I 
116TH CONGRESS 
1ST SESSION H. R. 3112 
To revise the 90–10 rule under the Higher Education Act of 1965, and 
for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JUNE 5, 2019 
Ms. WATERS introduced the following bill; which was referred to the Com-
mittee on Education and Labor, and in addition to the Committees on 
Armed Services, and Veterans’ Affairs, for a period to be subsequently 
determined by the Speaker, in each case for consideration of such provi-
sions as fall within the jurisdiction of the committee concerned 
A BILL 
To revise the 90–10 rule under the Higher Education Act 
of 1965, and for other purposes. 
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 ‘‘For-Profit Fraud Act’’. 
SEC. 2. 85/15 RULE. 
Section 487 of the Higher Education Act of 1965 (20 
U.S.C. 1094) is amended— 
(1) in subsection (a)(24)— 
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(A) by striking ‘‘In the case’’ and insert-
ing: 
‘‘(A) In the case’’; 
(B) by striking ‘‘not less than ten percent 
of such institution’s revenues from sources 
other than funds provided under this title’’ and 
inserting ‘‘not less than 15 percent of such in-
stitution’s revenues from sources other than 
Federal funds’’; and 
(C) by adding at the end the following: 
‘‘(B) FEDERAL FUNDS.—In this paragraph, the 
term ‘Federal funds’ means any Federal funds pro-
vided, under this Act or any other Federal law, 
through a grant, contract, subsidy, loan, guarantee, 
insurance, or other means to a proprietary institu-
tion, including Federal funds disbursed or delivered 
to an institution or on behalf of a student or to a 
student to be used to attend the institution, except 
that such term shall not include any monthly hous-
ing stipend provided under the Post-9/11 Edu-
cational Assistance Program under chapter 33 of 
title 38, United States Code.’’; and 
(2) in subsection (d)— 
(A) in the heading, by amending the head-
ing to read as follows: ‘‘IMPLEMENTATION OF 
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REVENUE REQUIREMENTS FOR NON-FEDERAL 
EDUCATION ASSISTANCE FUNDS’’; and 
(B) in paragraph (2)(A), by inserting at 
the end the following: ‘‘The Secretary of Edu-
cation shall notify the Secretary of Defense and 
the Secretary of Veterans Affairs when, by rea-
son of failing to meet a requirement of sub-
section (a)(24), a proprietary institution of 
higher education becomes ineligible to partici-
pate in the programs authorized by this title, 
and when the institution regains such eligi-
bility.’’; 
SEC. 3. INELIGIBILITY OF CERTAIN PROPRIETARY INSTITU-
TIONS OF HIGHER EDUCATION TO PARTICI-
PATE IN DEPARTMENT OF DEFENSE OR DE-
PARTMENT 
OF 
VETERANS 
AFFAIRS 
PRO-
GRAMS OF EDUCATIONAL ASSISTANCE. 
(a) DEPARTMENT OF DEFENSE.— 
(1) IN
GENERAL.—Chapter 101 of title 10, 
United States Code, is amended by inserting after 
section 2008 the following new section: 
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‘‘§ 2008a. Ineligibility of certain proprietary institu-
tions of higher education to participate 
in Department of Defense programs of 
educational assistance 
‘‘Upon notice from the Secretary of Education under 
section 487(d)(2)(A) of the Higher Education Act of 1965 
(20 U.S.C. 1094(d)(2)(A)) that a proprietary institution 
of higher education is ineligible to participate in the pro-
grams authorized by title IV of such Act (20 U.S.C. 1070 
et seq.), the Secretary of Defense shall ensure that no edu-
cational assistance provided by the Secretary under this 
title or any other provision of law is available or used for 
education at the institution for the period of institutional 
fiscal years during which the institution remains ineligible 
to participate in the programs authorized by title IV of 
the Higher Education Act of 1965 (20 U.S.C. 1070 et 
seq.).’’. 
(2) CLERICAL AMENDMENT.—The table of sec-
tions at the beginning of chapter 101 of such title 
is amended by inserting after the item relating to 
section 2008 the following new item: 
‘‘2008a. Ineligibility of certain proprietary institutions of higher education to 
participate in Department of Defense programs of educational 
assistance.’’. 
(b) DEPARTMENT OF VETERANS AFFAIRS.— 
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(1) IN GENERAL.—Subchapter II of chapter 36 
of title 38, United States Code, is amended by in-
serting after section 3681 the following new section: 
‘‘§ 3681A. Ineligibility of certain proprietary institu-
tions of higher education to participate 
in Department of Veterans Affairs pro-
grams of educational assistance 
‘‘(a) IN GENERAL.—Upon notice from the Secretary 
of Education under section 487(d)(2)(A) of the Higher 
Education Act of 1965 (20 U.S.C. 1094(d)(2)(A)) that 
a proprietary institution of higher education is ineligible 
to participate in the programs authorized by title IV of 
such Act (20 U.S.C. 1070 et seq.), the Secretary of Vet-
erans Affairs shall ensure that no educational assistance 
provided by the Secretary under this title or any other 
provision of law is available or used for education at the 
institution for the period of institutional fiscal years dur-
ing which the institution remains ineligible to participate 
in the programs authorized by title IV of the Higher Edu-
cation Act of 1965 (20 U.S.C. 1070 et seq.).’’. 
(2) CLERICAL AMENDMENT.—The table of sec-
tions at the beginning of chapter 36 of such title is 
amended by inserting after the item relating to sec-
tion 3681 the following new item: 
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‘‘3681A. Ineligibility of certain proprietary institutions of higher education to 
participate in Department of Veterans Affairs programs of 
educational assistance.’’. 
Æ 
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