‘‘(XI) the number of complaints 
from students enrolled in such propri-
etary institutions of higher education 
who have submitted a complaint to 
any member entity of the Committee. 
‘‘(iii) DEPARTMENT OF DEFENSE AND 
VETERANS AFFAIRS ASSISTANCE.— 
‘‘(I) IN GENERAL.—To the extent 
practicable, each report under sub-
section (a) shall provide information 
on the data described in clause (ii) for 
individuals using, to pay for the costs 
of attending such a proprietary insti-
tution of higher education, Federal 
funds provided under title 10, United 
States Code, or title 38, United States 
Code. 
‘‘(II) REVENUE.—Each report 
under subsection (a) shall provide in-
formation on the revenue of propri-
etary institutions of higher education 
that are publicly traded corporations 
that is derived from the Federal funds 
described in subclause (I). 
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‘‘(C) COMPARISON DATA.—To the extent 
practicable, each report under subsection (a) 
shall provide information comparing the data 
described in subparagraph (B) for proprietary 
institutions of higher education that are pub-
licly traded corporations with such data for 
public institutions of higher education disaggre-
gated by State. 
‘‘(3) ACCOUNTING OF ANY ACTION.—For the 
purposes of paragraph (1)(A), the term ‘any action’ 
shall include— 
‘‘(A) a complaint filed by a Federal or 
State agency in a Federal, State, local, or tribal 
court; 
‘‘(B) an administrative proceeding by a 
Federal or State agency involving noncompli-
ance of any applicable law or regulation; or 
‘‘(C) any other review, audit, or adminis-
trative process by any Federal or State agency 
that results in a penalty, suspension, or termi-
nation from any Federal or State program. 
‘‘SEC. 170. WARNING LIST FOR PARENTS AND STUDENTS. 
‘‘(a) IN GENERAL.—Each academic year, the Com-
mittee shall publish a list to be known as the ‘Warning 
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List for Parents and Students’ to be comprised of propri-
etary institutions of higher education— 
‘‘(1) that have engaged in illegal activity during 
the previous academic year as determined by a Fed-
eral or State court; 
‘‘(2) that have entered into a settlement result-
ing in a monetary payment for an unfair, deceptive, 
abusive, unethical, fraudulent, or predatory practice, 
policy, or procedure; 
‘‘(3) that have had any higher education pro-
gram withdrawn or suspended; or 
‘‘(4) for which the Committee has sufficient evi-
dence of widespread or systemic unfair, deceptive, 
abusive, unethical, fraudulent, or predatory prac-
tices, policies, or procedures that pose a threat to 
the academic success, financial security, or general 
best interest of students. 
‘‘(b) DETERMINATIONS.—In making a determination 
pursuant to subsection (a)(4), the Committee may con-
sider evidence that includes the following: 
‘‘(1) Any consumer complaint collected by any 
member entity of the Committee. 
‘‘(2) Any complaint filed by a Federal or State 
agency in a Federal, State, local, or tribal court. 
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‘‘(3) Any administrative proceeding by a Fed-
eral or State agency involving noncompliance of any 
applicable law or regulation. 
‘‘(4) Any other review, audit, or administrative 
process by any Federal or State agency that results 
in a penalty, suspension, or termination from any 
Federal or State program. 
‘‘(5) Data or information submitted by a pro-
prietary institution of higher education to any ac-
crediting agency or association recognized by the 
Secretary of Education pursuant to section 496 or 
the findings or adverse actions of any such accred-
iting agency or association. 
‘‘(6) Information submitted by a proprietary in-
stitution of higher education to any member entity 
of the Committee. 
‘‘(7) Any other evidence that the Committee de-
termines relevant in making a determination pursu-
ant to subsection (a)(4). 
‘‘(c) PUBLICATION.— 
‘‘(1) IN GENERAL.—Not later than July 1 of 
each fiscal year, the Committee shall publish the list 
described in subsection (a) prominently and in a 
manner that is easily accessible to parents, students, 
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and other stakeholders in accordance with any best 
practices developed under section 167(b)(5). 
‘‘(2) NOTICE
OF
SELF
REPORTING.—In pub-
lishing the list in accordance with paragraph (1), the 
Committee shall note each institution that is in-
cluded on the list due to an act described in sub-
section (a) that was reported by such institution.’’. 
SEC. 8. IMPROVED DETERMINATION OF COHORT DEFAULT 
RATES; PUBLICATION OF DEFAULT PREVEN-
TION PLAN. 
Section 435 of the Higher Education Act of 1965 (20 
U.S.C. 1085) is amended— 
(1) in subsection (a)— 
(A) in paragraph (2), by adding at the end 
the following new subparagraph: 
‘‘(D) In any case where the Secretary has de-
termined that the institution has engaged in default 
manipulation, the Secretary— 
‘‘(i) shall recalculate the cohort default 
rate for the institution under this section using 
corrected data and information, for all fiscal 
years for which the default manipulation has 
occurred; and 
‘‘(ii) using the recalculated cohort default 
rate, shall redetermine under subsection (a)(2) 
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whether the institution is ineligible to partici-
pate in a program under this title.’’; and 
(B) in paragraph (7)(A), by adding at the 
end the following new clause: 
‘‘(iii) SUMMARY
OF
DEFAULT
PRE-
VENTION PLAN.—Upon receiving technical 
assistance from the Secretary under clause 
(ii), each institution subject to this sub-
paragraph shall— 
‘‘(I) prepare a summary of the 
plan described under clause (i) that is 
directed to a student audience; 
‘‘(II) make the summary publicly 
available; and 
‘‘(III) provide the summary to 
students at the institution.’’; and 
(2) in subsection (m)(3), by striking ‘‘through 
the use of’’ and all that follows through the period 
at the end and inserting ‘‘through default manipula-
tion’’. 
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SEC. 9. ELIMINATION OF ORIGINATION FEES AND OTHER 
AMENDMENTS TO TERMS AND CONDITIONS 
OF LOANS. 
(a) AMENDMENTS.—Section 455(h) of the Higher 
Education Act of 1965 (20 U.S.C. 1087e(h)) is amended 
to read as follows: 
‘‘(h) BORROWER CLAIMS AND DEFENSES.— 
‘‘(1) IN GENERAL.—Notwithstanding any other 
provision of State or Federal law, a borrower, re-
gardless of the account status of the borrower’s loan, 
may assert as an affirmative claim or defense 
against repayment, any act or omission of an insti-
tution of higher education attended by the borrower 
that would give rise to a cause of action against the 
institution under this Act, other Federal law, or ap-
plicable State law, except that in no event may a 
borrower recover from the Secretary, in any action 
arising from or relating to a loan made under this 
part, an amount in excess of the amount such bor-
rower has repaid on such loan. 
‘‘(2) EXERCISE BY SECRETARY.—The Secretary 
may elect to carry out the authority under this sub-
section on behalf of a group of multiple borrowers 
if the Secretary determines that the group has been 
harmed by the same act, omission, or practice.’’. 
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SEC. 10. IMPROVED STUDENT LOAN SERVICING AND DEBT 
COLLECTION PRACTICES. 
Section 456 of the Higher Education Act of 1965 (20 
U.S.C. 1087f) is amended by adding at the end the fol-
lowing new subsection: 
‘‘(c) NO PREDISPUTE ARBITRATION CLAUSES.—A 
contract entered into under this section for the servicing 
of loans made or purchased under this part shall include 
a provision that any rights and remedies available to bor-
rowers against the servicer may not be waived by any 
agreement, policy, or form, including by a predispute arbi-
tration agreement.’’. 
SEC. 11. IMPROVED DISCLOSURES, COUNSELING, AND FI-
NANCIAL ASSISTANCE INFORMATION FOR 
STUDENTS. 
Section 485(l) of the Higher Education Act of 1965 
(20 U.S.C. 1092(l)) is amended— 
(1) by striking paragraph (1) and inserting the 
following new paragraph: 
‘‘(1) DISCLOSURE REQUIRED PRIOR TO SIGNING 
MASTER PROMISSORY NOTE.—Each eligible institu-
tion shall, prior to obtaining or arranging execution 
of a master promissory note for a loan under part 
D (other than a Federal Direct Consolidation Loan) 
by a first-time borrower at such institution, ensure 
that the borrower receives comprehensive informa-
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tion on the terms and conditions of the loan and of 
the responsibilities the borrower has with respect to 
such loan in accordance with paragraph (2). Such 
information— 
‘‘(A) shall be provided through the use of 
interactive programs that include mechanisms 
to check the borrower’s comprehension of the 
terms and conditions of the borrower’s loans 
under part D, using simple and understandable 
language and clear formatting; and 
‘‘(B) shall be provided— 
‘‘(i) during an entrance counseling 
session conducted in person; or 
‘‘(ii) online.’’; and 
(2) in paragraph (2), by adding at the end the 
following new subparagraph: 
‘‘(L) Information relating to the institu-
tion’s cohort default rate, including— 
‘‘(i) the cohort default rate, as defined 
in section 435(m), of the institution; 
‘‘(ii) an easy to understand expla-
nation of the cohort default rate; 
‘‘(iii) the percentage of students at 
the institution of higher education who 
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borrow Federal student loans under this 
title; 
‘‘(iv) the national average cohort de-
fault rate (as determined by the Secretary 
in accordance with section 435(m)); 
‘‘(v) in the case of an institution with 
a cohort default rate that is greater than 
the national average cohort default rate (as 
described in clause (iv)), a disclosure to the 
student that the institution’s cohort de-
fault rate is above the national average; 
and 
‘‘(vi) in the case of an institution with 
a cohort default rate that is greater than 
30 percent, a disclosure to the students 
that if the cohort default rate remains 
greater than 30 percent for the 3 consecu-
tive years— 
‘‘(I) the institution will lose insti-
tutional eligibility for the purposes of 
programs authorized under this title; 
and 
‘‘(II) the student will no longer 
be able to receive Federal financial aid 
at that institution.’’. 
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SEC. 12. PROGRAM PARTICIPATION AGREEMENTS. 
(a) SENSE OF CONGRESS REGARDING INCENTIVE 
COMPENSATION.—It is the sense of Congress that— 
(1) incentive compensation is an inappropriate 
mechanism in the delivery of higher education for in-
stitutions of higher education wishing to participate 
in programs under title IV of the Higher Education 
Act of 1965 (20 U.S.C. 1001 et seq.); and 
(2) the ban on incentive compensation under 
section 487(a)(20) of the Higher Education Act of 
1965 (20 U.S.C. 1094(a)(20)), as amended by sub-
section (b), is intended to preclude its use by institu-
tions wishing to participate in such programs, at any 
point in the recruitment, enrollment, education, or 
employment placement of students. 
(b) AMENDMENTS.—Section 487 of the Higher Edu-
cation Act of 1965 (20 U.S.C. 1094) is amended— 
(1) in subsection (a)— 
(A) in paragraph (19), by inserting ‘‘hous-
ing facilities,’’ after ‘‘libraries,’’; 
(B) by striking paragraph (20) and insert-
ing the following: 
‘‘(20)(A) The institution or any third party act-
ing on the institution’s behalf, including an institu-
tion affiliate or service provider to the institution, 
will not provide any commission, bonus, or other in-
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centive payment to any person or entity at any 
phase of the academic process based directly or indi-
rectly on success in— 
‘‘(i) securing enrollments or securing or award-
ing financial aid; 
‘‘(ii) performance in educational coursework; 
‘‘(iii) graduation; 
‘‘(iv) job placement; or 
‘‘(v) any other academic facet of a student’s en-
rollment in an institution of higher education. 
‘‘(B) The requirements of subparagraph (A) shall not 
apply to the recruitment of foreign students residing in 
foreign countries who are not eligible to receive Federal 
student assistance.’’; and 
(C) by adding at the end the following new 
paragraphs: 
‘‘(30)(A) The institution— 
‘‘(i) shall not include a predispute arbitra-
tion agreement in any contract with a student 
or prospective student for enrollment at the in-
stitution; and 
‘‘(ii) shall agree that, in any case where a 
contract for enrollment at the institution en-
tered into by a student before the date of enact-
ment of the Protections and Regulation for Our 
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Students Act included a predispute arbitration 
agreement, such agreement shall be invalid and 
unenforceable by the institution. 
‘‘(B) In this paragraph, the term ‘predispute 
arbitration agreement’ means any agreement to arbi-
trate a dispute that had not yet arisen at the time 
of the making of the agreement. 
‘‘(31)(A) If the institution has a student default 
risk for a fiscal year, as calculated by the Secretary, 
of 0.1 or greater, the institution will, for such 
year— 
‘‘(i) provide an individual accepted for en-
rollment at the institution with a waiting pe-
riod, beginning on the date that the individual 
receives notification of the acceptance and last-
ing for not less than 2 weeks, before the indi-
vidual is required to enroll in the institution, 
pay tuition charges, or sign a master promis-
sory note for a loan under this title, in order to 
give the individual time to consider, and com-
pare among postsecondary options, program 
costs at the institution and employment pros-
pects upon completion of a program of study; 
‘‘(ii) ensure that the receipt of financial 
aid, incentives, or other benefits is not made 
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contingent on an individual confirming enroll-
ment before the end of the individual’s waiting 
period; 
‘‘(iii) inform the individual, in writing and 
in a manner determined by the Secretary at the 
time of the acceptance notification, of— 
‘‘(I) the individual’s right to the 2- 
week waiting period under clause (i) begin-
ning on the date that the individual re-
ceives notification of the acceptance; and 
‘‘(II) the reason why the institution is 
required to provide such waiting period; 
‘‘(iv) notify an individual accepted for en-
rollment at the institution of all financial aid 
determinations by not less than 1 week before 
the enrollment confirmation deadline, if all re-
quested application forms are received from the 
individual on time; and 
‘‘(v) disclose to an individual accepted for 
enrollment, in a manner determined by the Sec-
retary, that the individual may file a complaint 
through the complaint tracking system estab-
lished under section 161 if the individual be-
lieves that the institution has violated any pro-
vision of this paragraph. 
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‘‘(B) If an institution described in subpara-
graph (A) fails to meet the requirements of this 
paragraph, the institution shall be subject to a civil 
penalty in accordance with section 489A. 
‘‘(C) Notwithstanding subparagraph (A), the 
Secretary may, after providing notice and an oppor-
tunity to comment, elect to replace the use of the 
student default risk percentage threshold established 
under subparagraph (A) with a loan repayment rate 
threshold calculated in accordance with section 
483D(b).’’; and 
(2) in subsection (c)(1)(A)(i), by striking 
‘‘available’’ and inserting ‘‘made publicly available 
and provided’’. 
SEC. 13. IMPROVED DISCLOSURES, COUNSELING, AND FI-
NANCIAL ASSISTANCE INFORMATION FOR 
STUDENTS. 
Section 485 of the Higher Education Act of 1965 (20 
U.S.C. 1092) is amended by adding at the end the fol-
lowing new subsection: 
‘‘(n) REPORTS RELATING TO CLINICAL TRAINING 
PROGRAMS.— 
‘‘(1) REPORT ON CLINICAL TRAINING PROGRAM 
AGREEMENTS.— 
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‘‘(A) IN GENERAL.—Beginning in the year 
in which the Protections and Regulation for 
Our Students Act is enacted, an eligible institu-
tion that participates in any program under this 
title shall prepare and submit a report to the 
Secretary containing the information described 
in subparagraph (C), for every year in which 
the eligible institution has an agreement with a 
hospital or health facility, through which— 
‘‘(i) the eligible institution agrees to 
provide funding or other benefits to the 
hospital or health facility; and 
‘‘(ii) that hospital or health facility 
provides opportunities for students at the 
institution to participate in a clinical train-
ing program. 
‘‘(B) TIMING.—Following the year in 
which the Protections and Regulation for Our 
Students Act is enacted, the report described in 
this paragraph shall be submitted not more 
than 30 days after the end of any year for 
which a report is required to comply with sub-
paragraph (A). 
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‘‘(C) CONTENTS OF REPORT.—The report 
described in this paragraph shall include the 
following: 
‘‘(i) The amount of any payments 
from the institution of higher education to 
a hospital or health facility during the pe-
riod covered by the report, and the precise 
terms of any agreement under which such 
amounts are determined. 
‘‘(ii) Any conditions associated with 
the transfer of money or the provision of 
clinical training program opportunities 
that are part of the agreement described in 
subparagraph (A). 
‘‘(iii) Any memorandum of under-
standing between the institution of higher 
education, or an alumni association or 
foundation affiliated with or related to 
such institution, and a hospital or health 
facility, that directly or indirectly relates to 
any aspect of any agreement referred to in 
subparagraph (A) or controls or directs 
any obligations or distribution of benefits 
between or among any such entities. 
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‘‘(iv) For each hospital or health facil-
ity that has an agreement described in 
subparagraph (A) with the institution, the 
number of clinical training positions at the 
hospital or health facility that are reserved 
for students at that institution. 
‘‘(2) REPORT ON CHARITABLE DONATIONS.— 
‘‘(A) IN GENERAL.—Beginning in the year 
in which the Protections and Regulation for 
Our Students Act is enacted, and annually 
thereafter, an eligible institution shall prepare 
and submit to the Secretary a report containing 
the information described in subparagraph (C) 
if— 
‘‘(i) the eligible institution made a 
charitable donation to a hospital or health 
facility in any of the previous 3 years; and 
‘‘(ii) the number of students from the 
eligible institution who participate in any 
clinical training program at the hospital or 
health facility where such a donation was 
made increases by more than 5 students or 
10 percent, whichever is less, as compared 
to the number of such students who par-
ticipated in a clinical training program at 
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that hospital or health facility during the 
first year in the previous 3-year period. 
‘‘(B) TIMING.—Following the year in 
which the Protections and Regulation for Our 
Students Act is enacted, the report described in 
subparagraph (A) shall be submitted not more 
than 30 days after the end of any year for 
which a report is required to comply with sub-
paragraph (A). 
‘‘(C) CONTENTS OF REPORT.—The report 
described in this paragraph shall include the 
following: 
‘‘(i) The amount of each charitable 
donation that was made in the previous 3- 
year period by the eligible institution to a 
hospital or health facility. 
‘‘(ii) The number of students from the 
eligible institution who participate in any 
clinical training program at the hospital or 
health facility where each such donation 
was made— 
‘‘(I) during the year in which the 
report is submitted; and 
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‘‘(II) during the first year in the 
previous 3-year period covered by the 
report. 
‘‘(3) AGGREGATION BY INSTITUTION.—The in-
formation required to be reported in this subsection 
shall include, and shall be aggregated with respect 
to, each institution of higher education and each 
alumni association or foundation affiliated with or 
related to such institution. For any year in which an 
institution is required to submit a report described 
under paragraph (1) and a report described under 
paragraph (2), the institution may submit a single 
report for that year containing all of the information 
required under paragraphs (1) and (2). 
‘‘(4) REPORT TO CONGRESS.—The Secretary, in 
conjunction with the Secretary of Health and 
Human Services, shall submit to Congress, and 
make available to the public, an annual report that 
lists the reports submitted to the Secretary by each 
institution of higher education in accordance with 
this subsection. 
‘‘(5) PUBLIC DISCLOSURE.—Each eligible insti-
tution described in paragraph (1) or (2) of this sub-
section shall make readily available the reports de-
scribed in such paragraph (as applicable), through 
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appropriate publications, mailings, and electronic 
media to the general public. 
‘‘(6) DEFINITIONS.—In this subsection: 
‘‘(A) CLINICAL TRAINING PROGRAM.—The 
term ‘clinical training program’ means any pro-
gram at, or associated or affiliated with, a hos-
pital or health facility (or any of a hospital’s af-
filiates or health facility’s affiliates), the com-
pletion of which fulfills a requirement that is 
necessary to receive a license, certificate, spe-
cialized accreditation, or other academically re-
lated pre-condition necessary under Federal or 
State law for a health profession. 
‘‘(B) 
HEALTH
FACILITY.—The 
term 
‘health facility’ has the meaning given that 
term in section 804(d). 
‘‘(C) HOSPITAL.—The term ‘hospital’ has 
the meaning given that term in section 1861 of 
the Social Security Act (42 U.S.C. 1395x).’’. 
SEC. 14. CIVIL PENALTIES. 
Part G of title IV of the Higher Education Act of 
1965 (20 U.S.C. 1088 et seq.) is amended by inserting 
after section 489 the following new section: 
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‘‘SEC. 489A. CIVIL PENALTIES AND OTHER REMEDIES. 
‘‘(a) SANCTIONS FOR SUBSTANTIAL MISREPRESEN-
TATIONS OR SERIOUS VIOLATIONS.— 
‘‘(1) CIVIL
PENALTIES.—The Secretary may 
impose a civil penalty upon an eligible institution 
upon making a determination, after reasonable no-
tice and opportunity for a hearing, that an eligible 
institution has engaged in a substantial misrepresen-
tation or other serious violation. 
‘‘(2) AMOUNT
OF
CIVIL
PENALTIES.—A civil 
penalty imposed for a violation under subparagraph 
(A) shall be not less than $100,000 or— 
‘‘(A) in the case of a first violation, an 
amount equal to the product of $1,000,000 
multiplied by the institution’s student default 
risk, whichever is larger; 
‘‘(B) in the case of a second violation, an 
amount equal to the product of $2,000,000 
multiplied by the institution’s student default 
risk, whichever is larger; and 
‘‘(C) in the case of a third or subsequent 
violation, an amount equal to the product of 
$3,000,000 multiplied by the institution’s stu-
dent default risk, whichever is larger. 
‘‘(3) TREATMENT
OF
MULTIPLE
INSTITU-
TIONS.—For the purpose of determining the number 
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of violations for subparagraph (B), any violation by 
a particular institution will accrue against all identi-
fication codes used by the Office of Postsecondary 
Education to designate campuses and institutions 
affiliated with the institution, and within the period 
of participation for the institution, as defined in sec-
tion 668.13(b) of title 34, Code of Federal Regula-
tions, or any successor regulation. 
‘‘(b) SANCTIONS FOR OTHER VIOLATIONS OF THIS 
TITLE.—Upon determination, after reasonable notice and 
opportunity for a hearing, that an eligible institution has 
engaged in a violation of any other provision of this title, 
including the failure to carry out any provision of this 
title, that is not a significant misrepresentation or other 
serious violation, the Secretary may impose a civil penalty 
upon such institution of not more than $100,000 (subject 
to such adjustments for inflation as the Secretary may 
prescribe by regulation) for each such violation. 
‘‘(c) CIVIL PENALTIES AND SANCTIONS FOR OFFI-
CERS OF INSTITUTIONS.—Upon determination, after rea-
sonable notice and an opportunity for a hearing on the 
record, that an officer of an institution of higher education 
that participates in a program under this title has know-
ingly and willfully, or with gross negligence, violated a pro-
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vision of this title, the Secretary may sanction the officer. 
Such sanctions may include the following: 
‘‘(1) Prohibiting the institution of higher edu-
cation that has employed the officer of an institution 
of higher education and that participates in a pro-
gram under this title, or any other institution of 
higher education that participates in a program 
under this title, from employing the officer, except 
that any such prohibition under this subsection shall 
not be for a period of more than 5 years from the 
date of the determination of the violation. 
‘‘(2) Assessing a civil penalty against an officer 
of an institution of higher education who has know-
ingly and willfully, or with gross negligence, violated 
a provision of this title, except that any such civil 
penalty under this subsection shall not be greater 
than the amount of the officer’s compensation for 
each year for which the violations are determined to 
have occurred. For purposes of this subparagraph, 
an officer’s compensation shall include proceeds of 
any sales of stock and any incentive-based com-
pensation (including stock options awarded as com-
pensation) based on information required to be re-
ported to the Secretary or any other Federal agency 
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during the period in which the violations are deter-
mined to have occurred. 
‘‘(d) LIMITATION, SUSPENSION, OR TERMINATION OF 
ELIGIBILITY STATUS.— 
‘‘(1) IN GENERAL.—Upon determination, after 
reasonable notice and opportunity for a hearing, that 
an eligible institution has engaged in a violation of 
any provision of this title (including the failure to 
carry out any provision of this title or any regulation 
prescribed under such provision) or a violation of 
any applicable special arrangement, agreement, or 
limitation, the Secretary may limit, suspend, or ter-
minate the participation in any program under this 
title of an eligible institution, subject to the require-
ments of paragraph (2). 
‘‘(2) SUSPENSION PROCEDURES.—No period of 
suspension under this section shall exceed 60 days 
unless the institution and the Secretary agree to an 
extension or unless limitation or termination pro-
ceedings are initiated by the Secretary within that 
period of time. 
‘‘(e) EMERGENCY ACTION.— 
‘‘(1) IN GENERAL.—The Secretary may take an 
emergency action against an institution, under which 
the Secretary shall, effective on the date on which a 
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notice and statement of the basis of the action is 
mailed to the institution (by registered mail, return 
receipt requested), withhold funds from the institu-
tion or its students and withdraw the institution’s 
authority to obligate funds under any program 
under this title, if the Secretary— 
‘‘(A) receives information, determined by 
the Secretary to be reliable, that the institution 
is violating any provision of this title, any regu-
lation prescribed under this title, or any appli-
cable special arrangement, agreement, or limita-
tion; 
‘‘(B) determines that immediate action is 
necessary to prevent misuse of Federal funds; 
and 
‘‘(C) determines that the likelihood of loss 
outweighs the importance of the procedures pre-
scribed in subsection (e) for limitation, suspen-
sion, or termination. 
‘‘(2) TIME LIMITATION.—An emergency action 
described in paragraph (1) shall not exceed 30 days 
unless limitation, suspension, or termination pro-
ceedings are initiated by the Secretary against the 
institution within that period of time. 
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‘‘(3) OPPORTUNITY TO SHOW CAUSE.—The Sec-
retary shall provide an institution that is the subject 
of an emergency action under this subsection an op-
portunity to show cause, if the institution so re-
quests, that the emergency action is unwarranted 
and should be lifted. 
‘‘(f) LIFTING OF SANCTIONS.—Notwithstanding any 
other provision of this title, an institution of higher edu-
cation that has been sanctioned by the Secretary under 
this section or any other provision of this title may not 
have such sanctions lifted until the Secretary has con-
ducted a subsequent program review under section 498A 
and has found the institution to be in compliance with this 
title. 
‘‘(g) SINGLE COURSE OF CONDUCT; COMPROMISE 
AUTHORITY AND COLLECTION OF PENALTY.— 
‘‘(1) SAME
COURSE
OF
CONDUCT.—For pur-
poses of this section, acts and omissions relating to 
a single course of conduct shall be treated as a sin-
gle violation. 
‘‘(2) COMPROMISE AUTHORITY.—Any civil pen-
alty under this section may be compromised (but not 
eliminated) by the Secretary. In determining the 
amount of such penalty, or the amount agreed upon 
in compromise, the Secretary shall consider— 
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‘‘(A) the appropriateness of the penalty to 
the size of the institution of higher education 
subject to the determination; and 
‘‘(B) the gravity of the violation, failure, or 
misrepresentation. 
‘‘(h) COLLECTION OF PENALTY.—The amount of any 
penalty under this section may be deducted from any sums 
owing by the United States to the institution charged. 
‘‘(i) DISPOSITION OF AMOUNTS RECOVERED.— 
‘‘(1) IN
GENERAL.—Amounts collected under 
this section shall be transferred to the Secretary, 
who shall determine the distribution of collected 
amounts, in accordance with paragraphs (2) and (3). 
‘‘(2) USE FOR PROGRAM INTEGRITY EFFORTS 
AND PROGRAM REVIEWS.— 
‘‘(A) IN GENERAL.—For each fiscal year, 
an amount equal to not more than 50 percent 
of the amounts recovered or collected under this 
section— 
‘‘(i) shall be available to the Secretary 
to carry out program reviews under section 
498A and other efforts by the Secretary 
related to program integrity under part H; 
and 
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‘‘(ii) may be credited, if applicable, for 
that purpose by the Secretary to any ap-
propriations and funds that are available 
to the Secretary for obligation at the time 
of collection. 
‘‘(B) 
SUPPLEMENT
NOT
SUPPLANT.— 
Amounts made available under subparagraph 
(A) shall be used to supplement and not sup-
plant any other amounts available to the Sec-
retary for the purpose described in such sub-
paragraph. 
‘‘(C) AVAILABILITY
FOR
FUNDS.—Any 
amounts collected under this section that are 
made available under paragraph (2) shall re-
main available until expended. 
‘‘(3) USE FOR STUDENT RELIEF FUND.—For 
each fiscal year, an amount equal to not less than 
50 percent of the amounts recovered or collected 
under this section shall be deposited into the Stu-
dent Relief Fund established under subsection (k). 
‘‘(4) REPORT.—The Secretary shall regularly 
publish, on the website of the Department, a de-
tailed description that includes— 
‘‘(A) the amount of funds that were dis-
tributed for the purposes described in para-
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graph (2) and the amount used for the Student 
Relief Fund under paragraph (3); and 
‘‘(B) how funds were distributed among 
the purposes described in paragraph (2)(A)(i). 
‘‘(j) STUDENT RELIEF FUND.— 
‘‘(1) ESTABLISHMENT.—The Secretary shall es-
tablish a Student Relief Fund (referred to in this 
subsection as the ‘Fund’) that shall be used, subject 
to the availability of funds, to provide financial relief 
to any student enrolled in an institution of higher 
education that— 
‘‘(A) has failed to comply with an eligi-
bility requirement under section 101 or 102 or 
an obligation incurred under the terms of the 
program participation agreement under section 
487; or 
‘‘(B) has been sanctioned under subsection 
(b) or (c). 
‘‘(2) DETERMINATION
OF
RELIEF.—The Sec-
retary, in consultation with Director of the Bureau 
of Consumer Financial Protection— 
‘‘(A) shall determine the manner of relief 
to be provided under paragraph (1), which may 
include tuition reimbursement, full or partial 
loan forgiveness, or loan reinstatement; and 
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‘‘(B) may issue regulations regarding how 
the amounts in the Fund will be distributed 
among students eligible for the funds. 
‘‘(3) 
TREATMENT
AND
AVAILABILITY
OF 
FUNDS.— 
‘‘(A) FUNDS THAT ARE NOT GOVERNMENT 
FUNDS.—Funds obtained by or transferred to 
the Fund shall not be construed to be Govern-
ment funds or appropriated monies. 
‘‘(B) AMOUNTS NOT SUBJECT TO APPOR-
TIONMENT.—Notwithstanding any other provi-
sion of law, amounts in the Fund shall not be 
subject to apportionment for purposes of chap-
ter 15 of title 31, United States Code, or under 
any other authority. 
‘‘(C) NO FISCAL YEAR LIMITATION.—Sums 
deposited in the Fund shall remain in the Fund 
and be available for expenditure under this 
chapter without fiscal year limitation. 
‘‘(4) INVESTMENTS.— 
‘‘(A) AMOUNTS
IN
FUND
MAY
BE
IN-
VESTED.—The Secretary of Education may re-
quest the Secretary of the Treasury to invest 
the portion of the Fund that is not, in the dis-
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cretion of the Secretary of Education, required 
to meet the current needs of the Fund. 
‘‘(B) 
ELIGIBLE
INVESTMENTS.—Invest-
ments shall be made by the Secretary of the 
Treasury in obligations of the United States or 
obligations that are guaranteed as to principal 
and interest by the United States, with matu-
rities suitable to the needs of the Fund as de-
termined by the Secretary on the record. 
‘‘(C) INTEREST
AND
PROCEEDS
CRED-
ITED.—The interest on, and the proceeds from 
the sale or redemption of, any obligations held 
in the Fund shall be credited to the Fund. 
‘‘(5) REGULATIONS.—The Secretary shall pre-
scribe regulations to implement the requirements of 
this section within 1 year after the date of enact-
ment of the PRO Students Act. 
‘‘(6) AUTHORIZATION OF APPROPRIATIONS.—In 
addition to funds derived from financial penalties as-
sessed pursuant to subsection (j), there are author-
ized to be appropriated such sums as may be nec-
essary to carry out this subsection. 
‘‘(k) STATE ENFORCEMENT.— 
‘‘(1) IN GENERAL.—Any violation of subsection 
(b), including the regulations promulgated under 
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such subsection, shall be a cause of action enforce-
able by the State, through the attorney general (or 
the equivalent thereof) of the State, in any district 
court of the United States in that State or in a 
State court that is located in that State and that 
has jurisdiction over the defendant. The State may 
seek any relief provided under paragraph (4)(B) for 
such violation, or any remedies otherwise provided 
under law. 
‘‘(2) NOTICE REQUIRED.— 
‘‘(A) IN GENERAL.—Before initiating any 
action in a court or other administrative or reg-
ulatory proceeding against any institution of 
higher education as authorized by paragraph 
(1) to enforce any provision of this subsection, 
including any regulation promulgated by the 
Secretary under this subsection, a State attor-
ney general shall timely provide a copy of the 
complete complaint to be filed and written no-
tice describing such action or proceeding to the 
Secretary, except as provided in subparagraph 
(B). 
‘‘(B) EMERGENCY ACTION.—If prior notice 
of the initiation of an action or administrative 
or regulatory proceeding required under sub-
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paragraph (A) is not practicable, the State at-
torney general shall provide a copy of the com-
plete complaint and the notice to the Secretary 
immediately upon instituting the action or pro-
ceeding. 
‘‘(C) CONTENTS OF NOTICE.—The notifi-
cation required under this subparagraph shall 
include— 
‘‘(i) the identity of the parties; 
‘‘(ii) the alleged facts underlying the 
proceeding; and 
‘‘(iii) whether there may be a need to 
coordinate the prosecution of the pro-
ceeding so as not to interfere with any ac-
tion, including any rulemaking, undertaken 
by the Secretary or another Federal agen-
cy. 
‘‘(3) REGULATIONS.—The Secretary shall pre-
scribe regulations to implement the requirements of 
this subsection and periodically provide guidance to 
further coordinate actions with the State attorneys 
general. 
‘‘(4) PRESERVATION OF STATE AUTHORITY.— 
‘‘(A) STATE CLAIMS.—Nothing in this sub-
section shall be construed as altering, limiting, 
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or affecting the authority of a State attorney 
general or any other regulatory or enforcement 
agency or authority to bring an action or other 
regulatory proceeding arising solely under the 
law in effect in that State. 
‘‘(B) RELIEF.— 
‘‘(i) IN GENERAL.—Relief under this 
subsection may include, without limita-
tion— 
‘‘(I) rescission or reformation of 
contracts; 
‘‘(II) refund of moneys or return 
of real property; 
‘‘(III) restitution; 
‘‘(IV) disgorgement or compensa-
tion for unjust enrichment; 
‘‘(V) payment of damages or 
other monetary relief pursuant to the 
requirements of paragraph (2); 
‘‘(VI) public notification regard-
ing the violation, including the costs 
of notification; and 
‘‘(VII) limits on the activities or 
functions of the person. 
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‘‘(ii) EXCLUSION.—Relief under this 
subsection shall not include the ability to 
suspend or terminate the eligibility status 
of an institution of higher education for 
programs under this title. 
‘‘(l) DEFINITIONS.—In this section: 
‘‘(1) OFFICER OF AN INSTITUTION OF HIGHER 
EDUCATION.—The term ‘officer of an institution of 
higher education’ includes the president, chief execu-
tive officer, and chief financial officer of an institu-
tion of higher education or their equivalents. 
‘‘(2) SUBSTANTIAL
MISREPRESENTATION
OR 
OTHER SERIOUS VIOLATION.—The term ‘substantial 
misrepresentation or other serious violation’ means 
any of the following: 
‘‘(A) A substantial misrepresentation re-
garding— 
‘‘(i) the nature of the educational pro-
gram of an institution of higher education; 
‘‘(ii) the financial charges of the insti-
tution; 
‘‘(iii) the space availability in a pro-
gram of the institution for which a student 
is considering enrollment; 
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‘‘(iv) the admission requirements of 
the institution; 
‘‘(v) the transferability of credits from 
the institution; 
‘‘(vi) whether a program of the insti-
tution meets the necessary standards to 
qualify students to sit for licensing exami-
nations, or obtain certification required as 
a precondition for employment, in the 
State in which the students reside; 
‘‘(vii) the passage rates of students at 
the institution in obtaining certification re-
quirements; 
‘‘(viii) the passage rates of students 
who sit for licensing examinations; or 
‘‘(ix) the employability of the grad-
uates of the institution. 
‘‘(B) Failure of an institution subject to 
the requirements of section 487(a)(32) to com-
ply with such section. 
‘‘(C) A knowing and willful misuse of Fed-
eral student aid from any source. 
‘‘(D) A violation of section 487(a)(20). 
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‘‘(E) A violation of the default manipula-
tion regulations promulgated by the Secretary 
under section 435(m)(3). 
‘‘(F) Failure to comply with the program 
review process described in section 498A, in-
cluding any disclosure requirement described in 
paragraph (2)(C) or (5) of section 498A(b). 
‘‘(G) A violation of the program integrity 
regulations promulgated by the Secretary under 
this Act. 
‘‘(H) A violation of this Act that the Sec-
retary has determined, by regulation, to be a 
serious violation for purposes of this section.’’. 
SEC. 15. REQUIREMENTS FOR ACCREDITING AGENCIES OR 
ASSOCIATIONS. 
Section 496(a) of the Higher Education Act of 1965 
(20 U.S.C. 1099b(a)) is amended— 
(1) in paragraph (7), by striking ‘‘and’’ after 
the semicolon; 
(2) in paragraph (8), by striking the period and 
inserting ‘‘; and’’ ; and 
(3) by adding at the end the following new 
paragraph: 
‘‘(9) such agency or association does not re-
quire any institution to enter into predispute arbi-
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tration agreements with the students of the institu-
tion.’’. 
SEC. 16. PROGRAM REVIEW AND DATA. 
Section 498A of the Higher Education Act of 1965 
(20 U.S.C. 1099c–1) is amended to read as follows: 
‘‘SEC. 498A. PROGRAM REVIEW AND DATA. 
‘‘(a) PROGRAM REVIEWS FOR INSTITUTIONS PAR-
TICIPATING UNDER TITLE IV.— 
‘‘(1) IN GENERAL.—The Secretary— 
‘‘(A) may conduct program reviews, includ-
ing on-site visits, of each institution of higher 
education participating in a program authorized 
under this title; and 
‘‘(B) shall conduct a program review under 
this subsection of each institution of higher 
education that poses a significant risk of failure 
to comply with this title, as described in para-
graphs (2) and (3). 
‘‘(2) MANDATORY REVIEWS.— 
‘‘(A) IN GENERAL.—The Secretary shall, 
on an annual basis, conduct program reviews of 
each institution of higher education partici-
pating in a program authorized under this title 
that meets one or more of the following criteria: 
‘‘(i) The Secretary determines that— 
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‘‘(I) more than 15 percent of the 
students enrolled at the institution 
have received a Federal Direct Unsub-
sidized Stafford Loan during the pre-
vious year; and 
‘‘(II) the institution has a cohort 
default rate, as defined in section 
435(m), that is more than 20 percent. 
‘‘(ii) The Secretary determines that— 
‘‘(I) the institution has a cohort 
default rate, as defined in section 
435(m), that exceeds the national av-
erage, as determined by the Secretary 
in accordance with such section; and 
‘‘(II) the institution has an ag-
gregate amount of defaulted loans, as 
determined by the Secretary, that 
places the institution in the highest 1 
percent of institutions participating in 
programs authorized under this title 
in terms of the aggregate amount of 
defaulted loans. 
‘‘(iii) In the case of proprietary insti-
tutions of higher education, the institution 
received more than 80 percent of the insti-
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tution’s revenues from Federal funds as 
defined in section 166(2), during the 2 
most recent years for which data is avail-
able. 
‘‘(iv) The institution is among the top 
1 percent of institutions participating in 
programs authorized under this title in 
terms of numbers or rates of complaints 
related to Federal student financial aid, 
educational practices and services, or re-
cruiting and marketing practices, as re-
ported in the complaint tracking system 
established under section 161. 
‘‘(v) As of the date of the determina-
tion, the institution is among the top 1 
percent of institutions in terms of low 
graduation rates, as determined by the 
Secretary, of all institutions participating 
in programs authorized under this title. 
‘‘(vi) The institution spends more 
than 20 percent of the institution’s reve-
nues on recruiting and marketing activities 
and executive compensation. 
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‘‘(vii) In the fiscal year immediately 
following the most recent cohort default 
rate period— 
‘‘(I) the institution’s loan de-
faults increased by 50 percent or 
more as compared to the preceding 
period; and 
‘‘(II) more than 50 percent of 
the students attending the institution 
received loans under this title. 
‘‘(viii) The institution, or an executive 
of the institution, has publicly acknowl-
edged or disclosed that the institution— 
‘‘(I) is in violation or noncompli-
ance with any provision of law admin-
istered by a relevant Federal agency 
or relevant State entity or agency; or 
‘‘(II) is being investigated re-
garding a potential violation of such 
provision of law. 
‘‘(ix) The institution— 
‘‘(I) is a proprietary institution 
of higher education that has acquired 
a nonprofit institution of higher edu-
cation at any point during the 1-year 
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period preceding the date of the deter-
mination; or 
‘‘(II) was a proprietary institu-
tion of higher education and has be-
come a nonprofit institution of higher 
education at any time during the 1- 
year period preceding the date of the 
determination. 
‘‘(B) PUBLICATION OF INSTITUTIONS RE-
VIEWED.—The Secretary shall— 
‘‘(i) post, on a publicly available 
website, the name of each institution of 
higher education that is reviewed under 
subparagraph (A); 
‘‘(ii) indicate, on such website, with 
respect to each such institution, which of 
the mandatory review criteria, as described 
in subparagraph (A), such institution met; 
and 
‘‘(iii) indicate on the College Navi-
gator website of the Department, or any 
successor website, the name of each insti-
tution of higher education that is reviewed 
under subparagraph (A). 
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‘‘(C) INSTITUTIONAL DISCLOSURE OF RE-
VIEW.—Each institution of higher education 
that is reviewed under subparagraph (A) 
shall— 
‘‘(i) post on the home page of the in-
stitution’s website that the institution will 
be subject to a mandatory program review 
and why the institution is being reviewed 
and shall maintain such posting and expla-
nation for 1 year or until the Secretary has 
issued its final program review report 
under subsection (c)(5)(C), whichever oc-
curs sooner; 
‘‘(ii) provide a clear, conspicuous dis-
closure of the information described in 
clause (i) to students who inquire about 
admission to the institution or submit an 
application for admission to the institution 
prior to the student signing an enrollment 
agreement with the institution, for 1 year 
or until the Secretary has issued the final 
program review report under subsection 
(c)(6)(C), whichever occurs sooner; and 
‘‘(iii) include the information de-
scribed in clause (i) on materials of accept-
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ance or admission submitted to each stu-
dent before the student enrolls in the insti-
tution, for 1 year or until the Secretary 
has issued the final program review report 
under subsection (c)(6)(C), whichever oc-
curs sooner. 
‘‘(3) RISK-BASED REVIEWS.— 
‘‘(A) IN
GENERAL.—The Secretary shall 
use a risk-based approach to select, on an an-
nual basis not less than 2 percent of institu-
tions of higher education participating in a pro-
gram authorized under this title that are not 
reviewed under paragraph (2), for a program 
review. Such approach shall prioritize program 
reviews of institutions that— 
‘‘(i) have received large increases in 
funding under this title during the 5-year 
period preceding the date of the determina-
tion; 
‘‘(ii) have a large proportion of overall 
revenue from Federal funds, as defined in 
section 166(2); 
‘‘(iii) have a significant fluctuation in 
Federal Direct Stafford Loan volume, Fed-
eral Pell Grant award volume, or any com-
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bination thereof, in the year for which the 
selection is made, compared to the year 
prior to such year, that is not accounted 
for by changes in the Federal Direct Staf-
ford Loan program, the Federal Pell Grant 
program, or any combination thereof; 
‘‘(iv) have experienced sharp increases 
in enrollment in absolute numbers or rate 
of growth; 
‘‘(v) have high rates of defaults, rel-
ative to all other institutions of higher edu-
cation participating in a program author-
ized under this title, for loans issued under 
this title over the lifetime of the loans; 
‘‘(vi) have a large aggregate dollar 
amount of loans under this title in default, 
or a high cohort default rate as described 
in section 435(m); 
‘‘(vii) have a high student default 
risk, as compared to the student default 
risk for all institutions participating in a 
program under this title; 
‘‘(viii) have a high proportion or high 
rate of complaints related to Federal stu-
dent financial aid, educational practices 
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and services, or recruiting and marketing 
practices, as reported in the complaint 
tracking system established under section 
161; 
‘‘(ix) have extremely low graduation 
rates, as determined by the Secretary; 
‘‘(x) are in poor financial health ac-
cording to financial responsibility stand-
ards described in section 498(c); 
‘‘(xi) are spending a large percentage 
of the institution’s revenues on recruiting 
and marketing activities and executive 
compensation; 
‘‘(xii) in the case of proprietary insti-
tutions of higher education, have large 
profit margins and profit growth; 
‘‘(xiii) have been put on notice, warn-
ing, or probation by, or is subject to a 
show cause order from, a nationally recog-
nized accrediting agency or association 
that is recognized by the Secretary pursu-
ant to part H of title IV; 
‘‘(xiv) has been found to have compli-
ance problems under this title, or is at sig-
nificant risk of failing to comply with ap-
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plicable Federal or State laws, by a rel-
evant Federal agency or a relevant State 
entity or agency, including the Comptroller 
General of the United States; 
‘‘(xv) has had a large amount of funds 
returned under section 484B; or 
‘‘(xvi) in the case of proprietary insti-
tutions of higher education, have experi-
enced a change in ownership or control of 
the institution, including a buyout. 
‘‘(B) CRITERIA
FOR
RISK-BASED
RE-
VIEWS.—The Secretary shall publish, and up-
date as necessary, the specific criteria that the 
Secretary will use to determine which institu-
tions of higher education are selected for risk- 
based reviews under subparagraph (A). 
‘‘(4) PUBLIC
DISCLOSURE
OF
VIOLATIONS.— 
The Secretary shall— 
‘‘(A) post on the College Navigator 
website, or any successor website, of the De-
partment, the name of each institution of high-
er education that is found to have violated a 
provision of this title knowingly and willfully or 
with gross negligence; 
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‘‘(B) indicate on such website, with respect 
to each such institution, which of the provisions 
of this title the institution violated; and 
‘‘(C) maintain such posting until the date 
the institution of higher education rectifies the 
violation or the date that is 1 year after the 
date the Secretary issues the final program re-
view report under subsection (c)(6)(C) with re-
spect to such institution, whichever date is 
later. 
‘‘(5) INSTITUTIONAL
DISCLOSURE
OF
VIOLA-
TIONS.—Each institution of higher education that is 
found to have violated a provision of this title know-
ingly and willfully or with gross negligence shall— 
‘‘(A) not later than 15 days after the date 
of issuance of the final program review report 
containing the finding, post on the home page 
of the institution’s website that the institution 
has been found to have violated a provision of 
this title knowingly and willfully or with gross 
negligence, including the provision the institu-
tion was found to have violated; 
‘‘(B) maintain such posting until the date 
the institution rectifies the violation or the date 
that is 1 year after the date the Secretary 
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issues the final program review report under 
subsection (c)(6)(C) with respect to such insti-
tution, whichever date is later; and 
‘‘(C) include the information described in 
subparagraph (A) on materials of acceptance or 
admission submitted to each student before the 
student enrolls in the institution until the date 
the institution rectifies the violation or the date 
that is 1 year after the date the Secretary 
issues the final program review report under 
subsection (c)(6)(C) with respect to such insti-
tution, whichever date is later. 
‘‘(b) CHARACTERISTICS OF PROGRAM REVIEWS.— 
‘‘(1) NOTICE.—The Secretary may give not 
more than 72 hours notice to an institution of high-
er education that will undergo a program review 
pursuant to subsection (b) of such review. 
‘‘(2) SHARING
OF
INFORMATION.—The Sec-
retary shall share all final program review deter-
minations conducted under this section with relevant 
Federal agencies and relevant State entities or agen-
cies, and appropriate accrediting agencies and asso-
ciations, to enable such agencies, entities, and asso-
ciations to determine the eligibility of institutions for 
funds or accreditation. 
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‘‘(3) INTERACTION
WITH
OTHER
FEDERAL 
AGENCIES AND LAWS.—To the extent practicable, 
the Secretary shall coordinate program reviews con-
ducted under this section with other reviews and au-
dits conducted by the Department, and with relevant 
Federal agencies and relevant State entities or agen-
cies. 
‘‘(4) VIOLATIONS DISCOVERED THROUGH PRO-
GRAM REVIEW.— 
‘‘(A) VIOLATIONS OF THIS TITLE.—If, in 
the course of conducting a program review, the 
Secretary obtains evidence that any institution 
of higher education or person has engaged in 
conduct that may constitute a violation of this 
title, including a failure to fully comply with the 
program review process and reporting require-
ments under this section, the Secretary may 
sanction such institution or person, pursuant to 
section 489A. 
‘‘(B) VIOLATIONS
OF
OTHER
FEDERAL 
LAWS.—If, in the course of conducting a pro-
gram review, the Secretary obtains evidence 
that any institution of higher education or per-
son has engaged in conduct that may constitute 
a violation of Federal law, the Secretary shall 
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transmit such evidence to the Attorney General 
of the United States, the Director of the Bu-
reau of Consumer Financial Protection, the 
Commissioner of the Federal Trade Commis-
sion, or the head of any other appropriate Fed-
eral agency who may institute proceedings 
under appropriate law. 
‘‘(C) RULE OF CONSTRUCTION.—Nothing 
in this paragraph shall be constructed to affect 
any other authority of the Secretary to disclose 
information. 
‘‘(5) CONDUCT OF REVIEWS.—When conducting 
program reviews under this section, the Secretary 
shall assess the institution of higher education’s 
compliance with the provisions of this title. Each 
program review shall include, at a minimum, the fol-
lowing: 
‘‘(A) With regard to the institutional infor-
mation, the Secretary shall assess financial ca-
pability, administrative capability, and program 
integrity, including whether the institution— 
‘‘(i) knowingly and willfully misused 
Federal student aid from any source; 
‘‘(ii) violated section 487(a)(20); 
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‘‘(iii) engaged in any substantial mis-
representation or other serious violation, as 
defined in section 489A; or 
‘‘(iv) violated the program integrity 
regulations promulgated by the Secretary 
under this Act. 
‘‘(B) With regard to student information, 
the Secretary shall examine— 
‘‘(i) graduation rates compared with 
all other institutions participating in a pro-
gram authorized under this title; 
‘‘(ii) student complaints, including 
interviews with current and former stu-
dents, faculty and staff, and accrediting 
agencies; and 
‘‘(iii) information from the complaint 
data system established under section 161. 
‘‘(6) ADMINISTRATIVE PROCESS.— 
‘‘(A) TRAINING.—The Secretary shall pro-
vide training, including investigative training, to 
personnel of the Department designed to im-
prove the quality of financial and compliance 
audits and program reviews conducted under 
this section, including instruction about appro-
priately and effectively conducting such audits 
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and reviews for institutions of higher education 
from different sectors of higher education. 
‘‘(B) 
CARRYING
OUT
PROGRAM
RE-
VIEWS.—In carrying out program reviews under 
this section, the Secretary shall— 
‘‘(i) establish guidelines designed to 
ensure uniformity of practice in the con-
duct of such reviews; 
‘‘(ii) make available to each institu-
tion of higher education participating in a 
program authorized under this title com-
plete copies of all review guidelines and 
procedures used in program reviews, except 
that internal training materials for Depart-
ment staff related to identifying instances 
of fraud, misrepresentation, or intentional 
noncompliance shall not be disclosed; 
‘‘(iii) permit an institution of higher 
education to correct or cure an administra-
tive, accounting, or recordkeeping error 
within 90 days of the issuance of the final 
program review report, if the error is not 
part of a pattern of error and there is no 
evidence of fraud or misconduct related to 
the error; 
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‘‘(iv) without sharing personally iden-
tifiable information and in accordance with 
section 444 of the General Education Pro-
visions Act (20 U.S.C. 1232g, commonly 
known as the ‘Family Educational Rights 
and Privacy Act of 1974’), inform the rel-
evant Federal agencies and relevant State 
entities or agencies, and accrediting agency 
or association, whenever the Secretary 
finds a violation of this title or sanctions 
an institution of higher education under 
section 432, 489A, or 498; and 
‘‘(v) provide to an institution of high-
er education 90 calendar days to review 
and respond to any program review report 
and relevant materials related to the report 
before any final program review report is 
issued. 
‘‘(C) FINAL
PROGRAM
REVIEW
DETER-
MINATION.— 
‘‘(i) IN
GENERAL.—Not later than 
180 calendar days after issuing a program 
review report under this section, the Sec-
retary shall review and consider an institu-
tion of higher education’s response, and 
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issue a final program review determination 
or audit determination. The final deter-
mination shall include— 
‘‘(I) a written statement address-
ing the institution of higher edu-
cation’s response; 
‘‘(II) a written statement of the 
basis for such determination; and 
‘‘(III) a copy of the institution’s 
response. 
‘‘(ii) CONFIDENTIALITY.—The Sec-
retary shall maintain and preserve at all 
times the confidentiality of any program 
review report until a final program review 
determination is issued, other than to in-
form the relevant Federal agencies and rel-
evant State entities or agencies, and ac-
crediting agency or association, as required 
under this section. 
‘‘(D) REPORTS DISCLOSED TO THE INSTI-
TUTION.—The Secretary shall promptly disclose 
each program review report and each final pro-
gram review determination to the institution of 
higher education under review. 
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‘‘(E) REMOVAL OF PERSONALLY IDENTIFI-
ABLE INFORMATION.—Any personally identifi-
able information from the education records of 
students shall be removed from any program re-
view report or final program review determina-
tion before the report is shared with any rel-
evant Federal agency, State entity or agency, or 
accrediting agency or association. 
‘‘(7) FOLLOW-UP
REVIEWS
AFTER
VIOLA-
TIONS.—The Secretary shall conduct follow-up re-
views of each institution of higher education that 
has been found in violation of a provision of this 
title not later than 1 year after the date of such 
finding. Such follow-up reviews may only assess 
whether the institution of higher education has cor-
rected violations found in a previous program review 
or final program review determination. 
‘‘(c) DEFINITIONS.—In this section: 
‘‘(1) EXECUTIVE
COMPENSATION.—The term 
‘executive compensation’, when used with respect to 
an institution of higher education, means the wages, 
salary, fees, commissions, fringe benefits, deferred 
compensation, retirement contributions, options, bo-
nuses, property, and any other form of remuneration 
that the Secretary determines is appropriate, given 
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to the 5 percent of employees at the institution who 
are the highest compensated. 
‘‘(2) RELEVANT FEDERAL AGENCY.—The term 
‘relevant Federal agency’ means— 
‘‘(A) the Department of Education; 
‘‘(B) the Department of Veterans Affairs; 
‘‘(C) the Department of Defense; 
‘‘(D) the Bureau of Consumer Financial 
Protection; 
‘‘(E) the Federal Trade Commission; or 
‘‘(F) any other Federal agency that pro-
vides Federal student assistance or that the 
Secretary determines appropriate. 
‘‘(3) RELEVANT STATE ENTITY OR AGENCY.— 
The term ‘relevant State entity or agency’ means— 
‘‘(A) an appropriate State licensing or au-
thorizing agency; 
‘‘(B) the attorney general (or the equiva-
lent thereof) of the State; or 
‘‘(C) any other State entity or agency that 
the Secretary determines appropriate.’’. 
SEC. 17. CONSUMER PROTECTIONS FOR STUDENTS. 
(a) DEFINITIONS.—In this section: 
(1) FEDERAL
FINANCIAL
ASSISTANCE
PRO-
GRAM.—The term ‘‘Federal financial assistance pro-
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gram’’ means a program that provides Federal edu-
cation assistance funds, as described in section 103 
of the Higher Education Act of 1965 (20 U.S.C. 
1003), to any postsecondary educational institution. 
(2) POSTSECONDARY
EDUCATIONAL
INSTITU-
TION.—The term ‘‘postsecondary educational institu-
tion’’ means an educational institution that awards 
a degree or certificate and is located in any State 
and includes— 
(A) an institution of higher education, as 
defined in section 102 of the Higher Education 
Act of 1965 (20 U.S.C. 1002); 
(B) a postsecondary educational institu-
tion, as defined in section 203 of the Adult 
Education and Family Literacy Act (20 U.S.C. 
9202); and 
(C) an educational institution, as defined 
under section 3452 of title 38, United States 
Code. 
(3) STATE.— 
(A) STATE.—The term ‘‘State’’ includes, 
in addition to the several States of the United 
States, the Commonwealth of Puerto Rico, the 
District of Columbia, Guam, American Samoa, 
the United States Virgin Islands, the Common-
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100 
wealth of the Northern Mariana Islands, and 
the freely associated States. 
(B) FREELY
ASSOCIATED
STATES.—The 
term ‘‘freely associated States’’ means the Re-
public of the Marshall Islands, the Federated 
States of Micronesia, and the Republic of 
Palau. 
(b) 
CONSUMER
PROTECTIONS.—Notwithstanding 
any other provision of law, a postsecondary educational 
institution is not eligible to participate in a Federal finan-
cial assistance program with respect to any program of 
postsecondary education or training, including a degree or 
certificate program, that is designed to prepare students 
for entry into a recognized occupation or profession that 
requires licensing or other established requirements as a 
pre-condition for entry into such occupation or profession, 
unless— 
(1) the successful completion of the program 
fully qualifies a student, in the Metropolitan Statis-
tical Area in which the student resides, to— 
(A) take any examination required for 
entry into the recognized occupation or profes-
sion in the Metropolitan Statistical Area in 
which the student resides, including satisfying 
all State or professionally mandated pro-
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101 
grammatic and specialized accreditation re-
quirements, if any; and 
(B) be certified or licensed or meet any 
other academically related pre-conditions that 
are required for entry into the recognized occu-
pation or profession in the Metropolitan Statis-
tical Area in which the student resides; and 
(2) the institution offering the program pro-
vides timely placement for all of the academically re-
lated pre-licensure requirements for entry into the 
recognized occupation or profession in the Metropoli-
tan Statistical Area in which the student resides, 
such as clinical placements, internships, or appren-
ticeships. 
(c) EFFECTIVE DATE.—This section shall take effect 
on the date that is 180 days after the date of the enact-
ment of this Act. 
Æ 
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