Protecting Financial Aid for Students and Taxpayers Act

SECTION 1. SHORT TITLE; FINDINGS.

    (a) Short Title.--This Act may be cited as the ``Protecting 
Financial Aid for Students and Taxpayers Act''.
    (b) Findings.--Congress finds the following:
            (1) From 1998 to 2013, enrollment in for-profit 
        institutions of higher education increased by 314 percent, from 
        498,176 students to 2,064,920 students.
            (2) In the 2012-2013 academic year, students who enrolled 
        at for-profit institutions of higher education received 
        $26,469,028,523 in Federal Pell Grants and student loans.
            (3) Eight out of the 10 top recipients of Post- 9/11 
        Educational Assistance funds are for-profit institutions of 
        higher education. These 8 companies have received 
        $2,900,000,000 in taxpayer funds to enroll veterans from 2009 
        to 2013.
            (4) An analysis of 15 publicly traded companies that 
        operate institutions of higher education shows that, on 
        average, such companies spend 28 percent of expenditures on 
        advertising, marketing, and recruiting.

SEC. 2. RESTRICTIONS ON SOURCES OF FUNDS FOR RECRUITING AND MARKETING 
              ACTIVITIES.

    Section 119 of the Higher Education Opportunity Act (20 U.S.C. 
1011m) is amended--
            (1) in the section heading, by inserting ``and restrictions 
        on sources of funds for recruiting and marketing activities'' 
        after ``funds'';
            (2) in subsection (d), by striking ``subsections (a) 
        through (c)'' and inserting ``subsections (a), (b), (c), and 
        (e)'';
            (3) by redesignating subsection (e) as subsection (f); and
            (4) by inserting after subsection (d) the following:
    ``(e) Restrictions on Sources of Funds for Recruiting and Marketing 
Activities.--
            ``(1) In general.--An institution of higher education, or 
        other postsecondary educational institution, may not use 
        revenues derived from Federal educational assistance funds for 
        recruiting or marketing activities described in paragraph (2).
            ``(2) Covered activities.--Except as provided in paragraph 
        (3), the recruiting and marketing activities subject to 
        paragraph (1) shall include the following:
                    ``(A) Advertising and promotion activities, 
                including paid announcements in newspapers, magazines, 
                radio, television, billboards, electronic media, naming 
                rights, or any other public medium of communication, 
                including paying for displays or promotions at job 
                fairs, military installations, or college recruiting 
                events.
                    ``(B) Efforts to identify and attract prospective 
                students, either directly or through a contractor or 
                other third party, including contact concerning a 
                prospective student's potential enrollment or 
                application for grant, loan, or work assistance under 
                title IV of the Higher Education Act of 1965 (20 U.S.C. 
                1070 et seq.) or participation in preadmission or 
                advising activities, including--
                            ``(i) paying employees responsible for 
                        overseeing enrollment and for contacting 
                        potential students in-person, by phone, by 
                        email, or by other internet communications 
                        regarding enrollment; and
                            ``(ii) soliciting an individual to provide 
                        contact information to an institution of higher 
                        education, including websites established for 
                        such purpose and funds paid to third parties 
                        for such purpose.
                    ``(C) Such other activities as the Secretary of 
                Education may prescribe, including paying for promotion 
                or sponsorship of education or military-related 
                associations.
            ``(3) Exceptions.--Any activity that is required as a 
        condition of receipt of funds by an institution under title IV 
        of the Higher Education Act of 1965 (20 U.S.C. 1070 et seq.), 
        is specifically authorized under such title, or is otherwise 
        specified by the Secretary of Education shall not be considered 
        to be a covered activity under paragraph (2).
            ``(4) Federal educational assistance funds.--In this 
        subsection, the term `Federal educational assistance funds' 
        means funds provided directly to an institution or to a student 
        attending such institution under any of the following 
        provisions of law:
                    ``(A) Title IV of the Higher Education Act of 1965 
                (20 U.S.C. 1070 et seq.).
                    ``(B) Chapter 30, 31, 32, 33, 34, or 35 of title 
                38, United States Code.
                    ``(C) Chapter 101, 105, 106A, 1606, 1607, or 1608 
                of title 10, United States Code.
                    ``(D) Section 1784a, 2005, or 2007 of title 10, 
                United States Code.
                    ``(E) Title I of the Workforce Innovation and 
                Opportunity Act (29 U.S.C. 3111 et seq.).
                    ``(F) The Adult Education and Family Literacy Act 
                (29 U.S.C. 3271 et seq.).
            ``(5) Rule of construction.--Nothing in this section shall 
        be construed as a limitation on the use by an institution of 
        revenues derived from sources other than Federal educational 
        assistance funds.
            ``(6) Reporting.--Each institution of higher education, or 
        other postsecondary educational institution, that receives 
        revenues derived from Federal educational assistance funds 
        shall report annually to the Secretary and to Congress the 
        institution's expenditures on advertising, marketing, and 
        recruiting.''.

Summary: Protecting Financial Aid for Students and Taxpayers Act  This bill amends the Higher Education Opportunity Act to prohibit an institution of higher education (IHE) or postsecondary educational institution from using revenues derived from federal educational assistance funds for recruiting or marketing activities. Federal educational assistance funds include federal student aid under title IV (Student Assistance) of the Higher Education Act of 1965, education benefits for military personnel and veterans, and grants for workforce development programs. An IHE or postsecondary educational institution must annually certify compliance with this requirement to retain eligibility to participate in title IV federal student aid programs.