‘‘(C) will be dually enrolled in that institu-
tion and a secondary school; 
‘‘(2) is legally authorized within such State to 
provide a program of education beyond secondary 
education; 
‘‘(3)(A) is accredited by a nationally recognized 
accrediting agency or association; or 
‘‘(B) if not so accredited, is a public or non-
profit 
institution 
that 
has 
been 
granted 
preaccreditation status by such an agency or asso-
ciation that has been recognized by the Secretary for 
the granting of preaccreditation status, and the Sec-
retary has determined that there is satisfactory as-
surance that the institution will meet the accredita-
tion standards of such an agency or association 
within a reasonable time; and 
‘‘(4) meets either of the following criteria: 
‘‘(A) is a nonprofit, for-profit, or public in-
stitution that—
‘‘(i) provides an educational program 
for which the institution awards a bach-
elor’s, graduate, or professional degree; 
‘‘(ii) provides not less than a 2-year 
educational program which is acceptable 
for full credit towards such a degree;
‘‘(iii) provides not less than a 1-year 
program of training that prepares students 
for gainful employment in a recognized oc-
cupation; or 
‘‘(iv) awards a degree that is accept-
able for admission to graduate or profes-
sional degree programs, subject to the re-
view and approval of the Secretary; or 
‘‘(B) is a nonprofit, for-profit, or public in-
stitution that provides an eligible program (as 
defined in section 481)—
‘‘(i) for which the institution awards a 
certificate; and 
‘‘(ii) that prepares students for gain-
ful employment in a recognized occupation. 
‘‘(b) ADDITIONAL LIMITATIONS.—
‘‘(1) FOR-PROFIT
POSTSECONDARY
INSTITU-
TIONS.—
‘‘(A) DURATION
OF
ACCREDITATION.—A 
for-profit institution shall not be considered to 
be an institution of higher education unless 
such institution is accredited by a nationally 
recognized accrediting agency or association 
and such institution has been in existence for at 
least 2 years.
‘‘(B) INSTITUTIONAL
ELIGIBILITY
ONLY 
FOR COMPETITIVE GRANTS.—For the purposes 
of any program providing grants to institutions 
for use by the institution (and not for distribu-
tion among students), a for-profit institution 
shall not be considered to be an institution of 
higher education under this section if such 
grants are awarded on any basis other than 
competition on the merits of the grant proposal 
or application. 
‘‘(2) POSTSECONDARY
VOCATIONAL
INSTITU-
TIONS.—A nonprofit or public institution that meets 
the criteria of subsection (a)(4)(B) shall not be con-
sidered to be an institution of higher education un-
less such institution has been in existence for at 
least 2 years. 
‘‘(3) LIMITATIONS BASED ON MANAGEMENT.—
An institution shall not be considered to meet the 
definition of an institution of higher education in 
this section if—
‘‘(A) the institution, or an affiliate of the 
institution that has the power, by contract or 
ownership interest, to direct or cause the direc-
tion of the management or policies of the insti-
tution, has filed for bankruptcy, except that
this paragraph shall not apply to a nonprofit in-
stitution, the primary function of which is to 
provide health care educational services (or an 
affiliate of such an institution that has the 
power, by contract or ownership interest, to di-
rect or cause the direction of the institution’s 
management or policies) that filed for bank-
ruptcy under chapter 11 of title 11, United 
States Code, between July 1, 1998, and Decem-
ber 1, 1998; or 
‘‘(B) the institution, the institution’s 
owner, or the institution’s chief executive officer 
has been convicted of, or has pled nolo 
contendere or guilty to, a crime involving the 
acquisition, use, or expenditure of Federal, 
State, or local government funds, or has been 
judicially determined to have committed a crime 
involving the acquisition, use, or expenditure in-
volving Federal, State, or local government 
funds. 
‘‘(4) LIMITATION ON COURSE OF STUDY OR EN-
ROLLMENT.—An institution shall not be considered 
to meet the definition of an institution of higher 
education in subsection (a) if such institution—
‘‘(A) offers more than 50 percent of such 
institution’s courses by correspondence (exclud-
ing courses offered by telecommunications as 
defined in section 484(l)(4)), unless the institu-
tion is an institution that meets the definition 
in section 3(3)(C) of the Carl D. Perkins Voca-
tional and Technical Education Act of 1998; 
‘‘(B) enrolls 50 percent or more of the in-
stitution’s students in correspondence courses 
(excluding courses offered by telecommuni-
cations as defined in section 484(l)(4)), unless 
the institution is an institution that meets the 
definition in section 3(3)(C) of the Carl D. Per-
kins Vocational and Technical Education Act of 
1998, except that the Secretary, at the request 
of the institution, may waive the applicability of 
this subparagraph to the institution for good 
cause, as determined by the Secretary in the 
case of an institution of higher education that 
provides a 2- or 4-year program of instruction 
(or both) for which the institution awards an 
associate or baccalaureate degree, respectively; 
‘‘(C) has a student enrollment in which 
more than 25 percent of the students are incar-
cerated, except that the Secretary may waive
the limitation contained in this subparagraph 
for an institution that provides a 2- or 4-year 
program of instruction (or both) for which the 
institution awards a bachelor’s degree, or an as-
sociate’s degree or a postsecondary certificate, 
respectively; or 
‘‘(D) has a student enrollment in which 
more than 50 percent of the students either do 
not meet the requirements of section 484(d)(3) 
or do not have a secondary school diploma or 
its recognized equivalent, and does not provide 
a 2- or 4-year program of instruction (or both) 
for which the institution awards an associate’s 
degree or a bachelor’s degree, respectively, ex-
cept that the Secretary may waive the limita-
tion contained in this subparagraph if an insti-
tution demonstrates to the satisfaction of the 
Secretary that the institution exceeds such limi-
tation because the institution serves, through 
contracts with Federal, State, or local govern-
ment agencies, significant numbers of students 
who do not meet the requirements of section 
484(d)(3) or do not have a secondary school di-
ploma or its recognized equivalent.