I 
113TH CONGRESS 
1ST SESSION H. R. 3496 
To amend the Higher Education Act of 1965 regarding proprietary 
institutions of higher education in order to protect students and taxpayers. 
IN THE HOUSE OF REPRESENTATIVES 
NOVEMBER 14, 2013 
Mr. COHEN (for himself, Mr. CONYERS, and Mr. GRIJALVA) introduced the 
following bill; which was referred to the Committee on Education and the 
Workforce 
A BILL 
To amend the Higher Education Act of 1965 regarding 
proprietary institutions of higher education in order to 
protect students and taxpayers. 
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 ‘‘Protecting Our Stu-
dents and Taxpayers Act of 2013’’ or ‘‘POST Act of 
2013’’. 
SEC. 2. 85/15 RULE. 
(a) IN GENERAL.—Section 102(b) of the Higher 
Education Act of 1965 (20 U.S.C. 1002(b)) is amended— 
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(1) in paragraph (1)— 
(A) in subparagraph (D), by striking 
‘‘and’’ after the semicolon; 
(B) in subparagraph (E), by striking the 
period 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 15 percent of the institution’s rev-
enues from sources other than Federal funds, 
as calculated in accordance with subparagraphs 
(B) and (C). 
‘‘(B) FEDERAL
FUNDS.—In this para-
graph, the term ‘Federal funds’ means any 
Federal financial assistance provided, under 
this Act or any other Federal law, through a 
grant, contract, subsidy, loan, guarantee, insur-
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ance, or other means to a proprietary institu-
tion, including Federal financial assistance that 
is disbursed or delivered to an institution 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 housing stipend 
provided under the Post-9/11 Veterans 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; 
‘‘(II) activities conducted by the 
institution that are necessary for the 
education and training of the institu-
tion’s students, if such activities are— 
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‘‘(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 funds 
that are disbursed or delivered to an insti-
tution 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 whether the institution cred-
its such funds to the student’s account or 
pays such funds directly to the student, ex-
cept to the extent that the student’s tui-
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tion, 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 
with the institution; and 
‘‘(II) 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; 
‘‘(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-
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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 
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; 
‘‘(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 
funds provided to the institution to 
pay institutional charges for a student 
that were refunded or returned; and 
‘‘(V) the amount charged for 
books, supplies, and equipment, unless 
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the institution includes that amount 
as tuition, fees, or other institutional 
charges. 
‘‘(D) REPORT
TO
CONGRESS.—Not later 
than July 1, 2014, 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-
tution pursuant to the requirements of section 
487(c)— 
‘‘(i) the amount and percentage of 
such institution’s revenues received from 
Federal 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); 
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(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; 
(4) in subsection (f)(1) (as redesignated by 
paragraph (3)), by striking ‘‘subsection (e)(2)’’ and 
inserting ‘‘subsection (d)(2)’’; and 
(5) 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’’ 
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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)’’; 
(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)’’. 
Æ 
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