352 
‘‘(C) the repayment plans that are available 
to the borrower under section (c); 
‘‘(D) the options of the borrower to prepay 
the consolidation loan, to pay such loan on a 
shorter schedule, and to change repayment plans; 
‘‘(E) the consequences of default on the con-
solidation loan; and 
‘‘(F) that by applying for a consolidation 
loan, the borrower is not obligated to agree to 
take the consolidation loan; and 
‘‘(6) not make such a loan to an eligible bor-
rower, unless— 
‘‘(A) the borrower has agreed to notify the 
Secretary promptly concerning any change of 
address; and 
‘‘(B) the loan is evidenced by a note or 
other written agreement which— 
‘‘(i) is made without security and 
without endorsement, except that if— 
‘‘(I) the borrower is a minor and 
such note or other written agreement 
executed by him or her would not, 
under applicable law, create a binding 
obligation, endorsement may be re-
quired; or 
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‘‘(II) the borrower desires to in-
clude in the consolidation loan, a Fed-
eral ONE Parent Loan, or a loan 
under section 428B, or a Federal Di-
rect PLUS loan, made on behalf of a 
dependent student, endorsement shall 
be required; 
‘‘(ii) provides for the payment of inter-
est and the repayment of principal as de-
scribed in paragraph (2); 
‘‘(iii) provides that during any period 
for which the borrower would be eligible for 
a deferral under section 469A, which period 
shall not be included in determining the re-
payment schedule pursuant to subsection 
(c)— 
‘‘(I) periodic installments of prin-
cipal need not be paid, but interest 
shall accrue and be paid by the bor-
rower or be capitalized; and 
‘‘(II) except as otherwise provided 
under subsections (f) and (g) of section 
465, the Secretary shall not pay inter-
est on any portion of the consolidation 
loan, without regard to whether the 
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portion repays Federal Stafford Loans 
for which the student borrower received 
an interest subsidy under section 428 
or Federal Direct Stafford Loans for 
which the borrower received an interest 
subsidy under section 455; 
‘‘(iv) entitles the borrower to accelerate 
without penalty repayment of the whole or 
any part of the loan; and 
‘‘(v) contains a notice of the system of 
disclosure concerning such loan to consumer 
reporting agencies under section 430A, and 
provides that the Secretary on request of the 
borrower will provide information on the 
repayment status of the note to such con-
sumer reporting agencies. 
‘‘(b) NONDISCRIMINATION IN LOAN CONSOLIDATION.— 
The Secretary shall not discriminate against any borrower 
seeking a loan under this section— 
‘‘(1) based on the number or type of eligible stu-
dent loans the borrower seeks to consolidate; 
‘‘(2) based on the type or category of institution 
of higher education that the borrower attended; 
‘‘(3) based on the interest rate to be charged to 
the borrower with respect to the consolidation loan; or 
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‘‘(4) with respect to the types of repayment 
schedules offered to such borrower. 
‘‘(c) PAYMENT OF PRINCIPAL AND INTEREST.— 
‘‘(1) REPAYMENT SCHEDULES.— 
‘‘(A) ESTABLISHMENT.— 
‘‘(i) IN
GENERAL.—Notwithstanding 
any other provision of this part, the Sec-
retary shall— 
‘‘(I) establish repayment terms as 
will promote the objectives of this sec-
tion; and 
‘‘(II) provide a borrower with the 
option of the standard-repayment plan 
or income-based repayment plan under 
section 466(d) in lieu of such repay-
ment terms. 
‘‘(ii) SCHEDULE TERMS.—The repay-
ment terms established under clause (i)(I) 
shall require that if the sum of the consoli-
dation loan and the amount outstanding on 
other eligible student loans to the indi-
vidual— 
‘‘(I) is less than $7,500, then such 
consolidation loan shall be repaid in 
not more than 10 years; 
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‘‘(II) is equal to or greater than 
$7,500 but less than $10,000, then such 
consolidation loan shall be repaid in 
not more than 12 years; 
‘‘(III) is equal to or greater than 
$10,000 but less than $20,000, then 
such consolidation loan shall be repaid 
in not more than 15 years; 
‘‘(IV) is equal to or greater than 
$20,000 but less than $40,000, then 
such consolidation loan shall be repaid 
in not more than 20 years; 
‘‘(V) is equal to or greater than 
$40,000 but less than $60,000, then 
such consolidation loan shall be repaid 
in not more than 25 years; or 
‘‘(VI) is equal to or greater than 
$60,000, then such consolidation loan 
shall be repaid in not more than 30 
years. 
‘‘(B) 
LIMITATION.—The 
amount 
out-
standing on other eligible student loans which 
may be counted for the purpose of subparagraph 
(A) may not exceed the amount of the consolida-
tion loan. 
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‘‘(2) ADDITIONAL REPAYMENT REQUIREMENTS.— 
Notwithstanding paragraph (1)— 
‘‘(A) except in the case of an income-based 
repayment schedule under section 466(d), a re-
payment schedule established with respect to a 
consolidation loan shall require that the min-
imum installment payment be an amount equal 
to not less than the accrued unpaid interest; and 
‘‘(B) an income-based repayment schedule 
under section 466(d) shall not be available to a 
consolidation loan borrower who— 
‘‘(i) used the proceeds of a Federal 
ONE Consolidation loan to discharge the li-
ability— 
‘‘(I) on a loan under section 428B 
made on behalf of a dependent student; 
‘‘(II) a Federal Direct PLUS loan 
made on behalf of a dependent student; 
‘‘(III) a Federal ONE Parent 
loan; or 
‘‘(IV) an excepted consolidation 
loan (defined in section 493C); or 
‘‘(ii) used the proceeds of a subsequent 
Federal ONE Consolidation loan to dis-
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charge the liability on a Federal ONE Con-
solidation loan described in clause (i). 
‘‘(3) COMMENCEMENT OF REPAYMENT.—Repay-
ment of a consolidation loan shall commence within 
60 days after all holders have, pursuant to subsection 
(a)(4), discharged the liability of the borrower on the 
loans selected for consolidation. 
‘‘(4) INTEREST
RATE.—A consolidation loan 
made under this section shall bear interest at an an-
nual rate described in section 465(c)(4). 
‘‘(d) INSURANCE RULE.—Any insurance premium 
paid by the borrower under subpart I of part A of title 
VII of the Public Health Service Act with respect to a loan 
made under that subpart and consolidated under this sec-
tion shall be retained by the student loan insurance account 
established under section 710 of the Public Health Service 
Act. 
‘‘(e) DEFINITIONS.—For the purpose of this section: 
‘‘(1) ELIGIBLE BORROWER.— 
‘‘(A) IN GENERAL.—The term ‘eligible bor-
rower’ means a borrower who— 
‘‘(i) is not subject to a judgment se-
cured through litigation with respect to a 
loan under this title or to an order for wage 
garnishment under section 488A; and 
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‘‘(ii) at the time of application for a 
consolidation loan— 
‘‘(I) is in repayment status as de-
termined under section 466(a)(1); 
‘‘(II) is in a grace period pre-
ceding repayment; or 
‘‘(III) is a defaulted borrower who 
has made arrangements to repay the 
obligation on the defaulted loans satis-
factory to the holders of the defaulted 
loans. 
‘‘(B) TERMINATION OF STATUS AS AN ELIGI-
BLE BORROWER.—An individual’s status as an 
eligible borrower under this section terminates 
upon receipt of a consolidation loan under this 
section, except that— 
‘‘(i) an individual who receives eligible 
student loans after the date of receipt of the 
consolidation loan may receive a subsequent 
consolidation loan; 
‘‘(ii) loans received prior to the date of 
the consolidation loan may be added during 
the 180-day period following the making of 
the consolidation loan; 
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‘‘(iii) loans received following the mak-
ing of the consolidation loan may be added 
during the 180-day period following the 
making of the consolidation loan; 
‘‘(iv) loans received prior to the date of 
the first consolidation loan may be added to 
a subsequent consolidation loan; and 
‘‘(v) an individual may obtain a sub-
sequent consolidation loan for the purpose— 
‘‘(I) of income-based repayment 
under section 466(d) only if the loan 
has been submitted for default aversion 
or if the loan is already in default; 
‘‘(II) of using the no accrual of 
interest for active duty service members 
benefit offered under section 465(g); of 
‘‘(III) of submitting an applica-
tion under section 469B(d) for a bor-
rower defense to repayment of a loan 
made, insured, or guaranteed under 
this title. 
‘‘(2) ELIGIBLE STUDENT LOANS.—For the pur-
pose of paragraph (1), the term ‘eligible student loans’ 
means loans— 
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‘‘(A) made, insured, or guaranteed under 
part B, and first disbursed before July 1, 2010, 
including loans on which the borrower has de-
faulted (but has made arrangements to repay the 
obligation on the defaulted loans satisfactory to 
the Secretary or guaranty agency, whichever in-
sured the loans); 
‘‘(B) made under part D of this title, and 
first disbursed before July 1, 2019; 
‘‘(C) made under this part before September 
30, 2017; 
‘‘(D) made under this part on or after the 
date of enactment of the PROSPER Act; 
‘‘(E) made under subpart II of part A of 
title VII of the Public Health Service Act; or 
‘‘(F) made under part E of title VIII of the 
Public Health Service Act. 
‘‘(f) DESIGNATION.—For purposes of this Act, the Fed-
eral ONE Loans described in this section shall be known 
as ‘Federal ONE Consolidation Loans’. 
‘‘SEC. 469. TEMPORARY LOAN CONSOLIDATION AUTHORITY. 
‘‘(a) IN GENERAL.—A borrower who has 1 or more 
loans in 2 or more of the categories described in subsection 
(b), and who has not yet entered repayment on 1 or more 
of those loans in any of the categories, may consolidate all 
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362 
of the loans of the borrower that are described in subsection 
(b) into a Federal ONE Consolidation Loan during the pe-
riod described in subsection (c). 
‘‘(b) CATEGORIES OF LOANS THAT MAY BE CONSOLI-
DATED.—The categories of loans that may be consolidated 
under this section are— 
‘‘(1) loans made under this part before October 
1, 2017 and on or after July 1, 2019; 
‘‘(2) loans purchased by the Secretary pursuant 
to section 459A; 
‘‘(3) loans made under part B that are held by 
an eligible lender, as such term is defined in section 
435(d); and 
‘‘(4) loans made under part D. 
‘‘(c) TIME PERIOD IN WHICH LOANS MAY BE CON-
SOLIDATED.—The Secretary may make a Federal ONE 
Consolidation Loan under this section to a borrower whose 
application for such Federal ONE Consolidation Loan is 
received on or after July 1, 2019, and before July 1, 2024. 
‘‘(d) TERMS OF LOANS.—A Federal ONE Consolida-
tion Loan made under this subsection shall have the same 
terms and conditions as a Federal ONE Consolidation 
Loan made under section 468, except that in determining 
the applicable rate of interest on the Federal ONE Consoli-
dation Loan made under this section, section 465(c)(4) shall 
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be applied without rounding the weighted average of the 
interest rate on the loans consolidated to the nearest higher 
one-eighth of one percent as in such section. 
‘‘SEC. 469A. DEFERMENT. 
‘‘(a) EFFECT ON PRINCIPAL AND INTEREST.—A bor-
rower of a loan made under this part who meets the require-
ments described in subsection (b) shall be eligible for a 
deferment during which installments of principal need not 
be paid and, unless otherwise provided in this subsection, 
interest shall accrue and be capitalized or paid by the bor-
rower. 
‘‘(b) ELIGIBILITY.—A borrower of a loan made under 
this part shall be eligible for a deferment— 
‘‘(1) during any period during which the bor-
rower— 
‘‘(A) is carrying at least one-half the nor-
mal full-time work load for the course of study 
that the borrower is pursuing, as determined by 
the eligible institution the borrower is attending; 
‘‘(B) is pursuing a course of study pursuant 
to— 
‘‘(i) an eligible graduate fellowship 
program in accordance with subsection (g); 
or 
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‘‘(ii) an eligible rehabilitation training 
program for individuals with disabilities in 
accordance with subsection (i); 
‘‘(C) is serving on active duty during a war 
or other military operation or national emer-
gency, and for the 180-day period following the 
demobilization date for such service; 
‘‘(D) is performing qualifying National 
Guard duty during a war or other military op-
eration or national emergency, and for the 180- 
day period following the demobilization date for 
such service; 
‘‘(E) is a member of the National Guard 
who is not eligible for a post-active duty 
deferment under section 493D and is engaged in 
active State duty for a period of more than 30 
consecutive days beginning— 
‘‘(i) the day after 6 months after the 
date the student ceases to carry at least one- 
half the normal full-time academic workload 
(as determined by the institution); or 
‘‘(ii) the day after the borrower ceases 
enrollment on at least a half-time basis, for 
a loan in repayment; 
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‘‘(F) is serving in a medical or dental in-
ternship or residency program, the successful 
completion of which is required to begin profes-
sional practice or service, or is serving in a med-
ical or dental internship or residency program 
leading to a degree or certificate awarded by an 
institution of higher education, a hospital, or a 
health care facility that offers postgraduate 
training; or 
‘‘(G) is eligible for interest payments to be 
made on a loan made under this part for service 
in the Armed Forces under section 2174 of title 
10, United States Code, and pursuant to that 
eligibility, the interest is being paid on such loan 
under section 465(f); 
‘‘(2) during a period sufficient to enable the bor-
rower to resume honoring the agreement to repay the 
outstanding balance of principal and interest on the 
loan after default, if— 
‘‘(A) the borrower signs a new agreement to 
repay such outstanding balance; 
‘‘(B) the deferment period is limited to 120 
days; and 
‘‘(C) such deferment is not granted for con-
secutive periods; 
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‘‘(3) during a period of administrative deferment 
described in subsection (j); or 
‘‘(4) in the case of a borrower of a Federal ONE 
Parent Loan or an Excepted Federal ONE Consolida-
tion Loan, during a period described in subsection 
(k). 
‘‘(c) LENGTH OF DEFERMENT.—A deferment granted 
by the Secretary— 
‘‘(1) under subparagraph (F) or (G) of sub-
section (b)(1) shall be renewable at 12 month inter-
vals; 
‘‘(2) under subparagraph (F) of subsection (b)(1) 
shall equal the length of time remaining in the bor-
rower’s medical or dental internship or residency pro-
gram; and 
‘‘(3) under subparagraph (G) of subsection (b)(1) 
shall not exceed 3 years. 
‘‘(d) REQUEST AND DOCUMENTATION.—The Secretary 
shall determine the eligibility of a borrower for a deferment 
under paragraphs (1), (2), or (4) of subsection (b), or in 
the case of a loan for which an endorser is required, an 
endorser’s eligibility for a deferment under paragraph (2) 
or (4) or eligibility to request a deferment under paragraph 
(1), based on— 
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‘‘(1) the receipt of a request for a deferment from 
the borrower or the endorser, and documentation of 
the borrower’s or endorser’s eligibility for the 
deferment or eligibility to request the deferment; 
‘‘(2) receipt of a completed loan application that 
documents the borrower’s eligibility for a deferment; 
‘‘(3) receipt of a student status information doc-
umenting that the borrower is enrolled on at least a 
half-time basis; or 
‘‘(4) the Secretary’s confirmation of the bor-
rower’s half-time enrollment status, if the confirma-
tion is requested by the institution of higher edu-
cation. 
‘‘(e) NOTIFICATION.—The Secretary shall— 
‘‘(1) notify a borrower of a loan made under this 
part— 
‘‘(A) the granting of a deferment under this 
subsection on such loan; and 
‘‘(B) the option of the borrower to continue 
making payments on the outstanding balance of 
principal and interest on such loan in accord-
ance with subsection (f); 
‘‘(2) at the time the Secretary grants a deferment 
to a borrower of a loan made under this part, and 
not less frequently than once every 180 days during 
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368 
the period of such deferment, provide information to 
the borrower to assist the borrower in under-
standing— 
‘‘(A) the effect of granting a deferment on 
the total amount to be paid under the income- 
based repayment plan under 466(d); 
‘‘(B) the fact that interest will accrue on the 
loan for the period of deferment, other than for 
a deferment granted under subsection (b)(1)(G); 
‘‘(C) the amount of unpaid principal and 
the amount of interest that has accrued since the 
last statement of such amounts provided to the 
borrower; 
‘‘(D) the amount of interest that will be 
capitalized, and the date on which capitalization 
will occur; 
‘‘(E) the effect of the capitalization of inter-
est on the borrower’s loan principal and on the 
total amount of interest to be paid on the loan; 
‘‘(F) the option of the borrower to pay the 
interest that has accrued before the interest is 
capitalized; and 
‘‘(G) the borrower’s option to discontinue 
the deferment at any time. 
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369 
‘‘(f) FORM OF DEFERMENT.—The form of a deferment 
granted under this subsection on a loan made under this 
part shall be temporary cessation of all payments on such 
loan, except that— 
‘‘(1) in the case of a deferment granted under 
subsection (b)(1)(G), payments of interest on the loan 
will be made by the Secretary under section 465(f) 
during such period of deferment; and 
‘‘(2) a borrower may make payments on the out-
standing balance of principal and interest on such 
loan during any period of deferment granted under 
this subsection. 
‘‘(g) GRADUATE FELLOWSHIP DEFERMENT.— 
‘‘(1) IN GENERAL.—A borrower of a loan under 
this part is eligible for a deferment under subsection 
(b)(1)(B)(i) during any period for which an author-
ized official of the borrower’s graduate fellowship pro-
gram certifies that the borrower meets the require-
ments of paragraph (2) and is pursuing a course of 
study pursuant to an eligible graduate fellowship pro-
gram. 
‘‘(2) BORROWER
REQUIREMENTS.—A borrower 
meets the requirements of this subparagraph if the 
borrower— 
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‘‘(A) holds at least a baccalaureate degree 
conferred by an institution of higher education; 
‘‘(B) has been accepted or recommended by 
an institution of higher education for acceptance 
on a full-time basis into an eligible graduate fel-
lowship program; and 
‘‘(C) is not serving in a medical internship 
or residency program, except for a residency pro-
gram in dentistry. 
‘‘(h) TREATMENT OF STUDY OUTSIDE THE UNITED 
STATES.— 
‘‘(1) IN GENERAL.—The Secretary shall treat, in 
the same manner as required under section 428(b)(4), 
any course of study at a foreign university that is ac-
cepted for the completion of a recognized inter-
national fellowship program by the administrator of 
such a program as an eligible graduate fellowship 
program. 
‘‘(2) REQUESTS FOR DEFERMENT.—Requests for 
deferment of repayment of loans under this subsection 
by students engaged in graduate or postgraduate fel-
lowship-supported study (such as pursuant to a Ful-
bright grant) outside the United States shall be ap-
proved until completion of the period of the fellow-
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ship, in the same manner as required under section 
428(b)(4). 
‘‘(i) 
REHABILITATION
TRAINING
PROGRAM 
DEFERMENT.—A borrower of a loan under this part is eli-
gible for a deferment under subsection (b)(1)(B)(ii) during 
any period for which an authorized official of the borrower’s 
rehabilitation training program certifies that the borrower 
is pursuing an eligible rehabilitation training program for 
individuals with disabilities. 
‘‘(j) ADMINISTRATIVE DEFERMENTS.—The Secretary 
may grant a deferment to a borrower or, in the case of a 
loan for which an endorser is required, an endorser, without 
requiring a request and documentation from the borrower 
or the endorser under subsection (d) for— 
‘‘(1) a period during which the borrower was de-
linquent at the time a deferment is granted, including 
a period for which scheduled payments of principal 
and interest were overdue at the time such deferment 
is granted; 
‘‘(2) a period during which the borrower or the 
endorser was granted a deferment under this sub-
section but for which the Secretary determines the 
borrower or the endorser should not have qualified; 
‘‘(3) a period necessary for the Secretary to de-
termine the borrower’s eligibility for the cancellation 
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372 
of the obligation of the borrower to repay the loan 
under section 437; 
‘‘(4) a period during which the Secretary has 
authorized deferment due to a national military mo-
bilization or other local or national emergency; or 
‘‘(5) a period not to exceed 60 days, during 
which interest shall accrue but not be capitalized, if 
the Secretary reasonably determines that a suspension 
of collection activity is warranted to enable the Sec-
retary to process supporting documentation relating 
to a borrower’s request— 
‘‘(A) for a deferment under this subsection; 
‘‘(B) for a change in repayment plan under 
section 466(c); or 
‘‘(C) to consolidate loans under section 468. 
‘‘(k) DEFERMENTS FOR PARENT OR EXCEPTED CON-
SOLIDATION LOANS.— 
‘‘(1) IN GENERAL.—A qualified borrower shall be 
eligible for deferments under paragraphs (3) through 
(5). 
‘‘(2) QUALIFIED BORROWER DEFINED.—In this 
subsection, the term ‘qualified borrower’ means— 
‘‘(A) a borrower of a Federal ONE Parent 
Loan or an Excepted Federal ONE Consolida-
tion Loan; or 
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‘‘(B) in the case of such a loan for which an 
endorser is required, the endorser of such loan. 
‘‘(3) ECONOMIC HARDSHIP DEFERMENT.— 
‘‘(A) IN
GENERAL.—A qualified borrower 
shall be eligible for a deferment during periods, 
not to exceed 3 years in total, during which the 
qualified borrower experiences an economic hard-
ship described in subparagraph (B). 
‘‘(B) ECONOMIC HARDSHIP.—An economic 
hardship described in this clause is a period dur-
ing which the qualified borrower— 
‘‘(i) is receiving payment under a 
means-tested benefit program; 
‘‘(ii) is employed full-time and the 
monthly gross income of the qualified bor-
rower does not exceed the greater of— 
‘‘(I) the minimum wage rate de-
scribed in section 6 of the Fair Labor 
Standards Act of 1938 (29 U.S.C. 
206); or 
‘‘(II) an amount equal to 150 per-
cent of the poverty line; or 
‘‘(iii) demonstrates that the sum of the 
qualified borrower’s monthly payments on 
the qualified borrower’s Federal ONE Par-
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ent Loan or Excepted Federal ONE Consoli-
dation Loan is not less than 20 percent of 
the qualified borrower’s monthly gross in-
come. 
‘‘(C) ELIGIBILITY.—To be eligible to receive 
a deferment under this subparagraph, a qualified 
borrower shall submit to the Secretary— 
‘‘(i) for the first period of deferment 
under this subparagraph, evidence showing 
the monthly gross income of the qualified 
borrower; and 
‘‘(ii) for a subsequent period of 
deferment that begins less than one year 
after the end of a period of deferment grant-
ed under this subparagraph— 
‘‘(I) evidence showing the monthly 
gross income of the qualified borrower; 
or 
‘‘(II) the qualified borrower’s most 
recently filed Federal income tax re-
turn, if such a return was filed in ei-
ther of the two tax years preceding the 
year in which the qualified borrower 
requests 
the 
subsequent 
period 
of 
deferment. 
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‘‘(4) UNEMPLOYMENT DEFERMENT.— 
‘‘(A) IN
GENERAL.—A qualified borrower 
shall be eligible for a deferment for periods dur-
ing which the qualified borrower is seeking, and 
is unable to find, full-time employment. 
‘‘(B) ELIGIBILITY.— 
‘‘(i) IN GENERAL.—To be eligible to re-
ceive an deferment under this subpara-
graph, a qualified borrower shall submit to 
the Secretary— 
‘‘(I) evidence of the qualified bor-
rower’s eligibility for unemployment 
benefits; or 
‘‘(II) written confirmation, or an 
equivalent as approved by the Sec-
retary, that— 
‘‘(aa) the qualified borrower 
has registered with a public or 
private employment agency, if one 
is available to the borrower within 
50 miles of the qualified bor-
rower’s address; and 
‘‘(bb) for requests submitted 
after the initial request, the quali-
fied borrower has made at least 
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six diligent attempts during the 
preceding six-month period to se-
cure full-time employment. 
‘‘(ii) ACCEPTANCE OF EMPLOYMENT.— 
A qualified borrower shall not be eligible for 
a deferment under this subparagraph if the 
qualified borrower refuses to seek or accept 
employment in types of positions or at sal-
ary levels or responsibility levels for which 
the qualified borrower feels overqualified 
based on the qualified borrower’s education 
or previous experience. 
‘‘(C) TERMS
OF
DEFERMENT.—The fol-
lowing terms shall apply to a deferment under 
this subparagraph: 
‘‘(i) 
INITIAL
PERIOD.—The 
first 
deferment granted to a qualified borrower 
under this subparagraph may be for a pe-
riod of unemployment beginning not more 
than 6 months before the date on which the 
Secretary receives the qualified borrower’s 
request for deferment and may be granted 
for a period of up to 6 months after that 
date. 
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377 
‘‘(ii) RENEWALS.—Deferments under 
this subparagraph shall be renewable at 6- 
month intervals beginning after the expira-
tion of the first period of deferment under 
clause (i). To be eligible to renew a 
deferment under this subparagraph, a 
qualified borrower shall submit to the Sec-
retary the information described in sub-
paragraph (B)(i). 
‘‘(iii) AGGREGATE LIMIT.—The period 
of all deferments granted to a borrower 
under this subparagraph may not exceed 3 
years in aggregate. 
‘‘(5) HEALTH DEFERMENT.— 
‘‘(A) IN
GENERAL.—A qualified borrower 
shall be eligible for a deferment during periods 
in which the qualified borrower is unable to 
make scheduled loan payments due to high med-
ical expenses, as determined by the Secretary. 
‘‘(B) ELIGIBILITY.—To be eligible to receive 
a deferment under this subparagraph, a qualified 
borrower shall— 
‘‘(i) submit to the Secretary docu-
mentation 
demonstrating 
that 
making 
scheduled loan payments would be an ex-
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378 
treme economic hardship to the borrower 
due to high medical expenses, as determined 
by the Secretary; and 
‘‘(ii) resubmit such documentation to 
the Secretary not less frequently than once 
every 3 months. 
‘‘(l) PROHIBITIONS.— 
‘‘(1) PROHIBITION ON FEES.—No administrative 
fee or other fee may be charged to the borrower in 
connection with the granting of a deferment under 
this subsection. 
‘‘(2) PROHIBITION ON ADVERSE CREDIT REPORT-
ING.—No adverse information relating to a borrower 
may be reported to a consumer reporting agency sole-
ly because of the granting of a deferment under this 
subsection. 
‘‘(3) LIMITATION ON AUTHORITY.—The Secretary 
shall not, through regulation or otherwise, authorize 
additional deferment options or periods of deferment 
other than the deferment options and periods of 
deferment authorized under this subsection. 
‘‘(m) TREATMENT OF ENDORSERS.—With respect to 
any Federal ONE Parent Loan or Federal ONE Consolida-
tion Loan for which an endorser is required— 
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379 
‘‘(1) paragraphs (2) through (4) of subsection (b) 
shall be applied— 
‘‘(A) by substituting ‘An endorser’ for ‘A 
borrower’; 
‘‘(B) by substituting ‘the endorser’ for ‘the 
borrower’; and 
‘‘(C) by substituting ‘an endorser’ for ‘a 
borrower’; and 
‘‘(2) in the case in which the borrower of such 
a loan is eligible for a deferment described in sub-
paragraph (C), (D), (E), (F), or (G) of subsection 
(b)(1), but is not making payments on the loan, the 
endorser of the loan may request a deferment under 
such subparagraph for the loan. 
‘‘(n) DEFINITIONS.—In this section: 
‘‘(1) ELIGIBLE
GRADUATE
FELLOWSHIP
PRO-
GRAM.—The term ‘eligible graduate fellowship pro-
gram’, when used with respect to a course of study 
pursued by the borrower of a loan under this part, 
means a fellowship program that— 
‘‘(A) provides sufficient financial support to 
graduate fellows to allow for full-time study for 
at least six months; 
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380 
‘‘(B) requires a written statement from each 
applicant explaining the applicant’s objectives 
before the award of that financial support; 
‘‘(C) requires a graduate fellow to submit 
periodic reports, projects, or evidence of the fel-
low’s progress; and 
‘‘(D) in the case of a course of study at an 
institution of higher education outside the 
United States described in section 102, accepts 
the course of study for completion of the fellow-
ship program. 
‘‘(2) ELIGIBLE REHABILITATION TRAINING PRO-
GRAM
FOR
INDIVIDUALS
WITH
DISABILITIES.—The 
term ‘eligible rehabilitation training program for in-
dividuals with disabilities’, when used with respect a 
course of study pursued by the borrower of a loan 
under this part, means a program that— 
‘‘(A) is necessary to assist an individual 
with a disability in preparing for, securing, re-
taining, or regaining employment; 
‘‘(B) is licensed, approved, certified, or oth-
erwise recognized as providing rehabilitation 
training to disabled individuals by— 
‘‘(i) a State agency with responsibility 
for vocational rehabilitation programs, drug 
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381 
abuse treatment programs, mental health 
services programs, or alcohol abuse treat-
ment programs; or 
‘‘(ii) the Secretary of the Department 
of Veterans Affairs; and 
‘‘(C) provides or will provide the borrower 
with rehabilitation services under a written plan 
that— 
‘‘(i) is individualized to meet the bor-
rower’s needs; 
‘‘(ii) specifies the date on which the 
services to the borrower are expected to end; 
and 
‘‘(iii) requires a commitment of time 
and effort from the borrower that prevents 
the borrower from being employed at least 
30 hours per week, either because of the 
number of hours that must be devoted to re-
habilitation or because of the nature of the 
rehabilitation. 
‘‘(3) EXCEPTED FEDERAL ONE CONSOLIDATION 
LOAN.—The ‘Excepted Federal ONE Consolidation 
Loan’ have the meaning given the term in section 
466(d)(5). 
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382 
‘‘(4) FAMILY
SIZE.—The term ‘family size’ 
means the number that is determined by counting— 
‘‘(A) the borrower; 
‘‘(B) the borrower’s spouse; 
‘‘(C) the borrower’s children, including un-
born children who are expected to be born during 
the period covered by the deferment, if the chil-
dren receive more than half their support from 
the borrower; and 
‘‘(D) another individual if, at the time the 
borrower requests a deferment under this section, 
the individual— 
‘‘(i) lives with the borrower; 
‘‘(ii) receives more than half of the in-
dividual’s support (which may include 
money, gifts, loans, housing, food, clothes, 
car, medical and dental care, and payment 
of college costs) from the borrower; and 
‘‘(iii) is expected to receive such sup-
port from the borrower during the relevant 
period of deferment. 
‘‘(5) FULL-TIME.—The term ‘full-time’, when 
used with respect to employment, means employment 
for not less than 30 hours per week that is expected 
to continue for not less than three months. 
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383 
‘‘(6) MEANS-TESTED
BENEFIT
PROGRAM.—The 
term ‘means-tested benefit program’ means— 
‘‘(A) a State public assistance program 
under which eligibility for the program’s bene-
fits, or the amount of such benefits, are deter-
mined on the basis of income or resources of the 
individual or family seeking the benefit; or 
‘‘(B) a mandatory spending program of the 
Federal Government, other than a program 
under this title, under which eligibility for the 
program’s benefits, or the amount of such bene-
fits, are determined on the basis of income or re-
sources of the individual or family seeking the 
benefit, and may include such programs as 
‘‘(i) the supplemental security income 
program under title XVI of the Social Secu-
rity Act (42 U.S.C. 1381 et seq.); 
‘‘(ii) the supplemental nutrition assist-
ance program under the Food and Nutri-
tion Act of 2008 (7 U.S.C. 2011 et seq.); 
‘‘(iii) the free and reduced price school 
lunch program established under the Rich-
ard B. Russell National School Lunch Act 
(42 U.S.C. 1751 et seq.); 
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384 
‘‘(iv) the program of block grants for 
States for temporary assistance for needy 
families established under part A of title IV 
of the Social Security Act (42 U.S.C. 601 et 
seq.); 
‘‘(v) the special supplemental nutrition 
program for women, infants, and children 
established by section 17 of the Child Nutri-
tion Act of 1966 (42 U.S.C. 1786); and 
‘‘(vi) other programs identified by the 
Secretary. 
‘‘(7) 
MONTHLY
GROSS
INCOME.—The 
term 
‘monthly gross income’, when used with respect to a 
borrower, means— 
‘‘(A) the gross amount of income received by 
the borrower from employment and other sources 
for the most recent month; or 
‘‘(B) one-twelfth of the borrower’s adjusted 
gross income, as recorded on the borrower’s most 
recently filed Federal income tax return. 
‘‘SEC. 469B. ADDITIONAL TERMS. 
‘‘(a) APPLICABLE PART B PROVISIONS.— 
‘‘(1) DISCLOSURES.—Except as otherwise pro-
vided in this part, section 455(p) shall apply with re-
spect to loans under this part in the same manner 
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385 
that such section applies with respect to loans under 
part D. 
‘‘(2) OTHER PROVISIONS.—Except as otherwise 
provided in this part, the following provisions shall 
apply with respect to loans made under this part in 
the same manner that such provisions apply with re-
spect to loans made under part D: 
‘‘(A) Section 427(a)(2). 
‘‘(B) Section 428(d). 
‘‘(C) Section 428F 
‘‘(D) Section 430A. 
‘‘(E) Paragraphs (1), (2), (4), and (6) of 
section 432(a). 
‘‘(F) Section 432(i). 
‘‘(G) Section 432(l). 
‘‘(H) Section 432(m), except that an insti-
tution of higher education shall have a separate 
master promissory note under paragraph (1)(D) 
of such section for loans made under this part. 
‘‘(I) Subsections (a), (c), and (d) of section 
437. 
‘‘(3) APPLICATION OF PROVISIONS.—Any provi-
sion listed under paragraph (1) or (2) that applies 
to— 
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386 
‘‘(A) Federal Direct PLUS Loans made on 
behalf of dependent students shall apply to Fed-
eral ONE Parent Loans; 
‘‘(B) Federal Direct PLUS Loans made to 
students shall apply to Federal ONE Loans for 
graduate or professional students; 
‘‘(C) Federal Direct Unsubsidized Stafford 
loans shall apply to Federal ONE Loans (other 
than Federal ONE Consolidation Loans) for any 
student borrower; 
‘‘(D) Federal Direct Consolidation Loans 
shall apply to Federal ONE Consolidation 
Loans; and 
‘‘(E) forbearance shall apply to deferment 
under section 469A. 
‘‘(b) ELIGIBLE STUDENT.—A loan under this part 
may only be made to a student who— 
‘‘(1) is an eligible student under section 484; 
‘‘(2) has agreed to notify promptly the Secretary 
and the applicable contractors with which the Sec-
retary has a contract under section 493E con-
cerning— 
‘‘(A) any change of permanent address, tele-
phone number, or email address; 
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387 
‘‘(B) when the student ceases to be enrolled 
on at least a half-time basis; and 
‘‘(C) any other change in status, when such 
change in status affects the student’s eligibility 
for the loan; and 
‘‘(3) is carrying at least one-half the normal full- 
time academic workload for the course of study the 
student is pursuing (as determined by the institu-
tion). 
‘‘(c) LOAN APPLICATION AND PROMISSORY NOTE.— 
The common financial reporting form required in section 
483(a)(1) shall constitute the application for loans made 
under this part. The Secretary shall develop, print, and dis-
tribute to participating institutions a standard promissory 
note and loan disclosure form. 
‘‘(d) BORROWER DEFENSES.—A borrower of a loan 
under this part may assert a defense to repayment to such 
loan under the provisions of section 455(h) that apply to 
a borrower of a loan made under part D asserting, on or 
after the date of enactment of the PROSPER Act, a defense 
to repayment to such loan made under part D. 
‘‘(e) IDENTITY FRAUD PROTECTION.—The Secretary 
shall ensure that monthly Federal ONE Loan statements 
and other publications of the Department do not contain 
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388 
more than four digits of the Social Security number of any 
individual. 
‘‘(f) AUTHORITY TO SELL LOANS.—The Secretary, in 
consultation with the Secretary of the Treasury, is author-
ized to sell loans made under this part on such terms deter-
mined to be in the best interest of the United States, except 
that any such sale shall not result in any cost to the Federal 
Government.’’. 
PART F—NEED ANALYSIS 
SEC. 471. COST OF ATTENDANCE. 
Section 472 (20 U.S.C. 1087ll) is amended— 
(1) by striking paragraph (10); and 
(2) by redesignating paragraphs (11), (12), and 
(13) as paragraphs (10), (11), and (12), respectively. 
SEC. 472. SIMPLIFIED NEEDS TEST. 
Section 479(b)(1) (20 U.S.C. 1087ss) is amended by 
striking ‘‘$50,000’’ both places it appears and inserting 
‘‘$100,000’’. 
SEC. 473. DISCRETION OF STUDENT FINANCIAL AID ADMIN-
ISTRATORS. 
Section 479A (20 U.S.C. 1087tt) is amended— 
(1) in subsection (a), by striking ‘‘financial as-
sistance under section 428H or a Federal Direct Un-
subsidized Stafford Loan’’ and inserting ‘‘a Federal 
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389 
Direct Unsubsidized Stafford Loan or a Federal ONE 
Loan’’; 
(2) in subsection (c), by striking ‘‘part B or D’’ 
and inserting ‘‘part D or E’’; and 
(3) by adding at the end the following: 
‘‘(d) ADJUSTMENT BASED ON DELIVERY OF INSTRUC-
TION.—A student’s eligibility to receive grants, loans, or 
work assistance under this title shall be reduced if a finan-
cial aid officer determines, in accordance with the discre-
tionary authority provided under this section, that the 
model or method used to deliver instruction to the student 
results in a substantially reduced cost of attendance to the 
student.’’. 
SEC. 474. DEFINITIONS OF TOTAL INCOME AND ASSETS. 
Section 480 (20 U.S.C. 1087vv) is amended— 
(1) in subsection (a)(1), by striking subpara-
graph (B) and inserting the following: 
‘‘(B) Notwithstanding section 478(a), the Secretary 
shall provide for the use of data from the second preceding 
tax year to carry out the simplification of applications (in-
cluding simplification for a subset of applications) used for 
the estimation and determination of financial aid eligi-
bility. Such simplification shall include the sharing of data 
between the Internal Revenue Service and the Department, 
pursuant to the consent of the taxpayer.’’; and 
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390 
(2) in subsection (f)— 
(A) in paragraph (2)— 
(i) in subparagraph (B), by striking 
‘‘or’’ at the end; 
(ii) in subparagraph (C), by striking 
the period at the end and inserting ‘‘; or’’; 
and 
(iii) by adding at the end the fol-
lowing: 
‘‘(D) a qualified tuition program (as de-
fined in section 529(b)(1)(A) of the Internal Rev-
enue Code of 1986).’’; and 
(B) in paragraph (5)(A)(i), by striking 
‘‘qualified tuition program (as defined in section 
529(b)(1)(A) of the Internal Revenue Code of 
1986) or other’’. 
PART G—GENERAL PROVISIONS RELATING TO 
STUDENT ASSISTANCE 
SEC. 481. DEFINITIONS OF ACADEMIC YEAR AND ELIGIBLE 
PROGRAM. 
Section 481 (20 U.S.C. 1088) is amended— 
(1) in subsection (a)— 
(A) in paragraph (2)(A)— 
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(i) by striking ‘‘For the’’ and inserting 
the following: ‘‘Except as provided in para-
graph (3), for the’’; and 
(ii) in clause (i), by striking ‘‘require 
a minimum of 30 weeks’’ and inserting the 
following: ‘‘require— 
‘‘(I) a minimum of 30 weeks’’; 
(iii) in clause (ii), by striking ‘‘re-
quire’’; 
(iv) by redesignating clause (ii) as sub-
clause (II) (and by adjusting the margin 
accordingly); and 
(v) by redesignating clause (iii) as 
clause (ii); and 
(B) by adding at the end the following: 
‘‘(3)(A) For the purpose of a competency-based 
education program the term ‘academic year’ shall be 
the published measured period established by the in-
stitution of higher education that is necessary for a 
student with a normal full-time workload for the 
course of study the student is pursuing (as measured 
using the value of competencies or sets of competencies 
required by such institution and approved by such in-
stitution’s accrediting agency or association) to 
earn— 
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392 
‘‘(i) one-quarter of a bachelor’s degree; 
‘‘(ii) one-half of an associate’s degree; or 
‘‘(iii) with respect to a non-degree or graduate 
program, the equivalent of a period described in 
clause (i) or (ii). 
‘‘(B)(i) A competency-based education pro-
gram that is not a term-based program may be 
treated as a term-based program for purposes of 
establishing payment periods for disbursement of 
loans and grants under this title if— 
‘‘(I) the institution of higher education 
that offers such program charges a flat sub-
scription fee for access to instruction during 
a period determined by the institution; and 
‘‘(II) the institution is able to deter-
mine the competencies a student is expected 
to demonstrate for such subscription period. 
‘‘(ii) Clause (i) shall apply even in a case 
in which instruction or other work with respect 
to a competency that is expected to be attrib-
utable to a subscription period begins prior to 
such subscription period. 
‘‘(iii) In a case in which a competency- 
based education program offered by an institu-
tion of higher education is treated as a term- 
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393 
based program under clause (i), the institution 
shall review the academic progress of each stu-
dent enrolled in such program in accordance 
with section 484(c), except that such review shall 
occur at the end of each payment period.’’; 
(2) by amending subsection (b) to read as fol-
lows: 
‘‘(b) ELIGIBLE PROGRAM.—(1) For purposes of this 
title, the term ‘eligible program’ means— 
‘‘(A) a program of at least 300 clock hours of in-
struction, 8 semester hours, or 12 quarter hours, of-
fered during a minimum of 10 weeks; or 
‘‘(B) a competency-based program that— 
‘‘(i) has been evaluated and approved by an 
accrediting agency or association that— 
‘‘(I) is recognized by the Secretary 
under subpart 2 of part H; and 
‘‘(II) has evaluation of competency- 
based education programs within the scope 
of its recognition in accordance with section 
496(a)(4)(C); or 
‘‘(ii) as of the day before the date of enact-
ment of the PROSPER Act, met the require-
ments of a direct assessment program under sec-
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394 
tion 481(b)(4) (as such section was in effect on 
the day before such date of enactment). 
‘‘(2) An eligible program described in paragraph (1) 
may be offered in whole or in part through telecommuni-
cations. 
‘‘(3) For purposes of this title, the term ‘eligible pro-
gram’ does not include a program that loses its eligibility 
under section 481B(a). 
‘‘(4)(A) If an eligible institution enters into a written 
arrangement with an institution or organization that is not 
an eligible institution under which such ineligible institu-
tion or organization provides the educational program (in 
whole or in part) of students enrolled in the eligible institu-
tion, the educational program provided by such ineligible 
institution shall be considered to be an eligible program 
if— 
‘‘(i) the ineligible institution or organiza-
tion has not— 
‘‘(I) had its eligibility to participate in 
the programs under this title terminated by 
the Secretary; 
‘‘(II) voluntarily withdrawn from par-
ticipation in the programs under this title 
under a proceeding initiated by the Sec-
retary, accrediting agency or association, 
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guarantor, or the licensing agency for the 
State in which the institution is located, in-
cluding a termination, show-cause, or sus-
pension; 
‘‘(III) had its certification under sub-
part 3 of part H to participate in the pro-
grams under this title revoked by the Sec-
retary; 
‘‘(IV) had its application for recertifi-
cation under subpart 3 of part H to par-
ticipate in the programs under this title de-
nied by the Secretary; or 
‘‘(V) had its application for certifi-
cation under subpart 3 of part H to par-
ticipate in the programs under this title de-
nied by the Secretary; 
‘‘(ii) the educational program offered by the 
institution that grants the degree or certificate 
otherwise satisfies the requirements of paragraph 
(1); and 
‘‘(iii)(I) the ineligible institution or organi-
zation provides 25 percent or less of the edu-
cational program; or 
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‘‘(II)(aa) the ineligible institution or orga-
nization provides more than 25 percent of the 
educational program; and 
‘‘(bb) the eligible institution’s accrediting 
agency or association has determined that the el-
igible institution’s arrangement meets the agen-
cy’s standards for the contracting out of edu-
cational services in accordance with section 
496(c)(5)(B)(iv). 
‘‘(B) For purposes of subparagraph (A), the term ‘eli-
gible institution’ means an institution described in section 
487(a).’’; and 
(3) in subsection (c)(2), by striking ‘‘part B of’’. 
SEC. 482. PROGRAMMATIC LOAN REPAYMENT RATES. 
Part G of title IV (20 U.S.C. 1088 et seq.) is amended, 
as amended by section 481, is further amended by inserting 
after section 481A (20 U.S.C. 1088a) the following: 
‘‘SEC. 481B. PROGRAMMATIC LOAN REPAYMENT RATES. 
‘‘(a) INELIGIBILITY OF AN EDUCATIONAL PROGRAM 
BASED ON LOW REPAYMENT RATES.— 
‘‘(1) IN GENERAL.—With respect to fiscal year 
2016 and each succeeding fiscal year, an educational 
program at an institution of higher education whose 
loan repayment rate is less than 45 percent for each 
of the 3 most recent fiscal years for which data are 
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available shall not be considered an eligible program 
for the fiscal year in which the determination is made 
and for the 2 succeeding fiscal years, unless, not later 
than 30 days after receiving notification from the 
Secretary of the loss of eligibility under this para-
graph, the institution appeals the loss of such pro-
gram’s eligibility to the Secretary. 
‘‘(2) APPEAL.—The Secretary shall issue a deci-
sion on any such appeal within 45 days after its sub-
mission. Such decision may permit a program to be 
considered an eligible program, if— 
‘‘(A) the institution demonstrates to the sat-
isfaction of the Secretary that— 
‘‘(i) the Secretary’s calculation of such 
program’s loan repayment rate is not accu-
rate; and 
‘‘(ii) recalculation would increase such 
program’s loan repayment rate for any of 
the 3 fiscal years equal to or greater than 
45 percent; or 
‘‘(B) the program is not subject to para-
graph (1) by reason of paragraph (3). 
‘‘(3) PARTICIPATION RATE INDEX.— 
‘‘(A) IN
GENERAL.—An institution that 
demonstrates to the Secretary that a program’s 
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participation rate index is equal to or less than 
0.11 for any of the 3 most recent fiscal years for 
which data is available shall not be subject to 
paragraph (1). 
‘‘(B) INDEX CALCULATION.—The participa-
tion rate index for a program shall be deter-
mined by multiplying— 
‘‘(i) the amount of the difference be-
tween— 
‘‘(I) 1.0; and 
‘‘(II) the quotient that results by 
dividing— 
‘‘(aa) the program’s loan re-
payment rate for a fiscal year, or 
the weighted average loan repay-
ment rate for a fiscal year, by 
‘‘(bb) 100; and 
‘‘(ii) the quotient that results by divid-
ing— 
‘‘(I) the percentage of the pro-
gram’s regular students, enrolled on at 
least a half-time basis, who received a 
covered loan for a 12-month period 
ending during the 6 months imme-
diately preceding the fiscal year for 
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which the program’s loan repayment 
rate or the weighted average loan re-
payment rate is determined, by 
‘‘(II) 100. 
‘‘(C) DATA.—An institution shall provide 
the Secretary with sufficient data to determine 
the program’s participation rate index not later 
than 30 days after receiving an initial notifica-
tion of the program’s draft loan repayment rate 
under subsection (d)(4)(C). 
‘‘(D) NOTIFICATION.—Prior to publication 
of a final loan repayment rate under subsection 
(d)(4)(A) for a program at an institution that 
provides the data described in subparagraph (C), 
the Secretary shall notify the institution of the 
institution’s compliance or noncompliance with 
subparagraph (A). 
‘‘(b) REPAYMENT IMPROVEMENT AND ASSESSMENT OF 
ELIGIBILITY BASED ON LOW LOAN REPAYMENT RATES.— 
‘‘(1) FIRST YEAR.— 
‘‘(A) IN GENERAL.—An institution with a 
program whose loan repayment rate is less than 
45 percent for any fiscal year shall establish a 
repayment improvement task force to prepare a 
plan to— 
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‘‘(i) identify the factors causing such 
program’s loan repayment rate to fall below 
such percent; 
‘‘(ii) establish measurable objectives 
and the steps to be taken to improve the 
program’s loan repayment rate; and 
‘‘(iii) specify actions that the institu-
tion can take to improve student loan re-
payment, including appropriate counseling 
regarding loan repayment options. 
‘‘(B) TECHNICAL ASSISTANCE.—Each insti-
tution subject to this paragraph shall submit the 
plan under subparagraph (A) to the Secretary, 
who shall review the plan and offer technical as-
sistance to the institution to promote improved 
student loan repayment. 
‘‘(2) SECOND CONSECUTIVE YEAR.— 
‘‘(A) IN GENERAL.—An institution with a 
program whose loan repayment rate is less than 
45 percent for two consecutive fiscal years, 
shall— 
‘‘(i) require the institution’s repayment 
improvement task force established under 
paragraph (1) to review and revise the plan 
required under such paragraph; and 
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‘‘(ii) submit such revised plan to the 
Secretary. 
‘‘(B) REVIEW
BY
THE
SECRETARY.—The 
Secretary— 
‘‘(i) shall review each revised plan sub-
mitted in accordance with this paragraph; 
and 
‘‘(ii) may direct that such plan be 
amended to include actions, with measur-
able objectives, that the Secretary deter-
mines, based on available data and analyses 
of student loan repayment and non-repay-
ment, will promote student loan repayment. 
‘‘(c) PROGRAMMATIC LOAN REPAYMENT RATE DE-
FINED.— 
‘‘(1) IN GENERAL.—Except as provided in sub-
section (d), for purposes of this section, the term ‘loan 
repayment rate’ means, when used with respect to an 
educational program at an institution— 
‘‘(A) with respect to any fiscal year in 
which 30 or more current and former students in 
such program enter repayment on a covered loan 
received for attendance in such program, the per-
centage of such current and former students— 
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‘‘(i) who enter repayment in such fis-
cal year on a covered loan received for at-
tendance in such program; and 
‘‘(ii) who are in a positive repayment 
status on each such covered loan at the end 
of the second fiscal year following the fiscal 
year in which such students entered repay-
ment on such loan; and 
‘‘(B) with respect to any fiscal year in 
which fewer than 30 of the current and former 
students in such program enter repayment on a 
covered loan received for attendance in such pro-
gram, the percentage of such current and former 
students— 
‘‘(i) who, in any of the three most re-
cent fiscal years, entered repayment on a 
covered loan received for attendance in such 
program; and 
‘‘(ii) who are in a positive repayment 
status on each such covered loan at the end 
of the second fiscal year following the fiscal 
year in which such students entered repay-
ment on such loan. 
‘‘(2) GUARANTY
AGENCY
REQUIREMENTS.—The 
Secretary shall require that each guaranty agency 
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that has insured loans for current or former students 
of the institution afford such institution a reasonable 
opportunity (as specified by the Secretary) to review 
and correct errors in the information required to be 
provided to the Secretary by the guaranty agency for 
the purposes of calculating a loan repayment rate for 
programs at such institution, prior to the calculation 
of such rate. 
‘‘(3) POSITIVE REPAYMENT STATUS.—For pur-
poses of this section, the term ‘positive repayment sta-
tus’, when used with respect to a borrower of a cov-
ered loan, means— 
‘‘(A) the borrower has entered repayment on 
such loan, and such loan is less than 90 days de-
linquent; 
‘‘(B) the loan is paid in full (but not 
through consolidation); or 
‘‘(C) with respect to a covered loan that is 
a Federal ONE Loan, the loan is in a deferment 
described in 469A(b)(1), and with respect to a 
covered loan made, insured, or guaranteed under 
part B or made under part D, the loan is in a 
deferment or forbearance that is comparable to a 
deferment described in 469A(b)(1). 
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404 
‘‘(4) COVERED LOAN.—For purposes of this sec-
tion— 
‘‘(A) the term ‘covered loan’ means— 
‘‘(i) a loan made, insured, or guaran-
teed under section 428 or 428H; 
‘‘(ii) a Federal Direct Stafford Loan; 
‘‘(iii) a Federal Direct Unsubsidized 
Stafford Loan; 
‘‘(iv) a Federal Direct PLUS Loan 
issued to a graduate or professional student; 
‘‘(v) a Federal ONE Loan (other than 
a Federal ONE Parent Loan or a Federal 
ONE Consolidation Loan not described in 
clause (vi)); or 
‘‘(vi) the portion of a loan made under 
section 428C, a Federal Direct Consolida-
tion Loan, or a Federal ONE Consolidation 
Loan that is used to repay any covered loan 
described in clauses (i) through (v); and 
‘‘(B) the term ‘covered loan’ does not in-
clude a loan described in subparagraph (A) that 
has been discharged under section 437(a). 
‘‘(d) SPECIAL RULES.— 
‘‘(1) IN GENERAL.—In the case of a student who 
has attended and borrowed at more than one institu-
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405 
tion of higher education or for more than one edu-
cational program at an institution, the student (and 
such student’s subsequent positive repayment status 
on a covered loan, if applicable)) shall be attributed 
to each institution of higher education and edu-
cational program for attendance at which the student 
received a loan that entered repayment for the fiscal 
year for which the loan repayment rate is being cal-
culated. 
‘‘(2) DELINQUENT.—A loan on which a payment 
is made by an institution of higher education, such 
institutions’s owner, agent, contractor, employee, or 
any other entity or individual affiliated with such in-
stitution, in order to prevent the borrower from being 
more than 90 days delinquent on the loan, shall be 
considered more than 90 days delinquent for purposes 
of this subsection. 
‘‘(3) REGULATIONS TO PREVENT EVASIONS.—The 
Secretary shall prescribe regulations designed to pre-
vent an institution of higher education from evading 
the application of a loan repayment rate determina-
tion under this section to an educational program at 
such institution through— 
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‘‘(A) the use of such measures as branching, 
consolidation, change of ownership or control, or 
any similar device; or 
‘‘(B) creating a new educational program 
that is substantially similar to a program deter-
mined to be ineligible under subsection (a). 
‘‘(4) COLLECTION AND REPORTING OF LOAN RE-
PAYMENT RATES.— 
‘‘(A) IN
GENERAL.—The Secretary shall 
publish not less often than once every fiscal year 
a report showing final loan repayment data for 
each program at each institution of higher edu-
cation for which a loan repayment rate is cal-
culated under this section. 
‘‘(B) PUBLICATION.—The Secretary shall 
publish the report described in subparagraph (A) 
by September 30 of each year. 
‘‘(C) DRAFTS.— 
‘‘(i) IN GENERAL.—The Secretary shall 
provide institutions with draft loan repay-
ment rates for each educational program at 
the institution at least 6 months prior to 
the release of the final rates under subpara-
graph (A). 
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‘‘(ii) CHALLENGE OF DRAFT RATES.— 
An institution may challenge a program’s 
draft loan repayment rate provided under 
clause (i) for any fiscal year by dem-
onstrating to the satisfaction of the Sec-
retary that such draft loan repayment rate 
is not accurate. 
‘‘(e) TRANSITION PERIOD.— 
‘‘(1) DURING THE TRANSITION PERIOD.—During 
the transition period, the cohort default rate for each 
institution of higher education shall be calculated 
under section 435(m)(1) for each fiscal year for which 
such rate has not yet been calculated and any require-
ments with respect to such rates shall continue to 
apply, except that the loans with respect to which 
such cohort default rate shall be calculated shall be the 
covered loans defined in subsection (c)(4). 
‘‘(2) AFTER THE TRANSITION PERIOD.—After the 
transition period, no new cohort default rates shall be 
calculated for an institution of higher education and 
any requirements with respect to such rates shall 
cease to apply. 
‘‘(3) DEFINITIONS.—For purposes of this sub-
section— 
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408 
‘‘(A) the term ‘cohort default rate’ has the 
meaning given the term in section 435(m); and 
‘‘(B) the term ‘transition period’ means the 
period— 
‘‘(i) beginning on the date of enact-
ment of the PROSPER Act; and 
‘‘(ii) ending on the date on which the 
Secretary has published under subsection 
(d)(4)(A) the final loan repayment rate for 
each program at each institution of higher 
education with respect to each of fiscal 
years 2016, 2017, and 2018.’’. 
SEC. 483. MASTER CALENDAR. 
Section 482 (20 U.S.C. 1089) is amended— 
(1) in subsection (a)— 
(A) in paragraph (1)— 
(i) in subparagraph (A), by striking 
‘‘February 1’’ and inserting ‘‘January 15’’; 
(ii) in subparagraph (B), by striking 
‘‘March 1’’ and inserting ‘‘February 1’’; 
(iii) in subparagraph (C), by striking 
‘‘June 1’’ and inserting ‘‘May 1’’; 
(iv) in subparagraph (D), by striking 
‘‘August 15’’ and inserting ‘‘July 15’’; 
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(v) by striking subparagraph (E), and 
redesignating subparagraphs (F) and (G) 
as subparagraphs (E) and (F), respectively; 
and 
(vi) in subparagraph (E), as so redes-
ignated, by striking ‘‘October 1’’ and insert-
ing ‘‘September 1’’; and 
(vii) in subparagraph (F), as so redes-
ignated, by striking ‘‘November 1’’ and in-
serting ‘‘October 1’’; 
(B) in paragraph (2)— 
(i) in subparagraph (F), by striking 
‘‘and final Pell Grant payment schedule’’; 
(ii) in subparagraph (J), by striking 
‘‘June 1’’ and inserting ‘‘May 1’’; 
(iii) by redesignating subparagraphs 
(C) through (J) as subparagraphs (D) 
through (K), respectively; and 
(iv) by inserting after subparagraph 
(B) the following: 
‘‘(C) by November 1: final Pell Grant pay-
ment schedule;’’; and 
(2) in subsection (b)— 
(A) by striking ‘‘413D(d), 442(d), or 
462(i)’’ and inserting ‘‘442(d)’’; and 
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(B) by striking ‘‘the programs under sub-
part 3 of part A, part C, and part E, respec-
tively’’ and inserting ‘‘part C’’. 
SEC. 484. FAFSA SIMPLIFICATION. 
(a) IN GENERAL.—Section 483 (20 U.S.C. 1090) is 
amended— 
(1) in subsection (a)(3)— 
(A) in subparagraph (E), by adding at the 
end the following: ‘‘Notwithstanding the limita-
tions on sharing data described in this para-
graph, an institution of higher education may, 
with explicit written consent of the applicant, 
provide such information as is necessary to a 
scholarship granting organization designated by 
the applicant to assist the applicant in applying 
for and receiving financial assistance for the ap-
plicant’s education at that institution. An orga-
nization that receives information pursuant to 
the preceding sentence shall not maintain, ware-
house, sell, or otherwise store or share such infor-
mation after it has been used to determine the 
additional aid available for such applicant and 
the organization shall destroy the information 
after such determination has been made.’’; and 
(B) by adding at the end the following: 
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411 
‘‘(I) FORMAT.—Not later than 1 year after 
the date of the enactment of the PROSPER Act, 
the Secretary shall make the electronic version of 
the forms under this paragraph available 
through a technology tool optimized for use on 
mobile devices. Such technology tool shall, at 
minimum, enable applicants to— 
‘‘(i) save data; and 
‘‘(ii) submit the FAFSA of such appli-
cant to the Secretary through such tool. 
‘‘(J) CONSUMER
TESTING.—In developing 
and maintaining the electronic version of the 
forms under this paragraph and the technology 
tool for mobile devices under subparagraph (I), 
the Secretary shall conduct consumer testing 
with appropriate persons to ensure the forms 
and technology tool are designed to be easily usa-
ble and understandable by students and families. 
Such consumer testing shall include— 
‘‘(i) current and prospective college 
students, family members of such students, 
and other individuals with expertise in stu-
dent financial assistance application proc-
esses; 
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‘‘(ii) dependent students and inde-
pendent students who meet the requirements 
under subsection (b) or (c) of section 479; 
and 
‘‘(iii) dependent students and inde-
pendent students who do not meet the re-
quirements under subsection (b) or (c) of 
section 479.’’; and 
(2) by amending subsection (f) to read as follows: 
‘‘(f) USE OF INTERNAL REVENUE SERVICE DATA RE-
TRIEVAL TOOL TO POPULATE FAFSA.— 
‘‘(1) SIMPLIFICATION EFFORTS.—The Secretary 
shall— 
‘‘(A) make every effort to allow applicants 
to utilize the current data retrieval tool to trans-
fer, through a rigorous authentication process, 
data available from the Internal Revenue Service 
to reduce the amount of original data entry by 
applicants and strengthen the reliability of data 
used to calculate expected family contributions, 
including through the use of technology to— 
‘‘(i) allow an applicant to automati-
cally populate the electronic version of the 
forms under this paragraph with data 
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413 
available from the Internal Revenue Serv-
ice; and 
‘‘(ii) direct an applicant to appro-
priate questions on such forms based on the 
applicant’s answers to previous questions; 
and 
‘‘(B) allow single taxpayers, married tax-
payers filing jointly, and married taxpayers fil-
ing separately to utilize the current data re-
trieval tool to its full capacity. 
‘‘(2) USE OF TAX RETURN IN APPLICATION PROC-
ESS.—The Secretary shall continue to examine wheth-
er data provided by the Internal Revenue Service can 
be used to generate an expected family contribution 
without additional action on the part of the student 
and taxpayer. 
‘‘(3) REPORTS
ON
FAFSA
SIMPLIFICATION
EF-
FORTS.—Not less than once every year, the Secretary 
shall report to the authorizing committees on— 
‘‘(A) the progress of the simplification ef-
forts under this subsection; and 
‘‘(B) the security of the data retrieval tool.’’. 
(b) TECHNICAL AMENDMENT.—Section 483(a)(9)(C) 
(20 U.S.C. 1090(a)(9)(C)) is amended by inserting ‘‘, in-
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cluding through the tool described in section 485E(c)’’ before 
the semicolon. 
SEC. 485. STUDENT ELIGIBILITY. 
Section 484 (20 U.S.C. 1091) is amended— 
(1) in subsection (a)— 
(A) in paragraph (1), by striking ‘‘a degree, 
certificate, or other program (including a pro-
gram of study abroad approved for credit by the 
eligible institution at which such student is en-
rolled) leading to a’’ and inserting ‘‘an eligible 
program (including a program of study abroad 
approved for credit by the eligible institution at 
which such student is enrolled) leading to a de-
gree, certificate, or other’’; and 
(B) in paragraph (3), by inserting ‘‘as in 
effect on the day before the date of enactment of 
the PROSPER Act and pursuant to section 
461(a) of such Act,’’ after ‘‘part E,’’; 
(2) in subsection (b)— 
(A) in paragraph (3), by striking ‘‘part B 
or D’’ and inserting ‘‘part B, D, or E’’; and 
(B) by adding at the end the following: 
‘‘(6) For purposes of competency-based education, in 
order to be eligible to receive any loan under this title for 
an award year, a student may be enrolled in coursework 
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415 
attributable only to 2 academic years within the award 
year.’’; 
(3) in subsection (c)— 
(A) in paragraph (1)— 
(i) in subparagraph (A)— 
(I) by inserting ‘‘least as fre-
quently as’’ before ‘‘the end of each’’; 
and 
(II) by striking ‘‘, and’’ at the end 
and inserting a semicolon; 
(ii) in subparagraph (B)— 
(I) by striking ‘‘the student has a 
cumulative’’ and inserting the fol-
lowing: ‘‘the student has— 
‘‘(i) a cumulative’’; 
(II) by striking ‘‘the second’’ and 
inserting ‘‘each’’; 
(III) by striking the period at the 
end and inserting ‘‘; or’’ ; and 
(IV) by adding at the end the fol-
lowing: 
‘‘(ii) for the purposes of competency- 
based programs, a non-grade equivalent 
demonstration of academic standing con-
sistent with the requirements for gradua-
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tion, as determined by the institution, at 
the end of each such academic year; and’’; 
and 
(iii) by adding at the end the fol-
lowing: 
‘‘(C) the student maintains a pace in his or her 
educational program that— 
‘‘(i) ensures that the student completes the 
program within the maximum timeframe; and 
‘‘(ii) is measured by a method determined 
by the institution which may be based on credit 
hours, clock hours, or competencies completed.’’; 
(B) in paragraph (2), by striking ‘‘grading 
period’’ and inserting ‘‘evaluation period’’; and 
(C) by adding at the end the following: 
‘‘(4) For purposes of this subsection, the term ‘max-
imum timeframe’ means— 
‘‘(A) with respect to an undergraduate program 
measured in credit hours, a period that is no longer 
than 150 percent of the published length of the edu-
cational program, as measured in credit hours; 
‘‘(B) with respect to an undergraduate program 
measured in competencies, a period that is no longer 
than 150 percent of the published length of the edu-
cational program, as measured in competencies; 
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‘‘(C) with respect to an undergraduate program 
measured in clock hours, a period that is no longer 
than 150 percent of the published length of the edu-
cational program, as measured by the cumulative 
number of clock hours the student is required to com-
plete and expressed in calendar time; and 
‘‘(D) with respect to a graduate program, a pe-
riod defined by the institution that is based on the 
length of the educational program.’’; 
(4) by amending subsection (d) to read as fol-
lows: 
‘‘(d) ADDITIONAL STUDENT ELIGIBILITY.— 
‘‘(1) ABILITY TO BENEFIT STUDENTS.—In order 
for a student who does not have a certificate of grad-
uation from a school providing secondary education, 
or the recognized equivalent of such certificate, to be 
eligible for any assistance under subpart 1 of part A 
and parts C, D, and E of this title, the student shall 
be determined by the institution of higher education 
as having the ability to benefit from the education of-
fered by the institution of higher education upon sat-
isfactory completion of 6 credit hours or the equiva-
lent coursework that are applicable toward a degree 
or certificate offered by the institution of higher edu-
cation. 
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‘‘(2) HOMESCHOOL STUDENTS.—A student who 
has completed a secondary school education in a home 
school setting that is treated as a home school or pri-
vate school under State law shall be eligible for assist-
ance under subpart 1 of part A and parts C, D, and 
E of this title. 
‘‘(3) SECONDARY EDUCATION PROVIDED BY NON-
PROFIT
CORPORATIONS.—A student who has com-
pleted a secondary education provided by a school op-
erating as a nonprofit corporation that offers a pro-
gram of study determined acceptable for admission at 
an institution of higher education shall be eligible for 
assistance under subpart 1 of part A and parts C, D, 
and E of this title.’’. 
(5) in subsection (f)(1), by striking ‘‘or part E’’ 
both places it appears and inserting the following: ‘‘, 
part E (as in effect on the day before the date of en-
actment of the PROSPER Act and pursuant to sec-
tion 461(a) of such Act), or part E (as in effect on 
or after the date of enactment of the PROSPER 
Act)’’; 
(6) by striking subsection (l); 
(7) in subsection (n)— 
(A) by striking ‘‘(n) DATA BASE MATCH-
ING.—To enforce’’; and inserting the following: 
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‘‘(n) SELECTIVE SERVICE REGISTRATION.— 
‘‘(1) DATA BASE MATCHING.—To enforce’’; and 
(B) by adding at the end the following: 
‘‘(2) EFFECT OF FAILURE TO REGISTER FOR SE-
LECTIVE SERVICE.—A person who is 26 years of age 
or older shall not be ineligible for assistance or a ben-
efit provided under this title by reason of failure to 
present himself for, and submit to, registration under 
section 3 of the Military Selective Service Act (50 
U.S.C. 3802).’’; and 
(8) by redesignating subsections (m) through (t) 
as subsections (l) through (s). 
SEC. 486. STATUTE OF LIMITATIONS. 
Section 484A (20 U.S.C. 1088) is amended— 
(1) in subsection (a)(2)(C)— 
(A) by striking ‘‘or 463(a)’’ and inserting ‘‘, 
section 463(a) (as in effect on the day before the 
date of enactment of the PROSPER Act and 
pursuant to section 461(a) of such Act), or sec-
tion 463 (as in effect on or after the date of en-
actment of the PROSPER Act)’’; and 
(B) by striking ‘‘or E’’ and inserting ‘‘, E 
(as in effect on the day before the date of enact-
ment of the PROSPER Act and pursuant to sec-
tion 461(a) of such Act), or E (as in effect on 
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or after the date of enactment of the PROSPER 
Act)’’; and 
(2) in subsection (b)— 
(A) by striking ‘‘and’’ at the end of para-
graph (2); 
(B) in paragraph (3)— 
(i) by inserting ‘‘(as in effect on the 
day before the date of enactment of the 
PROSPER Act and pursuant to section 
461(a) of such Act)’’ after ‘‘part E’’; 
(ii) by inserting ‘‘(as so in effect)’’ 
after ‘‘section 463(a)’’; and 
(iii) by striking the period at the end 
and inserting ‘‘; and’’; and 
(C) by adding at the end the following: 
‘‘(4) in collecting any obligation arising from a 
loan made under part E (as in effect on or after the 
date of enactment of the PROSPER Act), an institu-
tion of higher education that has an agreement with 
the Secretary pursuant to section 463(a) (as so in ef-
fect) shall not be subject to a defense raised by any 
borrower based on a claim of infancy.’’. 
SEC. 487. INSTITUTIONAL REFUNDS. 
Section 484B (20 U.S.C. 1091b) is amended— 
(1) in subsection (a)— 
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(A) in paragraph (1)— 
(i) by striking ‘‘If a recipient’’ and in-
serting the following: 
‘‘(A) CONSEQUENCE OF WITHDRAWAL.—If a 
recipient’’; and 
(ii) by adding at the end the following: 
‘‘(B) SPECIAL RULE.—For purposes of sub-
paragraph (A), a student— 
‘‘(i) who is enrolled in a program of-
fered in modules is not considered with-
drawn if the change in the student’s attend-
ance constitutes a change in enrollment sta-
tus within the payment period rather than 
a discontinuance of attendance within the 
payment period; and 
‘‘(ii) is considered withdrawn if the 
student follows the institution’s official 
withdrawal procedures or leaves without no-
tifying the institution and has not returned 
before the end of the payment period.’’; 
(B) in paragraph (3)— 
(i) in subparagraph (B), by striking 
clauses (i) and (ii) and inserting the fol-
lowing: 
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422 
‘‘(i) 0 percent, if the day the student 
withdrew occurs when the student has com-
pleted (as determined in accordance with 
subsection (d)) 0 to 24 percent of the pay-
ment period or period of enrollment; 
‘‘(ii) 25 percent, if the day the student 
withdrew occurs when the student has com-
pleted (as determined in accordance with 
subsection (d)) 25 to 49 percent of the pay-
ment period or period of enrollment; 
‘‘(iii) 50 percent, if the day the student 
withdrew occurs when the student has com-
pleted (as determined in accordance with 
subsection (d)) 50 to 74 percent of the pay-
ment period or period of enrollment; or 
‘‘(iv) 75 percent, if the day the student 
withdrew occurs when the student has com-
pleted (as determined in accordance with 
subsection (d)) 75 to 99 percent of the pay-
ment period or period of enrollment.’’. 
(ii) in subparagraph (C)(i), by strik-
ing ‘‘subparts 1 and 3 of part A, or loan as-
sistance under parts B, D,’’ and inserting 
‘‘subpart 1 of part A or loan assistance 
under parts D’’; and 
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(C) in paragraph (4)— 
(i) in subparagraph (A), by striking 
‘‘Secretary), the institution of higher edu-
cation shall contact the borrower’’ and in-
serting ‘‘Secretary), the institution of higher 
education shall have discretion to determine 
whether all or a portion of the late or post- 
withdrawal disbursement should be made, 
under a publicized institutional policy. If 
the institution of higher education deter-
mines that a disbursement should be made, 
the institution shall contact the borrower’’; 
and 
(ii) in subparagraph (B) by striking 
‘‘institution or the student, or both, as may 
be required under paragraphs (1) and (2) of 
subsection (b), to the programs under this 
title in the order specified in’’ and inserting 
‘‘institution, as may be required under 
paragraph (1) of subsection (b), to the pro-
grams under this title in accordance with’’; 
(2) by amending subsection (b) to read as fol-
lows: 
‘‘(b) RETURN OF TITLE IV PROGRAM FUNDS.— 
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‘‘(1) RESPONSIBILITY
OF
THE
INSTITUTION.— 
The institution shall return not later than 60 days 
from the determination of withdrawal, in accordance 
with paragraph (3), the amount of grant and loan as-
sistance awarded under this title that has not been 
earned by the student, as calculated under subsection 
(a)(3)(C). 
‘‘(2) RESPONSIBILITY OF THE STUDENT.— 
‘‘(A) IN GENERAL.—The student is not re-
sponsible to return assistance that has not been 
earned, except that the institution may require 
the student to pay to the institution up to 10 
percent of the amount owed by the institution in 
paragraph (1). 
‘‘(B) RULE OF CONSTRUCTION.—Nothing in 
this section shall be construed to prevent an in-
stitution from enforcing the published institu-
tional refund policies of such institution. 
‘‘(3) ORDER OF RETURN OF TITLE IV FUNDS.— 
‘‘(A) IN GENERAL.—Excess funds returned 
by the institution in accordance with paragraph 
(1) shall be credited to awards under subpart 1 
of part A for the payment period or period of en-
rollment for which a return of funds is required. 
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‘‘(B) 
REMAINING
EXCESSES.—If 
excess 
funds remain after repaying all outstanding 
grant amounts, the remaining excess shall be 
credited in the following order: 
‘‘(i) To outstanding balances on loans 
made under this title to the student or on 
behalf of the student for the payment period 
or period of enrollment for which a return 
of funds is required. 
‘‘(ii) To other assistance awarded 
under this title for which a return of funds 
is required.’’; 
(3) by amending subsection (c) to read as fol-
lows: 
‘‘(c) WITHDRAWAL DATE.— 
‘‘(1) IN GENERAL.—In this section, the term ‘day 
the student withdrew’— 
‘‘(A) for institutions not required to take at-
tendance, is the date as determined by the insti-
tution that— 
‘‘(i) the student began the withdrawal 
process prescribed and publicized by the in-
stitution, or a later date if the student con-
tinued attendance despite beginning the 
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withdrawal process, but did not then com-
plete the payment period; or 
‘‘(ii) in the case of a student who does 
not begin the withdrawal process, the date 
that is the mid-point of the payment period 
for which assistance under this title was 
disbursed or another date documented by 
the institution; or 
‘‘(B) for institutions required to take at-
tendance, is determined by the institution from 
such attendance records. 
‘‘(2) SPECIAL
RULE.—Notwithstanding para-
graph (1), if the institution determines that a student 
did not begin the withdrawal process, due to illness, 
accident, grievous personal loss, or other such cir-
cumstances beyond the student’s control, the institu-
tion may determine the appropriate withdrawal date 
under its own defined policies. 
‘‘(3) ATTENDANCE.—An institution is required 
to take attendance if an institution’s accrediting 
agency or State licensing agency has a requirement 
that the institution take attendance for all students in 
an academic program throughout the entire payment 
period.’’; and 
(4) by striking subsections (d) and (e). 
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SEC. 488. INFORMATION DISSEMINATED TO PROSPECTIVE 
AND ENROLLED STUDENTS. 
(a) USE
OF WEBSITE
TO DISSEMINATE INFORMA-
TION.—Section 485(a)(1) (20 U.S.C. 1092(a)(1)) is amend-
ed in the matter preceding subparagraph (A) by striking 
the second and third sentences and inserting the following: 
‘‘The information required by this section shall be produced 
and be made readily available to enrolled and prospective 
students on the institution’s website (or in other formats 
upon request).’’. 
(b) INFORMATION ON PROHIBITING COPYRIGHT IN-
FRINGEMENT.—Section 
485(a)(1)(P) 
(20 
U.S.C. 
1092(a)(1)(P)) is amended by striking ‘‘, including—’’ and 
all that follows and inserting a period. 
(c) ELIMINATION OF CERTAIN REPORTING REQUIRE-
MENTS.— 
(1) IN GENERAL.—Section 485(a)(1) (20 U.S.C. 
1092(a)(1)) is amended— 
(A) by striking subparagraph (L); 
(B) by redesignating subparagraphs (M) 
through (P) as subparagraphs (L) through (O); 
and 
(C) by striking subparagraphs (Q) through 
(V) and inserting the following: 
‘‘(P) the fire safety report prepared by the 
institution pursuant to subsection (i); and 
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‘‘(Q) the link to the institution’s informa-
tion on the College Dashboard website operated 
under section 132.’’. 
(2) CONFORMING AMENDMENTS.—Section 485(a) 
(20 U.S.C. 1092(a)) is amended by striking para-
graphs (3) through (7). 
(d) EXIT COUNSELING.—Section 485(b) (20 U.S.C. 
1092(b)) is amended— 
(1) in paragraph (1)(A)— 
(A) in the matter preceding clause (i)— 
(i) by striking ‘‘through financial aid 
offices or otherwise’’ and inserting ‘‘through 
the use of an interactive program, during 
an exit counseling session that is in-person 
or online, or through the use of the online 
counseling tool described in subsection 
(n)(1)(A)’’; and 
(ii) by inserting ‘‘, as in effect on the 
day before the date of enactment of the 
PROSPER Act and pursuant to section 
461(a) of such Act or made under part E 
(other than Federal ONE Parent Loans), as 
in effect on or after the date of enactment 
of the PROSPER Act’’ after ‘‘part E’’; 
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(B) by redesignating clauses (i) through (ix) 
as clauses (iv) through (xii), respectively; 
(C) by inserting before clause (iv), as so re-
designated, the following: 
‘‘(i) a summary of the outstanding balance of 
principal and interest due on the loans made to the 
borrower under this title; 
‘‘(ii) an explanation of the grace period pre-
ceding repayment and the expected date that the bor-
rower will enter repayment; 
‘‘(iii) an explanation of cases of interest capital-
ization and that the borrower has the option to pay 
any interest that has accrued while the borrower was 
in school or that may accrue during the grace period 
preceding repayment or during an authorized period 
of deferment or forbearance, prior to the capitaliza-
tion of the interest;’’; 
(D) in clause (iv), as so redesignated— 
(i) by striking ‘‘sample information 
showing the average’’ and inserting ‘‘infor-
mation, based on the borrower’s outstanding 
balance described in clause (i), showing the 
borrower’s’’; and 
(ii) by striking ‘‘of each plan’’ and in-
serting ‘‘of at least the standard repayment 
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plan and the income-based repayment plan 
under section 466(d)’’; 
(E) in clause (ix), as so redesignated— 
(i) by inserting ‘‘decreased credit 
score,’’ after ‘‘credit reports,’’; and 
(ii) by inserting ‘‘potential reduced 
ability to rent or purchase a home or car, 
potential difficulty in securing employ-
ment,’’ after ‘‘Federal law,’’; 
(F) in clause (x), as so redesignated, by 
striking ‘‘consolidation loan under section 428C 
or a’’; 
(G) in clauses (xi) and (xii), as so redesig-
nated, by striking ‘‘and’’ at the end; and 
(H) by adding at the end the following: 
‘‘(xiii) for each of the borrower’s loans made 
under this title for which the borrower is receiving 
counseling under this subsection, the contact informa-
tion for the servicer of the loan and a link to the 
Website of such servicer; and 
‘‘(xiv) an explanation that an individual has a 
right to annually request a disclosure of information 
collected by a consumer reporting agency pursuant to 
section 612(a) of the Fair Credit Reporting Act (15 
U.S.C. 1681j(a)).’’; 
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(2) in paragraph (1)(B)— 
(A) by inserting ‘‘online or’’ before ‘‘in 
writing’’; and 
(B) by adding before the period at the end 
the following: ‘‘, except that in the case of an in-
stitution using the online counseling tool de-
scribed in subsection (n)(1)(A), the Secretary 
shall attempt to provide such information to the 
student in the manner described in subsection 
(n)(3)(C)’’; and 
(3) in paragraph (2)(C), by inserting ‘‘, such as 
the online counseling tool described in subsection 
(n)(1)(A),’’ after ‘‘electronic means’’. 
(e) DEPARTMENTAL PUBLICATION OF DESCRIPTIONS 
OF ASSISTANCE PROGRAMS.—The third sentence of section 
485(d)(1) (20 U.S.C. 1092(d)(1)) is amended by striking 
‘‘part D’’ and inserting ‘‘part D or E’’. 
(f) AMENDMENTS TO CLERY ACT.— 
(1) PREVENTING INTERFERENCE WITH CRIMINAL 
JUSTICE PROCEEDINGS; TIMELY WARNINGS; CONSIST-
ENCY OF INSTITUTIONAL CRIME REPORTING.—Section 
485(f) (20 U.S.C. 1092(f)) is amended— 
(A) by striking paragraph (3) and inserting 
the following: 
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‘‘(3) Each institution participating in any pro-
gram under this title, other than a foreign institution 
of higher education, shall make timely reports to the 
campus community on crimes described in paragraph 
(1)(F) that have been reported to campus security of-
ficials and pose a serious and continuing threat to 
other students and employees’ safety. Such reports 
shall withhold the names of victims as confidential 
and shall be provided in a timely manner, except that 
an institution may delay issuing a report if the 
issuance would compromise ongoing law enforcement 
efforts, such as efforts to apprehend a suspect. The re-
port shall also include information designed to assist 
students and employees in staying safe and avoiding 
similar occurrences to the extent such information is 
available and appropriate to include. In assessing in-
stitutional compliance with this section, the Secretary 
shall defer to the institution’s determination of wheth-
er a particular crime poses a serious and continuing 
threat to the campus community, and the timeliness 
of such warning, provided that, in making its deci-
sion, the institution acted reasonably and based on 
the considered professional judgement of campus secu-
rity officials, based on the facts and circumstances 
known at the time.’’; 
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(B) by redesignating paragraph (18) as 
paragraph (20); and 
(C) by inserting after paragraph (17) the 
following: 
‘‘(18) Nothing in this subsection may be construed to 
prohibit an institution of higher education from delaying 
the initiation of, or suspending, an investigation or institu-
tional disciplinary proceeding involving an allegation of 
sexual assault in response to a request from a law enforce-
ment agency or a prosecutor to delay the initiation of, or 
suspend, the investigation or proceeding, and any delay or 
suspension of such an investigation or proceeding in re-
sponse to such a request may not serve as the grounds for 
any sanction or audit finding against the institution or 
for the suspension or termination of the institution’s par-
ticipation in any program under this title. 
‘‘(19)(A) Reporting carried out under this subsection 
shall be conducted in a manner to ensure maximum consist-
ency with the Uniform Crime Reporting Program of the 
Department of Justice. 
‘‘(B) The Secretary shall require institutions of higher 
education to report crime statistics under this section using 
definitions of such crimes, when available, from the Uni-
form Crime Reporting Program of the Department of Jus-
tice. 
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434 
‘‘(C) The Secretary shall maintain a publicly available 
and updated list of all applicable definitions from the Uni-
form Crime Reporting Program of the Department of Jus-
tice. 
‘‘(D) With respect to a report under this subsection, 
in the case of a crime for which no Uniform Crime Report-
ing Program of the Department of Justice definition exists, 
the Secretary shall require that institutions of higher edu-
cation report such crime according to a definition provided 
by the Secretary. 
‘‘(E) An institution of higher education that reports 
a crime described in subparagraph (D) shall not be subject 
to any penalty or fine for reporting inaccuracies or omis-
sions if the institution of higher education can demonstrate 
that it made a reasonable and good faith effort to report 
crimes consistent with the definition provided by the Sec-
retary. 
‘‘(F) With respect to a report under this subsection, 
the Secretary shall require institutions of higher education 
to follow the Hierarchy Rule for reporting crimes under the 
Uniform Crime Reporting Program of the Department of 
Justice, so as to minimize duplicate reporting and ensure 
greater consistency with national crime reporting sys-
tems.’’. 
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435 
(2) DUE PROCESS REQUIREMENTS FOR INSTITU-
TIONAL
DISCIPLINARY
PROCEEDINGS.—Section 
485(f)(8)(B)(iv)(I) (20 U.S.C. 1092(f)(8)(B)(iv)(I)) is 
amended to read as follows: 
‘‘(I) the investigation of the allegation 
and any institutional disciplinary pro-
ceeding in response to the allegation shall be 
prompt, impartial, and fair to both the ac-
cuser and the accused by, at a minimum— 
‘‘(aa) providing all parties to the 
proceeding with adequate written no-
tice of the allegation not later than 2 
weeks prior to the start of any formal 
hearing or similar adjudicatory pro-
ceeding, and including in such notice a 
description of all rights and respon-
sibilities under the proceeding, a state-
ment of all relevant details of the alle-
gation, and a specific statement of the 
sanctions which may be imposed; 
‘‘(bb) 
providing 
each 
person 
against whom the allegation is made 
with a meaningful opportunity to 
admit or contest the allegation; 
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‘‘(cc) ensuring that all parties to 
the proceeding have access to all mate-
rial evidence not later than one week 
prior to the start of any formal hear-
ing or similar adjudicatory proceeding; 
‘‘(dd) ensuring that the pro-
ceeding is carried out free from con-
flicts of interest by ensuring that there 
is no commingling of administrative or 
adjudicative roles; and 
‘‘(ee) ensuring that the investiga-
tion and proceeding shall be conducted 
by officials who receive annual edu-
cation on issues related to domestic vi-
olence, dating violence, sexual assault, 
and stalking, and on how to conduct 
an investigation and an institutional 
disciplinary proceeding that protects 
the safety of victims, ensures fairness 
for both the accuser and the accused, 
and promotes accountability;’’. 
(3) ESTABLISHMENT OF STANDARD OF EVIDENCE 
FOR INSTITUTIONAL DISCIPLINARY PROCEEDINGS.— 
(A) INCLUSION IN STATEMENT OF POLICY.— 
Section 485(f)(8)(B) (20 U.S.C. 1092(f)(8)(B)) is 
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amended by adding at the end the following new 
clause: 
‘‘(viii) The establishment of a standard of evi-
dence that will be used in institutional disciplinary 
proceedings involving allegations of sexual assault, 
which may be based on such standards and criteria 
as the institution considers appropriate (including 
the institution’s culture, history, and mission, the val-
ues reflected in its student code of conduct, and the 
purpose of the institutional disciplinary proceedings) 
so long as the standard is not arbitrary or capricious 
and is applied consistently throughout all such pro-
ceedings.’’. 
(B) CONFORMING
AMENDMENTS.—Section 
485(f)(8)(B)(iv) (20 U.S.C. 1092(f)(8)(B)(iv)) is 
amended— 
(i) by striking ‘‘and’’ at the end of sub-
clause (II); 
(ii) by striking the period at the end of 
subclause (III) and inserting ‘‘; and’’; and 
(iii) by adding at the end the following 
new subclause: 
‘‘(IV) in the case of a proceeding involving 
an allegation of sexual assault, such proceedings 
shall be conducted in accordance with the stand-
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ard of evidence established by the institution 
under clause (viii), together with a clear state-
ment describing such standard of evidence.’’. 
(4) EDUCATION MODULES FOR OFFICIALS CON-
DUCTING
INVESTIGATIONS
AND
INSTITUTIONAL
DIS-
CIPLINARY
PROCEEDINGS.—Section 
485(f)(8) 
(20 
U.S.C. 1092(f)(8)) is amended by adding at the end 
the following new subparagraph: 
‘‘(D) In consultation with experts from institutions of 
higher education, law enforcement agencies, advocates for 
sexual assault victims, experts in due process, and other ap-
propriate persons, the Secretary shall create and regularly 
update modules which an institution of higher education 
may use to provide the annual education described in sub-
paragraph (B)(iv)(I)(ee) for officials conducting investiga-
tions and institutional disciplinary proceedings involving 
allegations described in such subparagraph. If the institu-
tion uses such modules to provide the education described 
in such subparagraph, the institution shall be considered 
to meet any requirement under such subparagraph or any 
other Federal law regarding the education provided to offi-
cials conducting such investigations and proceedings.’’. 
(g) MODIFICATION OF CERTAIN REPORTING REQUIRE-
MENTS.— 
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(1) FIRE
SAFETY.—Section 485(i) (20 U.S.C. 
1092(i)) is amended to read as follows: 
‘‘(i) FIRE SAFETY REPORTS.— 
‘‘(1) ANNUAL REPORT.—Each eligible institution 
participating in any program under this title that 
maintains on-campus student housing facilities shall, 
on an annual basis, publish a fire safety report, 
which shall contain information with respect to the 
campus fire safety practices and standards of that in-
stitution, statistics on any fire related incidents or 
injuries, and any preventative measures or tech-
nologies. 
‘‘(2) RULES OF CONSTRUCTION.—Nothing in this 
subsection shall be construed to— 
‘‘(A) authorize the Secretary to require par-
ticular policies, procedures, programs, or prac-
tices by institutions of higher education with re-
spect to fire safety; 
‘‘(B) affect section 444 of the General Edu-
cation Provisions Act (commonly known as the 
‘Family Education Rights and Privacy Act of 
1974’) or the regulations issued under section 
264 of the Health Insurance Portability and Ac-
countability Act of 1996 (42 U.S.C. 1320d-2 
note); 
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‘‘(C) create a cause of action against any 
institution of higher education or any employee 
of such an institution for any civil liability; or 
‘‘(D) establish any standard of care. 
‘‘(3) EVIDENCE.—Notwithstanding any other 
provision of law, evidence regarding compliance or 
noncompliance with this subsection shall not be ad-
missible as evidence in any proceeding of any court, 
agency, board, or other entity, except with respect to 
an action to enforce this subsection.’’. 
(2) MISSING PERSONS PROCEDURES.— 
(A) IN
GENERAL.—Section 485(j)(1) (20 
U.S.C. 1092(j)(1)) is amended to read as follows: 
‘‘(1) IN GENERAL.—Each institution of higher 
education that provides on-campus housing and par-
ticipates in any program under this title shall estab-
lish a missing student policy for students who reside 
in on-campus housing that, at a minimum, informs 
each residing student that the institution will notify 
such student’s designated emergency contact and the 
appropriate law enforcement agency not later than 24 
hours after the time that the student is determined 
missing, and in the case of a student who is under 
18 years of age, the institution will notify a custodial 
parent or guardian.’’. 
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(B) RULE
OF
CONSTRUCTION.—Section 
485(j)(2) (20 U.S.C. 1092(j)(2)) is amended— 
(i) by striking ‘‘or’’ at the end of sub-
paragraph (A); 
(ii) by striking the period at the end of 
subparagraph (B) and inserting ‘‘; or’’; and 
(iii) by adding at the end the following 
new subparagraph: 
‘‘(C) to require an institution of higher edu-
cation to maintain separate missing student 
emergency contact information, so long as the in-
stitution otherwise has an emergency contact for 
students residing on campus.’’. 
(h) ANNUAL COUNSELING.—Section 485(l) (20 U.S.C. 
1092(l)) is amended to read as follows: 
‘‘(l) ANNUAL FINANCIAL AID COUNSELING.— 
‘‘(1) ANNUAL DISCLOSURE REQUIRED.— 
‘‘(A) IN GENERAL.—Each eligible institu-
tion shall ensure, and annually affirm to the 
Secretary, that each individual enrolled at such 
institution who receives a Federal Pell Grant or 
a loan made under this title (other than a Fed-
eral Direct Consolidation Loan or Federal ONE 
Consolidation Loan) receives comprehensive in-
formation on the terms and conditions of such 
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Federal Pell Grant or loan and the responsibil-
ities the individual has with respect to such Fed-
eral Pell Grant or loan. Such information shall 
be provided, for each award year for which the 
individual receives such Federal Pell Grant or 
loan, in a simple and understandable manner— 
‘‘(i) during a counseling session con-
ducted in person; 
‘‘(ii) online, with the individual ac-
knowledging receipt of the information; or 
‘‘(iii) through the use of the online 
counseling tool described in subsection 
(n)(1)(B). 
‘‘(B) USE OF INTERACTIVE PROGRAMS.—In 
the case of institutions not using the online 
counseling tool described in subsection (n)(1)(B), 
the Secretary shall require such institutions to 
carry out the requirements of subparagraph 
(A)— 
‘‘(i) through the use of interactive pro-
grams; 
‘‘(ii) during an annual counseling ses-
sion that is in-person or online that tests 
the individual’s understanding of the terms 
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and conditions of the Federal Pell Grant or 
loan awarded to the student; and 
‘‘(iii) using simple and understandable 
language and clear formatting. 
‘‘(2) ALL INDIVIDUALS.—The information to be 
provided under paragraph (1) to each individual re-
ceiving counseling under this subsection shall include 
the following: 
‘‘(A) An explanation of how the student 
may budget for typical educational expenses and 
a sample budget based on the cost of attendance 
for the institution. 
‘‘(B) An explanation that an individual has 
a right to annually request a disclosure of infor-
mation collected by a consumer reporting agency 
pursuant to section 612(a) of the Fair Credit Re-
porting Act (15 U.S.C. 1681j(a)). 
‘‘(C) Based on the most recent data avail-
able from the American Community Survey 
available from the Department of Commerce, the 
estimated average income and percentage of em-
ployment in the State of domicile of the borrower 
for persons with— 
‘‘(i) a high school diploma or equiva-
lent; 
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‘‘(ii) some post-secondary education 
without completion of a degree or certifi-
cate; 
‘‘(iii) an associate’s degree; 
‘‘(iv) a bachelor’s degree; and 
‘‘(v) a graduate or professional degree. 
‘‘(D) An introduction to the financial man-
agement resources provided by the Financial Lit-
eracy and Education Commission. 
‘‘(3) STUDENTS
RECEIVING
FEDERAL
PELL 
GRANTS.—The information to be provided under 
paragraph (1) to each student receiving a Federal 
Pell Grant shall include the following: 
‘‘(A) An explanation of the terms and con-
ditions of the Federal Pell Grant. 
‘‘(B) An explanation of approved edu-
cational expenses for which the student may use 
the Federal Pell Grant. 
‘‘(C) An explanation of why the student 
may have to repay the Federal Pell Grant. 
‘‘(D) An explanation of the maximum num-
ber of semesters or equivalent for which the stu-
dent may be eligible to receive a Federal Pell 
Grant, and a statement of the amount of time re-
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maining for which the student may be eligible to 
receive a Federal Pell Grant. 
‘‘(E) An explanation that if the student 
transfers to another institution not all of the stu-
dent’s courses may be acceptable to apply toward 
meeting specific degree or program requirements 
at such institution, but the amount of time re-
maining for which a student may be eligible to 
receive a Federal Pell Grant, as provided under 
subparagraph (D), will not change. 
‘‘(F) An explanation of how the student 
may seek additional financial assistance from 
the institution’s financial aid office due to a 
change in the student’s financial circumstances, 
and the contact information for such office. 
‘‘(4) BORROWERS RECEIVING LOANS MADE THIS 
TITLE (OTHER THAN FEDERAL DIRECT PLUS LOANS 
MADE ON BEHALF OF DEPENDENT STUDENTS OR FED-
ERAL ONE PARENT LOANS).—The information to be 
provided under paragraph (1) to a borrower of a loan 
made under this title (other than other than a Federal 
Direct PLUS Loan made on behalf of a dependent 
student or a Federal ONE Parent Loan) shall include 
the following: 
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‘‘(A) To the extent practicable, the effect of 
accepting the loan to be disbursed on the eligi-
bility of the borrower for other forms of student 
financial assistance. 
‘‘(B) An explanation of the use of the mas-
ter promissory note. 
‘‘(C) An explanation that the borrower is 
not required to accept the full amount of the loan 
offered to the borrower. 
‘‘(D) An explanation that the borrower 
should consider accepting any grant, scholarship, 
or State or Federal work-study jobs for which the 
borrower is eligible prior to accepting Federal 
student loans. 
‘‘(E) An explanation of treatment of loans 
made under this title and private education 
loans in bankruptcy, and an explanation that if 
a borrower decides to take out a private edu-
cation loan— 
‘‘(i) the borrower has the ability to se-
lect a private educational lender of the bor-
rower’s choice; 
‘‘(ii) the proposed private education 
loan may impact the borrower’s potential 
eligibility for other financial assistance, in-
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cluding Federal financial assistance under 
this title; and 
‘‘(iii) the borrower has a right— 
‘‘(I) to accept the terms of the pri-
vate education loan within 30 calendar 
days following the date on which the 
application for such loan is approved 
and the borrower receives the required 
disclosure documents, pursuant to sec-
tion 128(e)(6) of the Truth in Lending 
Act; and 
‘‘(II) to cancel such loan within 3 
business days of the date on which the 
loan is consummated, pursuant to sec-
tion 128(e)(7) of such Act. 
‘‘(F) An explanation of the approved edu-
cational expenses for which the borrower may use 
a loan made under this title. 
‘‘(G) Information on the annual and aggre-
gate loan limits for a loan made under this title. 
‘‘(H) Information on interest, including the 
annual percentage rate of such loan, as cal-
culated using the standard 10-year repayment 
term, and how interest accrues and is capitalized 
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448 
during periods when the interest is not paid by 
the borrower. 
‘‘(I) The option of the borrower to pay the 
interest while the borrower is in school. 
‘‘(J) The definition of half-time enrollment 
at the institution, during regular terms and 
summer school, if applicable, and the con-
sequences of not maintaining at least half-time 
enrollment. 
‘‘(K) An explanation of the importance of 
contacting the appropriate offices at the institu-
tion of higher education if the borrower with-
draws prior to completing the borrower’s pro-
gram of study so that the institution can provide 
exit counseling, including information regarding 
the borrower’s repayment options and loan con-
solidation. 
‘‘(L) For a first-time borrower or a bor-
rower of a loan under this title who owes no 
principal or interest on such loan— 
‘‘(i) a statement of the anticipated bal-
ance on the loan for which the borrower is 
receiving counseling under this subsection; 
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449 
‘‘(ii) based on such anticipated bal-
ance, the anticipated monthly payment 
amount under, at minimum— 
‘‘(I) the standard repayment plan; 
and 
‘‘(II) an income-based repayment 
plan under section 466(d) or 493C, as 
determined using available percentile 
data from the Bureau of Labor Statis-
tics of the starting salary for the occu-
pation in which the borrower has an 
interest in or intends to be employed; 
and 
‘‘(iii) an estimate of the projected 
monthly payment amount under each re-
payment plan described in clause (ii), based 
on the average cumulative indebtedness at 
graduation for borrowers of loans made 
under this title who are in the same pro-
gram of study as the borrower. 
‘‘(M) For a borrower with an outstanding 
balance of principal or interest due on a loan 
made under this title— 
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‘‘(i) a current statement of the amount 
of such outstanding balance and interest ac-
crued; 
‘‘(ii) based on such outstanding bal-
ance, the anticipated monthly payment 
amount under the standard repayment 
plan, and the income-based repayment plan 
under section 466(d) or 493C, as deter-
mined using available percentile data from 
the Bureau of Labor Statistics of the start-
ing salary for the occupation the borrower 
intends to be employed; and 
‘‘(iii) an estimate of the projected 
monthly payment amount under each re-
payment plan described in clause (ii), based 
on— 
‘‘(I) the outstanding balance de-
scribed in clause (i); 
‘‘(II) the anticipated outstanding 
balance on the loan for which the stu-
dent is receiving counseling under this 
subsection; and 
‘‘(III) a projection for any other 
loans made under this title that the 
borrower is reasonably expected to ac-
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cept during the borrower’s program of 
study based on at least the expected in-
crease in the cost of attendance of such 
program. 
‘‘(N) The obligation of the borrower to 
repay the full amount of the loan, regardless of 
whether the borrower completes or does not com-
plete the program in which the borrower is en-
rolled within the regular time for program com-
pletion. 
‘‘(O) The likely consequences of default on 
the loan, including adverse credit reports, delin-
quent debt collection procedures under Federal 
law, and litigation, and a notice of the institu-
tion’s most recent loan repayment rate (as de-
fined in section 481B) for the educational pro-
gram in which the borrower is enrolled, an ex-
planation of the loan repayment rate, and the 
most recent national average loan repayment 
rate for an educational program. 
‘‘(P) Information on the National Student 
Loan Data System and how the borrower can 
access the borrower’s records. 
‘‘(Q) The contact information for the insti-
tution’s financial aid office or other appropriate 
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452 
office at the institution the borrower may contact 
if the borrower has any questions about the bor-
rower’s rights and responsibilities or the terms 
and conditions of the loan. 
‘‘(5) BORROWERS RECEIVING FEDERAL DIRECT 
PLUS LOANS FOR DEPENDENT STUDENTS OR FEDERAL 
ONE PARENT LOANS.—The information to be provided 
under paragraph (1) to a borrower of a Federal Di-
rect PLUS Loan for a dependent student or a Federal 
ONE Parent Loan shall include the following: 
‘‘(A) The information described in subpara-
graphs (A) through (C) and (N) through (Q) of 
paragraph (4). 
‘‘(B) An explanation of the treatment of the 
loan and private education loans in bankruptcy. 
‘‘(C) Information on the annual and aggre-
gate loan limits. 
‘‘(D) Information on the annual percentage 
rate of the loan. 
‘‘(E) The option of the borrower to pay the 
interest on the loan while the loan is in 
deferment. 
‘‘(F) For a first-time borrower of a loan or 
a borrower of a loan under this title who owes 
no principal or interest on such loan— 
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‘‘(i) a statement of the anticipated bal-
ance on the loan for which the borrower is 
receiving counseling under this subsection; 
‘‘(ii) based on such anticipated bal-
ance, the anticipated monthly payment 
amount under the standard repayment 
plan; and 
‘‘(iii) an estimate of the projected 
monthly payment amount under the stand-
ard repayment plan, based on the average 
cumulative indebtedness of other borrowers 
of loans made under this title on behalf of 
dependent students who are in the same 
program of study as the student on whose 
behalf the borrower borrowed the loan. 
‘‘(G) For a borrower with an outstanding 
balance of principal or interest due on such 
loan— 
‘‘(i) a statement of the amount of such 
outstanding balance; 
‘‘(ii) based on such outstanding bal-
ance, the anticipated monthly payment 
amount under the standard repayment 
plan; and 
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‘‘(iii) an estimate of the projected 
monthly payment amount under the stand-
ard repayment plan, based on— 
‘‘(I) the outstanding balance de-
scribed in clause (i); 
‘‘(II) the anticipated outstanding 
balance on the loan for which the bor-
rower is receiving counseling under 
this subsection; and 
‘‘(III) a projection for any other 
Federal Direct PLUS Loan made on 
behalf of the dependent student or Fed-
eral ONE Parent Loan that the bor-
rower is reasonably expected to accept 
during the program of study of such 
student based on at least the expected 
increase in the cost of attendance of 
such program. 
‘‘(H) Debt management strategies that are 
designed to facilitate the repayment of such in-
debtedness. 
‘‘(I) An explanation that the borrower has 
the options to prepay each loan, pay each loan 
on a shorter schedule, and change repayment 
plans. 
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‘‘(J) For each Federal Direct PLUS Loan 
and each Federal ONE Parent Loan for which 
the borrower is receiving counseling under this 
subsection, the contact information for the loan 
servicer of the loan and a link to such servicer’s 
Website. 
‘‘(6) ANNUAL LOAN ACCEPTANCE.—Prior to mak-
ing the first disbursement of a loan made under this 
title (other than a Federal Direct Consolidation Loan 
or Federal ONE Consolidation Loan) to a borrower 
for an award year, an eligible institution, shall, as 
part of carrying out the counseling requirements of 
this subsection for the loan, ensure that after receiving 
the applicable counseling under paragraphs (2), (4), 
and (5) for the loan the borrower accepts the loan for 
such award year by— 
‘‘(A) signing the master promissory note for 
the loan; 
‘‘(B) signing and returning to the institu-
tion a separate written statement that affirma-
tively states that the borrower accepts the loan; 
or 
‘‘(C) electronically signing an electronic 
version of the statement described in subpara-
graph (B). 
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‘‘(7) PROHIBITION.—An institution of higher 
education may not counsel a borrower of a loan under 
this title to divorce or separate and live apart from 
one another for the purpose of qualifying for, or ob-
taining an increased amount of, Federal financial as-
sistance under this Act. 
‘‘(8) CONSTRUCTION.—Nothing in this section 
shall be construed to prohibit an eligible institution 
from providing additional information and coun-
seling services to recipients of Federal student aid 
under this title.’’. 
(i) ONLINE COUNSELING TOOLS.—Section 485 (20 
U.S.C. 1092) is further amended by adding at the end the 
following: 
‘‘(n) ONLINE COUNSELING TOOLS.— 
‘‘(1) IN GENERAL.—Beginning not later than 1 
year after the date of enactment of the PROSPER 
Act, the Secretary shall maintain— 
‘‘(A) an online counseling tool that provides 
the exit counseling required under subsection (b) 
and meets the applicable requirements of this 
subsection; and 
‘‘(B) an online counseling tool that provides 
the annual counseling required under subsection 
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(l) and meets the applicable requirements of this 
subsection. 
‘‘(2) REQUIREMENTS OF TOOLS.—In maintain-
ing the online counseling tools described in paragraph 
(1), the Secretary shall ensure that each such tool is— 
‘‘(A) consumer tested to ensure that the tool 
is effective in helping individuals understand 
their rights and obligations with respect to bor-
rowing a loan made this title or receiving a Fed-
eral Pell Grant; 
‘‘(B) understandable to students receiving 
Federal Pell Grants and borrowers of loans made 
this title; and 
‘‘(C) freely available to all eligible institu-
tions. 
‘‘(3) RECORD
OF
COUNSELING
COMPLETION.— 
The Secretary shall— 
‘‘(A) use each online counseling tool de-
scribed in paragraph (1) to keep a record of 
which individuals have received counseling using 
the tool, and notify the applicable institutions of 
the individual’s completion of such counseling; 
‘‘(B) in the case of a borrower who receives 
annual counseling for a loan made under this 
title using the tool described in paragraph 
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(1)(B), notify the borrower by when the borrower 
should accept, in a manner described in sub-
section (l)(6), the loan for which the borrower 
has received such counseling; and 
‘‘(C) in the case of a borrower described in 
subsection (b)(1)(B) at an institution that uses 
the online counseling tool described in paragraph 
(1)(A) of this subsection, the Secretary shall at-
tempt to provide the information described in 
subsection (b)(1)(A) to the borrower through such 
tool.’’. 
(j) PREVENTING HAZING ON CAMPUS.—Section 485 
(20 U.S.C. 1092) is further amended by adding at the end 
the following: 
‘‘(o) PREVENTING HAZING ON CAMPUS.— 
‘‘(1) SENSE OF CONGRESS.—It is the Sense of 
Congress that— 
‘‘(A) institutions of higher education should 
have clear policies that prohibit unsafe practices, 
such as hazing, on campus; 
‘‘(B) institutions of higher education should 
ensure each student organization understands 
what is considered an unsafe practice; 
‘‘(C) student organizations on campus 
should ensure their policies and activities do not 
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endanger students safety or cause harm to stu-
dents; 
‘‘(D) administrators and faculty should take 
seriously any threats or acts of harm to students 
through activities organized by student organiza-
tions and act quickly to prevent any potential 
harm to students by these groups; 
‘‘(E) institutions of higher education should 
ensure law enforcement has access to investigate 
any crimes committed by student organizations 
without obstruction from the students, student 
organization, administrators, or faculty; and 
‘‘(F) hazing is a dangerous practice and 
should not be allowed on any campus. 
‘‘(2) DISCLOSURE OF POLICIES.—Each institu-
tion of higher education participating in any pro-
gram under this title shall ensure that— 
‘‘(A) all policies and required procedures re-
lated to hazing are clearly posted for students, 
faculty, and administrators; and 
‘‘(B) all student organizations are aware 
of— 
‘‘(i) the policies described in subpara-
graph (A), including all prohibited activi-
ties; and 
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‘‘(ii) the dangers of hazing. 
‘‘(3) HAZING DEFINED.—In this subsection, the 
term ‘hazing’ means any intentional, knowing, or 
reckless act committed by a student, or a former stu-
dent, of an institution of higher education, whether 
individually or with other persons, against another 
student, that— 
‘‘(A) was committed in connection with an 
initiation into, an affiliation with, or the main-
tenance of membership in, any organization that 
is affiliated with such institution of higher edu-
cation; and 
‘‘(B)(i) contributes to a substantial risk of 
physical injury, mental harm, or personal deg-
radation; or 
‘‘(ii) causes physical injury, mental harm 
or personal degradation.’’. 
SEC. 489. EARLY AWARENESS OF FINANCIAL AID ELIGI-
BILITY. 
Section 485E (20 U.S.C. 1092f) is amended— 
(1) in subsection (b)— 
(A) in paragraph (2)— 
(i) strike ‘‘The Secretary,’’ and insert 
‘‘To improve the financial and economic lit-
eracy of students and parents of students in 
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order to make informed decisions with re-
spect to financing postsecondary education, 
the Secretary,’’; 
(ii) by striking ‘‘junior year’’ and in-
serting ‘‘sophomore year’’; 
(iii) by striking ‘‘The Secretary shall 
ensure that’’ and inserting ‘‘The Secretary 
shall— 
‘‘(A) ensure that’’; and 
(iv) by adding at the end the following: 
‘‘(B) create an online platform— 
‘‘(i) for States, institutions of higher 
education, other organizations involved in 
college access and student financial aid, sec-
ondary schools, and programs under this 
title that serve secondary school students to 
share best practices on disseminating infor-
mation under this section; and 
‘‘(ii) on which the Secretary shall an-
nually— 
‘‘(I) summarize such best prac-
tices; and 
‘‘(II) describe the notification and 
dissemination activities carried out 
under this section.’’. 
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462 
(B) in paragraph (4)— 
(i) in the first sentence— 
(I) by striking ‘‘Not later than 
two years after the date of enactment 
of the Higher Education Opportunity 
Act, the’’ and inserting ‘‘The’’; and 
(II) by inserting ‘‘continue to’’ be-
fore ‘‘implement’’; and 
(ii) in the second sentence, by striking 
‘‘the Internet’’ and inserting ‘‘the Internet, 
including through social media’’; and 
(2) by adding at the end the following: 
‘‘ (c) ONLINE ESTIMATOR TOOL.— 
‘‘(1) IN GENERAL.—Not later than 1 year after 
the date of enactment of the PROSPER Act, the Sec-
retary, in consultation with States, institutions of 
higher education, and other individuals with experi-
ence or expertise in student financial assistance ap-
plication processes, shall develop an early estimator 
tool to be available online and through a mobile ap-
plication, which— 
‘‘(A) allows an individual to— 
‘‘(i) enter basic financial and other rel-
evant information; and 
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463 
‘‘(ii) on the basis of such information, 
receive non-binding estimates of potential 
Federal grant, loan, or work study assist-
ance under this title for which a student 
may be eligible upon completion of an ap-
plication form under section 483(a); 
‘‘(B) with respect to each institution of 
higher education that participates in a program 
under this title selected by an individual for 
purposes of the estimator tool, provides the indi-
vidual with the net price (as defined in section 
132) for the income category described in para-
graph (2) that is determined on the basis of the 
information under subparagraph (A)(i) of this 
paragraph entered by the individual; 
‘‘(C) includes a clear and conspicuous dis-
claimer that the amounts calculated using the es-
timator tool are estimates based on limited fi-
nancial information, and that— 
‘‘(i) each such estimate— 
‘‘(I) in the case of an estimate 
under subparagraph (A), is only an es-
timate and does not represent a final 
determination, or actual award, of fi-
nancial assistance under this title; 
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‘‘(II) in the case of an estimate 
under subparagraph (B), is only an es-
timate and not a guarantee of the ac-
tual amount that a student may be 
charged; 
‘‘(III) shall not be binding on the 
Secretary or an institution of higher 
education; and 
‘‘(IV) may change; and 
‘‘(ii) a student must complete an ap-
plication form under section 483(a) in 
order to be eligible for, and receive, an ac-
tual financial aid award that includes Fed-
eral grant, loan, or work study assistance 
under this title; and 
‘‘(D) includes a clear and conspicuous ex-
planation of the differences between a grant and 
a loan, and that an individual will be required 
to repay any loan borrowed by the individual. 
‘‘(2) INCOME
CATEGORIES.—The income cat-
egories for purposes of paragraph (1)(B) are as fol-
lows: 
‘‘(A) $0 to $30,000. 
‘‘(B) $30,001 to $48,000. 
‘‘(C) $48,001 to $75,000. 
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‘‘(D) $75,001 to $110,000. 
‘‘(E) $110,001 to $150,000. 
‘‘(F) Over $150,000. 
‘‘(3) CONSUMER
TESTING.—In developing and 
maintaining the estimator tool described in para-
graph (1), the Secretary shall conduct consumer test-
ing with appropriate persons, including current and 
prospective college students, family members of such 
students, and other individuals with expertise in stu-
dent financial assistance application processes and 
college access, to ensure that such tool is easily under-
standable by students and families and effective in 
communicating early aid eligibility. 
‘‘(4) DATA STORAGE PROHIBITED.—In carrying 
out this subsection, the Secretary shall not keep, store, 
or warehouse any data inputted by individuals ac-
cessing the tool described in paragraph (1). 
‘‘(d) PELL TABLE.— 
‘‘(1) IN GENERAL.—The Secretary shall develop, 
and annually update at the beginning of each award 
year, the following electronic tables to be utilized in 
carrying out this section and containing the informa-
tion described in paragraph (2) of this subsection: 
‘‘(A) An electronic table for dependent stu-
dents. 
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‘‘(B) An electronic table for independent 
students with dependents other than a spouse. 
‘‘(C) An electronic table for independent 
students without dependents other than a spouse. 
‘‘(2) INFORMATION.—Each electronic table under 
paragraph (1), with respect to the category of students 
to which the table applies for the most recently com-
pleted award year for which information is available, 
and disaggregated in accordance with paragraph (3), 
shall contain the following information: 
‘‘(A) The percentage of undergraduate stu-
dents attending an institution of higher edu-
cation on a full-time, full-academic year basis 
who file the financial aid form prescribed under 
section 483 for the award year and received, for 
their first academic year during such award 
year (and not for any additional payment peri-
ods after such first academic year), the following: 
‘‘(i) A Federal Pell Grant equal to the 
maximum amount of a Federal Pell Grant 
award determined under section 401(b)(2) 
for such award year. 
‘‘(ii) A Federal Pell Grant in an 
amount that is— 
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‘‘(I) less than the maximum 
amount described in clause (i); and 
‘‘(II) not less than 3/4 of such 
maximum amount for such award 
year. 
‘‘(iii) A Federal Pell Grant in an 
amount that is— 
‘‘(I) less than 3/4 of such max-
imum amount; and 
‘‘(II) not less than 1⁄2 of such 
maximum amount for such award 
year. 
‘‘(iv) A Federal Pell Grant in an 
amount that is— 
‘‘(I) less than 1⁄2 of such max-
imum amount; and 
‘‘(II) not less than the minimum 
Federal Pell Grant amount determined 
under section 401(b)(4) for such award 
year. 
‘‘(B) The dollar amounts equal to— 
‘‘(i) the maximum amount of a Fed-
eral Pell Grant award determined under 
section 401(b)(2) for an award year; 
‘‘(ii) 3/4 of such maximum amount; 
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‘‘(iii) 1⁄2 of such maximum amount; 
and 
‘‘(iv) the minimum Federal Pell Grant 
amount determined under section 401(b)(4) 
for such award year. 
‘‘(C) A clear and conspicuous notice that— 
‘‘(i) the Federal Pell Grant amounts 
listed in subparagraph (B) are for a pre-
vious award year, and such amounts and 
the 
requirements 
for 
awarding 
such 
amounts may be different for succeeding 
award years; and 
‘‘(ii) the Federal Pell Grant amount 
for which a student may be eligible will be 
determined based on a number of factors, 
including enrollment status, once the stu-
dent completes an application form under 
section 483(a). 
‘‘(D) A link to the early estimator tool de-
scribed in subsection (c) of this section, which in-
cludes an explanation that an individual may 
estimate a student’s potential Federal aid eligi-
bility under this title by accessing the estimator 
on the individual’s mobile phone or online. 
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469 
‘‘(3) INCOME
CATEGORIES.—The information 
provided 
under 
paragraph 
(2)(A) 
shall 
be 
disaggregated by the following income categories: 
‘‘(A) Less than $5,000. 
‘‘(B) $5,000 to $9,999. 
‘‘(C) $10,000 to $19,999. 
‘‘(D) $20,000 to $29,999. 
‘‘(E) $30,000 to $39,999. 
‘‘(F) $40,000 to $49,999. 
‘‘(G) $50,000 to $59,999. 
‘‘(H) Greater than $59,999. 
‘‘(e) LIMITATION.—The Secretary may not require a 
State to participate in the activities or disseminate the ma-
terials described in this section.’’. 
SEC. 490. DISTANCE EDUCATION DEMONSTRATION PRO-
GRAMS. 
Section 486 (20 U.S.C. 1093(b)) is repealed. 
SEC. 491. CONTENTS OF PROGRAM PARTICIPATION AGREE-
MENTS. 
(a) PROGRAM PARTICIPATION AGREEMENTS.—Section 
487(a) (20 U.S.C. 1094(a)) is amended in the matter before 
paragraph (1) by striking ‘‘, except with respect to a pro-
gram under subpart 4 of part A’’. 
(b) 
PERKINS
CONFORMING
CHANGES.—Section 
487(a)(5) (20 U.S.C. 1094(a)(5)) is amended by striking 
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‘‘and, in the case of an institution participating in a pro-
gram under part B or part E, to holders of loans made 
to the institution’s students under such parts’’. 
(c) CERTIFICATIONS
TO LENDERS.—Section 487(a) 
(20 U.S.C. 1094(a)) is amended by striking paragraph (6). 
(d) STATE GRANT ASSISTANCE.—Section 487(a)(9) 
(20 U.S.C. 1094(a)(9)) is amended by striking ‘‘in a pro-
gram under part B or D’’ and inserting ‘‘in a loan program 
under this title’’. 
(e) OPIOID MISUSE AND SUBSTANCE ABUSE PREVEN-
TION
PROGRAM.—Section 
487(a)(10) 
(20 
U.S.C. 
1094(a)(10)) is amended by inserting ‘‘under section 118’’ 
after ‘‘drug abuse prevention program’’. 
(f) REPAYMENT SUCCESS PLAN.—Section 487(a)(14) 
(20 U.S.C. 1094(a)(14)) is amended— 
(1) by striking ‘‘under part B or D’’ both places 
it appears and inserting ‘‘a loan program under this 
title’’; 
(2) by striking ‘‘Default Management Plan’’ both 
places it appears and inserting ‘‘Repayment Success 
Plan’’; and 
(3) in subparagraph (C), by striking ‘‘a cohort 
default rate in excess of 10 percent’’ both places it ap-
pears and inserting ‘‘any program with a loan repay-
ment rate less than 65 percent’’. 
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471 
(g) COMMISSIONS TO THIRD-PARTY ENTITIES.—Sec-
tion 487(a)(20) (20 U.S.C. 1094(a)(20)) is amended— 
(1) by striking ‘‘The institution’’ and inserting 
‘‘(A) Except as provided in subparagraph (B), the in-
stitution’’; and 
(2) by adding at the end the following new sub-
paragraph: 
‘‘(B) An institution described in section 101 
may provide payment, based on— 
‘‘(i) the amount of tuition generated by the 
institution from student enrollment, to a third- 
party entity that provides a set of services to the 
institution that includes student recruitment 
services, regardless of whether the third-party en-
tity is affiliated with an institution that pro-
vides educational services other than the institu-
tion providing such payment, if— 
‘‘(I) the third-party entity is not affili-
ated with the institution providing such 
payment; 
‘‘(II) the third-party entity does not 
make compensation payments to its employ-
ees that would be prohibited under subpara-
graph (A) if such payments were made by 
the institution; 
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‘‘(III) the set of services provided to the 
institution by the third-party entity include 
services in addition to student recruitment 
services, and the institution does not pay 
the third-party entity solely or separately 
for student recruitment services provided by 
the third-party entity; and 
‘‘(IV) any student recruitment infor-
mation available to the third-party entity, 
including personally identifiable informa-
tion, will not be used by, shared with, or 
sold to any other person or entity, including 
any institution that is affiliated with the 
third-party entity, unless written consent is 
provided by the student; and 
‘‘(ii) students successfully completing their 
educational programs, to persons who were en-
gaged in recruiting such students, but solely to 
the extent that such payments— 
‘‘(I) are obligated to be paid, and are 
actually paid, only after each student upon 
whom such payments are based has success-
fully completed his or her educational pro-
gram; and 
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‘‘(II) are paid only to employees of the 
institution or its parent company, and not 
to any other person or outside entity.’’. 
(h) CLARIFICATION OF PROOF OF AUTHORITY TO OP-
ERATE WITHIN A STATE.—Section 487(a)(21) (20 U.S.C. 
1094(a)(21)) is amended by striking ‘‘within a State’’ and 
inserting ‘‘within a State in which it maintains a physical 
location’’. 
(i) DISTRIBUTION OF VOTER REGISTRATION FORMS.— 
Section 487(a)(23) (20 U.S.C. 1094(a)(23)) is amended to 
read as follows: 
‘‘(23) The institution, if located in a State to 
which section 4(b) of the National Voter Registration 
Act of 1993 (42 U.S.C. 1973gg–2(b)) does not apply, 
will make a good faith effort to distribute, including 
through electronic transmission, voter registration 
forms to students enrolled and physically in attend-
ance at the institution.’’. 
(j) PROHIBITING COPYRIGHT INFRINGEMENT.—Sec-
tion 487(a)(29) (20 U.S.C. 1094(a)(29)) is amended to read 
as follows: 
‘‘(29) The institution will have a policy prohib-
iting copyright infringement.’’. 
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(m) CONFORMING AMENDMENTS.—The Higher Edu-
cation Act of 1965 (20 U.S.C. 1001 et seq.) is amended— 
(1) in section 487(a) (20 U.S.C. 1094(a)), as 
amended by this section— 
(A) 
by 
redesignating 
paragraphs 
(7) 
through (23), as paragraphs (6) through (22), re-
spectively; and 
(C) by redesignating paragraphs (25) 
through (29) as paragraphs (23) through (27), 
respectively; 
(2) in section 487(c)(1)(A)(iii) (20 U.S.C. 
1094(c)(1)(A)(iii)), by striking ‘‘section 102(a)(1)(C)’’ 
and inserting ‘‘section 102(a)(1)’’; and 
(3) in section 487(h)(4) (20 U.S.C. 1094(h)(4)), 
as redesignated by subsection (l)(3), by striking ‘‘sec-
tion 102’’ and inserting ‘‘section 101 or 102’’. 
SEC. 492. REGULATORY RELIEF AND IMPROVEMENT. 
Section 487A (20 U.S.C. 1094a) is amended— 
(1) in subsection (a)— 
(A) in paragraph (1), by striking ‘‘The Sec-
retary is authorized to’’ and inserting ‘‘The Sec-
retary shall’’; and 
(B) in paragraph (5), by inserting ‘‘at least 
once every two years’’ before the period at the 
end; and 
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(2) in subsection (b)— 
(A) in paragraph (2)— 
(i) in the paragraph heading, by in-
serting ‘‘ANNUAL’’ before ‘‘REPORT’’; and 
(ii) by striking the first sentence and 
inserting ‘‘The Secretary shall review the 
experience, and rigorously evaluate the ac-
tivities, of all institutions participating as 
experimental sites and shall, on an annual 
basis, submit a report based on the review 
and evaluation findings to the authorizing 
committees.’’; 
(B) in paragraph (3), by amending sub-
paragraph (A) to read as follows: 
‘‘(A) IN GENERAL.— 
‘‘(i) EXPERIMENTAL SITES.—The Sec-
retary is authorized periodically to select a 
limited number of institutions for voluntary 
participation as experimental sites to pro-
vide recommendations to the Secretary and 
to the Congress on the impact and effective-
ness of proposed regulations or new man-
agement initiatives. 
‘‘(ii) CONGRESSIONAL
NOTICE
AND 
COMMENTS REQUIRED.— 
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‘‘(I) NOTICE.—Prior to announc-
ing a new experimental site and invit-
ing institutions to participate, the Sec-
retary shall provide to the authorizing 
committees a notice that shall in-
clude— 
‘‘(aa) a description of the 
proposed experiment and ration-
ale for the proposed experiment; 
and 
‘‘(bb) a list of the institu-
tional requirements the Secretary 
expects to waive and the legal au-
thority for such waivers. 
‘‘(II) 
CONGRESSIONAL
COM-
MENTS.—The Secretary shall not pro-
ceed with announcing a new experi-
mental site and inviting institutions to 
participate until 10 days after the Sec-
retary— 
‘‘(aa) receives and addresses 
all comments from the authorizing 
committees; and 
‘‘(bb) responds to such com-
mittees in writing with an expla-
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nation of how such comments have 
been addressed. 
‘‘(iii) PROHIBITION.—The Secretary is 
not authorized to carry out clause (i) in 
any year in which an annual report de-
scribed in paragraph (2) relating to the 
previous year is not submitted to the au-
thorizing committees.’’; 
(C) in paragraph (4)(A), by striking ‘‘bien-
nial’’ and inserting ‘‘annual’’; and 
(D) by striking paragraph (1) and redesig-
nating paragraphs (2) through (4) as para-
graphs (1) through (3), respectively. 
SEC. 493. TRANSFER OF ALLOTMENTS. 
Section 488 (20 U.S.C. 1095) is amended— 
(1) by inserting ‘‘, as in effect on the day before 
the date of enactment of the PROSPER Act,’’ after 
‘‘section 462’’; and 
(2) by inserting ‘‘, as in effect on the day before 
the date of enactment of the PROSPER Act,’’ after 
‘‘or 462’’. 
SEC. 494. ADMINISTRATIVE EXPENSES. 
Section 489(a) (20 U.S.C. 1096(a)) is amended— 
(1) in the second sentence— 
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(A) by striking ‘‘subpart 3 of part A or part 
C,’’ and inserting ‘‘part C’’ ; and 
(B) by striking ‘‘or under part E of this 
title’’; and 
(2) in the third sentence— 
(A) by striking ‘‘its grants to students 
under subpart 3 of part A,’’; and 
(B) by striking ‘‘, and the principal 
amount of loans made during such fiscal year 
from its student loan fund established under part 
E, excluding the principal amount of any such 
loans which the institution has referred under 
section 463(a)(4)(B)’’. 
SEC. 494A. REPEAL OF ADVISORY COMMITTEE. 
Section 491 (20 U.S.C. 1098) is repealed. 
SEC. 494B. REGIONAL MEETINGS AND NEGOTIATED RULE-
MAKING. 
Section 492 (20 U.S.C. 1098a) is amended— 
(1) by redesignating subsections (c) and (d) as 
subsections (f) and (g), respectively; and 
(2) by striking subsections (a) and (b) and in-
serting the following: 
‘‘(a) IN GENERAL.—The Secretary may, in accordance 
with this section, issue such regulations as are reasonably 
necessary to ensure compliance with this title. 
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‘‘(b) PUBLIC INVOLVEMENT.—The Secretary shall ob-
tain public involvement in the development of proposed reg-
ulations for this title. Before carrying out a negotiated rule-
making process as described in subsection (d) or publishing 
in the Federal Register proposed regulations to carry out 
this title, the Secretary shall obtain advice and rec-
ommendations from individuals, and representatives of 
groups, involved in student financial assistance programs 
under this title, such as students, institutions of higher edu-
cation, financial aid administrators, accrediting agencies 
or associations, State student grant agencies, guaranty 
agencies, lenders, secondary markets, loan servicers, guar-
anty agency servicers, and collection agencies. 
‘‘(c) MEETINGS AND ELECTRONIC EXCHANGE.— 
‘‘(1) IN GENERAL.—The Secretary shall provide 
for a comprehensive discussion and exchange of infor-
mation concerning the implementation of this title 
through such mechanisms as regional meetings and 
electronic exchanges of information. Such regional 
meetings and electronic exchanges of information 
shall be public and notice of such meetings and ex-
changes shall be provided to— 
‘‘(A) the authorizing committees at least 10 
days prior to the notice to interested stakeholders 
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and the public described in subparagraph (B); 
and 
‘‘(B) interested stakeholders and the public 
at least 30 days prior to such meetings and ex-
changes. 
‘‘(2) CONSIDERATION.—The Secretary shall take 
into account the information received through such 
mechanisms in the development of proposed regula-
tions and shall publish a summary of such informa-
tion in the Federal Register prior to beginning the ne-
gotiated rulemaking process described in subsection 
(d). 
‘‘(d) NEGOTIATED RULEMAKING PROCESS.— 
‘‘(1) NEGOTIATED RULEMAKING REQUIRED.—All 
regulations pertaining to this title that are promul-
gated after the date of the enactment of this para-
graph shall be subject to the negotiated rulemaking 
process described in this subsection (including the se-
lection of the issues to be negotiated), unless the Sec-
retary— 
‘‘(A) determines that applying such a re-
quirement with respect to given regulations is 
impracticable, unnecessary, or contrary to the 
public interest (within the meaning of section 
553(b)(3)(B) of title 5, United States Code); 
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482 
‘‘(B) publishes the basis for such determina-
tion in the Federal Register at the same time as 
the proposed regulations in question are first 
published; and 
‘‘(C) includes the basis for such determina-
tion in the congressional notice under subsection 
(e)(1). 
‘‘(2) CONGRESSIONAL
NOTICE
AND
COMMENTS 
REQUIRED.— 
‘‘(A) NOTICE.—The Secretary shall provide 
to the Committee on Education and the Work-
force of the House of Representatives and the 
Committee on Health, Education, Labor, and 
Pensions of the Senate notice of the intent estab-
lish a negotiated rulemaking committee that 
shall include— 
‘‘(i) the need to issue regulations; 
‘‘(ii) the statutory and legal authority 
of the Secretary to regulate the issue; 
‘‘(iii) the summary of public comments 
described in paragraph (2) of subsection (c); 
‘‘(iv) the anticipated burden, including 
the time, cost, and paperwork burden, the 
regulations will have on institutions of 
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483 
higher education and other entities that 
may be impacted by the regulations; and 
‘‘(v) any regulations that will be re-
pealed when the new regulations are issued. 
‘‘(B) 
CONGRESSIONAL
COMMENTS.—The 
Secretary shall not proceed with the negotiated 
rulemaking process— 
‘‘(i) until 10 days after the Sec-
retary— 
‘‘(I) receives and addresses all 
comments from the authorizing com-
mittees; and 
‘‘(II) responds to the authorizing 
committees in writing with an expla-
nation of how such comments have 
been addressed; or 
‘‘(ii) until 60 days after providing the 
notice required under subparagraph (A) if 
the Secretary has not received comments 
under clause (i). 
‘‘(3) PROCESS.—After obtaining advice and rec-
ommendations under subsections (b) and (c), and be-
fore publishing proposed regulations, the Secretary 
shall— 
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484 
‘‘(A) establish a negotiated rulemaking 
process; 
‘‘(B) select individuals to participate in 
such process— 
‘‘(i) from among individuals or groups 
that provided advice and recommendations 
under subsections (b) and (c), including— 
‘‘(I) representatives of such groups 
from Washington, D.C.; and 
‘‘(II) other industry participants; 
and 
‘‘(ii) with demonstrated expertise or 
experience in the relevant subjects under ne-
gotiation, reflecting the diversity in the in-
dustry, representing both large and small 
participants, as well as individuals serving 
local areas and national markets; 
‘‘(C) prepare a draft of proposed policy op-
tions, which shall take into account comments re-
ceived from both the public and the authorizing 
committees, that shall be provided to the individ-
uals selected by the Secretary under subpara-
graph (B) and such authorizing committees not 
less than 15 days before the first meeting under 
such process; and 
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485 
‘‘(D) ensure that the negotiation process is 
conducted in a timely manner in order that the 
final regulations may be issued by the Secretary 
within the 360-day period described in section 
437(e) of the General Education Provisions Act 
(20 U.S.C. 1232(e)). 
‘‘(4) AGREEMENTS AND RECORDS.— 
‘‘(A) AGREEMENTS.—All published proposed 
regulations developed through the negotiation 
process under this subsection shall conform to all 
agreements resulting from such process unless the 
Secretary reopens the negotiated rulemaking 
process. 
‘‘(B) RECORDS.—The Secretary shall ensure 
that a clear and reliable record is maintained of 
agreements reached during a negotiation process 
under this subsection. 
‘‘(e) PROPOSED RULEMAKING.—If the Secretary deter-
mines pursuant to subsection (d)(1) that a negotiated rule-
making process is impracticable, unnecessary, or contrary 
to the public interest (within the meaning of section 
553(b)(3)(B) of title 5, United States Code), or the individ-
uals selected to participate in the process under subsection 
(d)(3)(B) fail to reach unanimous agreement on an issue 
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486 
being negotiated, the Secretary may propose regulations 
subject to subsection (f). 
‘‘(f) REQUIREMENTS FOR PROPOSED REGULATIONS.— 
Regulations proposed pursuant to subsection (e) shall meet 
the following procedural requirements: 
‘‘(1) CONGRESSIONAL
NOTICE.—Regardless of 
whether congressional notice was submitted under 
subsection (d)(2), the Secretary shall provide to the 
Committee on Education and the Workforce of the 
House of Representatives and the Committee on 
Health, Education, Labor, and Pensions of the Senate 
notice that shall include— 
‘‘(A) a copy of the proposed regulations; 
‘‘(B) the need to issue regulations; 
‘‘(C) the statutory and legal authority of the 
Secretary to regulate the issue; 
‘‘(D) the anticipated burden, including the 
time, cost, and paperwork burden, the regula-
tions will have on institutions of higher edu-
cation and other entities that may be impacted 
by the regulations; and 
‘‘(E) any regulations that will be repealed 
when the new regulations are issued. 
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487 
‘‘(2) CONGRESSIONAL
COMMENTS.—The Sec-
retary may not proceed with the rulemaking proc-
ess— 
‘‘(A) until 10 days after the Secretary— 
‘‘(i) receives and addresses all com-
ments from the authorizing committees; and 
‘‘(ii) responds to the authorizing com-
mittees in writing with an explanation of 
how such comments have been addressed; or 
‘‘(B) until 60 days after providing the no-
tice required under paragraph (1) if the Sec-
retary has not received comments under subpara-
graph (A). 
‘‘(3) COMMENT AND REVIEW PERIOD.—The com-
ment and review period for the proposed regulation 
shall be 90 days unless an emergency requires a short-
er period, in which case such period shall be not less 
than 45 days and the Secretary shall— 
‘‘(A) designate the proposed regulation as 
an emergency, with an explanation of the emer-
gency, in the notice to the Congress under para-
graph (1); 
‘‘(B) publish the length of the comment and 
review period in such notice and in the Federal 
Register; and 
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488 
‘‘(C) conduct immediately thereafter re-
gional meetings to review such proposed regula-
tion before issuing any final regulation. 
‘‘(4) INDEPENDENT ASSESSMENT.—No regulation 
shall be made final after the comment and review pe-
riod until the Secretary has published in the Federal 
Register an independent assessment (which shall in-
clude a representative sampling of institutions of 
higher education based on sector, enrollment, urban, 
suburban, or rural character, and other factors im-
pacted by the regulation) of— 
‘‘(A) the burden, including the time, cost, 
and paperwork burden, the final regulation will 
impose on institutions and other entities that 
may be impacted by the regulation; 
‘‘(B) an explanation of how the entities de-
scribed in subparagraph (A) may cover the cost 
of the burden assessed under such subparagraph; 
and 
‘‘(C) the regulation, including a thorough 
assessment, based on the comments received dur-
ing the comment and review period under para-
graph (3), of whether the rule is financially, 
operationally, and educationally viable at the in-
stitutional level.’’. 
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489 
SEC. 494C. REPORT TO CONGRESS. 
Section 493C (20 U.S.C. 1098e) is amended by adding 
at the end the following: 
‘‘(f) REPORT.— 
‘‘(1) IN
GENERAL.—Not later than 180 days 
after the date of enactment of the PROSPER Act, the 
Secretary shall submit to the authorizing committees 
a report on the efforts of the Department to detect and 
combat fraud in the income-driven repayment plans 
described in paragraph (2). 
‘‘(2) INCOME
DRIVEN
REPAYMENT
PLANS
DE-
FINED.—The income-driven repayment plans de-
scribed in this paragraph are the repayment plans 
made available under— 
‘‘(A) this section; 
‘‘(B) subparagraphs (D) and (E) of section 
455(d)(1); and 
‘‘(C) section 455(e).’’. 
SEC. 494D. DEFERRAL OF LOAN REPAYMENT FOLLOWING 
ACTIVE DUTY. 
Section 493D(a) (20 U.S.C. 1098f) is amended, by 
striking 
‘‘or 
464(c)(2)(A)(iii)’’ 
and 
inserting 
‘‘464(c)(2)(A)(iii) (as in effect on the day before the date 
of enactment of the PROSPER Act and pursuant to section 
461(a)), or 469A(a)(2)(A)(iii)’’. 
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490 
SEC. 494E. CONTRACTS; MATCHING PROGRAM. 
(a) CONTRACTS FOR SUPPLIES AND SERVICES.— 
(1) IN GENERAL.—Part G of title IV (20 U.S.C. 
1088 et seq.), as amended by this part, is further 
amended by adding at the end the following: 
‘‘SEC. 493E. CONTRACTS. 
‘‘(a) CONTRACTS FOR SUPPLIES AND SERVICES.— 
‘‘(1) IN GENERAL.—The Secretary shall, to the 
extent practicable, award contracts for origination, 
servicing, and collection described in subsection (b). 
In awarding such contracts, the Secretary shall en-
sure that such services and supplies are provided at 
competitive prices. 
‘‘(2) ENTITIES.—The entities with which the 
Secretary may enter into contracts shall include enti-
ties qualified to provide such services and supplies 
and will comply with the procedures applicable to the 
award of such contracts. In the case of awarding con-
tracts for the origination, servicing, and collection of 
loans under parts D and E, the Secretary shall enter 
into contracts with entities that have extensive and 
relevant experience and demonstrated effectiveness. 
The entities with which the Secretary may enter into 
such contracts may include, where practicable, agen-
cies with agreements with the Secretary under sec-
tions 428(b) and (c), if such agencies meet the quali-
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491 
fications as determined by the Secretary under this 
subsection and if those agencies have such experience 
and demonstrated effectiveness. In awarding contracts 
to such State agencies, the Secretary shall, to the ex-
tent practicable and consistent with the purposes of 
parts D and E, give consideration to State agencies 
with a history of high quality performance to perform 
services for institutions of higher education within 
their State. 
‘‘(3) ALLOCATIONS.— 
‘‘(A) IN GENERAL.—Except as provided in 
subparagraph (B), the Secretary shall allocate 
new borrower loan accounts to entities awarded 
a contract under this section on the basis of— 
‘‘(i) the performance of each such enti-
ty compared to other such entities per-
forming similar work using common per-
formance metrics (which may take into ac-
count, as appropriate, portfolio risk factors, 
including a borrower’s time in repayment, 
category of institution of higher education 
attended, and completion of an educational 
program), as determined by the Secretary; 
and 
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492 
‘‘(ii) the capacity of each such entity 
compared to other such entities performing 
similar work to service new and existing 
borrower loan accounts. 
‘‘(B) 
FEDERAL
ONE
CONSOLIDATION 
LOANS.—Any borrower who receives a Federal 
ONE Consolidation Loan may select the entity 
awarded a contract under this section to service 
such loan. 
‘‘(4) RULE OF CONSTRUCTION.—Nothing in this 
section shall be construed as a limitation of the au-
thority of any State agency to enter into an agree-
ment for the purposes of this section as a member of 
a consortium of State agencies. 
‘‘(b) CONTRACTS FOR ORIGINATION, SERVICING, AND 
DATA SYSTEMS.—The Secretary may enter into contracts 
for— 
‘‘(1) the servicing and collection of loans made or 
purchased under part D or E; 
‘‘(2) the establishment and operation of 1 or 
more data systems for the maintenance of records on 
all loans made or purchased under part D or E; and 
‘‘(3) such other aspects of the direct student loan 
program under part D or E necessary to ensure the 
successful operation of the program. 
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493 
‘‘(c) COMMON PERFORMANCE MANUAL.— 
‘‘(1) CONSULTATION.—Not later than 180 days 
after the date of enactment of the PROSPER Act and 
biannually thereafter, the Secretary shall consult (in 
writing and in person) with entities awarded con-
tracts for loan servicing under section 456 (as in ef-
fect on the day before the date of enactment of the 
PROSPER Act) and this section, to the extent prac-
ticable, to develop and update as necessary, a guid-
ance manual for entities awarded contracts for loan 
servicing under this section that provides such entities 
with best practices to ensure borrowers receive ade-
quate and consistent service from such entities. 
‘‘(2) PROVISION
OF
MANUAL.—The Secretary 
shall provide the most recent guidance manual devel-
oped and updated under paragraph (1) to each entity 
awarded a contract for loan serving under this sec-
tion. 
‘‘(3) ANNUAL REPORT.—The Secretary shall pro-
vide to the authorizing committees a report, on a an-
nual basis, detailing the consultation required under 
paragraph (1). 
‘‘(d) FEDERAL PREEMPTION.— 
‘‘(1) IN GENERAL.—Covered activities shall not 
be subject to any law or other requirement of any 
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494 
State or political subdivision of a State with respect 
to— 
‘‘(A) disclosure requirements; 
‘‘(B) requirements or restrictions on the 
content, time, quantity, or frequency of commu-
nications with borrowers, endorsers, or references 
with respect to such loans; or 
‘‘(C) any other requirement relating to the 
servicing or collection of a loan made under this 
title. 
‘‘(2) SERVICING AND COLLECTION.—The require-
ments of this section with respect to any covered ac-
tivity shall preempt any law or other requirement of 
a State or political subdivision of a State to the ex-
tent that such law or other requirement would, in the 
absence of this subsection, apply to such covered activ-
ity. 
‘‘(3) STATE LICENSES.—No qualified entity en-
gaged in a covered activity shall be required to obtain 
a license from, or pay a licensing fee or other assess-
ment to, any State or political subdivision of a State 
relating to such covered activity. 
‘‘(4) DEFINITIONS.—For purposes of this section: 
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495 
‘‘(A) The term ‘covered activity’ means any 
of the following activities, as carried out by a 
qualified entity: 
‘‘(i) Origination of a loan made under 
this title. 
‘‘(ii) Servicing of a loan made under 
this title. 
‘‘(iii) Collection of a loan made under 
this title. 
‘‘(iv) Any other activity related to the 
activities described in clauses (i) through 
(iii). 
‘‘(B) The term ‘qualified entity’ means an 
organization, other than an institution of higher 
education— 
‘‘(i) that is responsible for the servicing 
or collection of a loan made under this title; 
‘‘(ii) that has agreement with the Sec-
retary under subsections (a) and (b) of sec-
tion 428; or 
‘‘(iii) that is under contract with an 
entity described in clause (i) or clause (ii) 
to support such entity’s responsibilities 
under this title. 
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496 
‘‘(5) LIMITATION.—This subsection shall not 
have any legal effect on any other preemption provi-
sion under Federal law with respect to this title.’’. 
(2) CONFORMING AMENDMENT.—Section 456 (20 
U.S.C. 1087f) is repealed. 
(b) MATCHING PROGRAM.—Part G of title IV (20 
U.S.C. 1088 et seq.), as amended by subsection (a), is fur-
ther amended by adding at the end the following: 
‘‘SEC. 493F. MATCHING PROGRAM. 
‘‘(a) IN GENERAL.—The Secretary of Education and 
the Secretary of Veterans Affairs shall carry out a computer 
matching program under which the Secretary of Education 
identifies, on at least a quarterly basis, borrowers— 
‘‘(1) who have been assigned a disability rating 
of 100 percent (or a combination of ratings equaling 
100 percent or more) by the Secretary of Veterans Af-
fairs for a service-connected disability (as defined in 
section 101 of title 38, United States Code); or 
‘‘(2) who have been determined by the Secretary 
of Veterans Affairs to be unemployable due to a serv-
ice-connected condition, as described in section 
437(a)(2). 
‘‘(b) BORROWER NOTIFICATION.—With respect to each 
borrower who is identified under subsection (a), the Sec-
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497 
retary shall, as soon as practicable after such identifica-
tion— 
‘‘(1) notify the borrower of the borrower’s eligi-
bility for loan discharge under section 437(a); and 
‘‘(2) provide the borrower with simple instruc-
tions on how to apply for such loan discharge, includ-
ing an explanation that the borrower shall not be re-
quired to provide any documentation of the bor-
rower’s disability rating to receive such discharge. 
‘‘(c) DATA COLLECTION AND REPORT TO CONGRESS.— 
‘‘(1) IN GENERAL.—The Secretary shall annually 
collect and submit to the Committees on Education 
and the Workforce and Veterans’ Affairs of the House 
of Representatives and the Committees on Health, 
Education, Labor, and Pensions and Veterans Affairs 
of the Senate, data about borrowers applying for and 
receiving loan discharges under section 437(a), which 
shall be disaggregated in the manner described in 
paragraph (2) and include the following: 
‘‘(A) The number of applications received 
under section 437(a). 
‘‘(B) The number of such applications that 
were approved. 
‘‘(C) The number of loan discharges that 
were completed under section 437(a). 
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498 
‘‘(2) 
DISAGGREGATION.—The 
data 
collected 
under paragraph (1) shall be disaggregated— 
‘‘(A) by borrowers who applied under this 
section for loan discharges under section 437(a); 
‘‘(B) by borrowers who received loan dis-
charges as a result of applying for such dis-
charges under this section; 
‘‘(C) by borrowers who applied for loan dis-
charges under section 437(a)(2); and 
‘‘(D) by borrowers who received loan dis-
charges as a result of applying for such dis-
charges under section 437(a)(2). 
‘‘(d) NOTIFICATION TO BORROWERS.—The Secretary 
shall notify each borrower whose liability on a loan has been 
discharged under section 437(a) that the liability on the 
loan has been so discharged.’’. 
PART H—PROGRAM INTEGRITY 
SEC. 495. REPEAL OF AND PROHIBITION ON STATE AU-
THORIZATION REGULATIONS. 
(a) REGULATIONS REPEALED.—The following regula-
tions relating to State authorization (including any supple-
ments or revisions to such regulations) are repealed and 
shall have no force or effect: 
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499 
(1) The final regulations published by the De-
partment of Education in the Federal Register on Oc-
tober 29, 2010 (75 Fed. Reg. 66832 et seq.). 
(2) The final regulations published by the De-
partment of Education in the Federal Register on De-
cember 19, 2016 (81 Fed. Reg. 92232 et seq). 
(b) PROHIBITION ON STATE AUTHORIZATION REGULA-
TIONS.—The Secretary of Education shall not, on or after 
the date of enactment of this Act, promulgate or enforce any 
regulation or rule with respect to the State authorization 
for institutions of higher education to operate within a 
State for any purpose under the Higher Education Act of 
1965 (20 U.S.C. 1001 et seq.). 
(c) INSTITUTIONAL RESPONSIBILITY; TREATMENT OF 
RELIGIOUS INSTITUTIONS.—Section 495 (20 U.S.C. 1099a) 
is amended by striking subsection (b) and inserting the fol-
lowing: 
‘‘(b) INSTITUTIONAL RESPONSIBILITY.—Each institu-
tion of higher education shall provide evidence to the Sec-
retary that the institution has authority to operate within 
each State in which it maintains a physical location at 
the time the institution is certified under subpart 3. 
‘‘(c) TREATMENT OF RELIGIOUS INSTITUTIONS.—An 
institution shall be treated as legally authorized to operate 
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500 
educational programs beyond secondary education in a 
State under section 101(a)(2) if the institution is— 
‘‘(1) recognized as a religious institution by the 
State; and 
‘‘(2) because of the institution’s status as a reli-
gious institution, exempt from any provision of State 
law that requires institutions to be authorized by the 
State to operate educational programs beyond sec-
ondary education.’’. 
SEC. 496. RECOGNITION OF ACCREDITING AGENCY OR AS-
SOCIATION. 
Section 496 (20 U.S.C. 1099b) is amended— 
(1) in subsection (j), by striking ‘‘section 102’’ 
and inserting ‘‘section 101’’; 
(2) in subsection (a)— 
(A) in paragraph (2), by amending sub-
paragraph (A) to read as follows: 
‘‘(A) for the purpose of participation in 
programs under this Act or other programs ad-
ministered by the Department of Education or 
other Federal agencies, has a voluntary member-
ship of institutions of higher education or other 
entities and has as a principal purpose the ac-
crediting of institutions of higher education or 
programs;’’; 
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501 
(B) in paragraph (3)— 
(i) in subparagraph (A)— 
(I) by striking ‘‘subparagraph 
(A)(i)’’ and inserting ‘‘subparagraph 
(A) or (C)’’; 
(II) by striking ‘‘separate’’ and 
inserting ‘‘separately incorporated’’; 
and 
(III) by adding ‘‘or’’ at the end; 
(ii) by striking ‘‘or’’ at the end of sub-
paragraph (B); and 
(iii) by striking subparagraph (C); 
(C) in paragraph (4)— 
(i) in subparagraph (A)— 
(I) by inserting ‘‘as defined by the 
institution’’ after ‘‘stated mission of 
the institution of higher education’’; 
(II) by striking ‘‘, including dis-
tance 
education 
or 
correspondence 
courses or programs,’’; and 
(III) by striking ‘‘and’’ at the 
end; 
(ii) by striking subparagraph (B) and 
inserting the following: 
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502 
‘‘(B) such agency or association dem-
onstrates the ability to review, evaluate, and as-
sess the quality of any instruction delivery model 
or method such agency or association has or 
seeks to include within its scope of recognition, 
without giving preference to or differentially 
treating a particular instruction delivery model 
or method offered by an institution of higher 
education or program except that, in a case in 
which the instruction delivery model allows for 
the separation of the student from the instruc-
tor— 
‘‘(i) the agency or association requires 
the institution to have processes through 
which the institution establishes that the 
student who registers in a course or pro-
gram is the same student who participates 
in, including, to the extent practicable, test-
ing or other assessment, and completes the 
program and receives the academic credit; 
and 
‘‘(ii) the agency or association requires 
that any process used by an institution to 
comply with the requirement under clause 
(i) does not infringe upon student privacy 
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and is implemented in a manner that is 
minimally burdensome to the student; and 
‘‘(C) if such an agency or association evalu-
ates or assesses the quality of competency-based 
education programs, the agency’s or association’s 
evaluation or assessment — 
‘‘(i) shall address effectively the quality 
of an institution’s competency-based edu-
cation programs as set forth in paragraph 
(5), except that the agency or association is 
not required to have separate standards, 
procedures, or policies for the evaluation of 
competency-based education; 
‘‘(ii) shall establish whether an institu-
tion has demonstrated that its program sat-
isfies the definitions in section 103(25); and 
‘‘(iii) shall establish whether an insti-
tution has demonstrated that it has defined 
an academic year for a competency-based 
program 
in 
accordance 
with 
section 
481(a)(3).’’; 
(D) by amending paragraph (5) to read as 
follows: 
‘‘(5) the standards for accreditation of the agen-
cy or association assess the institution’s success with 
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respect to student learning and educational outcomes 
in relation to the institution’s mission, which may 
include different standards for different institutions 
or programs, except that the standards shall include 
consideration of student learning and educational 
outcomes in relation to expected measures of student 
learning and educational outcomes, which at the 
agency’s or association’s discretion are established— 
‘‘(A) by the agency or association; or 
‘‘(B) by the institution or program, at the 
institution or program level, as the case may be, 
if the institution or program— 
‘‘(i) defines expected student learning 
goals and educational outcomes; 
‘‘(ii) measures and evaluates student 
learning, educational outcomes, and, if ap-
propriate, other outcomes of the students 
who complete their program of study; 
‘‘(iii) uses information about student 
learning, educational outcomes, and, if ap-
propriate, other outcomes, to improve the 
institution or program; and 
‘‘(iv) makes such information available 
to appropriate constituencies;’’; and 
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505 
(E) in paragraph (8), by striking ‘‘, upon 
request,’’; 
(3) in subsection (b)— 
(A) in the subsection heading, by striking 
‘‘SEPARATE’’ and inserting ‘‘SEPARATELY IN-
CORPORATED’’; 
(B) in the matter preceding paragraph (1), 
by striking ‘‘separate’’ and inserting ‘‘separately 
incorporated’’; 
(C) in paragraph (2), by inserting ‘‘who 
shall represent business’’ after ‘‘one such public 
member’’; and 
(D) in paragraph (4), by inserting before 
the period at the end ‘‘and is maintained sepa-
rately from any such entity or organization’’; 
(4) in subsection (c)— 
(A) in paragraph (1)— 
(i) by inserting ‘‘(which may vary 
based on institutional risk consistent with 
policies promulgated by the agency or asso-
ciation to determine such risk and interval 
frequency as allowed under subsection (p))’’ 
after ‘‘intervals’’; and 
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(ii) by striking ‘‘distance education’’ 
and 
inserting 
‘‘competency-based 
edu-
cation’’; 
(B) by striking paragraph (5) and redesig-
nating paragraphs (2), (3), and (4) as para-
graphs (3), (4), and (5), respectively; 
(C) by inserting after paragraph (1), the 
following: 
‘‘(2) develops a mechanism to identify institu-
tions or programs accredited by the agency or asso-
ciation that may be experiencing difficulties accom-
plishing their missions with respect to the student 
learning and educational outcome goals established 
under subsection (a)(5) and— 
‘‘(A) as appropriate, uses information such 
as student loan default or repayment rates, re-
tention or graduation rates, evidence of student 
learning, financial data, and other indicators to 
identify such institutions; 
‘‘(B) not less than annually, evaluates the 
extent to which those identified institutions or 
programs continue to be in compliance with the 
agency or association’s standards; and 
‘‘(C) as appropriate, requires the institution 
or program to address deficiencies and ensure 
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507 
that any plan to address and remedy deficiencies 
is successfully implemented.’’; 
(D) in paragraph (4)(A), as so redesig-
nated, by striking ‘‘487(f)’’ and inserting 
‘‘487(e)’’; 
(E) by amending paragraph (5), as so re-
designated, to read as follows: 
‘‘(5) establishes and applies or maintains poli-
cies which ensure that any substantive change to the 
educational mission, program, or programs of an in-
stitution after the agency or association has granted 
the institution accreditation or preaccreditation sta-
tus does not adversely affect the capacity of the insti-
tution to continue to meet the agency’s or associa-
tion’s 
standards 
for 
such 
accreditation 
or 
preaccreditation status, which shall include policies 
that— 
‘‘(A) require the institution to obtain the 
agency’s or association’s approval of the sub-
stantive change before the agency or association 
includes the change in the scope of the institu-
tion’s accreditation or preaccreditation status; 
and 
‘‘(B) define substantive change to include, 
at a minimum— 
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‘‘(i) any change in the established mis-
sion or objectives of the institution; 
‘‘(ii) any change in the legal status, 
form of control, or ownership of the institu-
tion; 
‘‘(iii) the addition of courses, programs 
of instruction, training, or study, or creden-
tials or degrees that represent a significant 
departure from the courses, programs, or 
credentials or degrees that were offered at 
time the agency or association last evalu-
ated the institution; or 
‘‘(iv) the entering into a contract 
under which an institution or organization 
not certified to participate programs under 
title IV provides a portion of an accredited 
institution’s educational program that is 
greater than 25 percent;’’; 
(F) in paragraph (7)— 
(i) in the matter preceding subpara-
graph (A), by inserting ‘‘, on the agency’s 
or association’s website,’’ after ‘‘public’’; 
(ii) in subparagraph (C), by inserting 
before the semicolon at the end the fol-
lowing: ‘‘, and a summary of why such ac-
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509 
tion was taken or such placement was 
made’’; 
(G) in paragraph (8), by striking ‘‘and’’ at 
the end; 
(H) in paragraph (9), by striking the pe-
riod at the end and inserting a semicolon; 
(I) by adding at the end the following: 
‘‘(10) makes publicly available, on the agency or 
association’s website, a list of the institutions of high-
er education accredited by such agency or association, 
which includes, with respect to each institution on the 
list–— 
‘‘(A) the year accreditation was granted; 
‘‘(B) the most recent date of a comprehen-
sive evaluation of the institution under para-
graph (1); and 
‘‘(C) the anticipated date of the next such 
evaluation; and 
‘‘(11) confirms, as a part of the agency’s or asso-
ciation’s review for accreditation or reaccreditation, 
that the institution’s website includes consumer infor-
mation described section paragraphs (1) and (2) of 
section 132(d).’’; 
(5) in subsection (e)— 
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510 
(A) by striking ‘‘The Secretary’’ and insert-
ing the following: 
‘‘(1) IN GENERAL.—Subject to paragraph (2), the 
Secretary’’; and 
(B) by adding at the end the following: 
‘‘(2) EXCEPTION.—Paragraph (1) shall not 
apply in the case of an institution described in sub-
section (j).’’. 
(6) by striking subsection (h) and inserting the 
following: 
‘‘(h) CHANGE OF ACCREDITING AGENCY OR ASSOCIA-
TION.— 
‘‘(1) IN GENERAL.—The Secretary shall not rec-
ognize the accreditation of any otherwise eligible in-
stitution of higher education if the institution is in 
the process of changing its accrediting agency or asso-
ciation and is subject to one or more of the following 
actions, unless the eligible institution submits to the 
Secretary materials demonstrating a reasonable cause 
for changing the accrediting agency or association: 
‘‘(A) A pending or final action brought by 
a State agency to suspend, revoke, withdraw, or 
terminate the institution’s legal authority to pro-
vide postsecondary education in the State. 
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‘‘(B) A decision by a recognized accrediting 
agency or association to deny accreditation or 
preaccreditation to the institution. 
‘‘(C) A pending or final action brought by 
a recognized accrediting agency or association to 
suspend, revoke, withdraw, or terminate the in-
stitution’s accreditation or preaccreditation. 
‘‘(D) Probation or an equivalent status im-
posed on the institution by a recognized accred-
iting agency or association. 
‘‘(2) RULE OF CONSTRUCTION.—Nothing in this 
subsection shall be construed to restrict the ability of 
an institution of higher education not subject to an 
action described in paragraph (1) and otherwise in 
good standing to change accrediting agencies or asso-
ciations without the approval of the Secretary as long 
as the institution notifies the Secretary of the 
change.’’; 
(7) by striking subsection (k) and inserting the 
following: 
‘‘(k) RELIGIOUS INSTITUTION RULE.— 
‘‘(1) IN GENERAL.—Notwithstanding subsection 
(j), the Secretary shall allow an institution that has 
had its accreditation withdrawn, revoked, or other-
wise terminated, or has voluntarily withdrawn from 
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512 
an accreditation agency, to remain certified as an in-
stitution of higher education under section 101 and 
subpart 3 of this part for a period sufficient to allow 
such institution to obtain alternative accreditation, if 
the Secretary determines that the withdrawal, revoca-
tion, or termination— 
‘‘(A) is related to the religious mission or 
affiliation of the institution; and 
‘‘(B) is not related to the accreditation cri-
teria provided for in this section. 
‘‘(2) REQUIREMENTS.—For purposes of this sec-
tion the following shall apply: 
‘‘(A) The religious mission of an institution 
may be reflected in the institution’s religious te-
nets, beliefs, or teachings, and any policies or de-
cisions related to such tenets, beliefs, or teachings 
(including any policies or decisions concerning 
housing, employment, curriculum, self-govern-
ance, or student admission, continuing enroll-
ment, or graduation). 
‘‘(B) An agency or association’s standard 
fails to respect an institution’s religious mission 
when the institution determines that the stand-
ard induces, pressures, or coerces the institution 
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to act contrary to, or to refrain from acting in 
support of, any aspect of its religious mission. 
‘‘(3) ADMINISTRATIVE COMPLAINT FOR FAILURE 
TO RESPECT RELIGIOUS MISSION.— 
‘‘(A) IN GENERAL.— 
‘‘(i) INSTITUTION.—If an institution of 
higher education believes that an adverse 
action of an accrediting agency or associa-
tion fails to respect the institution’s reli-
gious mission in violation of subsection 
(a)(4)(A), the institution— 
‘‘(I) may file a complaint with 
the Secretary to require the agency or 
association to withdraw the adverse ac-
tion; and 
‘‘(II) prior to filing such com-
plaint, shall notify the Secretary and 
the agency or association of an intent 
to file such complaint not later than 30 
days after— 
‘‘(aa) receiving the adverse 
action from the agency or associa-
tion; or 
‘‘(bb) determining that dis-
cussions with or the processes of 
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514 
the agency or association to rem-
edy the failure to respect the reli-
gious mission of the institution 
will fail to result in the with-
drawal of the adverse action by 
the agency or association. 
‘‘(ii) ACCREDITING AGENCY OR ASSO-
CIATION.—Upon notification of an intent to 
file a complaint and through the duration 
of the complaint process under this para-
graph, the Secretary and the accrediting 
agency or association shall treat the accred-
itation status of the institution of higher 
education as if the adverse action for which 
the institution is filing the complaint had 
not been taken. 
‘‘(B) COMPLAINT.—Not later than 45 days 
after providing notice of the intent to file a com-
plaint, the institution shall file the complaint 
with the Secretary (and provide a copy to the 
accrediting agency or association), which shall 
include— 
‘‘(i) a description of the adverse action; 
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‘‘(ii) how the adverse action fails to re-
spect the institution’s religious mission in 
violation of subsection (a)(4)(A); and 
‘‘(iii) any other information the insti-
tution determines relevant to the complaint. 
‘‘(C) RESPONSE.— 
‘‘(i) IN
GENERAL.—The accrediting 
agency or association shall have 30 days 
from the date the complaint is filed with the 
Secretary to file with the Secretary (and 
provide a copy to the institution) a response 
to the complaint, which response shall in-
clude— 
‘‘(I) how the adverse action is 
based on a violation of the agency or 
association’s standards for accredita-
tion; and 
‘‘(II) how the adverse action does 
not fail to respect the religious mission 
of the institution and is in compliance 
with subsection (a)(4)(A). 
‘‘(ii) BURDEN OF PROOF.— 
‘‘(I) IN
GENERAL.—The accred-
iting agency or association shall bear 
the burden of proving that the agency 
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or association has not taken the ad-
verse action as a result of the institu-
tion’s religious mission, and that the 
action does not fail to respect the insti-
tution’s religious mission in violation 
of subsection (a)(4)(A), by showing 
that the adverse action does not impact 
the aspect of the religious claimed to be 
affected in the complaint. 
‘‘(II) INSUFFICIENT PROOF.—Any 
evidence that the adverse action results 
from the application of a neutral and 
generally applicable rule shall be insuf-
ficient to prove that the action does not 
fail to respect an institution’s religious 
mission. 
‘‘(D) 
ADDITIONAL
INSTITUTION
RE-
SPONSE.—The institution shall have 15 days 
from the date on which the agency or associa-
tion’s response is filed with the Secretary to— 
‘‘(i) file with the Secretary (and pro-
vide a copy to the agency or association) a 
response to any issues raised in the response 
of the agency or association; or 
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‘‘(ii) inform the Secretary and the 
agency or association that the institution 
elects to waive the right to respond to the 
response of the agency or association. 
‘‘(E) SECRETARIAL ACTION.— 
‘‘(i) IN GENERAL.—Not later than 15 
days of receipt of the institution’s response 
under subparagraph (D) or notification 
that the institution elects not to file a re-
sponse under such subparagraph— 
‘‘(I) the Secretary shall review the 
materials to determine if the accred-
iting agency or association has met its 
burden of proof under subparagraph 
(C)(ii)(I); or 
‘‘(II) in a case in which the Sec-
retary fails to conduct such review— 
‘‘(aa) the Secretary shall be 
deemed as determining that the 
adverse action fails to respect the 
religious mission of the institu-
tion; and 
‘‘(bb) the accrediting agency 
or association shall be required to 
reverse the action immediately 
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and take no further action with 
respect to such adverse action. 
‘‘(ii) REVIEW OF COMPLAINT.—In re-
viewing the complaint under clause (i)(I)— 
‘‘(I) the Secretary shall consider 
the institution to be correct in the as-
sertion that the adverse action fails to 
respect the institution’s religious mis-
sion and shall apply the burden of 
proof 
described 
in 
subparagraph 
(C)(ii)(I) with respect to the accred-
iting agency or association; and 
‘‘(II) if the Secretary determines 
that the accrediting agency or associa-
tion fails to meet such burden of 
proof— 
‘‘(aa) the Secretary shall no-
tify the institution and the agency 
or association that the agency or 
association is not in compliance 
with subsection (a)(4)(A), and 
that such agency or association 
shall carry out the requirements of 
item (bb) to be in compliance sub-
section (a)(4)(A); and 
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‘‘(bb) the agency or associa-
tion shall reverse the adverse ac-
tion immediately and take no fur-
ther action with respect to such 
adverse action. 
‘‘(iii) 
FINAL
DEPARTMENTAL
AC-
TION.—The Secretary’s determination under 
this subparagraph shall be the final action 
of the Department on the complaint. 
‘‘(F) RULE OF CONSTRUCTION.—Nothing in 
this paragraph shall prohibit— 
‘‘(i) an accrediting agency or associa-
tion from taking an adverse action against 
an institution of higher education for a fail-
ure to comply with the agency or associa-
tion’s standards of accreditation as long as 
such standards are in compliance with sub-
section (a)(4)(A) and any other applicable 
requirements of this section; or 
‘‘(ii) an institution of higher education 
from exercising any other rights to address 
concerns with respect to an accrediting 
agency or association or the accreditation 
process of an accrediting agency or associa-
tion. 
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520 
‘‘(G) GUIDANCE.— 
‘‘(i) IN GENERAL.—The Secretary may 
only issue guidance under this paragraph 
that explains or clarifies the process for pro-
viding notice of an intent to file a com-
plaint or for filing a complaint under this 
paragraph. 
‘‘(ii) CLARIFICATION.—The Secretary 
may not issue guidance, or otherwise deter-
mine or suggest, when discussions to remedy 
the failure by an accrediting agency or as-
sociation to respect the religious mission of 
an institution of higher education referred 
to in subparagraph (A)(i)(II)(bb) have 
failed or will fail.’’; 
(8) in subsection (n)(3), by striking ‘‘distance 
education courses or programs’’ each place it appears 
and inserting ‘‘competency-based education pro-
grams’’ ; 
(9) in subsection (o), by inserting before the pe-
riod at the end the following: ‘‘, or with respect to the 
policies and procedures of an accreditation agency or 
association described in paragraph (2) or (5) of sub-
section (c) or how the agency or association carries 
out such policies and procedures’’; 
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521 
(10) by striking subsections (p) and (q); and 
(11) by adding at the end the following: 
‘‘(p) RISK-BASED OR DIFFERENTIATED REVIEW PROC-
ESSES OR PROCEDURES.— 
‘‘(1) IN GENERAL.—Notwithstanding any other 
provision of law (including subsection (a)(4)(A)), an 
accrediting agency or association may establish, with 
the involvement of its membership, risk-based or dif-
ferentiated review processes or procedures for assess-
ing compliance with the accrediting agency or asso-
ciation’s standards, including policies related to sub-
stantive change and award of accreditation statuses, 
for institutions of higher education or programs that 
have demonstrated exceptional past performance with 
respect to meeting the accrediting agency or associa-
tion’s standards. 
‘‘(2) PROHIBITION.—Risk-based or differentiated 
review processes or procedures shall not discriminate 
against, or otherwise preclude, institutions of higher 
education based on institutional sector or category, 
including an institution of higher education’s tax sta-
tus. 
‘‘(3) RULE OF CONSTRUCTION.—Nothing in this 
subsection shall be construed to permit the Secretary 
to establish any criterion that specifies, defines, or 
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prescribes an accrediting agency or association’s risk- 
based or differentiated review process or procedure. 
‘‘(q) WAIVER.—The Secretary shall establish a process 
through which an agency or association may seek to have 
a requirement of this subpart waived, if such agency or as-
sociation— 
‘‘(1) demonstrates that such waiver is necessary 
to enable an institution of higher education or pro-
gram accredited by the agency or association to im-
plement innovative practices intended to— 
‘‘(A) reduce administrative burdens to the 
institution or program without creating costs for 
the taxpayer; or 
‘‘(B) improve the delivery of services to stu-
dents, improve instruction or learning outcomes, 
or otherwise benefit students; and 
‘‘(2) describes the terms and conditions that will 
be placed upon the program or institution to ensure 
academic integrity and quality.’’. 
SEC. 497. ELIGIBILITY AND CERTIFICATION PROCEDURES. 
(a) ELIGIBILITY AND CERTIFICATION PROCEDURES.— 
Section 498 (20 U.S.C. 1099c) is amended— 
(1) in subsection (a)— 
(A) by striking ‘‘For purposes of’’ and in-
serting the following: 
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‘‘(1) IN GENERAL.—For purposes of’’; 
(B) by inserting ‘‘, subject to paragraph 
(2),’’ after ‘‘determine’’; and 
(C) by adding at the end the following: 
‘‘(2) SPECIAL
RULE.—The determination of 
whether an institution of higher education is legally 
authorized to operate in a State under section 
101(a)(2) shall be based solely on that State’s laws.’’; 
(2) in subsection (b)(5), by striking ‘‘B or D’’ 
and inserting ‘‘E’’; 
(3) in subsection (c)— 
(A) by redesignating paragraphs (4), (5), 
and (6) as paragraphs (6), (7), and (8), respec-
tively; 
(B) by striking the subsection designation 
and all that follows through the end of para-
graph (3) and inserting the following: 
‘‘(c) FINANCIAL RESPONSIBILITY STANDARDS.—(1) 
The Secretary shall determine whether an institution has 
the financial responsibility required by this title in accord-
ance with paragraph (2). 
‘‘(2) An institution shall be determined to be finan-
cially responsible by the Secretary, as required by this title, 
if the institution is able to provide the services described 
in its official publications and statements, is able to provide 
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