I
103D CONGRESS
2D SESSION
H. R. 4384
To substitute evaluations of educational quality for cohort default rates in
eligibility determinations for proprietary institutions of higher education
under the Federal student assistance programs.
IN THE HOUSE OF REPRESENTATIVES
MAY 11, 1994
Mr. ANDREWS of New Jersey introduced the following bill; which was referred
to the Committee on Education and Labor
A BILL
To substitute evaluations of educational quality for cohort
default rates in eligibility determinations for proprietary
institutions of higher education under the Federal stu-
dent assistance programs.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Educational Quality
Index Act of 1994’’.
SEC. 2. FINDINGS.
The Congress finds that—
(1) cohort default rates alone do not indicate
the quality of an educational institution;
(2) for the purpose of evaluating performance
of an institution of higher education, the population
which that institution serves should be taken into
account;
(3) schools whose students are from less afflu-
ent backgrounds have more difficulty with cohort de-
fault rate standards;
(4) use of the cohort default rates as a deter-
minant for participation in Federal student loan pro-
grams has kept technical and vocational school oper-
ators from opening schools in impoverished areas;
(5) many individuals living in impoverished
areas have been effectively denied an opportunity to
access technical and vocational higher education;
and
(6) the performance of a technical or vocational
institution of higher education can be measured by
objective data concerning the outcome from the per-
spective of the student.
SEC. 3. USE OF EDUCATIONAL QUALITY IN INSTITUTIONAL
ELIGIBILITY 
FOR 
GUARANTEED 
STUDENT
LOAN PROGRAM.
Section 435(a) of the Higher Education Act of
1965 (20 U.S.C. 1085(a)) is amended—
(1) in paragraph (1), by striking ‘‘paragraph
(2)’’ and inserting ‘‘paragraphs (2) and (4)’’;
(2) in paragraph (2), by striking ‘‘An institu-
tion’’ and inserting ‘‘Except as provided in para-
graph (4), an institution’’;
(3) by adding at the end the following new
paragraph:
‘‘(4) INELIGIBILITY
BASED
ON
EDUCATIONAL
QUALITY INDEX.—
‘‘(A) USE OF INDEX IN PLACE OF COHORT
DEFAULT RATE.—A proprietary institution of
higher education (as such term is defined in
section 481(b)) shall not be subject to ineligibil-
ity determinations under paragraph (2), but
shall be subject to such determinations on the
basis of the educational quality index prescribed
under this paragraph.
‘‘(B) PRESCRIPTION OF INDEX.—The Sec-
retary of Education shall by regulation pre-
scribe an educational quality index for the pur-
pose of evaluating the programs of proprietary
institutions of higher education. Such index
shall be equal to the sum of the following com-
ponent indexes:
‘‘(i) A placement rate index which
shall be based on the percentage of stu-
dents who are employed in the field for
which the institution has trained them.
‘‘(ii) A Pell grant eligibility index
equal to (I) the percentage of enrolled stu-
dents who are eligible for Pell grants,
minus (II) the national average percentage
of students who are so eligible at all insti-
tutions of higher education, divided by
(III) four.
‘‘(iii) An index based on the institu-
tion’s cohort default rate (as determined
under subsection (m)).
‘‘(iv) A successful completion index
which shall be based on graduation rates
(as determined for purposes of section
484(a)(1)(C)), or on certification or licen-
sure rates (if available).
‘‘(C) CONTENTS
OF
REGULATIONS.—The
regulations prescribed by the Secretary under
subparagraph (B) shall—
‘‘(i) define the minimum aggregate
score that an proprietary institution of
higher education must achieve, as a sum of
the 4 indexes established under clauses (i),
(ii), and (iii) of such subparagraph, in
order for the institution to remain eligible
to participate in the programs under this
part;
‘‘(ii) provide that the weights to be at-
tributed to such 4 indexes for purposes of
aggregating such score shall require that,
of 
the 
maximum 
possible 
aggregate
score—
‘‘(I) 37.5 percent shall be attrib-
uted to the index described in sub-
paragraph (B)(i);
‘‘(II) 25 percent shall be attrib-
uted to subparagraph (B)(ii);
‘‘(III) 25 percent shall be attrib-
uted to subparagraph (B)(iii); and
‘‘(IV) 12.5 percent shall be at-
tributed to subparagraph (B)(iv); and
‘‘(iii) establish the procedures for the
determination of scores for individual insti-