Title: Degrees Not Debt Act of 2018
Policy area: Education

Summary:
Degrees Not Debt Act of 2018
This bill repeals the alternative minimum tax exemption and the increased estate and gift tax exemption provided in 2017, uses the tax revenue to increase need-based federal student aid provided to students of institutions of higher education (IHEs), eliminates Pell Grant funding for institutions of higher education in states that do not maintain their funding levels for IHEs, and requires IHEs to disclose performance indicators (e.g., graduation rates and employments outcomes).

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[S. 3018 Introduced in Senate (IS)]

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115th CONGRESS
  2d Session
                                S. 3018

To give middle-class families access to the maximum Federal Pell Grant, 
to increase college transparency, and State maintenance of efforts, and 
                          for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                              June 6, 2018

 Mr. Heinrich introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
To give middle-class families access to the maximum Federal Pell Grant, 
to increase college transparency, and State maintenance of efforts, and 
                          for other purposes.

    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 ``Degrees Not Debt Act of 2018''.

SEC. 2. INCREASE IN THE MAXIMUM AMOUNT OF A FEDERAL PELL GRANT.

    Section 401(b)(7)(C) of the Higher Education Act of 1965 (20 U.S.C. 
1070a(b)(7)(C)) is amended--
            (1) in clause (i)(I), by striking ``clause (iv)(II)'' and 
        inserting ``clause (v)(II)'';
            (2) in clause (ii)(I), by striking ``clause (iv)(II)'' and 
        inserting ``clause (v)(II)'';
            (3) by redesignating clauses (iii) and (iv) as clauses (iv) 
        and (v), respectively;
            (4) by inserting after clause (ii) the following:
                            ``(iii) Award year 2018-2019.--For award 
                        year 2018-2019, the amount determined under 
                        this subparagraph for purposes of subparagraph 
                        (B)(iii) shall be equal to--
                                    ``(I) $10,000; reduced by
                                    ``(II) the maximum Federal Pell 
                                Grant for which a student would be 
                                eligible using the criteria provided 
                                under section 479; and
                                    ``(III) rounded to the nearest 
                                $5.''; and
            (5) by striking clause (iv), as redesignated by paragraph 
        (3), and inserting the following:
                            ``(iv) Subsequent award years.--For award 
                        year 2019-2020 and each subsequent award year, 
                        the amount determined under this subparagraph 
                        for purposes of subparagraph (B)(iii) shall be 
                        equal to--
                                    ``(I) the amount determined under 
                                this subparagraph for the preceding 
                                award year; increased by
                                    ``(II) a percentage equal to the 
                                annual adjustment percentage for the 
                                award year for which the amount under 
                                this subparagraph is being determined; 
                                and
                                    ``(III) rounded to the nearest 
                                $5.''.

SEC. 3. INCREASE FAMILY INCOME THRESHOLD FOR DETERMINATION OF EXPECTED 
              FAMILY CONTRIBUTION EQUAL TO ZERO.

    (a) In General.--Section 479 of the Higher Education Act of 1965 
(20 U.S.C. 1087ss) is amended to read as follows:

``SEC. 479. SIMPLIFIED APPLICATION.

    ``(a) Simplified Application Section.--
            ``(1) In general.--The Secretary shall develop and use an 
        easily identifiable simplified application section as part of 
        the common financial reporting form prescribed under section 
        483(a) for families described in subsection (b).
            ``(2) Reduced data requirements.--The simplified 
        application form shall in the case of a family meeting the 
        requirements of subsection (b), permit such family to be 
        treated as having an expected family contribution equal to zero 
        for purposes of establishing such eligibility and to submit 
        only the data elements required to make a determination under 
        subsection (b).
    ``(b) Zero Expected Family Contribution.--The Secretary shall 
consider an applicant to have an expected family contribution equal to 
zero if--
            ``(1) in the case of a dependent student, the sum of the 
        adjusted gross income of the student's parents is less than or 
        equal to 250 percent of the poverty line (as defined by the 
        Office of Management and Budget, and revised annually in 
        accordance with section 673(2) of the Community Services Block 
        Grant Act (42 U.S.C. 9902(2))) applicable to a family of the 
        size involved;
            ``(2) in the case of an independent student with dependents 
        other than a spouse, the sum of the adjusted gross income of 
        the student and the student's spouse (if appropriate) is less 
        than or equal to 250 percent of the poverty line (as defined by 
        the Office of Management and Budget, and revised annually in 
        accordance with section 673(2) of the Community Services Block 
        Grant Act (42 U.S.C. 9902(2))) applicable to a family of the 
        size involved; or
            ``(3) in the case of an independent student without 
        dependents other than a spouse, the sum of the adjusted gross 
        income of the student and the student's spouse (if appropriate) 
        is less than or equal to 250 percent of the poverty line (as 
        defined by the Office of Management and Budget, and revised 
        annually in accordance with section 673(2) of the Community 
        Services Block Grant Act (42 U.S.C. 9902(2))) applicable to a 
        family of the size involved.
    ``(c) Adjustments.--An individual is not required to qualify or 
file for the earned income credit in order to be eligible under this 
subsection. The Secretary shall annually adjust the income level 
necessary to qualify an applicant for the zero expected family 
contribution. The income level shall be adjusted according to increases 
in the Consumer Price Index, as defined in section 478(f).''.
    (b) Adjustments in Income Protection Allowances.--For each academic 
year, the Secretary of Education shall continue to publish in the 
Federal Register a revised table of income protection allowances 
pursuant to section 478(b)(1)(A) of the Higher Education Act of 1965 
(20 U.S.C. 1087rr(b)(1)(A)).

SEC. 4. STATE RESPONSIBILITY.

    (a) Maintenance of Effort Requirements.--Section 401 of the Higher 
Education Act of 1965 (20 U.S.C. 1070a) is amended by adding at the end 
the following:
    ``(k) Institutional Ineligibility Based on Failure of State To 
Maintain Higher Education Appropriations Level.--
            ``(1) In general.--Each State that receives funds under 
        this Act shall maintain expenditures and State financial aid 
        for institutions of higher education in the State, with respect 
        to a fiscal year, at an amount that is equal to or more than 
        the average amount of State expenditures and State financial 
        aid for institutions of higher education in the State for the 
        10 fiscal years preceding such fiscal year.
            ``(2) Consequences of failure to maintain effort.--
        Notwithstanding any other provision of law and beginning 5 
        years after the date of enactment of the Degrees Not Debt Act 
        of 2018, the Secretary shall not make a payment under this 
        subpart to an institution of higher education for a fiscal year 
        for the purpose of making a Federal Pell Grant to eligible 
        students in attendance at such institution and any such student 
        shall not be eligible to receive a Federal Pell Grant for 
        attendance at such institution for the fiscal year, if the 
        institution--
                    ``(A) is an institution of higher education, as 
                defined in section 102; and
                    ``(B) is located in a State that has not maintained 
                expenditures and State financial aid for institutions 
                of higher education in the State, with respect to the 
                fiscal year, at an amount that is equal to or more than 
                the average amount of State expenditures and State 
                financial aid for institutions of higher education in 
                the State for the 5 fiscal years preceding such fiscal 
                year.
            ``(3) Waiver.--The Secretary may waive the requirement of 
        paragraph (1) for a State, for one fiscal year at a time, and 
        the provisions of paragraph (2) shall have no effect for such 
        fiscal year if the Secretary determines that granting a waiver 
        would be equitable due to exceptional or uncontrollable 
        circumstances such as a natural disaster or a precipitous and 
        unforeseen decline in the financial resources of the State.''.

SEC. 5. COLLEGE AND UNIVERSITY RESPONSIBILITY.

    (a) Program Participation Agreements.--Section 487 of the Higher 
Education Act of 1965 (20 U.S.C. 1094) is amended--
            (1) in subsection (a), by adding at the end the following:
            ``(30) The institution will put a prominent link on the 
        homepage of the institution's primary website that goes 
        directly to a report of a standard set of key performance 
        indicators with respect to the institution, as described in 
        subsection (k).''; and
            (2) by adding at the end the following:
    ``(k) Performance Indicators.--
            ``(1) In general.--The key performance indicators under 
        this subsection are the following:
                    ``(A)(i) Graduation rates--
                            ``(I) at 100 percent of the normal time for 
                        graduation;
                            ``(II) at 150 percent of the normal time 
                        for graduation;
                            ``(III) at 200 percent of the normal time 
                        for graduation; and
                            ``(IV) each of which is disaggregated by 
                        age (25 years old and younger, and older than 
                        25 years old), income, race and ethnicity, and 
                        first-generation college status.
                    ``(ii) Transfer out rates. Each such rate shall be 
                disaggregated by age (25 years old and younger, and 
                older than 25 years old), income, race and ethnicity, 
                and first-generation college status.
                    ``(iii) Withdrawal rates, including rates of 
                students who withdraw from a certificate program to 
                seek employment in a related field of study.
                    ``(B) Employment outcomes, including the following:
                            ``(i) The average salary of a graduate 3 
                        years after graduation.
                            ``(ii) The percentage of graduates who, 180 
                        days after graduation--
                                    ``(I) are employed full time;
                                    ``(II) are employed part-time;
                                    ``(III) are employed in the 
                                graduate's field of study or 
                                certificate; and
                                    ``(IV) make more than $25,000 a 
                                year.
                            ``(iii) The cohort repayment rate.
                    ``(C) Student satisfaction rate as indicated by a 
                survey of all students and recent alumni with the 
                following 2 questions using a 5-point Likert scale:
                            ``(i) How satisfied are you with your 
                        educational experience at [name of 
                        institution]?
                            ``(ii) If you were making the decision 
                        today, how likely would you be to choose to 
                        attend [name of institution] again?
                    ``(D) The percentage of students who continue 
                enrollment at the institution after the first year of 
                enrollment.
                    ``(E) The average net price for the institution's 
                most recent cohort of graduates, disaggregated by 
                income quartile.
                    ``(F) The average annual net price for full-time 
                attendance, broken out by tuition, fees, living costs, 
                and other (indirect) costs.
                    ``(G) The median time to degree completion.
                    ``(H) The percentage of enrolled students with 
                student loan debt.
                    ``(I) The average student loan debt at time of 
                graduation for the most recent cohort of graduates who 
                borrowed money.
                    ``(J) The average student loan debt at time of 
                withdrawal for the most recent cohort of non-graduates 
                who borrowed money.
            ``(2) Cohort repayment rate.--
                    ``(A) In general.--In this subsection, the term 
                `cohort repayment rate' means, for any fiscal year 
                beginning with fiscal year 2022--
                            ``(i) in the case in which 30 or more 
                        borrowers at the institution enter repayment on 
                        Federal Direct Stafford Loans, Federal Direct 
                        Unsubsidized Stafford Loans, Federal Direct 
                        PLUS Loans, or Federal Direct Consolidation 
                        Loans, received for attendance at the 
                        institution, the percentage of those borrowers 
                        who are not in default and who make at least a 
                        one dollar reduction on their initial student 
                        loan principal balance before the end of the 
                        second fiscal year following the fiscal year in 
                        which the borrowers entered repayment, except 
                        as provided in subparagraph (B); and
                            ``(ii) in the case in which less than 30 
                        borrowers at the institution enter repayment on 
                        Federal Direct Stafford Loans, Federal Direct 
                        Unsubsidized Stafford Loans, Federal Direct 
                        PLUS Loans, or Federal Direct Consolidation 
                        Loans, received for attendance at the 
                        institution, the percentage of those borrowers 
                        plus all of the borrowers at the institution 
                        who entered repayment on such loans (or on the 
                        portion of a loan made under section 428C that 
                        is used to repay any such loans) in the 3 
                        fiscal years preceding the fiscal year for 
                        which the determination is made, who are not in 
                        default and who make at least a one dollar 
                        reduction on their initial student loan 
                        principal balance before the end of the second 
                        fiscal year following the year in which the 
                        borrowers entered repayment, except as provided 
                        in subparagraph (B).
                    ``(B) Exception.--The `cohort repayment rate' 
                calculation under subparagraph (A) shall not include in 
                the calculation a borrower who is--
                            ``(i) in deferment on repayment of a loan 
                        described in subparagraph (A) due to study in 
                        an approved graduate fellowship program or in 
                        an approved rehabilitation training program for 
                        the disabled;
                            ``(ii) in deferment on repayment of a loan 
                        described in subparagraph (A) during a period 
                        of at least half-time enrollment in college or 
                        a career school;
                            ``(iii) in deferment on repayment of a loan 
                        described in subparagraph (A) during a period 
                        of service qualifying for loan discharge or 
                        cancellation under part E;
                            ``(iv) in deferment on repayment of a loan 
                        described in subparagraph (A) due to active 
                        duty military service of the borrower during a 
                        war, military operation, or national emergency;
                            ``(v) in deferment on repayment of a loan 
                        described in subparagraph (A) during the 13 
                        months following the conclusion of qualifying 
                        active duty military service by the borrower, 
                        or until the borrower returns to enrollment on 
                        at least a half-time basis, whichever is 
                        earlier, if the borrower is a member of the 
                        National Guard or other reserve component of 
                        the Armed Forces and was called or ordered to 
                        active duty while enrolled at least half-time 
                        at an eligible school or within 6 months of 
                        having been enrolled at least half-time;
                            ``(vi) in mandatory forbearance on 
                        repayment of a loan described in subparagraph 
                        (A) for the full fiscal year; or
                            ``(vii) serving as a volunteer under the 
                        Peace Corps Act (22 U.S.C. 2501 et seq.) or the 
                        Domestic Volunteer Service Act of 1973 (42 
                        U.S.C. 4950 et seq.).
            ``(3) New data points.--The Secretary shall work with the 
        National Center for Education Statistics to identify new data 
        points that need to be collected to assist colleges and 
        universities with the collection, organization, and 
        distribution of key performance indicators and cohort repayment 
        rates.
            ``(4) Guidance.--The Secretary shall issue guidance, with 
        input from stakeholders, to facilitate the data collection and 
        display of key performance indicators.''.
    (b) Enhanced Data Collection for Institutions With Enrollment Rates 
of Less Than 5,000 Students.--Section 489(a) of the Higher Education 
Act of 1965 (20 U.S.C. 1096(a)) is amended--
            (1) in the first sentence, by inserting ``(or, in the case 
        of an institution with an enrollment of less than 5,000 
        students, $6)'' after ``$5'' ; and
            (2) by adding at the end the following: ``In addition, the 
        Secretary shall provide funds to assist small institutions of 
        higher education, with enrollment rates of less than 5,000 
        students, with data collection, organization, and distribution 
        of performance indicators and cohort repayment rates.''.

SEC. 6. REPEAL OF INCREASED ALTERNATIVE MINIMUM TAX EXEMPTION AMOUNT 
              FOR INDIVIDUALS.

    (a) In General.--Section 55(d) of the Internal Revenue Code of 1986 
is amended by striking paragraph (4).
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2017.

SEC. 7. REPEAL OF INCREASED ESTATE AND GIFT TAX EXEMPTION.

    (a) In General.--Section 2010(c)(3) of the Internal Revenue Code of 
1986 is amended by striking ``January 1, 2026'' and inserting ``the 
date of the enactment of the Degrees Not Debt Act of 2018''.
    (b) Effective Date.--The amendment made by this section shall apply 
to estates of decedents dying and gifts made after the date of the 
enactment of this Act.
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