Title: Higher Education Reform and Opportunity Act of 2017
Policy area: Education

Summary:
Higher Education Reform and Opportunity Act of 2017
This bill amends the Higher Education Act of 1965 to make postsecondary education courses and programs, such as apprenticeship programs, that provide credits toward a postsecondary certification, credential, or degree eligible for federal student aid funding if the programs and courses are accredited by a state that has an alternative accreditation agreement with the Department of Education.
The bill consolidates federal student loans into one student loan program and revises loan forgiveness for borrowers.
An institution that receives federal student aid funding must pay a default rate fine that is based on the default rate of loans made to its students.

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[S. 2228 Introduced in Senate (IS)]

<DOC>






115th CONGRESS
  1st Session
                                S. 2228

To amend the Higher Education Act of 1965 to provide for accreditation 
    reform, to require institutions of higher education to publish 
     information regarding student success, to provide for fiscal 
 accountability, and to provide for school accountability for student 
                                 loans.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           December 13, 2017

    Mr. Lee introduced the following bill; which was read twice and 
  referred to the Committee on Health, Education, Labor, and Pensions

_______________________________________________________________________

                                 A BILL


 
To amend the Higher Education Act of 1965 to provide for accreditation 
    reform, to require institutions of higher education to publish 
     information regarding student success, to provide for fiscal 
 accountability, and to provide for school accountability for student 
                                 loans.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Higher Education Reform and 
Opportunity Act of 2017''.

                     TITLE I--ACCREDITATION REFORM

SEC. 101. ACCREDITATION REFORM.

    (a) Definition of Institution of Higher Education.--Section 102(a) 
of the Higher Education Act of 1965 (20 U.S.C. 1002(a)) is amended--
            (1) by redesignating paragraphs (5) and (6) as paragraphs 
        (6) and (7), respectively;
            (2) in paragraph (1), in the matter preceding subparagraph 
        (A), by striking ``Subject to paragraphs (2) through (4)'' and 
        inserting ``Subject to paragraphs (2) through (5)'';
            (3) in paragraph (1)--
                    (A) by redesignating subparagraphs (B) and (C) as 
                subparagraphs (C) and (D), respectively; and
                    (B) by inserting after subparagraph (A) the 
                following:
                    ``(B) if accredited by an authorized accreditation 
                authority in a State that has an alternative 
                accreditation agreement with the Secretary, as 
                described in paragraph (5)--
                            ``(i) an institution that provides 
                        postsecondary education;
                            ``(ii) a postsecondary apprenticeship 
                        program; or
                            ``(iii) a postsecondary education course or 
                        program provided by an institution of 
                        postsecondary education, a nonprofit 
                        organization, or a for-profit organization or 
                        business;''; and
            (4) by inserting after paragraph (4), the following:
            ``(5) State alternative accreditation.--
                    ``(A) In general.--Notwithstanding any other 
                provision of law, a State may establish an alternative 
                accreditation system for the purpose of establishing 
                institutions that provide postsecondary education and 
                postsecondary education courses or programs as eligible 
                for funding under title IV if the State enters into an 
                agreement with the Secretary for the establishment of 
                the alternative accreditation system. Such 
                institutions, courses, or programs may include--
                            ``(i) institutions that provide 
                        postsecondary education;
                            ``(ii) postsecondary apprenticeship 
                        programs;
                            ``(iii) any other postsecondary education 
                        course or program offered at an institution of 
                        postsecondary education, a nonprofit 
                        organization, or a for-profit organization or 
                        business; and
                            ``(iv) any of the entities described in 
                        clauses (i) through (iii) that do not award a 
                        postsecondary certification, credential, or 
                        degree, provided that such entity provides 
                        credit that will apply toward a postsecondary 
                        certification, credential, or degree.
                    ``(B) Alternative accreditation agreement.--The 
                alternative accreditation agreement described in 
                subparagraph (A) shall include the following:
                            ``(i) The designation of one or more 
                        authorized accrediting entities within the 
                        State, such as the State Department of 
                        Education, another State agency, an industry-
                        specific accrediting agency, or another entity, 
                        and an explanation of the process through which 
                        the State will select such authorized 
                        accrediting entities.
                            ``(ii) The standards or criteria that an 
                        institution that provides postsecondary 
                        education and a postsecondary education course 
                        or program must meet in order to--
                                    ``(I) receive an initial 
                                accreditation as part of the 
                                alternative accreditation system; and
                                    ``(II) maintain such accreditation.
                            ``(iii) A description of the appeals 
                        process through which an institution that 
                        provides postsecondary education and a 
                        postsecondary education course or program may 
                        appeal to an authorized accrediting entity if 
                        such institution, course, or program is denied 
                        accreditation under the State alternative 
                        accreditation system.
                            ``(iv) Whether credit received from a 
                        postsecondary education course or program that 
                        is accredited as part of the alternative 
                        accreditation system is transferable--
                                    ``(I) to other courses or programs 
                                accredited as part of an alternative 
                                accreditation system; or
                                    ``(II) to other postsecondary 
                                certification, credential, or degree 
                                courses or programs at an educational 
                                institution that is eligible to 
                                participate in a program under title IV 
                                but is not accredited as part of an 
                                alternative accreditation system.
                            ``(v) The Secretary's reporting 
                        requirements for the State regarding the State 
                        alternative accreditation system, including--
                                    ``(I) the contents of reports that 
                                must be submitted to the Secretary, 
                                which may include information such as--
                                            ``(aa) in the case of a 
                                        postsecondary education course 
                                        or program that is accredited 
                                        through the State alternative 
                                        accreditation system--

                                                    ``(AA) the number 
                                                and percentage of 
                                                students who 
                                                successfully complete 
                                                each such postsecondary 
                                                education course or 
                                                program; and

                                                    ``(BB) the number 
                                                and percentage of 
                                                students who 
                                                successfully obtain a 
                                                postsecondary 
                                                certification, 
                                                credential, or degree 
                                                using credit obtained 
                                                from each such 
                                                postsecondary education 
                                                course or program; and

                                            ``(bb) in the case of an 
                                        institution that provides 
                                        postsecondary education that is 
                                        accredited through the State 
                                        alternative accreditation 
                                        system--

                                                    ``(AA) the number 
                                                and percentage of 
                                                students who 
                                                successfully obtain a 
                                                postsecondary 
                                                certification, 
                                                credential, or degree 
                                                from such institution; 
                                                and

                                                    ``(BB) the number 
                                                and percentage of 
                                                students who do not 
                                                successfully obtain a 
                                                postsecondary 
                                                certification, 
                                                credential, or degree 
                                                from such institution 
                                                but do obtain credit 
                                                from such institution 
                                                toward a postsecondary 
                                                degree, credential, or 
                                                certification;

                                    ``(II) the frequency with which 
                                such reports must be submitted to the 
                                Secretary; and
                                    ``(III) any requirements for third 
                                party verification of information 
                                contained in such reports.
                            ``(vi) The State policy regarding public 
                        accessibility to certain information relating 
                        to institutions that provide postsecondary 
                        education and postsecondary education courses 
                        and programs accredited under the State 
                        alternative accreditation system, including--
                                    ``(I) the information described in 
                                clause (v)(I); and
                                    ``(II) information about the rates 
                                of job placement for individuals that 
                                have graduated from an institution or 
                                completed a course or program that is 
                                accredited under the State alternative 
                                accreditation system, if available.
                            ``(vii) An assurance by the State that 
                        under the State alternative accreditation 
                        system, only institutions that provide 
                        postsecondary education and postsecondary 
                        education courses or programs that provide 
                        credits toward a postsecondary certification, 
                        credential, or degree (as defined by the State 
                        in accordance with clause (viii)) will be 
                        accredited.
                            ``(viii) The State's definition of a 
                        postsecondary certification, credential, or 
                        degree, as such term applies to the requirement 
                        described in clause (vii).
                            ``(ix) A description of the agreements that 
                        the State will enter into with institutions 
                        that provide postsecondary education and 
                        postsecondary education courses or programs 
                        that are accredited under the alternative 
                        accreditation system to enable such 
                        institutions, courses, or programs to be 
                        eligible under a program authorized under title 
                        IV, for participation in the direct student 
                        loan program, and for the origination of loans 
                        under part D of title IV, and how such 
                        agreements will operate in lieu of the 
                        agreements described in sections 487 and 454.
                            ``(x) A description of how the State will 
                        select institutions that provide postsecondary 
                        education and postsecondary education courses 
                        or programs that are accredited under the 
                        alternative accreditation system, in lieu of 
                        the selection process described in section 453, 
                        for--
                                    ``(I) participation in the direct 
                                student loan program under part D of 
                                title IV; and
                                    ``(II) approval allowing such 
                                institution, program, or course to 
                                originate direct loans under part D of 
                                title IV.
                            ``(xi) A description of how the State will 
                        administer title IV funds for institutions that 
                        provide postsecondary education, postsecondary 
                        apprenticeship programs, and postsecondary 
                        education courses or programs provided by an 
                        institution of postsecondary education, a 
                        nonprofit organization, or a for-profit 
                        organization or business that are accredited 
                        through the alternative accreditation system.
                    ``(C) Review and approval.--Not later than 30 days 
                after the Secretary receives an application from a 
                State to enter into an alternative accreditation 
                agreement, the Secretary shall--
                            ``(i) approve the application and enter 
                        into the agreement; and
                            ``(ii) submit to the State and Congress, 
                        and make publicly available, a response to the 
                        application.
                    ``(D) Time limit.--Each agreement the Secretary 
                enters into for the establishment of an alternative 
                accreditation system in a State shall be for a period 
                of 10 years.''.
    (b) Title IV Eligibility Requirements.--Part G of title IV of the 
Higher Education Act of 1965 (20 U.S.C. 1088 et seq.) is amended by 
adding at the end the following:

``SEC. 493E. STATE ACCREDITED INSTITUTIONS, PROGRAMS, OR COURSES.

    ``Notwithstanding any other provision of law, an institution, 
program, or course that is eligible for funds under this title in 
accordance with section 102(a)(1)(B) and meets the requirements of 
section 102(a)(5) shall not be required to meet any other requirements 
of this title. For purposes of this title, such an institution, 
program, or course shall be deemed to be an eligible institution that 
meets the requirements of section 487.''.

               TITLE II--TRANSPARENCY IN HIGHER EDUCATION

SEC. 201. TIME FOR TRANSPARENCY IN HIGHER EDUCATION.

    (a) In General.--Title IV of the Higher Education Act of 1965 (20 
U.S.C. 1070 et seq.) is amended--
            (1) in section 487(a), by adding at the end the following:
            ``(30) The institution will publish information in 
        compliance with section 493E.''; and
            (2) in part G, by adding at the end the following:

``SEC. 493E. INSTITUTIONAL PUBLICATION OF INFORMATION.

    ``(a) Publication of Information.--
            ``(1) In general.--Each institution of higher education 
        participating in a program under this title shall publish, on 
        an annual basis and in a readily accessible format (including 
        online and in an alternative format), the information described 
        in paragraphs (2) and (3).
            ``(2) Information.--Each institution of higher education 
        described in paragraph (1) shall publish, with respect to the 
        institution as a whole and with respect to each program of 
        study offered by the institution, the following information for 
        the most recent fiscal year for which the information is 
        available:
                    ``(A) For each of the following, the percentage and 
                number of students enrolled at the institution or in 
                the program of study, as applicable, who receive the 
                following:
                            ``(i) Federal grant aid, including Federal 
                        Pell Grants under subpart 1 of part A, Federal 
                        Supplemental Educational Opportunity Grants 
                        under subpart 3 of part A, or any other Federal 
                        postsecondary education grant aid or subsidy.
                            ``(ii) Federal student loans, including 
                        Federal Direct Stafford Loans, Federal Direct 
                        Unsubsidized Stafford Loans, Federal Direct 
                        PLUS Loans, and Federal Perkins Loans.
                            ``(iii) State grant aid.
                            ``(iv) Institutional grants.
                            ``(v) A student loan from a State.
                            ``(vi) A student loan from another source.
                    ``(B) Student body enrollment status, including as 
                a--
                            ``(i) first-time, full-time student;
                            ``(ii) first-time, part-time student;
                            ``(iii) non-first-time, full-time student; 
                        and
                            ``(iv) non-first-time, part-time student.
                    ``(C) An alumni report that includes the following:
                            ``(i) The percentage of students who do not 
                        complete the program of study the student 
                        initially started upon enrollment.
                            ``(ii) The percentage of students who 
                        transfer.
                            ``(iii) The percentage of students who 
                        complete the program of study the student 
                        initially started upon enrollment.
                            ``(iv) The average length of time for a 
                        student to complete the program of study.
                            ``(v) The percentage of alumni who continue 
                        on to higher levels of education.
                            ``(vi) The percentage of alumni who are 
                        employed, disaggregated by program of study.
                            ``(vii) The average salary for alumni, 
                        disaggregated by program of study.
                            ``(viii) The number and percentage of 
                        alumni contacted for such report.
                            ``(ix) The response rate of alumni 
                        contacted for such report.
            ``(3) Publication of default and non-repayment rates.--In 
        addition to the information described in paragraph (2), each 
        institution of higher education described in paragraph (1) 
        shall publish, with respect to the institution as a whole and 
        with respect to each program of study offered by the 
        institution, the following information for the most recent 
        fiscal year for which the information is available:
                    ``(A) The average amount of total Federal student 
                loan debt accrued upon graduation.
                    ``(B) The average amount of total Federal student 
                loan debt accrued by students who leave the institution 
                without having graduated.
                    ``(C) Federal student loan default rate.
                    ``(D) Federal student loan non-repayment rate.
                    ``(E) Default and non-repayment rate, including as 
                a--
                            ``(i) first-time, full-time student;
                            ``(ii) first-time, part-time student;
                            ``(iii) non-first-time, full-time student; 
                        and
                            ``(iv) non-first-time, part-time student.
                    ``(F) Default and non-repayment rate, of--
                            ``(i) students who complete a program of 
                        study;
                            ``(ii) students who transfer; and
                            ``(iii) students who do not complete a 
                        program of study.
    ``(b) Privacy.--
            ``(1) Compliance with ferpa.--In carrying out this section, 
        an institution of higher education and any personnel of the 
        institution shall not share any personally identifiable 
        information and shall act in accordance with section 444 of the 
        General Education Provisions Act (20 U.S.C. 1232g, commonly 
        known as the `Family Educational Rights and Privacy Act of 
        1974').
            ``(2) Prohibition on use of information.--Information 
        published pursuant to this section shall not be used--
                    ``(A) by a Federal employee, agency, or officer, or 
                an institution of higher education to take action 
                against an individual; and
                    ``(B) in legal processes or admitted as evidence in 
                any judicial or administrative proceeding.
            ``(3) Penalties.--The Secretary shall establish penalties 
        for a violation of paragraph (1) or (2) that includes both a 
        monetary fine and up to 5 years in prison.
            ``(4) Audits.--In carrying out this section, the State in 
        which the institution of higher education is located shall 
        contract with an independent third party to conduct audits of 
        the publication of information described in subsection (a)(1) 
        to ensure quality, validity, reliability, and compliance with 
        all Federal standards of data quality and individual privacy.
    ``(c) Rule of Construction.--Nothing in this section shall be 
construed to authorize or permit the Secretary or any employee or 
contractor of the Department to mandate, direct, or control the 
selection of practices or curriculum by an institution of higher 
education.''.
    (b) GAO Report.--
            (1) Study.--The Comptroller General of the United States 
        shall conduct a study that compiles all the institutional 
        publication of information pursuant to section 493F of the 
        Higher Education Act of 1965.
            (2) Report.--Not later than October 1 of the fourth fiscal 
        year after the date of enactment of this Act, the Comptroller 
        General of the United States shall submit a report containing 
        the results of the study under paragraph (1) to the appropriate 
        committees of Congress.

                    TITLE III--FISCAL ACCOUNTABILITY

SEC. 301. SIMPLIFICATION OF FEDERAL STUDENT LOANS.

    Part D of title IV of the Higher Education Act of 1965 (20 U.S.C. 
1087a et seq.) is amended by adding at the end the following:

``SEC. 461. FEDERAL DIRECT SIMPLIFICATION LOANS.

    ``(a) Termination of Authority To Make Loans Under This Part.--
            ``(1) In general.--Subject to paragraph (2) and 
        notwithstanding any other provision of this part, for any 
        period of instruction beginning on or after 6 months after the 
        date of enactment of the Higher Education Reform and 
        Opportunity Act of 2017, the Secretary may not make loans under 
        this part except as provided under this section.
            ``(2) Exception.--
                    ``(A) In general.--Paragraph (1) shall not apply to 
                an individual, or on behalf of an individual, who 
                received a loan under this part for any period of 
                instruction before July 1, 2017.
                    ``(B) Sunset.--A loan may not be made to an 
                individual, or on behalf of an individual, who received 
                a loan under this part for any period of instruction 
                before July 1, 2017, under this part, other than as 
                provided under this section, on or after July 1, 2019.
    ``(b) Federal Direct Simplification Loans.--The Secretary shall 
make loans to borrowers under this section in accordance with the 
following:
            ``(1) The applicable rate of interest on a loan made under 
        this section shall, for loans disbursed during any 12-month 
        period beginning on July 1 and ending on June 30, be determined 
        on the preceding June 1 and be equal to--
                    ``(A) a rate equal to the high yield of the 10-year 
                Treasury note auctioned at the final auction held prior 
                to such June 1, plus
                    ``(B) 3.6 percent.
            ``(2) Interest on a loan made under this section shall 
        begin to accrue on the date the loan is disbursed.
            ``(3) The maximum--
                    ``(A) annual amount of loans under this section an 
                undergraduate student may borrow in any academic year 
                (as defined in section 481(a)(2)) or its equivalent 
                shall be equal to $7,500; and
                    ``(B) aggregate amount of loans under this section 
                an undergraduate student may borrow shall be equal to 
                $30,000.
            ``(4) The maximum--
                    ``(A) annual amount of loans under this section a 
                graduate or professional student may borrow in any 
                academic year (as defined in section 481(a)(2)) or its 
                equivalent shall be equal to $13,500; and
                    ``(B) aggregate amount of loans under this section 
                a graduate or professional student may borrow shall be 
                equal to $40,000.
            ``(5) The length of repayment--
                    ``(A) for a loan borrowed by an undergraduate 
                student shall be 15 years; and
                    ``(B) for a loan borrowed by a graduate or 
                professional student shall be 25 years.
            ``(6) Repayment on a loan made under this section shall 
        begin--
                    ``(A) after 125 percent of the normal time for 
                completion of the program of study for which the 
                borrower receives the loan under this section; or
                    ``(B) if the borrower withdraws from the program of 
                study before the borrower completes the program, 6 
                months after the date the borrower withdraws.
    ``(c) Authorization To Limit Loan Amounts.--An institution of 
higher education that is required under State law to enroll all 
eligible applicants for an academic year may limit the amount of loans 
under this section that a student may borrow for such academic year to 
not more than the tuition and fees at such institution for such 
academic year.
    ``(d) Additional Charges.--The Secretary may not charge the 
borrower of a loan made under this section any fee for administrative 
costs that is not described under this section.
    ``(e) Repayment.--A borrower of a loan made under this section may 
accelerate without penalty repayment of the whole or any part of the 
loan.''.

SEC. 302. PHASING OUT LOAN FORGIVENESS.

    The Higher Education Act of 1965 (20 U.S.C. 1001 et seq.) is 
amended--
            (1) in section 455--
                    (A) in subsection (d), by adding at the end the 
                following:
            ``(6) Elimination of loan forgiveness.--Notwithstanding any 
        other provision of this Act, with respect to any loan made on 
        or after 6 months after the date of enactment of the Higher 
        Education Reform and Opportunity Act of 2017, the Secretary may 
        not repay or cancel any outstanding balance of principal and 
        interest due on the loan for the borrower of the loan pursuant 
        to this subsection.'';
                    (B) in subsection (e), by adding at the end the 
                following:
            ``(8) Elimination of loan forgiveness.--Notwithstanding any 
        other provision of this Act, with respect to any loan made on 
        or after 6 months after the date of enactment of the Higher 
        Education Reform and Opportunity Act of 2017, the Secretary may 
        not repay or cancel any outstanding balance of principal and 
        interest due on the loan for the borrower of the loan pursuant 
        to this subsection.''; and
                    (C) in subsection (m), by adding at the end the 
                following:
            ``(5) Elimination of loan forgiveness.--Notwithstanding any 
        other provision of this Act, with respect to any loan made on 
        or after 6 months after the date of enactment of the Higher 
        Education Reform and Opportunity Act of 2017, the Secretary may 
        not cancel any outstanding balance of principal and interest 
        due on the loan for the borrower of the loan pursuant to this 
        subsection.''; and
            (2) in section 493C, by adding at the end the following:
    ``(f) Elimination of Loan Forgiveness.--Notwithstanding any other 
provision of this Act, with respect to any loan made on or after 6 
months after the date of enactment of the Higher Education Reform and 
Opportunity Act of 2017, the Secretary may not repay or cancel any 
outstanding balance of principal and interest due on the loan for the 
borrower of the loan pursuant to this section.''.

           TITLE IV--SCHOOL ACCOUNTABILITY FOR STUDENT LOANS

SEC. 401. SCHOOL ACCOUNTABILITY FOR STUDENT LOANS.

    Section 487 of the Higher Education Act of 1965 (20 U.S.C. 1094), 
as amended by section 201, is further amended--
            (1) in subsection (a), by adding at the end the following:
            ``(31) The institution will pay a default rate fine that is 
        determined pursuant to subsection (k).''; and
            (2) by adding at the end the following:
    ``(k) Default Rate Fine.--
            ``(1) In general.--Each institution described in paragraph 
        (2) shall pay to the Secretary a default rate fine in 
        accordance with this subsection.
            ``(2) Applicable institutions.--An institution shall pay a 
        default rate fine under this subsection for a fiscal year based 
        on the cohort default rate on loans made, insured, or 
        guaranteed under this title for such fiscal year.
            ``(3) Fine.--
                    ``(A) In general.--Each institution described in 
                paragraph (2) shall pay a default rate fine for a 
                fiscal year that is equal to 10 percent of the 
                applicable amount determined under subparagraph (B)(i) 
                for such fiscal year.
                    ``(B) Applicable amount.--
                            ``(i) In general.--The applicable amount 
                        for a fiscal year with respect to an 
                        institution shall be an amount equal to the 
                        product of the amount of loans made, insured, 
                        or guaranteed under this title for such fiscal 
                        year, and the applicable rate determined in 
                        clause (ii). If the applicable rate is equal to 
                        or less than zero percent then the applicable 
                        amount shall be equal to zero.
                            ``(ii) Applicable rate.--The applicable 
                        rate for a fiscal year with respect to an 
                        institution shall be the rate that is equal to 
                        the difference between the default rate on 
                        loans made, insured, or guaranteed under this 
                        title for such fiscal year and the average rate 
                        of total unemployment in the United States for 
                        such fiscal year, as determined by the 
                        Secretary of Labor.
            ``(4) Credit for certain institutions.--Each institution 
        that is described in paragraph (2) shall receive a $400 credit 
        for the fiscal year for each graduate of the institution during 
        such fiscal year who received a Federal Pell Grant while 
        enrolled at the institution.
            ``(5) Flexibility in counsel and advice.--Notwithstanding 
        any other provision of the Act, the Secretary shall grant 
        institutions of higher education flexibility under this Act to 
        counsel and advise students on Federal financial aid, including 
        granting flexibility for institutions to award less than the 
        maximum amount of Federal student aid for which an individual 
        is eligible if the cost of tuition, room, and board at the 
        institution is less than such maximum amount.''.
                                 <all>