IB
Union Calendar No. 137
107TH CONGRESS
1ST SESSION
H. R. 1992
[Report No. 107–225]
To amend the Higher Education Act of 1965 to expand the opportunities
for higher education via telecommunications.
IN THE HOUSE OF REPRESENTATIVES
MAY 24, 2001
Mr. ISAKSON (for himself, Mr. BOEHNER, Mr. MCKEON, Mr. CASTLE, and
Mr. GOODLATTE) introduced the following bill; which was referred to the
Committee on Education and the Workforce
OCTOBER 2, 2001
Additional sponsors: Mr. PASCRELL, Mr. GRAHAM, Mr. TANCREDO, Mr. AN-
DREWS, Mr. SMITH of Texas, Mr. UPTON, Mr. HINOJOSA, Mr. GOODE,
Mr. DEUTSCH, Mr. SCHROCK, Mr. SCHAFFER, Mrs. ROUKEMA, Mr.
HOEKSTRA, Mr. GREENWOOD, Mr. NORWOOD, Mr. KELLER, Mr. TERRY,
Mr. BACA, Mr. BURTON of Indiana, Mr. PAUL, Ms. HART, Mr. PLATTS,
Mr. PETRI, Mr. SHIMKUS, Mr. KILDEE, Mr. HORN, Mr. DEMINT, Mrs.
BIGGERT, Mr. OSBORNE, Mr. DOYLE, Mr. STRICKLAND, and Mr.
RAMSTAD
OCTOBER 2, 2001
Reported with an amendment, committed to the Committee of the Whole
House on the State of the Union, and ordered to be printed
[Strike out all after the enacting clause and insert the part printed in italic]
A BILL
To amend the Higher Education Act of 1965 to expand
the opportunities for higher education via telecommuni-
cations.
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 ‘‘ Internet Equity and
Education Act of 2001’’.
SEC. 2. EXCEPTION TO 50 PERCENT CORRESPONDENCE
COURSE LIMITATIONS.
(a) DEFINITION OF INSTITUTION OF HIGHER EDU-
CATION FOR TITLE IV PURPOSES.—Section 102(a) of the
Higher Education Act of 1965 (20 U.S.C. 1002(a)) is
amended by adding at the end the following new para-
graph:
‘‘(7) EXCEPTION
TO
LIMITATION
BASED
ON
COURSE
OF
STUDY.—Courses
offered
via
tele-
communications (as defined in section 484(l)(4))
shall not be considered to be correspondence courses
for purposes of paragraph (3)(A) for any institution
that—
‘‘(A) is participating in either or both of
the loan programs under part B or D of title
IV on the date of enactment of the Internet Eq-
uity and Education Act of 2001; and
‘‘(B) has a cohort default rate (as deter-
mined under section 435(m)) for each of the 3
most recent fiscal years for which data are
available that is less than 10 percent.’’.
(b) DEFINITION OF ELIGIBLE STUDENT.—Section
484(l)(1) of the Higher Education Act of 1965 (20 U.S.C.
1091(l)(1)) is amended by adding at the end the following
new subparagraph:
‘‘(C) EXCEPTION TO 50 PERCENT LIMITA-
TION.—Notwithstanding the 50 percent limita-
tion in subparagraph (A), a student enrolled in
a course of instruction described in such sub-
paragraph shall not be considered to be enrolled
in correspondence courses if the student is en-
rolled in an institution that—
‘‘(i) is participating in either or both
of the loan programs under part B or D of
title IV on the date of enactment of the
Internet Equity and Education Act of
2001; and
‘‘(ii) has a cohort default rate (as de-
termined under section 435(m)) for each of
the 3 most recent fiscal years for which
data are available that is less than 10 per-
cent.’’.
SEC. 3. DEFINITION OF ACADEMIC YEAR.
Section 481(a)(2) of the Higher Education Act of
1965 (20 U.S.C. 1088(a)(2)) is amended by inserting
after the first sentence the following new sentence: ‘‘For
the purposes of any program under this title (whether a
standard or nonstandard term program), a week of in-
struction is defined as a week in which at least one day
of instruction, examination, or preparation for examina-
tion occurs.’’.
SEC. 4. INCENTIVE COMPENSATION.
(a) AMENDMENT.—Part G of title IV of the Higher
Education Act of 1965 is amended by inserting after sec-
tion 484B (20 U.S.C. 1091b) the following new section:
‘‘SEC. 484C. INCENTIVE COMPENSATION PROHIBITED.
‘‘No institution of higher education participating in
a program under this title shall make any payment of a
commission, bonus, or other incentive, non-salary pay-
ment, based directly on success in securing enrollments
or financial aid, to any person or entity directly engaged
in student recruiting or admission activities, or making de-
cisions regarding the award of student financial assist-
ance, except that this section shall not apply to the recruit-
ment of foreign students residing in foreign countries who
are not eligible to receive Federal student assistance.’’.
(b) CONFORMING AMENDMENT.—Paragraph (20) of
section 487(a) (20 U.S.C. 1094(a)(20)) is repealed.
(c) TECHNICAL AMENDMENT.—Section 487(c)(1) of
the Higher Education Act of 1965 (20 U.S.C. 1094(c)(1))
is amended by striking ‘‘paragraph (2)(B)’’ each place it
appears in subparagraphs (F) and (H) and inserting
‘‘paragraph (3)(B)’’.
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Internet Equity and
Education Act of 2001’’.
SEC. 2. EXCEPTION TO 50 PERCENT CORRESPONDENCE
COURSE LIMITATIONS.
(a) DEFINITION OF INSTITUTION OF HIGHER EDU-
CATION FOR TITLE IV PURPOSES.—Section 102(a) of the
Higher Education Act of 1965 (20 U.S.C. 1002(a)) is
amended by adding at the end the following new paragraph:
‘‘(7) EXCEPTION
TO
LIMITATION
BASED
ON
COURSE OF STUDY.—Courses offered via telecommuni-
cations (as defined in section 484(l)(4)) shall not be
considered to be correspondence courses for purposes
of subparagraph (A) or (B) of paragraph (3) for any
institution that—
‘‘(A) is participating in either or both of the
loan programs under part B or D of title IV on
the date of enactment of the Internet Equity and
Education Act of 2001;
paragraph shall not be considered to be enrolled
in correspondence courses if the student is en-
rolled in an institution that—
‘‘(i) is participating in either or both
of the loan programs under part B or D of
title IV on the date of enactment of the
Internet Equity and Education Act of 2001;
‘‘(ii) has a cohort default rate (as de-
termined under section 435(m)) for each of
the 3 most recent fiscal years for which data
are available that is less than 10 percent;
and
‘‘(iii)(I) has notified the Secretary, in
form and manner prescribed by the Sec-
retary (including such information as the
Secretary may require to meet the require-
ments of subclause (II)), of the election by
such institution to qualify its students as el-
igible students by means of the provisions of
this subparagraph; and
‘‘(II) the Secretary has not, within 90
days after such notice, and the receipt of
any information required under subclause
(I), notified the institution that the election
by such institution would pose a significant
risk to Federal funds and the integrity of
programs under title IV.’’.
SEC. 3. DEFINITION OF ACADEMIC YEAR.
Section 481(a) of the Higher Education Act of 1965
(20 U.S.C. 1088(a)) is amended by adding at the end the
following new paragraph:
‘‘(3) For the purposes of any eligible program, a week
of instruction is defined as a week in which at least one
day of regularly scheduled instruction or examinations oc-
curs, or at least one day of study for final examinations
occurs after the last scheduled day of classes. For an edu-
cational program using credit hours, but not using a semes-
ter, trimester, or quarter system, an institution of higher
education shall notify the Secretary, in the form and man-
ner prescribed by the Secretary, if the institution plans to
offer an eligible program of instruction of less than 12 hours
of regularly scheduled instruction, examinations, or prepa-
ration for examinations for a week of instructional time.’’.
SEC. 4. INCENTIVE COMPENSATION.
(a) AMENDMENT.—Part G of title IV of the Higher
Education Act of 1965 is amended by inserting after section
484B (20 U.S.C. 1091b) the following new section:
‘‘SEC. 484C. INCENTIVE COMPENSATION PROHIBITED.
‘‘(a) PROHIBITION.—No institution of higher edu-
cation participating in a program under this title shall
make any payment of a commission, bonus, or other incen-
tive payment, based directly on success in securing enroll-
ments or financial aid, to any person or entity directly en-
gaged in student recruiting or admission activities, or mak-
ing decisions regarding the award of student financial as-
sistance, except that this section shall not apply to the re-
cruitment of foreign students residing in foreign countries
who are not eligible to receive Federal student assistance.
‘‘(b) EXCEPTIONS.—Subsection (a) does not apply to
payment of a commission, bonus, or other incentive
payment—
‘‘(1) pursuant to any contract with any third-
party service provider that has no control over eligi-
bility for admission or enrollment or the awarding of
financial aid at the institution of higher education,
provided that no employee of the third-party service
provider is paid a commission, bonus, or other incen-
tive payment based directly on success in securing en-
rollments or financial aid; or
‘‘(2) to persons or entities for success in securing
agreements, contracts, or commitments from employ-
ers to provide financial support for enrollment by
their employees in an institution of higher education
or for activities that may lead to such agreements,
contracts, or commitments.
‘‘(c) EXCEPTION
FOR FIXED COMPENSATION.—For
purposes of subsection (a), a person shall not be treated as
receiving incentive compensation when such person receives
a fixed compensation that is paid regularly for services and
that is adjusted no more frequently than every six months.’’.
(b) CONFORMING AMENDMENT.—Paragraph (20) of
section 487(a) of the Higher Education Act of 1965 (20
U.S.C. 1094(a)(20)) is repealed.
(c) TECHNICAL AMENDMENT.—Section 487(c)(1) of the
Higher Education Act of 1965 (20 U.S.C. 1094(c)(1)) is
amended by striking ‘‘paragraph (2)(B)’’ each place it ap-
pears in subparagraphs (F) and (H) and inserting ‘‘para-
graph (3)(B)’’.
SEC. 5. EVALUATION AND REPORT.
(a) INFORMATION FROM INSTITUTIONS.—
(1) INSTITUTIONS COVERED BY REQUIREMENT.—
The requirements of paragraph (2) apply to any in-
stitution of higher education that—
(A) has notified the Secretary of Education
of an election to qualify for the exception to limi-
tation based on course of study in section
102(a)(7) of the Higher Education Act of 1965
(20 U.S.C. 1002(a)(7)) or the exception to the 50
percent limitation in section 484(l)(1)(C) of such
Act (20 U.S.C. 1091(l)(1)(C));
(B) has notified the Secretary under section
481(a)(3) of such Act (20 U.S.C. 1088(a)(3)); or
(C) contracts with outside parties for—
(i) the delivery of distance education
programs;
(ii) the delivery of programs offered in
nontraditional formats; or
(iii) the purpose of securing the enroll-
ment of students.
(2) REQUIREMENTS.—Any institution of higher
education to which this paragraph applies shall com-
ply, on a timely basis, with the Secretary of Edu-
cation’s reasonable requests for information on
changes in—
(A) the amount or method of instruction of-
fered;
(B) the types of programs or courses offered;
(C) enrollment by type of program or
course;
(D) the amount and types of grant, loan, or
work assistance provided under title IV of the
Higher Education Act of 1965 that is received by
students enrolled in programs conducted in non-
traditional formats; and
(E) outcomes for students enrolled in such
courses or programs.
(b) REPORT
BY SECRETARY REQUIRED.—The Sec-
retary of Education shall conduct by grant or contract a
study of, and by March 31, 2003, submit to the Congress,
a report on—
(1) the effect that the amendments made by this
Act have had on—
(A) the ability of institutions of higher edu-
cation to provide distance learning opportunities
to students; and
(B) program integrity;
(2) with respect to distance education or cor-
respondence education courses at institutions of high-
er education to which the information requirements of
subsection (a)(2) apply, changes from year-to-year
in—
(A) the amount or method of instruction of-
fered and the types of programs or courses of-
fered;
(B) the number and type of students en-
rolled in distance education or correspondence
education courses;
(C) the amount of student aid provided to
such students, in total and as a percentage of the
institution’s revenue; and
(D) outcomes for students enrolled in dis-
tance education or correspondence education
courses, including graduation rates, job place-
ment rates, and loan delinquencies and defaults;
(3) any reported and verified claim of induce-
ment to participate in the student financial aid pro-
grams and any violation of the Higher Education Act
of 1965, including any actions taken by the Depart-
ment of Education against the violator; and
(4) any further improvements that should be
made to the provisions amended by this Act (and re-
lated provisions), in order to accommodate nontradi-
tional educational opportunities in the Federal stu-
dent assistance programs while ensuring the integrity
of those programs.
SEC. 6. LEARNING ANYTIME ANYWHERE PARTNERSHIPS.
Section 420J of the Higher Education Act of 1965 (20
U.S.C. 1070f–6) is amended by adding at the end the fol-
lowing new sentence: ‘‘If for any fiscal year funds are not
appropriated pursuant to this section, funds available
under part B of title VII, relating to the Fund for the Im-
provement of Postsecondary Education, may be made avail-
able for continuation grants for any grant recipient under
this subpart.’’.
SEC. 7. IMPLEMENTATION.
(a) NO DELAY IN EFFECTIVE DATE.—Section 482(c)
of the Higher Education Act of 1965 (20 U.S.C. 1089(c))
shall not apply to the amendments made by this Act.
(b) IMPLEMENTING REGULATIONS.—Section 492 of the
Higher Education Act of 1965 (20 U.S.C. 1098a) shall not
apply to the amendments made by sections 2 and 3 of this
Act.
Union Calendar No. 137
107TH CONGRESS
1ST SESSION
H. R. 1992
[Report No. 107–225]
A BILL
To amend the Higher Education Act of 1965 to ex-
pand the opportunities for higher education via
telecommunications.
OCTOBER 2, 2001
Reported with an amendment, committed to the Com-
mittee of the Whole House on the State of the Union,
and ordered to be printed