I 
116TH CONGRESS 
1ST SESSION H. R. 3369 
To close the GI Bill loophole and update the 80/20 rule for proprietary 
institutions of higher education. 
IN THE HOUSE OF REPRESENTATIVES 
JUNE 19, 2019 
Ms. SHALALA (for herself, Ms. WASSERMAN SCHULTZ, Mr. MOULTON, Mr. 
CISNEROS, Ms. HOULAHAN, Ms. MUCARSEL-POWELL, Mr. LUJA´N, and 
Ms. SHERRILL) introduced the following bill; which was referred to the 
Committee on Education and Labor 
A BILL 
To close the GI Bill loophole and update the 80/20 rule 
for proprietary institutions of 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 ‘‘Defending All Veterans 
in Education Act’’ or the ‘‘DAVIE Act’’. 
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SEC. 2. CLOSING THE GI BILL LOOPHOLE AND UPDATING 
THE 80/20 RULE FOR PROPRIETARY INSTITU-
TIONS OF HIGHER EDUCATION. 
(a) IN GENERAL.—Section 102(b) of the Higher 
Education Act of 1965 (20 U.S.C. 1002(b)), is further 
amended— 
(1) in paragraph (1)— 
(A) in subparagraph (D), by striking 
‘‘and’’ after the semicolon; 
(B) in subparagraph (E), by striking the 
period at the end and inserting ‘‘; and’’; and 
(C) by adding at the end the following: 
‘‘(F) meets the requirements of paragraph 
(2).’’; 
(2) by redesignating paragraph (2) as para-
graph (3); and 
(3) by inserting after paragraph (1) the fol-
lowing: 
‘‘(2) REVENUE SOURCES.— 
‘‘(A) IN GENERAL.—In order to qualify as 
a proprietary institution of higher education 
under this subsection, an institution shall derive 
not less than 20 percent of the institution’s rev-
enues from sources other than Federal funds, 
as calculated in accordance with subparagraphs 
(B) and (C). 
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‘‘(B) FEDERAL
FUNDS.—In this para-
graph, the term ‘Federal funds’ means any 
Federal funds provided, under this Act or any 
other Federal law, through a grant, contract, 
subsidy, loan, guarantee, insurance, or other 
means to a proprietary institution, including 
Federal funds disbursed or delivered to an insti-
tution or on behalf of a student or to a student 
to be used to attend the institution, except that 
such term shall not include any monthly hous-
ing stipend provided under the Post-9/11 Edu-
cational Assistance Program under chapter 33 
of title 38, United States Code. 
‘‘(C) IMPLEMENTATION OF NON-FEDERAL 
REVENUE REQUIREMENT.—In making calcula-
tions under subparagraph (A), an institution of 
higher education shall— 
‘‘(i) use the cash basis of accounting; 
‘‘(ii) consider as revenue only those 
funds generated by the institution from— 
‘‘(I) tuition, fees, and other insti-
tutional charges for students enrolled 
in programs eligible for assistance 
under title IV; 
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‘‘(II) activities conducted by the 
institution that are necessary for the 
education and training of the institu-
tion’s students, if such activities are— 
‘‘(aa) conducted on campus 
or at a facility under the control 
of the institution; 
‘‘(bb) performed under the 
supervision of a member of the 
institution’s faculty; and 
‘‘(cc) required to be per-
formed by all students in a spe-
cific educational program at the 
institution; and 
‘‘(III) a contractual arrangement 
with a Federal agency for the purpose 
of providing job training to low-in-
come individuals who are in need of 
such training; 
‘‘(iii) presume that any Federal edu-
cation assistance funds that are disbursed 
or delivered to an institution on behalf of 
a student or directly to a student will be 
used to pay the student’s tuition, fees, or 
other institutional charges, regardless of 
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whether the institution credits such funds 
to the student’s account or pays such 
funds directly to the student, except to the 
extent that the student’s tuition, fees, or 
other institutional charges are satisfied 
by— 
‘‘(I) grant funds provided by an 
outside source that— 
‘‘(aa) has no affiliation with 
the institution; and 
‘‘(bb) shares no employees, 
executives, or board members 
with the institution; 
‘‘(II) funds provided under a con-
tractual arrangement with a Federal, 
State, or local government agency for 
the purpose of providing job training 
to low-income individuals who are in 
need of that training; or 
‘‘(III) institutional scholarships 
described in clause (v); 
‘‘(iv) include no loans made by an in-
stitution of higher education as revenue to 
the school, except for payments made by 
students on such loans; 
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‘‘(v) include a scholarship provided by 
the institution— 
‘‘(I) only if the scholarship is in 
the form of monetary aid based upon 
the academic achievements or finan-
cial need of students, disbursed to 
qualified student recipients during 
each fiscal year from an established 
restricted account; and 
‘‘(II) only to the extent that 
funds in that account represent des-
ignated funds, or income earned on 
such funds, from an outside source 
that— 
‘‘(aa) has no affiliation with 
the institution; and 
‘‘(bb) shares no employees, 
executives, or board members 
with the institution; and 
‘‘(vi) exclude from revenues— 
‘‘(I) the amount of funds the in-
stitution received under part C of title 
IV, unless the institution used those 
funds to pay a student’s institutional 
charges; 
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‘‘(II) the amount of funds the in-
stitution received under subpart 4 of 
part A of title IV; 
‘‘(III) the amount of funds pro-
vided by the institution as matching 
funds for any Federal program; 
‘‘(IV) the amount of Federal edu-
cation assistance funds provided to 
the institution to pay institutional 
charges for a student that were re-
funded or returned; and 
‘‘(V) the amount charged for 
books, supplies, and equipment, unless 
the institution includes that amount 
as tuition, fees, or other institutional 
charges. 
‘‘(D) REPORT
TO
CONGRESS.—Not later 
than July 1, 2020, and by July 1 of each suc-
ceeding year, the Secretary shall submit to the 
authorizing committees a report that contains, 
for each proprietary institution of higher edu-
cation that receives assistance under title IV 
and as provided in the audited financial state-
ments submitted to the Secretary by each insti-
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tution pursuant to the requirements of section 
487(c)— 
‘‘(i) the amount and percentage of 
such institution’s revenues received from 
Federal education assistance funds; and 
‘‘(ii) the amount and percentage of 
such institution’s revenues received from 
other sources.’’. 
(b) REPEAL OF EXISTING REQUIREMENTS.—Section 
487 of the Higher Education Act of 1965 (20 U.S.C. 
1094) is amended— 
(1) in subsection (a)— 
(A) by striking paragraph (24); 
(B) by redesignating paragraphs (25) 
through (29) as paragraphs (24) through (28), 
respectively; 
(C) in paragraph (24)(A)(ii) (as redesig-
nated by subparagraph (B)), by striking ‘‘sub-
section (e)’’ and inserting ‘‘subsection (d)’’; and 
(D) in paragraph (26) (as redesignated by 
subparagraph (B)), by striking ‘‘subsection (h)’’ 
and inserting ‘‘subsection (g)’’; 
(2) by striking subsection (d); 
(3) by redesignating subsections (e) through (j) 
as subsections (d) through (i), respectively; 
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(4) in subsection (d) (as redesignated by para-
graph (3)), by striking ‘‘(a)(25)’’ and inserting 
‘‘(a)(24)’’; 
(5) in subsection (f)(1) (as redesignated by 
paragraph (3)), by striking ‘‘subsection (e)(2)’’ and 
inserting ‘‘subsection (d)(2)’’; and 
(6) in subsection (g)(1) (as redesignated by 
paragraph (3)), by striking ‘‘subsection (a)(27)’’ in 
the matter preceding subparagraph (A) and insert-
ing ‘‘subsection (a)(26)’’. 
(c) CONFORMING AMENDMENTS.—The Higher Edu-
cation Act of 1965 (20 U.S.C. 1001 et seq.) is amended— 
(1) in section 152 (20 U.S.C. 1019a)— 
(A) in subsection (a)(1)(A), by striking 
‘‘subsections (a)(27) and (h) of section 487’’ 
and inserting ‘‘subsections (a)(26) and (g) of 
section 487’’; and 
(B) in subsection (b)(1)(B)(i)(I), by strik-
ing ‘‘section 487(e)’’ and inserting ‘‘section 
487(d)’’; 
(2) 
in 
section 
153(c)(3) 
(20 
U.S.C. 
1019b(c)(3)), by striking ‘‘section 487(a)(25)’’ each 
place the term appears and inserting ‘‘section 
487(a)(24)’’; 
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(3) 
in 
section 
496(c)(3)(A) 
(20 
U.S.C. 
1099b(c)(3)(A)), by striking ‘‘section 487(f)’’ and 
inserting ‘‘section 487(e)’’; and 
(4) 
in 
section 
498(k)(1) 
(20 
U.S.C. 
1099c(k)(1)), by striking ‘‘section 487(f)’’ and in-
serting ‘‘section 487(e)’’. 
SEC. 3. EFFECTIVE DATE. 
The amendments made by section 2 shall take effect 
one year after the date of the enactment of this Act. 
Æ 
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