I 
114TH CONGRESS 
1ST SESSION H. R. 1359 
To authorize the establishment of American Dream Accounts. 
IN THE HOUSE OF REPRESENTATIVES 
MARCH 13, 2015 
Mr. FATTAH (for himself and Mr. HINOJOSA) introduced the following bill; 
which was referred to the Committee on Education and the Workforce 
A BILL 
To authorize the establishment of American Dream Accounts. 
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’’. 
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. 
(2) Lack of knowledge about how to apply to, 
and pay for, an institution of higher education is a 
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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, 
room, and board), but in the 2010–2011 school year, 
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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) 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. 
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(2) 
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. 
(3) CHARTER
SCHOOL.—The term ‘‘charter 
school’’ has the meaning given such term in section 
5210 of the Elementary and Secondary Education 
Act of 1965 (20 U.S.C. 7221i). 
(4) COLLEGE
SAVINGS
ACCOUNT.—The term 
‘‘college savings account’’ means a trust created or 
organized exclusively for the purpose of paying the 
qualified expenses of only an individual who, when 
the trust is created or organized, has not obtained 
18 years of age, if the written governing instrument 
creating the trust contains the following require-
ments: 
(A) The trustee is a federally insured fi-
nancial institution, or a State insured financial 
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institution if a federally insured financial insti-
tution is not available. 
(B) The assets of the trust will be invested 
in accordance with the direction of the indi-
vidual or of a parent or guardian of the indi-
vidual, after consultation with the entity pro-
viding the initial contribution to the trust or, if 
applicable, a matching or other contribution for 
the individual. 
(C) The assets of the trust will not be 
commingled with other property except in a 
common trust fund or common investment 
fund. 
(D) Any amount in the trust that is attrib-
utable to an account seed or matched deposit 
may be paid or distributed from the trust only 
for the purpose of paying qualified expenses of 
the individual. 
(5) DUAL OR CONCURRENT ENROLLMENT PRO-
GRAM.—The term ‘‘dual or concurrent enrollment 
program’’ means a program of study— 
(A) provided by an institution of higher 
education through which a student who has not 
graduated from high school with a regular high 
school diploma (as defined in 34 C.F.R. 
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200.19(b)(1)(iv), as such section was in effect 
on November 28, 2008) is able to earn postsec-
ondary credit; and 
(B) that shall consist of not less than 2 
postsecondary credit-bearing courses and sup-
port and academic services that help a student 
persist and complete such courses. 
(6) EARLY
COLLEGE
HIGH
SCHOOL
PRO-
GRAM.—The term ‘‘early college high school pro-
gram’’ means a formal partnership between at least 
1 local educational agency and at least 1 institution 
of higher education that allows participants, who are 
primarily low-income students, to simultaneously 
complete requirements toward earning a regular 
high school diploma (as defined in 34 C.F.R. 
200.19(b)(1)(iv), as such section was in effect on 
November 28, 2008) and earn not less than 12 
transferable credits as part of an organized course 
of study toward a postsecondary degree or creden-
tial. 
(7) ELIGIBLE ENTITY.—The term ‘‘eligible enti-
ty’’ means— 
(A) a State educational agency; 
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(B) a local educational agency, including a 
charter school that operates as its own local 
educational agency; 
(C) a charter management organization or 
charter school authorizer; 
(D) an institution of higher education or a 
Tribal College or University; 
(E) a nonprofit organization; 
(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; 
(G) a consortium of 2 or more of the enti-
ties described in subparagraphs (A) through 
(F); or 
(H) a consortium of 1 or more of the enti-
ties described in subparagraphs (A) through 
(F) and a public school, a charter school, a 
school operated by the Bureau of Indian Af-
fairs, or a tribally controlled school. 
(8) INSTITUTION OF HIGHER EDUCATION.—The 
term ‘‘institution of higher education’’ has the 
meaning given such term in section 101(a) of the 
Higher Education Act of 1965 (20 U.S.C. 1001(a)). 
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(9) LOCAL EDUCATIONAL AGENCY.—The term 
‘‘local educational agency’’ has the meaning given 
such term in section 9101 of the Elementary and 
Secondary Education Act of 1965 (20 U.S.C. 7801). 
(10) LOW-INCOME STUDENT.—The term ‘‘low- 
income student’’ means a student who is eligible to 
receive a free or reduced price lunch under the Rich-
ard B. Russell National School Lunch Act (42 
U.S.C. 1751 et seq.). 
(11) PARENT.—The term ‘‘parent’’ has the 
meaning given such term in section 9101 of the Ele-
mentary and Secondary Education Act of 1965 (20 
U.S.C. 7801). 
(12) QUALIFIED EXPENSES.—The term ‘‘quali-
fied expenses’’ means, with respect to an individual, 
expenses that— 
(A) are incurred after the individual re-
ceives a secondary school diploma or its recog-
nized equivalent; and 
(B) are 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 
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(v) Internet access. 
(13) 
SECRETARY.—The 
term 
‘‘Secretary’’ 
means the Secretary of Education. 
(14) STATE EDUCATIONAL AGENCY.—The term 
‘‘State educational agency’’ has the meaning given 
such term in section 9101 of the Elementary and 
Secondary Education Act of 1965 (20 U.S.C. 7801). 
(15) TRIBAL COLLEGE OR UNIVERSITY.—The 
term ‘‘Tribal College or University’’ has the meaning 
given such term in section 316(b) of the Higher 
Education Act of 1965 (20 U.S.C. 1059c(b)). 
(16) TRIBALLY
CONTROLLED
SCHOOL.—The 
term ‘‘tribally controlled school’’ has the meaning 
given such term in section 5212 of the Tribally Con-
trolled Schools Act of 1988 (25 U.S.C. 2511). 
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 amounts appropriated 
each fiscal year to carry out this Act, the Secretary shall 
reserve not more than 5 percent of such amount to carry 
out the evaluation activities described in section 7. 
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(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)(11). 
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 
and other stakeholders) either online or in person, 
to— 
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(A) the students in the group described in 
paragraph (1); 
(B) the family members and teachers of 
such students; and 
(C) other stakeholders such as school ad-
ministrators and school counselors. 
(3) An identification of partners who will assist 
the eligible entity in establishing and sustaining 
American Dream Accounts. 
(4) A description of what experience the eligible 
entity or the partners of the eligible entity have in 
managing college savings accounts, preparing low-in-
come students for postsecondary education, man-
aging online systems, and teaching financial literacy. 
(5) A demonstration that the eligible entity has 
sufficient resources to provide an initial deposit into 
the college savings account portion of each American 
Dream Account. 
(6) A description of how the eligible entity will 
help increase the value of the college savings account 
portion of each American Dream Account, such as 
by providing matching funds or incentives for aca-
demic achievement. 
(7) A description of how the eligible entity will 
notify each participating student in the group de-
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scribed in paragraph (1), on a semiannual basis, of 
the current balance and status of the college savings 
account portion of the American Dream Account of 
the student. 
(8) A plan that describes how the eligible entity 
will monitor participating students in the group de-
scribed in paragraph (1) to ensure that the Amer-
ican Dream Account of each student will be main-
tained if a student in such group changes schools be-
fore graduating from secondary school. 
(9) A plan that describes how the American 
Dream Accounts will be managed for not less than 
1 year after a majority of the students in the group 
described in paragraph (1) graduate from secondary 
school. 
(10) A description of how the eligible entity will 
encourage students in the group described in para-
graph (1) who fail to graduate from secondary 
school to continue their education. 
(11) A description of how the eligible entity will 
evaluate the grant program, including by collecting, 
as applicable, the following data about the students 
in the group described in paragraph (1) during the 
grant period, or until the time of graduation from a 
secondary school, whichever comes first, and, if suf-
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ficient grant funds are available, after the grant pe-
riod: 
(A) Attendance rates. 
(B) Progress reports. 
(C) Grades and course selections. 
(D) The student graduation rate, as de-
fined in section 1111(b)(2)(C)(vi) of the Ele-
mentary and Secondary Education Act of 1965 
(20 U.S.C. 6311(b)(2)(C)(vi)). 
(E) Rates of student completion of the 
Free Application for Federal Student Aid de-
scribed in section 483 of the Higher Education 
Act of 1965 (20 U.S.C. 1090). 
(F) Rates of enrollment in an institution of 
higher education. 
(G) Rates of completion at an institution 
of higher education. 
(12) A description of what will happen to the 
funds in the college savings account portion of the 
American Dream Accounts that are dedicated to 
participating students described in paragraph (1) 
who have not matriculated at an institution of high-
er education at the time of the conclusion of the pe-
riod of American Dream Account management de-
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scribed in paragraph (9), including how the eligible 
entity will give students this information. 
(13) A description of how the eligible entity will 
ensure that participating students described in para-
graph (1) will have access to the Internet. 
(14) A description of how the eligible entity will 
take into consideration how funds in the college sav-
ings account portion of American Dream Accounts 
will affect participating families’ eligibility for public 
assistance. 
(c) PRIORITY.—In awarding grants under this Act, 
the Secretary shall give priority to applications from eligi-
ble entities that— 
(1) are described in subparagraph (G) or (H) of 
section 3(7); 
(2) serve the largest number of low-income stu-
dents; 
(3) in the case of an eligible entity described in 
subparagraph (A) or (B) of section 3(7), provide op-
portunities for participating students described in 
subsection (b)(1) to participate in a dual or concur-
rent enrollment program or early college high school 
program at no cost to the student or the student’s 
family; or 
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(4) as of the time of application, have been 
awarded a grant under chapter 2 of subpart 2 of 
part A of title IV of the Higher Education Act of 
1965 (20 U.S.C. 1070a–21 et seq.) (commonly re-
ferred to as the ‘‘GEAR UP program’’). 
SEC. 6. AUTHORIZED ACTIVITIES. 
(a) IN GENERAL.—An eligible entity that receives a 
grant under this Act shall use such grant funds to estab-
lish an American Dream Account for each participating 
student described in section 5(b)(1), that will be used to— 
(1) open a college savings account for such stu-
dent; 
(2) monitor the progress of such student online, 
which— 
(A) shall include monitoring student data 
relating to— 
(i) grades and course selections; 
(ii) progress reports; and 
(iii) 
attendance 
and 
disciplinary 
records; and 
(B) may also include monitoring student 
data relating to a broad range of information, 
provided by teachers and family members, re-
lated to postsecondary education readiness, ac-
cess, and completion; 
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(3) provide opportunities for such students, ei-
ther online or in person, to learn about financial lit-
eracy, including by— 
(A) assisting such students in financial 
planning for enrollment in an institution of 
higher education; 
(B) assisting such students in identifying 
and applying for financial aid (such as loans, 
grants, and scholarships) for an institution of 
higher education; and 
(C) enhancing student understanding of 
consumer, economic, and personal finance con-
cepts; 
(4) provide opportunities for such students, ei-
ther online or in person, to learn about preparing for 
enrollment in an institution of higher education, in-
cluding by providing instruction to students about— 
(A) choosing the appropriate courses to 
prepare for postsecondary education; 
(B) applying to an institution of higher 
education; 
(C) building a student portfolio, which may 
be used when applying to an institution of high-
er education; 
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(D) selecting an institution of higher edu-
cation; 
(E) choosing a major for the student’s 
postsecondary program of education or a career 
path; and 
(F) adapting to life at an institution of 
higher education; and 
(5) provide opportunities for such students, ei-
ther online or in person, to identify skills or inter-
ests, including career interests. 
(b) ACCESS TO AMERICAN DREAM ACCOUNT.— 
(1) IN GENERAL.—Subject to paragraphs (3) 
and (4), and in accordance with applicable Federal 
laws and regulations relating to privacy of informa-
tion and the privacy of children, an eligible entity 
that receives a grant under this Act shall allow vest-
ed stakeholders, as described in paragraph (2), to 
have secure access, through an Internet website, to 
an American Dream Account. 
(2) 
VESTED
STAKEHOLDERS.—The 
vested 
stakeholders that an eligible entity shall permit to 
access an American Dream Account are individuals 
(such as the student’s teachers, school counselors, 
school administrators, or other individuals) that are 
designated, in accordance with section 444 of the 
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General Education Provisions Act (20 U.S.C. 1232g, 
commonly known as the ‘‘Family Educational Rights 
and Privacy Act of 1974’’), by the parent of a par-
ticipating student in whose name such American 
Dream Account is held, as having permission to ac-
cess the account. A student’s parent may withdraw 
such designation from an individual at any time. 
(3) EXCEPTION
FOR
COLLEGE
SAVINGS
AC-
COUNT.—An eligible entity that receives a grant 
under this Act shall not be required to give vested 
stakeholders, as described in paragraph (2), access 
to the college savings account portion of a student’s 
American Dream Account. 
(4) ADULT STUDENTS.—Notwithstanding para-
graphs (1), (2), and (3), if a participating student 
is age 18 or older, an eligible entity that receives a 
grant under this Act shall not provide access to such 
participating student’s American Dream Account 
without the student’s consent, in accordance with 
section 444 of the General Education Provisions Act 
(20 U.S.C. 1232g, commonly known as the ‘‘Family 
Educational Rights and Privacy Act of 1974’’). 
(5) INPUT OF STUDENT INFORMATION.—Stu-
dent data collected pursuant to subsection (a)(2)(A) 
shall be entered into an American Dream Account 
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