I 
115TH CONGRESS 
2D SESSION 
H. R. 5384 
To establish State-Federal partnerships to provide students the opportunity 
to attain higher education at in-State public institutions of higher edu-
cation without debt, to provide Federal Pell Grant eligibility to DREAM-
er students, to repeal suspension of eligibility under the Higher Edu-
cation Act of 1965 for drug-related offenses, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
MARCH 22, 2018 
Mr. POCAN (for himself, Mr. ELLISON, Mrs. WATSON COLEMAN, Mr. GRI-
JALVA, Mr. TAKANO, Mr. NOLAN, Ms. JUDY CHU of California, Ms. 
CLARKE of New York, Mr. CROWLEY, Ms. DELAURO, Mr. DESAULNIER, 
Mr. GOMEZ, Ms. NORTON, Ms. JACKSON LEE, Mr. KHANNA, Ms. LEE, 
Mrs. CAROLYN B. MALONEY of New York, Ms. MOORE, Mrs. NAPOLI-
TANO, Mr. PALLONE, Mr. RASKIN, Mr. WELCH, and Mr. HUFFMAN) in-
troduced the following bill; which was referred to the Committee on Edu-
cation and the Workforce 
A BILL 
To establish State-Federal partnerships to provide students 
the opportunity to attain higher education at in-State 
public institutions of higher education without debt, to 
provide Federal Pell Grant eligibility to DREAMer stu-
dents, to repeal suspension of eligibility under the Higher 
Education Act of 1965 for drug-related offenses, and 
for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
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SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Debt-Free College 
Act’’. 
SEC. 2. DEBT-FREE COLLEGE PARTNERSHIP. 
Title IV of the Higher Education Act of 1965 (20 
U.S.C. 1070 et seq.) is amended by adding at the end 
the following: 
‘‘PART J—DEBT-FREE COLLEGE PARTNERSHIP 
‘‘SEC. 499A–1. PURPOSE. 
‘‘The purpose of this part is to establish State-Fed-
eral partnerships that will— 
‘‘(1) increase investment in public higher edu-
cation; and 
‘‘(2) provide students the opportunity to attain 
higher education at in-State public institutions of 
higher education without debt (‘debt-free college’). 
‘‘SEC. 499A–2. DEFINITIONS. 
‘‘In this part: 
‘‘(1) COLLEGE
COMPLETION
PROGRAM.—The 
term ‘college completion program’ means a program 
or service at an institution of higher education that 
is dedicated to addressing barriers to degree attain-
ment, particularly for low-income students, for the 
purpose of increasing the percentage of students 
completing programs of study in their entirety and 
attaining related degrees. 
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‘‘(2) COST OF ATTENDANCE.—The term ‘cost of 
attendance’ means— 
‘‘(A) tuition and fees normally assessed a 
student carrying the same academic workload 
as determined by the institution, and including 
costs for rental or purchase of any equipment, 
materials, or supplies required of all students in 
the same course of study; 
‘‘(B) an allowance for books, supplies, 
transportation, and miscellaneous personal ex-
penses, including a reasonable allowance for the 
documented rental or purchase of a personal 
computer, for a student attending the institu-
tion on at least a half-time basis, as determined 
by the institution; 
‘‘(C) an allowance (determined by the in-
stitution) for room and board costs incurred by 
the student which— 
‘‘(i) shall be an allowance determined 
by the institution for a student without de-
pendents residing at home with parents; 
‘‘(ii) for students without dependents 
residing in institutionally owned or oper-
ated housing, shall be a standard allowance 
determined by the institution based on the 
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amount normally assessed most of its resi-
dents for room and board; 
‘‘(iii) for students who live in housing 
located on a military base or for which a 
basic allowance is provided under section 
403(b) of title 37, United States Code, 
shall be an allowance based on the ex-
penses reasonably incurred by such stu-
dents for board but not for room; and 
‘‘(iv) for all other students shall be an 
allowance based on the expenses reason-
ably incurred by such students for room 
and board. 
‘‘(3) DEBT-FREE COLLEGE COMMITMENT.—The 
term ‘debt-free college commitment’ means a com-
mitment by a State participating in the State-Fed-
eral partnership under this part to cover the unmet 
financial need for all eligible students. 
‘‘(4) ELIGIBLE STUDENT.—The term ‘eligible 
student’ means an individual who— 
‘‘(A) is enrolled, or is eligible to enroll, in 
a public institution of higher education in the 
State in which the individual resides; 
‘‘(B) completes a Free Application for 
Federal Student Aid; and 
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‘‘(C) demonstrates satisfactory academic 
progress, as defined under the Federal Pell 
Grant program under subpart 1 of part A, once 
enrolled in a public institution of higher edu-
cation in the State in which the individual re-
sides. 
‘‘(5) FULL-TIME EQUIVALENT STUDENTS.—The 
term ‘full-time equivalent students’ means the sum 
of the number of students enrolled full time at an 
institution, plus the full-time equivalent of the num-
ber of students enrolled part time, which shall be de-
fined and calculated in the manner determined most 
appropriate by the Secretary. 
‘‘(6) NET
STATE
OPERATING
SUPPORT.—The 
term ‘net State operating support’ means an amount 
that is equal to the amount of State funds and local 
government appropriations used to support public 
higher education annual operating expenses in the 
State, calculated in accordance with subparagraphs 
(A) and (B). 
‘‘(A) CALCULATION.—A State’s net State 
operating support shall, for a fiscal year, be an 
amount that is equal to the difference resulting 
from the gross amount of State funds appro-
priated and disbursed by the State and ex-
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pended by the recipient institutions in the fiscal 
year for public higher education operating ex-
penses in the State, minus— 
‘‘(i) such appropriations that are re-
turned to the State; 
‘‘(ii) State-appropriated funds derived 
from Federal sources, including funds pro-
vided under this part; 
‘‘(iii) local government funds not ap-
propriated for operating support for public 
higher education; 
‘‘(iv) amounts that are portions of 
multi-year appropriations to be distributed 
over multiple years that are not to be 
spent for the year for which the calculation 
is being made; 
‘‘(v) tuition charges remitted to the 
State to offset State appropriations; 
‘‘(vi) State funding for students in 
non-credit continuing or adult education 
courses and non-credit extension courses; 
‘‘(vii) sums appropriated to private 
nonprofit institutions of higher education, 
or to proprietary institutions of higher 
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education, for capital outlay or operating 
expenses; and 
‘‘(viii) any other funds excluded under 
subparagraph (B). 
‘‘(B) EXCLUSIONS.—Net State operating 
support does not include— 
‘‘(i) funds for— 
‘‘(I) student aid programs that 
provide grants to students attending 
in-State private nonprofit institutions 
of higher education, in-State propri-
etary institutions of higher education, 
independent institutions, and out-of- 
State institutions; 
‘‘(II) capital outlay; 
‘‘(III) deferred maintenance; or 
‘‘(IV) research and development; 
or 
‘‘(ii) any other funds that the Sec-
retary may exclude. 
‘‘(7) NET STATE OPERATING SUPPORT PER FTE 
STUDENT.—The term ‘net State operating support 
per FTE student’ means, for a fiscal year— 
‘‘(A) the net State operating support for 
the previous fiscal year; divided by 
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‘‘(B) the full-time equivalent students for 
the previous fiscal year. 
‘‘(8) PARTNERSHIP OFFICE.—The term ‘Part-
nership Office’ means the Office created under sec-
tion 499A–4(a). 
‘‘(9) PUBLIC
INSTITUTION
OF
HIGHER
EDU-
CATION.—The term ‘public institution of higher edu-
cation’ means an educational institution in any State 
that— 
‘‘(A) admits as regular students only per-
sons having a certificate of graduation from a 
school providing secondary education, or the 
recognized equivalent of such a certificate, or 
persons who are eligible students; 
‘‘(B) is legally authorized within such 
State to provide a program of education beyond 
secondary education; 
‘‘(C) provides an educational program for 
which the institution awards a bachelor’s degree 
or provides not less than a 2-year program that 
is acceptable for full credit toward such a de-
gree, or awards a degree that is acceptable for 
admission to a graduate or professional degree 
program, subject to review and approval by the 
Secretary; 
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‘‘(D) has the full faith and credit of the 
State; and 
‘‘(E) is accredited by a nationally recog-
nized accrediting agency or association, or if 
not so accredited, is an institution that has 
been granted preaccreditation status by such an 
agency or association that has been recognized 
by the Secretary for the granting of preaccredi-
tation status, and the Secretary has determined 
that there is satisfactory assurance that the in-
stitution will meet the accreditation standards 
of such an agency or association within a rea-
sonable time. 
‘‘(10) 
RELEVANT
COMMITTEES
OF
CON-
GRESS.—The term ‘relevant committees of Congress’ 
means the Committee on Health, Education, Labor, 
and Pensions and the Committee on Appropriations 
of the Senate and the Committee on Education and 
the Workforce and the Committee on Appropriations 
of the House of Representatives. 
‘‘(11) UNMET NEED.—The term ‘unmet need’ 
means the difference between a student’s cost of at-
tendance to attend an in-State public institution of 
higher education and the student’s expected family 
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contribution plus any Federal, State, or local sources 
of grant aid. 
‘‘SEC. 499A–3. ESTABLISHMENT OF A STATE-FEDERAL PART-
NERSHIP GRANT PROGRAM. 
‘‘(a) GRANTS AUTHORIZED.—The Secretary shall 
award grants to States to establish State-Federal partner-
ships with a goal of providing debt-free college for all eligi-
ble students at in-State public institutions of higher edu-
cation. 
‘‘(b) APPLICATION.—A State that desires to partici-
pate in the State-Federal partnership under this part shall 
submit an application to the Secretary at such time, in 
such manner, and accompanied by such information as the 
Secretary may require. 
‘‘(c) AMOUNT OF GRANTS.— 
‘‘(1) IN GENERAL.—The Secretary shall award 
a grant to a State that submits an application under 
subsection (b) for a fiscal year in an amount that is 
equal to State’s net State operating support. 
‘‘(2) RATABLE REDUCTION.—If the amount ap-
propriated to carry out this part for a fiscal year is 
insufficient to award each State the State’s full 
grant amount pursuant to paragraph (1), the Sec-
retary shall establish procedures for ratably reducing 
each State’s award amount for such fiscal year. 
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‘‘(d) AMOUNTS NOT EXPENDED.—Any amount of a 
grant awarded under this part that is not expended on 
allowable expenditures by the end of the fiscal year for 
which the grant was awarded shall be applied to the fol-
lowing year’s grant award amount, if the State remains 
eligible to receive a grant under this part for such fol-
lowing year. If such State is not eligible to receive a grant 
under this part for such following year, the State shall 
return the unexpended balance amount to the Federal 
Government. 
‘‘SEC. 499A–4. STATE-FEDERAL PARTNERSHIP RESPON-
SIBILITIES. 
‘‘(a) FEDERAL.— 
‘‘(1) IN GENERAL.—The Secretary shall create 
an office in the Department of Education to admin-
ister the State-Federal partnerships established 
under this part. Such Partnership Office shall be re-
sponsible for— 
‘‘(A) administering grant awards; 
‘‘(B) monitoring compliance with partner-
ship requirements; 
‘‘(C) providing technical assistance to 
States in applying for participation in, and im-
plementing, a partnership; and 
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‘‘(D) providing information to students in 
participating States. 
‘‘(2) EVALUATIONS.—The Partnership Office 
shall develop metrics of evaluation and perform an 
annual evaluation of each State participating in a 
State-Federal partnership under this part. The eval-
uation shall assess the State’s success in meeting the 
partnership’s goals, including— 
‘‘(A) providing debt-free college for all eli-
gible students; 
‘‘(B) increasing State investment in higher 
education; 
‘‘(C) maintaining access to in-State public 
institutions of higher education for low-income 
and underserved students; 
‘‘(D) maintaining and improving rates of 
college completion and academic quality; 
‘‘(E) maintaining or reducing the cost of 
public higher education and the price charged 
to students; and 
‘‘(F) investing in improving capacity, ac-
cess, quality, and student achievement of in- 
State public institutions of higher education. 
‘‘(3) ANNUAL REPORT.—The Partnership Of-
fice shall submit an annual report to the relevant 
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committees of Congress and include information 
gained from the annual evaluation under paragraph 
(2). 
‘‘(4) WEBSITE.—The Partnership Office shall 
create a public, consumer-oriented website with in-
formation about State-Federal partnerships estab-
lished under this part, including information from 
the annual evaluation under paragraph (2). 
‘‘(b) STATE.— 
‘‘(1) IN
GENERAL.—A State that receives a 
grant under this part to establish a State-Federal 
partnership shall— 
‘‘(A) distribute the grant funds according 
to the allowable uses of funds described in sec-
tion 499A–5 in a manner designed to best 
achieve the partnership’s goal of providing debt- 
free college for all eligible students at in-State 
public institutions of higher education; 
‘‘(B) maintain access at each in-State pub-
lic institution of higher education for low-in-
come and underserved students; 
‘‘(C) cap tuition and fees at public institu-
tions of higher education in the State at levels 
as of the date of enactment of the Debt-Free 
College Act, with a yearly increase allowed 
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based on the Consumer Price Index (as deter-
mined by the Secretary); 
‘‘(D) commit to working with in-State pub-
lic institutions of higher education to reduce 
tuition and fees as the net State operating sup-
port increases; 
‘‘(E) maintain State need-based financial 
aid programs in effect on the date of enactment 
of the Debt-Free College Act or use State funds 
for such programs to further the debt-free com-
mitment made under the State-Federal partner-
ship; 
‘‘(F) maintain or increase levels of net 
State operating support in effect on the date of 
enactment of the Debt-Free College Act, subject 
to the maintenance of effort provisions con-
tained in this part; 
‘‘(G) develop, adopt, and implement a 
State formula for calculating the cost of attend-
ance at in-State public institutions of higher 
education; 
‘‘(H) develop statewide credit transfer poli-
cies to— 
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‘‘(i) facilitate credit transfers among 
in-State public institutions of higher edu-
cation; and 
‘‘(ii) provide students with clear and 
timely information about credit transfer 
policies at in-State public institutions of 
higher education; and 
‘‘(I) clearly communicate to prospective 
students, their families, and the general public 
how the State plans to implement the State- 
Federal partnership and how eligible students 
can attend a public institution of higher edu-
cation in the State without debt, including early 
notification for students of their eligibility for 
financial aid under the partnership. 
‘‘(2) 5-YEAR PLAN.— 
‘‘(A) IN GENERAL.—In order to receive a 
grant under this part, a State shall provide to 
the Secretary a 5-year plan for achieving the 
goals of the State-Federal partnership. A State 
shall update and resubmit a plan every 5 years 
thereafter. 
‘‘(B) PLAN TO MEET GOALS.—The 5-year 
plan shall detail how the State plans to meet 
the goal of providing debt-free college for all eli-
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gible students at in-State public institutions of 
higher education within 5 years and increase 
the State’s investment in higher education, with 
specific benchmarks detailed for each year. 
‘‘(C) APPROVED
BY
THE
SECRETARY.— 
The 5-year plan, and the State’s annual 
progress, shall be approved by the Secretary in 
order for the State to be eligible to receive, or 
continue receiving, grant funds under the State- 
Federal Partnership award. 
‘‘(D) WAIVER
OF
5-YEAR
DEADLINE.—A 
State may apply for a waiver from the deadline 
of meeting all of the State-Federal partner-
ship’s goals within 5 years if the State— 
‘‘(i) provides a credible plan for mak-
ing progress towards the goals; and 
‘‘(ii) is able to demonstrate that the 
State will, at a minimum, provide debt-free 
college within 5 years to eligible students 
who are Federal Pell Grant recipients 
under subpart 1 of part A. 
‘‘(3) NO
ADDITIONAL
ELIGIBILITY
REQUIRE-
MENTS.—A State that receives a grant under this 
part to establish a State-Federal partnership may 
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not impose additional eligibility requirements on stu-
dents other than those contained in this part. 
‘‘SEC. 499A–5. USES OF FUNDS. 
‘‘(a) IN GENERAL.— 
‘‘(1) NEED-BASED
AID
FOR
PELL
RECIPI-
ENTS.—A State that receives a grant under this 
part to establish a State-Federal partnership shall 
disburse funds from the net State operating support 
and the partnership grant funds on the basis of 
need, as determined by the Free Application for 
Federal Student Aid, to cover the unmet need for 
each eligible student who receives a Federal Pell 
Grant under subpart 1 of part A. 
‘‘(2) DISBURSEMENT OF REMAINING FUNDS.— 
Any funds that remain after a State disburses funds 
in accordance with paragraph (1) shall be used by 
the State to cover part or all of the unmet need for 
eligible students who do not receive a Federal Pell 
Grant under subpart 1 of part A, with priority based 
on student financial need, in a manner determined 
by the State. 
‘‘(3) NO FUNDS IN EXCESS OF COST OF AT-
TENDANCE.—An eligible student shall not receive 
funds under this part in excess of the student’s ac-
tual cost of attendance. 
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‘‘(4) PRIVATE
AID
NOT
TAKEN
INTO
AC-
COUNT.—In disbursing funds under this paragraph, 
the State shall not take into account any private 
sources of aid or loans available to an eligible stu-
dent. 
‘‘(b) COLLEGE COMPLETION PROGRAMS.— 
‘‘(1) IN
GENERAL.—A State that receives a 
grant under this part for a fiscal year to establish 
a State-Federal partnership shall use 4 percent of 
the grant funds for such fiscal year to establish or 
increase funding for college completion programs. 
‘‘(2) DISTRIBUTION.—From the total amount 
of grant funds available under paragraph (1) for a 
fiscal year, the State shall provide to each public in-
stitution of higher education in the State that is eli-
gible to participate in programs under this title for 
such fiscal year an amount that bears the same rela-
tion to such total amount as the number of students 
enrolled in such institution of higher education who 
are eligible to receive a Federal Pell Grant bears to 
the number of students enrolled in all public institu-
tions of higher education in the State who are eligi-
ble to receive a Federal Pell Grant. 
‘‘(3) ALLOWABLE
USES.—An institution of 
higher education that receives funds under para-
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graph (2) shall use such funds to establish, imple-
ment, or expand a college completion program, in-
cluding for the following purposes: 
‘‘(A) Providing information to prospective 
and current students to assist and improve 
completion, including creating materials clari-
fying different program completion require-
ments and costs, holding seminars for prospec-
tive or current students on course schedules 
and program costs, and updating school 
websites to make information publically avail-
able. 
‘‘(B) Hiring additional counselors and ad-
visors to focus on student completion support 
and training existing personnel to implement 
the college completion program. 
‘‘(C) Increasing academic support pro-
grams, such as writing coaches, tutors, pre-
requisite skill courses, and study materials, and 
enhancing academic facilities for students. 
‘‘(D) Providing microgrants for students 
participating in the college completion program 
who maintain good academic standing and 
progress toward on-time graduation. 
‘‘(4) REPORTING.— 
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‘‘(A) REPORTS FROM INSTITUTIONS.—An 
institution of higher education that receives 
funds under paragraph (2) shall submit to the 
State in which the institution is located at the 
end of each fiscal year a report that details the 
uses of funds, changes in the ratios of students 
to counselors, and 2-year and 4-year degree at-
tainment rates, disaggregated by race and Fed-
eral Pell Grant recipient status. 
‘‘(B) SUSPENSION.—If a State determines 
that an institution of higher education that re-
ceives funds under paragraph (2) for a fiscal 
year used such funds for activities that were 
not allowable uses under paragraph (3), the 
State may suspend distribution of funds to the 
institution for the following fiscal year and re-
quire the institution to submit proposed expend-
itures for approval before receiving funds again 
under paragraph (2). 
‘‘(C) REPORT FROM STATE.—A State that 
receives a grant under this part for a fiscal year 
to establish a State-Federal partnership shall 
submit to the Secretary at the end of each fis-
cal year a report that details the uses of grant 
funds under this subsection in public institu-
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tions of higher education in the State that are 
eligible to participate in programs under this 
title, changes in the ratio of students to coun-
selors in such institutions in the State, and 2- 
year and 4-year degree attainment rates in such 
institutions in the State, disaggregated by race 
and Federal Pell Grant recipient status. 
‘‘(c) HIGHER EDUCATION RELATED ACTIVITIES.—A 
State that receives a grant under this part to establish 
a State-Federal partnership may use not more than 5 per-
cent of the grant funds for the following higher education 
related activities: 
‘‘(1) Increasing the capacity within the public 
higher education system of the State, including 
through the following: 
‘‘(A) Construction of new facilities. 
‘‘(B) Renovation of existing facilities. 
‘‘(C) Hiring of faculty. 
‘‘(D) Student support services. 
‘‘(2) Increasing the enrollment of low-income 
and underserved students. 
‘‘(3) Improving student outcomes, including 
meeting student learning goals, increasing comple-
tion rates, and improving post-graduate job place-
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ment, in consultation with faculty and staff at in- 
State public institutions of higher education. 
‘‘(4) Providing information to prospective stu-
dents and families. 
‘‘(5) Developing new higher education programs 
to meet the State’s workforce needs, in consultation 
with faculty and staff at in-State public institutions 
of higher education, employers, and other relevant 
stakeholders. 
‘‘(6) Programs and student support services at 
public secondary schools if those programs and serv-
ices directly support an activity described in any of 
paragraphs (1) through (5). 
‘‘(7) Other activities as approved by the Sec-
retary to improve the State’s public higher education 
system, particularly for low-income and underserved 
students. 
‘‘(d) ADMINISTRATION AND OTHER USES.—A State 
that receives a grant under this part to establish a State- 
Federal partnership may use not more than 1 percent of 
the grant funds— 
‘‘(1) to administer the partnership; and 
‘‘(2) for— 
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‘‘(A) higher education research and data 
tools, such as those that link education and em-
ployment data systems; 
‘‘(B) forming agreements with other States 
participating in the partnership for reciprocal 
student eligibility; and 
‘‘(C) developing and implementing systems 
to provide early notification to students and 
families of their eligibility for financial aid. 
‘‘(e) PROHIBITION ON USE OF FUNDS.—A State that 
receives a grant under this part to establish a State-Fed-
eral partnership may not use grant funds for— 
‘‘(1) endowments; or 
‘‘(2) the construction of athletic or commercial 
venues. 
‘‘SEC. 499A–6. MAINTAINING NET STATE OPERATING SUP-
PORT FOR HIGHER EDUCATION. 
‘‘(a) IN GENERAL.—A State that receives a grant 
under this part to establish a State-Federal partnership 
shall maintain net State operating support for a fiscal year 
at a level that is not less than the level that is equal to 
the average of such net State operating support for the 
3 fiscal years preceding such fiscal year. 
‘‘(b) WAIVERS.— 
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‘‘(1) IN GENERAL.—The Secretary may grant a 
waiver to a State from the requirement under sub-
section (a) for a fiscal year, if the State dem-
onstrates that— 
‘‘(A) the net State operating support for 
such fiscal year as a percentage of total revenue 
available to the State that will fund higher edu-
cation for such fiscal year is not less than such 
percentage for the previous fiscal year; and 
‘‘(B) unexpected or uncontrollable cir-
cumstances prevent the State from maintaining 
such State support. 
‘‘(2) NO REDUCTION FOR SUBSEQUENT FISCAL 
YEAR.—If the Secretary grants a State a waiver 
under paragraph (1) for a fiscal year, a determina-
tion of the required level of net State operating sup-
port for subsequent fiscal years shall exclude the fis-
cal year for which the waiver was granted. 
‘‘SEC. 499A–7. OVERSIGHT. 
‘‘(a) IN GENERAL.—If a State that receives a grant 
under this part to establish a State-Federal partnership 
breaches a term of the partnership, the Partnership Office 
shall notify the State and provide the State an opportunity 
to correct the record or cure the breach within 30 days 
of the notification. 
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‘‘(b) RECOMMENDATION.—Based on the State’s re-
sponse to a notification under subsection (a), the Partner-
ship Office shall recommend that the Secretary— 
‘‘(1) take no action; 
‘‘(2) place the State on probation; or 
‘‘(3) deem the State ineligible to continue to 
participate in the partnership. 
‘‘(c) IMPLEMENTATION.— 
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2), the Secretary shall implement the rec-
ommendation of the Partnership Office under sub-
section (b). 
‘‘(2) EXCEPTION.— 
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), the Secretary may choose not to im-
plement the recommendation of the Partnership 
Office under subsection (b). 
‘‘(B) REASONS AND REPORT.—If the Sec-
retary chooses not to implement the rec-
ommendation of the Partnership Office under 
subsection (b), the Secretary shall— 
‘‘(i) provide an explanation for such 
decision; and 
‘‘(ii) notify the relevant committees of 
Congress in a report. 
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‘‘SEC. 499A–8. STATE WITHDRAWAL OR INELIGIBILITY. 
‘‘(a) IN GENERAL.—If a State that receives a grant 
under this part to establish a State-Federal partnership 
intends to withdraw from the partnership or becomes ineli-
gible to continue participation under this part, the State 
shall comply with the requirements of this section, includ-
ing, if the State intends to withdraw, notifying the Sec-
retary and the Partnership Office 60 days prior to the 
withdrawal. 
‘‘(b) CONTINUED COVERAGE.— 
‘‘(1) IN
GENERAL.—Any unexpended balance 
from a State-Federal partnership grant award that 
remains after a State notifies the Partnership Office 
of the State intention to withdraw from the partner-
ship or becomes ineligible to continue participation 
under this part shall be placed into an escrow ac-
count at the Department and used solely to provide 
need-based grant aid to an eligible student who has 
received a Federal Pell Grant under subpart 1 of 
part A and who was enrolled before the State noti-
fied the Partnership Office of the State’s intention 
to withdraw from the partnership or the State be-
came ineligible. 
‘‘(2) COVERAGE UNTIL STUDENTS FINISH PRO-
GRAM.— 
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‘‘(A) IN
GENERAL.—A State that with-
draws from a State-Federal partnership or be-
comes ineligible to continue participation under 
this part shall continue to cover the unmet need 
for each eligible student who received a Federal 
Pell Grant under subpart 1 of part A and who 
was enrolled before the State notified the Part-
nership Office of the State’s intention to with-
draw from the partnership or became ineligible 
until each such student completes the student’s 
program of study at the institution or until the 
allotted time for completion of such program of 
study expires. 
‘‘(B) PRIORITY.—In carrying out subpara-
graph (A), a State shall prioritize funding 
based on students’ financial need. 
‘‘(3) COMMUNICATION
OF
INFORMATION.—A 
State that withdraws from a State-Federal partner-
ship or becomes ineligible to continue participation 
under this part shall communicate its withdrawal or 
ineligibility, as appropriate, to students and families 
in the State and provide clear information to eligible 
students described in paragraph (2)(A) that the stu-
dents may continue to have their cost of attendance 
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at an in-State public institution of higher education 
covered. 
‘‘SEC. 499A–9. AUTHORIZATION OF APPROPRIATIONS. 
‘‘(a) IN GENERAL.—There are authorized to be ap-
propriated to carry out this part— 
‘‘(1) $81,000,000,000 for fiscal year 2018; and 
‘‘(2) such sums as may be necessary for each 
fiscal years 2019 through 2028. 
‘‘(b) AVAILABILITY.—Funds made available under 
subsection (a) shall be available for obligation through 
September 30 of the fiscal year succeeding the fiscal year 
for which such sums were appropriated.’’. 
SEC. 3. DEBT-FREE COLLEGE GRANT PROGRAM FOR HBCUS 
AND MSIS. 
Part F of title III of the Higher Education Act of 
1965 (20 U.S.C. 1067q et seq.) is amended by adding at 
the end the following: 
‘‘SEC. 372. DEBT-FREE COLLEGE GRANT PROGRAM FOR 
HBCUS AND MSIS. 
‘‘(a) DEFINITION OF ELIGIBLE INSTITUTION.— 
‘‘(1) IN GENERAL.—In this section, except as 
provided in paragraph (2), the term ‘eligible institu-
tion’ means an institution of higher education that 
is— 
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‘‘(A) a private, nonprofit 2-year or 4-year 
part B institution (as defined in section 322); 
‘‘(B) a Tribal College or University (as de-
fined in section 316); or 
‘‘(C) a private, nonprofit 2-year or 4-year 
institution— 
‘‘(i) that is— 
‘‘(I) a Hispanic-serving institu-
tion (as defined in section 502); 
‘‘(II) an Alaska Native-serving 
institution (as defined in section 
317(b)); 
‘‘(III) a Native Hawaiian-serving 
institution (as defined in section 
317(b)); 
‘‘(IV) a Predominantly Black In-
stitution (as defined in section 318); 
‘‘(V) an Asian American and Na-
tive American Pacific Islander-serving 
institution (as defined in section 
320(b)); or 
‘‘(VI) a Native American-serving, 
nontribal institution (as defined in 
section 319); and 
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‘‘(ii) in which not less than 35 percent 
of the students enrolled at the institution 
are eligible to receive a Federal Pell Grant. 
‘‘(2) FOR-PROFIT
INSTITUTION
THAT
CON-
VERTED TO A NONPROFIT INSTITUTION.—Notwith-
standing paragraph (1), an institution of higher edu-
cation is not an eligible institution if the institution 
was a for-profit institution of higher education that 
converted to a nonprofit institution of higher edu-
cation and less than 25 years have passed since the 
date of such conversion. 
‘‘(b) GRANT PROGRAM AUTHORIZED.— 
‘‘(1) IN GENERAL.—The Secretary shall award 
grants to eligible institutions to enable the institu-
tions to provide need-based financial aid to cover 
unmet need for students enrolled at the institutions. 
‘‘(2) DURATION.—Grants awarded under this 
section shall be for a period of 5 years. 
‘‘(c) APPLICATION.—An eligible institution that de-
sires a grant under this section shall submit an application 
to the Secretary at such time, in such manner, and accom-
panied by such information as the Secretary may require, 
including a plan detailing how— 
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‘‘(1) the eligible institution will use grant funds 
to provide debt-free college to the students enrolled 
at the institution; and 
‘‘(2) the institution plans to meet the require-
ments of the grant program. 
‘‘(d) AWARDING OF GRANTS.— 
‘‘(1) IN GENERAL.— 
‘‘(A) IN
GENERAL.—A grant amount 
awarded to an eligible institution under this 
section for a year— 
‘‘(i) shall be in an amount equal to 
the amount of the institution’s expendi-
tures on student undergraduate instruction 
and academic support for the year; and 
‘‘(ii) shall not be disbursed for the 
year until the Partnership Office created 
under section 499A–4(a) reviews and ap-
proves the annual update submitted by the 
institution pursuant to subsection (f). 
‘‘(B) 
RATABLE
REDUCTION.—If 
the 
amount appropriated to carry out this section 
for a fiscal year is insufficient to award each el-
igible institution the institution’s full grant 
amount pursuant to subparagraph (A), the Sec-
retary shall establish procedures for ratably re-
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ducing each institution’s award amount for 
such fiscal year. 
‘‘(2) WAIVERS.— 
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), if the percentage of students eligible 
to receive a Federal Pell Grant who are enrolled 
at an eligible institution that receives a grant 
under this section decreases to less than 35 per-
cent after the first year of the grant award, 
such institution may apply to the Secretary for 
a waiver of the requirement that an institution 
to be eligible to receive a grant under this sec-
tion have not less than 35 percent of the stu-
dents enrolled at the institution eligible to re-
ceive a Federal Pell Grant. 
‘‘(B) RESTRICTIONS
ON
WAIVER.—The 
Secretary shall grant a waiver under subpara-
graph (A)— 
‘‘(i) only if the decrease in percentage 
is— 
‘‘(I) small relative to the size of 
the student body; or 
‘‘(II) the result of unexpected or 
uncontrollable circumstances; and 
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‘‘(ii) not more than 2 times during the 
5-year grant period. 
‘‘(e) USE OF GRANT FUNDS.— 
‘‘(1) IN GENERAL.—An eligible institution that 
receives a grant under this section shall use the 
grant funds as follows: 
‘‘(A) 95 percent of the grant funds shall 
be— 
‘‘(i) used to cover the unmet need for 
financial assistance to attend the institu-
tion of students who have not yet earned 
a bachelor’s degree; and 
‘‘(ii) disbursed according to financial 
need. 
‘‘(B) 5 percent of the grant funds shall be 
used for the following activities: 
‘‘(i) Increasing capacity through con-
struction or renovation of facilities. 
‘‘(ii) Hiring faculty. 
‘‘(iii) Student support services. 
‘‘(iv) Other activities to increase en-
rollment of low-income and underserved 
students, improve student outcomes, and 
provide information to prospective students 
and families, and other activities as ap-
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proved by the Secretary to improve access, 
affordability, or quality of the education 
provided by the institution. 
‘‘(2) PROHIBITION ON USE OF FUNDS.—An eli-
gible institution that receives a grant under this sec-
tion may not use grant funds for endowments or the 
construction of athletic or commercial venues. 
‘‘(f) ANNUAL UPDATE.—An eligible institution that 
receives a grant under this section shall submit to the Sec-
retary an annual update— 
‘‘(1) with any changes to the institution’s ex-
penditures on student instruction and academic sup-
port; and 
‘‘(2) on how the institution is fulfilling the 
terms of the grant. 
‘‘(g) TERMS OF THE GRANT.— 
‘‘(1) GRANTEE COMMITMENT.—An eligible in-
stitution that receives a grant under this section 
shall carry out the following: 
‘‘(A) Cap tuition and fees at the institution 
at the level as of the date of enactment of the 
Debt-Free College Act, with a yearly increase 
allowed based on the Consumer Price Index (as 
determined by the Secretary). 
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‘‘(B) Maintain expenditures on instruction 
and academic support at the institution at a 
level that is not less than the average of such 
expenditures at the institution over the period 
of 3 years preceding the date of enactment of 
the Debt-Free College Act. 
‘‘(C) Maintain the enrollment of low-in-
come students, as defined by the Secretary, at 
the institution at a level that is not less than 
the level of such enrollment as of the date of 
enactment of the Debt-Free College Act. 
‘‘(D) Maintain institutional aid at a level 
that is not less than the average of such aid 
over the period of 3 years preceding the date of 
enactment of the Debt-Free College Act. 
‘‘(E) Submit to the Secretary for approval 
the institution’s calculation of the cost of at-
tendance at such institution. 
‘‘(F) Clearly communicate to prospective 
students and their families the following: 
‘‘(i) How students can attend the in-
stitution without debt. 
‘‘(ii) That a debt-free college edu-
cation provided pursuant to this section is 
conditioned upon institutional eligibility 
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and participation under this section and 
may not apply for each year that the stu-
dent is enrolled at the institution. 
‘‘(2) BREACH OF TERMS OF GRANT.— 
‘‘(A) IN GENERAL.—If an eligible institu-
tion that receives a grant under this section 
breaches a term of the grant, the Partnership 
Office created under section 499A–4(a) shall 
notify the institution and provide the institution 
with an opportunity to correct the record or 
cure the breach not later than 30 days after the 
date of the notification. 
‘‘(B) RECOMMENDATION.—The Partner-
ship Office created under section 499A–4(a) 
shall, after considering the eligible institution’s 
response to a notification under subparagraph 
(A) or lack of response, make a recommenda-
tion to the Secretary that the Secretary— 
‘‘(i) take no action with respect to the 
eligible institution; 
‘‘(ii) place the eligible institution on 
probation; or 
‘‘(iii) revoke the eligible institution’s 
eligibility for the grant program under this 
section. 
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‘‘(C) PROBATION.—An eligible institution 
that is placed on probation by the Secretary 
shall develop a plan to remedy the breach of the 
term of the grant. If the eligible institution does 
not remedy the breach, the Secretary may levy 
a fine against the institution of an amount not 
to exceed 1 percent of the annual grant 
amount. 
‘‘(D) INELIGIBILITY.—If an eligible insti-
tution’s eligibility for the grant program under 
this section has been revoked by the Secretary, 
such institution shall— 
‘‘(i) place into escrow any unexpended 
grant 
funds 
described 
in 
subsection 
(e)(1)(A) to be disbursed directly to stu-
dents enrolled at the institution; 
‘‘(ii) return to the Secretary any un-
expended funds described in subsection 
(e)(1)(B); 
‘‘(iii) remain ineligible to receive a 
grant under this section during the 3-year 
period after the date eligibility was re-
voked; and 
‘‘(iv) notify prospective and enrolled 
students at the institution and their fami-
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lies of such ineligibility for participation in 
the grant program under this section. 
‘‘(h) WITHDRAWAL.—An eligible institution that re-
ceives a grant under this section that intends to withdraw 
from the grant program under this section shall— 
‘‘(1) notify the Partnership Office created 
under section 499A–4(a) not less than 60 days prior 
to the withdrawal; 
‘‘(2) place into escrow any unexpended grant 
funds to be disbursed directly to students enrolled at 
the institution; and 
‘‘(3) notify prospective and enrolled students at 
the institution and their families of such withdrawal. 
‘‘(i) AUTHORIZATION OF APPROPRIATIONS.— 
‘‘(1) IN GENERAL.—There are authorized to be 
appropriated to carry out this section— 
‘‘(A) $3,000,000,000 for fiscal year 2018; 
and 
‘‘(B) such sums as may be necessary for 
each fiscal years 2019 through 2028. 
‘‘(2) AVAILABILITY.—Funds made available 
under paragraph (1) shall be available for obligation 
through September 30 of the fiscal year succeeding 
the fiscal year for which such sums were appro-
priated.’’. 
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