‘‘(iv) tuition, fees, or other edu-
cational charges paid directly by a student 
to a public institution of higher education 
or to the State; 
‘‘(v) funds for— 
‘‘(I) financial aid programs pro-
vided to out-of-State institutions of 
higher education, including aid to stu-
dents enrolled in such institutions; 
‘‘(II) merit-based financial aid to 
students awarded on the basis of pre-
dicted or actual academic perform-
ance; 
‘‘(III) financial aid for students 
attending, or annual operating ex-
penses of, proprietary institutions of 
higher education (as defined in section 
102(b)); 
‘‘(IV) financial aid for students 
attending, or annual operating ex-
penses of, unaccredited institutions; 
‘‘(V) research and development; 
‘‘(VI) 
hospitals, 
athletics, 
or 
other auxiliary enterprises; or 
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‘‘(VII) corporate or other private 
donations directed to one or more in-
stitutions of higher education per-
mitted to be expended by the State; or 
‘‘(vi) any other funds that the Sec-
retary determines shall not be included in 
the calculation of State fiscal support for 
higher education for such State. 
‘‘(C) ADJUSTMENTS FOR BIENNIAL APPRO-
PRIATIONS.—The Secretary shall take into con-
sideration any adjustments to the calculations 
under this paragraph that may be required to 
accurately reflect State fiscal support for higher 
education in States with biennial appropriation 
cycles. 
‘‘(D) INDIAN TRIBES.—In determining the 
State fiscal support for higher education of an 
Indian tribe for a fiscal year, the Indian tribe 
shall be treated as a State except as otherwise 
determined appropriate by the Secretary. 
‘‘(12) STATE
FISCAL
SUPPORT
FOR
HIGHER 
EDUCATION PER FTE STUDENT.—The term ‘State 
fiscal support for higher education per FTE stu-
dent’, used with respect to a State or Indian tribe 
for a fiscal year, means, the quotient of— 
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‘‘(A) the State fiscal support for higher 
education for the previous fiscal year; divided 
by 
‘‘(B) the number of full-time equivalent 
students enrolled in public institutions of higher 
education in such State or tribe for such pre-
vious fiscal year.’’. 
TITLE II—STUDENT SUCCESS 
FUND 
SEC. 201. STUDENT SUCCESS FUND. 
Part J of title IV of the Higher Education Act of 
1965 (20 U.S.C. 1070 et seq.), as added by section 101, 
is further amended by adding at the end the following: 
‘‘Subpart 2—Student Success Fund 
‘‘SEC. 499I. IN GENERAL. 
‘‘From amounts appropriated under section 499O for 
any fiscal year, the Secretary shall carry out a grant pro-
gram (to be known as the Student Success Fund) to make 
grants to eligible entities to carry out the activities and 
services described in section 499L. 
‘‘SEC. 499J. FEDERAL SHARE AND MATCHING FUNDS. 
‘‘(a) FEDERAL SHARE.— 
‘‘(1) FORMULA REQUIREMENTS.—The Federal 
share of a grant under this subpart shall be based 
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on a formula, developed by the Secretary, that ac-
counts for— 
‘‘(A) the State or Indian tribe’s relative 
share of eligible students, as determined in ac-
cordance with section 499B(c); 
‘‘(B) the State or Indian tribe’s relative 
share of Federal Pell Grant recipients; and 
‘‘(C) the ratio between a State or Indian 
tribe’s funding per full-time equivalent (FTE) 
student at public institutions of higher edu-
cation and the average net price at public four- 
year institutions of higher education, in such a 
way as to reward States and Indian tribes that 
keep net prices for students low while maintain-
ing their State fiscal support for higher edu-
cation. 
‘‘(2) FORMULA PUBLISHED BEFORE APPLICA-
TION DEADLINE.—The Secretary shall— 
‘‘(A) develop the formula described in 
paragraph (1); 
‘‘(B) calculate estimated allotments for 
each eligible entity under such formula; and 
‘‘(C) publish such formula and estimated 
allotments not later than the date of the notice 
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soliciting applications for participation in the 
program under this subpart. 
‘‘(b) MATCHING FUNDS.— 
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2), an eligible entity participating in the pro-
gram under this subpart shall provide, from non- 
Federal sources, in cash or in-kind— 
‘‘(A) in each of the first, second, third, and 
fourth years of participation in the program, an 
amount equal to 25 percent of the amount such 
entity received under subsection (a) with re-
spect to such year; 
‘‘(B) in each of the fifth and sixth years of 
participation in the program, an amount equal 
to 50 percent of the amount such entity re-
ceived under subsection (a) with respect to such 
year; 
‘‘(C) in each of the seventh and eighth 
years of participation in the program, an 
amount equal to 75 percent of the amount such 
entity received under subsection (a) with re-
spect to such year; and 
‘‘(D) in each ninth year and each subse-
quent year thereafter of participation in the 
program, an amount equal to 100 percent of 
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the amount such entity received under sub-
section (a) with respect to such year. 
‘‘(2) EXCEPTION
FOR
INDIAN
TRIBES.—The 
Secretary may modify or waive the matching fund 
requirements under paragraph (1) in the case of an 
eligible entity that is an Indian tribe. 
‘‘(3) REALLOTMENT.—If an eligible entity re-
turns to the Secretary any portion of the grant 
amount provided to such eligible entity under this 
subpart for any fiscal year, or requests a grant 
amount that is less than the Federal share deter-
mined for such entity in accordance with subsection 
(a), the Secretary shall reallot such excess amount 
for the succeeding fiscal year, in addition to the 
amounts appropriated under 499O for such suc-
ceeding fiscal year. 
‘‘(c) SUPPLEMENT, NOT SUPPLANT.—Grant funds 
awarded under this subpart shall be used to supplement, 
and not supplant, other Federal, State, tribal, and local 
funds that would otherwise be expended to carry out ac-
tivities assisted under this subpart. 
‘‘SEC. 499K. APPLICATIONS. 
‘‘(a) IN GENERAL.—To be eligible to participate in 
the program under this subpart, an eligible entity shall 
submit an application to the Secretary at such time, in 
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