attend, 
how to pay for higher education, what careers to 
pursue, and how to apply to an institution of higher 
education. 
(4) More than 1,700,000 students fail to file 
the Free Application for Federal Student Aid 
(FAFSA), and about one-third of such students 
would qualify for a Federal Pell Grant. 
(5) During the last 2 decades, costs of attend-
ing institutions of higher education have increased 
dramatically, but need-based financial aid has not 
kept pace with such increasing costs. 
(6) In the 1990–1991 school year, the max-
imum Federal Pell Grant covered 45 percent of the 
average cost of attendance at a public 4-year institu-
tion of higher education (including tuition, fees, 
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room, and board), but in the 2010–2011 school year, 
the maximum Federal Pell Grant covered only 34 
percent of such cost. 
(7) Parental and youth college savings are 
strong predictors of a youth’s expectations about at-
tendance at an institution of higher education. 
(8) Only 32 percent of parents who earn less 
than $35,000 a year are saving for their child’s edu-
cation at an institution of higher education. 
(9) According to the Center for Social Develop-
ment, ‘‘wilt’’ occurs when a young person who ex-
pects to graduate from a 4-year institution of higher 
education has not yet attended such institution by 
the ages of 19 to 22. 
(10) Children who have savings dedicated for 
attendance at an institution of higher education are 
4 times more likely to attend a 4-year institution of 
higher education and avoid ‘‘wilt’’. 
SEC. 3. DEFINITIONS. 
In this Act: 
(1) ESEA DEFINITIONS.—The terms ‘‘local 
educational agency’’, ‘‘parent’’, ‘‘State educational 
agency’’, and ‘‘Secretary’’ shall have the meanings 
given the terms in section 9101 of the Elementary 
and Secondary Education Act of 1965 (20 U.S.C. 
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7801) and the term ‘‘charter school’’ shall have the 
meaning given the term in section 5210 of such Act. 
(2) AMERICAN
DREAM
ACCOUNT.—The term 
‘‘American Dream Account’’ means a personal on-
line account for low-income students that monitors 
higher education readiness and includes a college 
savings account. 
(3) 
APPROPRIATE
COMMITTEES
OF
CON-
GRESS.—The term ‘‘appropriate committees of Con-
gress’’ means the Committee on Health, Education, 
Labor, and Pensions, the Committee on Appropria-
tions, and the Committee on Finance of the Senate, 
and the Committee on Education and the Work-
force, the Committee on Appropriations, and the 
Committee on Ways and Means of the House of 
Representatives, as well as any other Committee of 
the Senate or House of Representatives that the 
Secretary determines appropriate. 
(4) COLLEGE
SAVINGS
ACCOUNT.—The term 
‘‘college savings account’’ means a savings account 
that— 
(A) provides some tax-preferred accumula-
tion; 
(B) is widely available (such as Qualified 
Tuition Programs under section 529 of the In-
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ternal Revenue Code of 1986 or Coverdell Edu-
cation Savings Accounts under section 530 of 
the Internal Revenue Code of 1986); and 
(C) contains funds that may be used only 
for the costs associated with attending an insti-
tution of higher education, including— 
(i) tuition and fees; 
(ii) room and board; 
(iii) textbooks; 
(iv) supplies and equipment; and 
(v) Internet access. 
(5) DUAL ENROLLMENT PROGRAM.—The term 
‘‘dual enrollment program’’ means an academic pro-
gram through which a secondary school student is 
able simultaneously to earn credit toward a sec-
ondary school diploma and a postsecondary degree 
or credential. 
(6) ELIGIBLE ENTITY.—The term ‘‘eligible enti-
ty’’ means— 
(A) a State educational agency; 
(B) a local educational agency; 
(C) a charter school; 
(D) an institution of higher education; 
(E) a nonprofit organization; 
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(F) an entity with demonstrated experience 
in educational savings or in assisting low-in-
come students to prepare for, and attend, an in-
stitution of higher education; or 
(G) a consortium of 2 or more of the enti-
ties described in subparagraphs (A) through 
(F). 
(7) INSTITUTION OF HIGHER EDUCATION.—The 
term ‘‘institution of higher education’’ has the 
meaning given the term in section 101(a) of the 
Higher Education Act of 1965 (20 U.S.C. 1001(a)). 
(8) LOW-INCOME STUDENT.—The term ‘‘low-in-
come student’’ means a student who is eligible to re-
ceive a free or reduced price lunch under the Rich-
ard B. Russell National School Lunch Act (42 
U.S.C. 1751 et seq.). 
SEC. 4. GRANT PROGRAM. 
(a) PROGRAM AUTHORIZED.—The Secretary is au-
thorized to award grants, on a competitive basis, to eligible 
entities to enable such eligible entities to establish and ad-
minister American Dream Accounts for a group of low- 
income students. 
(b) RESERVATION.—From the amount appropriated 
each fiscal year to carry out this Act, the Secretary shall 
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reserve not more than 5 percent of such amount to carry 
out the evaluation activities described in section 7(a). 
(c) DURATION.—A grant awarded under this Act 
shall be for a period of not more than 3 years. The Sec-
retary may extend such grant for an additional 2-year pe-
riod if the Secretary determines that the eligible entity has 
demonstrated significant progress, based on the factors 
described in section 5(b)(10). 
SEC. 5. APPLICATIONS; PRIORITY. 
(a) IN GENERAL.—Each eligible entity desiring a 
grant under this Act shall submit an application to the 
Secretary at such time, in such manner, and containing 
such information as the Secretary may require. 
(b) CONTENTS.—At a minimum, the application de-
scribed in subsection (a) shall include the following: 
(1) A description of the characteristics of a 
group of not less than 30 low-income public school 
students who— 
(A) are, at the time of the application, at-
tending a grade not higher than grade 9; and 
(B) will, under the grant, receive an Amer-
ican Dream Account. 
(2) A description of how the eligible entity will 
engage, and provide support (such as tutoring and 
mentoring for students, and training for teachers 
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