Title: Protect Veterans' Education and Taxpayer Spending Act of 2019
Policy area: Education

Summary:
Protect Veterans' Education and Taxpayer Spending Act of 2019
This bill designates certain educational assistance funds as federal educational assistance for the purpose of determining a for-profit institution's revenue sources.
Under current law, a for-profit institution must receive at least 10% of its revenue from non-federal sources (known as the 90/10 Rule). Certain federal educational assistance funds provided to students who are servicemembers or veterans are not currently counted as federal sources, which enables a for-profit institution to count those funds towards its 10% requirement.
This bill designates such educational assistance funds as federal educational assistance, prohibiting a for-profit institution from counting such funds towards its 10% requirement. In addition, the bill establishes a tiered system of penalties for a school that violates the 90/10 Rule, but it also provides an appeal process that allows a for-profit institution to seek temporary relief from such penalties upon a showing that it meets certain conditions (e.g., offering high-quality academic or job-training programs and placing veterans and servicemembers in jobs after graduation).
The bill also requires disclosure—on the Department of Education's College Navigator website and the Department of Veterans Affairs' GI Bill Comparison Tool website—of any for-profit institution that is not in compliance, as well as the applicable sanction on such institution.
Lastly, any for-profit institution that converts to nonprofit status shall be subject to the 90/10 Rule for the two-year period after the date of conversion.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 2857 Introduced in Senate (IS)]

<DOC>






116th CONGRESS
  1st Session
                                S. 2857

    To amend the Higher Education Act of 1965 to count military and 
veterans education benefits as Federal educational assistance, and for 
                            other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           November 14, 2019

  Mr. Carper (for himself, Mr. Lankford, Mr. Cassidy, and Mr. Tester) 
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 count military and 
veterans education benefits as Federal educational assistance, 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 ``Protect Veterans' Education and 
Taxpayer Spending Act of 2019''.

SEC. 2. COUNTING MILITARY AND VETERAN EDUCATION BENEFITS AS FEDERAL 
              EDUCATIONAL ASSISTANCE.

    (a) In General.--Section 487(a)(24) of the Higher Education Act of 
1965 (20 U.S.C. 1094(a)(24)) is amended to read as follows:
            ``(24)(A) In the case of a proprietary institution of 
        higher education (as defined in section 102(b)), such 
        institution will derive not less than ten percent of such 
        institution's revenues from sources other than Federal 
        educational assistance, as calculated in accordance with 
        subsection (d)(1), or will be subject to the sanctions 
        described in subsection (d)(2).
            ``(B) In this paragraph, the term `Federal educational 
        assistance' means financial assistance that is disbursed or 
        delivered to an institution or on behalf of a student or to a 
        student to be used to attend the institution provided under any 
        of the following provisions of law:
                    ``(i) This title.
                    ``(ii) Chapter 30, 31, 32, 33, 34, or 35 of title 
                38, United States Code, except that such term shall not 
                include any monthly housing or book stipend provided 
                under the Post-9/11 Veterans Educational Assistance 
                Program under chapter 33 of title 38, United States 
                Code.
                    ``(iii) Chapter 101, 105, 106A, 1606, 1607, or 1608 
                of title 10, United States Code.
                    ``(iv) Section 1784a of title 10, United States 
                Code.
                    ``(v) Any other educational assistance programs 
                administered by the Department of Veterans Affairs, 
                Department of Defense, or any other agency that directs 
                funds to students who are members of the Armed Forces 
                or veterans.''.
    (b) Effective Date.--The amendment made under subsection (a) shall 
take effect with respect to a proprietary institution of higher 
education beginning with the 2022 institutional fiscal year.
    (c) Conforming Amendments.--Section 487(d) of the Higher Education 
Act of 1965 (20 U.S.C. 1094(d)) is amended--
            (1) in the subsection heading, by striking ``Non Title IV'' 
        and inserting ``Federal Educational Assistance''; and
            (2) in paragraph (1)--
                    (A) by striking subparagraph (E); and
                    (B) by redesignating subparagraph (F) as 
                subparagraph (E).

SEC. 3. ADMINISTRATION AND ELIGIBILITY REQUIREMENTS.

    Section 487(d)(2) of the Higher Education Act of 1965 (20 U.S.C. 
1094(d)(2)) is amended--
            (1) in subparagraph (A), by adding at the end the 
        following: ``The provisions of this subparagraph shall apply 
        only until the beginning of the 2022 institutional fiscal 
        year.'';
            (2) in subparagraph (B), by striking ``In addition'' and 
        inserting ``Until the beginning of the 2022 institutional 
        fiscal year, in addition'';
            (3) by adding at the end the following:
                    ``(C) Beginning with the 2022 institutional fiscal 
                year.--
                            ``(i) In general.--Notwithstanding any 
                        other provision of this section, beginning with 
                        the 2022 institutional fiscal year, a 
                        proprietary institution of higher education 
                        that fails to meet the requirement of 
                        subsection (a)(24) shall be subject to the 
                        following:
                                    ``(I) If the failure to meet the 
                                requirement of subsection (a)(24) is in 
                                a year that is immediately subsequent 
                                to a year in which the institution met 
                                the requirement of subsection (a)(24), 
                                no Federal educational assistance shall 
                                be paid by the Department of Veterans 
                                Affairs or the Department of Defense--
                                            ``(aa) to the institution 
                                        for new enrollments; or
                                            ``(bb) on behalf of a 
                                        student or to a student to be 
                                        used to attend the institution 
                                        if the student is a new 
                                        student.
                                    ``(II) If the failure to meet the 
                                requirement of subsection (a)(24) is 
                                the second consecutive failure--
                                            ``(aa) no Federal 
                                        educational assistance shall be 
                                        paid by the Department of 
                                        Veterans Affairs or the 
                                        Department of Defense--

                                                    ``(AA) to the 
                                                institution for new 
                                                enrollments; or

                                                    ``(BB) on behalf of 
                                                a student or to a 
                                                student to be used to 
                                                attend the institution 
                                                if the student is a new 
                                                student; and

                                            ``(bb) no Federal 
                                        educational assistance shall be 
                                        paid to the institution or on 
                                        behalf of a student or to a 
                                        student to be used to attend 
                                        the institution unless the 
                                        enrollment total at the 
                                        institution for the academic 
                                        year that is subsequent to the 
                                        year of the second consecutive 
                                        failure is equal to or less 
                                        than the enrollment total of 
                                        the previous academic year.
                                    ``(III) If the failure to meet the 
                                requirement of subsection (a)(24) is 
                                the third consecutive failure, the 
                                institution shall be ineligible to 
                                participate in or receive funds under 
                                any program of Federal educational 
                                assistance for a period of not less 
                                than two institutional fiscal years.
                            ``(ii) Regaining eligibility.--For a 
                        proprietary institution of higher education to 
                        regain eligibility to participate in or receive 
                        funds after being ineligible pursuant to a 
                        failure to meet a requirement as described in 
                        clause (i), the Secretary shall certify that 
                        the institution has demonstrated compliance 
                        with all eligibility and certification 
                        requirements for the program.
                            ``(iii) Appeal for relief from sanctions.--
                                    ``(I) Submission of appeal.--
                                            ``(aa) In general.--A 
                                        proprietary institution of 
                                        higher education described in 
                                        item (bb) that fails to meet 
                                        the requirement of subsection 
                                        (a)(24) for an institutional 
                                        fiscal year may submit an 
                                        appeal to the Secretary to 
                                        remain eligible to participate 
                                        in or receive funds under any 
                                        program of Federal educational 
                                        assistance for the 
                                        institutional fiscal year. In 
                                        order to regain eligibility to 
                                        participate in or receive funds 
                                        under any program of Federal 
                                        educational assistance for the 
                                        succeeding institutional fiscal 
                                        year, the proprietary 
                                        institution of higher education 
                                        shall demonstrate compliance as 
                                        described in clause (ii).
                                            ``(bb) Eligibility to 
                                        appeal.--In order to be 
                                        eligible to submit an appeal 
                                        under item (aa), proprietary 
                                        institution of education shall 
                                        derive not less than 10 percent 
                                        of such institution's revenues 
                                        from sources other than funds 
                                        provided under this title.
                                    ``(II) 90/10 compliance plan.--In 
                                the appeal under subclause (I), a 
                                proprietary institution of higher 
                                education shall submit a plan 
                                explaining the reasons for failure to 
                                comply with the requirement of 
                                subsection (a)(24) and describing the 
                                steps the institution will take to 
                                comply moving forward, including 
                                descriptions of any partnerships 
                                proposed or existing on the date of the 
                                appeal between the institution and 
                                employers, as well as a description of 
                                the expected tuition rates for the 
                                institution for the next 3 
                                institutional fiscal years.
                                    ``(III) Determination of relief.--
                                            ``(aa) In general.--Not 
                                        later than 30 days after the 
                                        date the Secretary receives an 
                                        appeal submitted under 
                                        subclause (I), the Secretary 
                                        shall determine whether the 
                                        appeal should be granted. Such 
                                        determination shall be based 
                                        only on the institution meeting 
                                        all of the following 
                                        conditions:

                                                    ``(AA) The 
                                                institution has had no 
                                                final adverse action 
                                                taken by the 
                                                institution's 
                                                accrediting agency or 
                                                association in the 5-
                                                year period preceding 
                                                the date of the 
                                                determination.

                                                    ``(BB) The 
                                                institution has not 
                                                been found to be in 
                                                violation or 
                                                noncompliance with any 
                                                provision in this title 
                                                in the 5-year period 
                                                preceding the date of 
                                                the determination.

                                                    ``(CC) The 
                                                institution has not 
                                                been found to be in 
                                                violation or 
                                                noncompliance with the 
                                                Department of Defense 
                                                Voluntary Education 
                                                Partnership Memorandum 
                                                of Understanding (MOU) 
                                                in the 5-year period 
                                                preceding the date of 
                                                the determination.

                                                    ``(DD) The 
                                                institution has not 
                                                been found by the 
                                                Department of Veterans 
                                                Affairs or the relevant 
                                                State approving agency 
                                                to be in violation or 
                                                noncompliance with the 
                                                Principles of 
                                                Excellence program 
                                                established under 
                                                Executive Order 13607 
                                                (77 Fed. Reg. 25861; 
                                                relating to 
                                                establishing principles 
                                                of excellence for 
                                                educational 
                                                institutions serving 
                                                service members, 
                                                veterans, spouses, and 
                                                other family members) 
                                                in the 5-year period 
                                                preceding the date of 
                                                the determination.

                                                    ``(EE) The 
                                                institution has not 
                                                been found in a final 
                                                order by the Federal 
                                                Trade Commission to 
                                                have engaged in unfair 
                                                or deceptive acts or 
                                                practices in the 5-year 
                                                period preceding the 
                                                date of the 
                                                determination.

                                                    ``(FF) The 
                                                institution offers 
                                                high-quality academic 
                                                or job-training 
                                                programs, and positions 
                                                veterans and service 
                                                members after 
                                                graduation for success 
                                                in the workforce.

                                            ``(bb) Limitation on 
                                        appeals; noncompliance.--

                                                    ``(AA) In 
                                                general.--A proprietary 
                                                institution of higher 
                                                education may submit 
                                                not more than 3 
                                                consecutive appeals and 
                                                not more than 5 appeals 
                                                in 10 years under 
                                                subclause (I).

                                                    ``(BB) 
                                                Compliance.--If the 
                                                Secretary grants an 
                                                appeal under this 
                                                clause and subsequently 
                                                determines that the 
                                                proprietary institution 
                                                of higher education is 
                                                not in compliance with 
                                                the plan described in 
                                                subclause (II), the 
                                                Secretary shall impose 
                                                the sanction for which 
                                                the appeal was granted. 
                                                If the Secretary grants 
                                                consecutive appeals 
                                                under this clause and 
                                                subsequently determines 
                                                that the proprietary 
                                                institution of higher 
                                                education is not in 
                                                compliance with the 
                                                plan described in 
                                                subclause (II), the 
                                                Secretary shall impose 
                                                the cumulative 
                                                sanctions for the 
                                                consecutive years for 
                                                which the appeals were 
                                                granted.

                                    ``(IV) Submission to va, dod, saa, 
                                accrediting agency or association, and 
                                congress.--The Secretary shall submit a 
                                copy of each determination under 
                                subclause (III) to the Secretary of 
                                Veterans Affairs, the Secretary of 
                                Defense, the relevant State approving 
                                agency, the relevant accrediting agency 
                                or association, and the authorizing 
                                committees.
                            ``(iv) Additional enforcement.--In addition 
                        to such other means of enforcing the 
                        requirements of this subparagraph as may be 
                        available to the Secretary, if a proprietary 
                        institution of higher education fails to meet a 
                        requirement of subsection (a)(24) for any 
                        institutional fiscal year, then the 
                        institution's eligibility to participate in the 
                        programs authorized by this title becomes 
                        provisional for the two institutional fiscal 
                        years after the institutional fiscal year in 
                        which the institution failed to meet the 
                        requirement of subsection (a)(24), except that 
                        such provisional eligibility shall terminate--
                                    ``(I) on the expiration date of the 
                                institution's program participation 
                                agreement under this subsection that is 
                                in effect on the date the Secretary 
                                determines that the institution failed 
                                to meet the requirement of subsection 
                                (a)(24); or
                                    ``(II) in the case that the 
                                Secretary determines that the 
                                institution failed to meet a 
                                requirement of subsection (a)(24) for 
                                three consecutive institutional fiscal 
                                years, on the date the institution is 
                                determined ineligible in accordance 
                                with this subparagraph.
                            ``(v) Federal educational assistance.--In 
                        this subparagraph, the term `Federal 
                        educational assistance' has the meaning given 
                        the term in subsection (a)(24)(B).''.

SEC. 4. UPDATING 90/10 DISCLOSURE AND DATA REPORTING REQUIREMENTS.

    Section 487(d) of the Higher Education Act of 1965 (20 U.S.C. 
1094(d)) is amended by striking paragraphs (3) and (4) and inserting 
the following:
            ``(3) Publication on websites.--
                    ``(A) Publication on college navigator website.--
                The Secretary shall publicly disclose on the College 
                Navigator, or its successor, website--
                            ``(i) the name of any proprietary 
                        institution of higher education that fails to 
                        meet the requirement of subsection (a)(24); and
                            ``(ii) the applicable sanction on such 
                        institution that failed to meet such 
                        requirement.
                    ``(B) Publication on gi bill comparison tool 
                website.--The Secretary of Veterans Affairs shall--
                            ``(i) publicly disclose on the GI Bill 
                        Comparison Tool website, or its successor, the 
                        name of any proprietary institution of higher 
                        education that fails to meet the requirement of 
                        subsection (a)(24);
                            ``(ii) publicly disclose the applicable 
                        sanction on such institution that failed to 
                        meet such requirement, and include a caution 
                        flag with such disclosure; and
                            ``(iii) remove a caution flag included 
                        under clause (ii) after the Secretary of 
                        Education certifies that such institution has 
                        demonstrated compliance with the eligibility 
                        requirements of subsection (a)(24).
            ``(4) Report to congress.--Not later than July 1, 2020, and 
        July 1 of each succeeding year, the Secretary shall submit to 
        the authorizing committees a report that contains, for each 
        proprietary institution of higher education that receives 
        Federal educational assistance (as defined in subsection 
        (a)(24)(B)), as provided in the audited financial statements 
        submitted to the Secretary by each institution pursuant to the 
        requirements of subsection (a)(24)--
                    ``(A) the amount and percentage of such 
                institution's revenues received from Federal 
                educational assistance (as defined in subsection 
                (a)(24)(B)), disaggregated by the source of the 
                assistance; and
                    ``(B) the amount and percentage of such 
                institution's revenues received from other sources.''.

SEC. 5. CONVERSIONS TO NONPROFIT OR PUBLIC INSTITUTIONS OF HIGHER 
              EDUCATION.

    Section 498(i) of the Higher Education Act of 1965 (20 U.S.C. 
1099c(i)) is amended by adding at the end the following:
    ``(5) Notwithstanding any other provision of this Act, in the case 
of a proprietary institution of higher education approved for 
conversion to a nonprofit or public institution of higher education, 
such institution shall be subject to the requirement provided under 
section 487(a)(24), for the 2-year period after the date of 
conversion.''.

SEC. 6. NOTIFICATION.

    Not later than 90 days after the date of enactment of this Act, the 
Secretary of Education shall notify, in writing, proprietary 
institutions of higher education of the new requirements provided under 
the amendments made by this Act.
                                 <all>