Title: PSA Act of 2019
Policy area: Education

Summary:
Protecting Student Aid Act of 2019 or the PSA Act of 2019
This bill requires the Department of Education to establish an enforcement unit that will review and investigate violations of federal law related to student financial aid.
Specifically, the enforcement unit shall be established within the performance-based organization that manages administrative and oversight functions supporting student financial aid. The enforcement unit must review, investigate, and make recommendations related to any allegation that an institution of higher education has violated federal student financial aid law.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4497 Introduced in House (IH)]

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116th CONGRESS
  1st Session
                                H. R. 4497

 To amend the Higher Education Act of 1965 to make improvements to the 
          Federal Student Aid Office, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           September 25, 2019

Ms. Shalala (for herself, Ms. Pressley, Ms. Tlaib, Ms. Jackson Lee, Ms. 
   Moore, and Ms. Haaland) introduced the following bill; which was 
            referred to the Committee on Education and Labor

_______________________________________________________________________

                                 A BILL


 
 To amend the Higher Education Act of 1965 to make improvements to the 
          Federal Student Aid Office, 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 ``Protecting Student Aid Act of 2019'' 
or the ``PSA Act of 2019''.

SEC. 2. IMPROVEMENTS TO THE FEDERAL STUDENT AID OFFICE.

    Section 141 of the Higher Education Act of 1965 (20 U.S.C. 1018) is 
amended--
            (1) by redesignating subsection (i) as subsection (k); and
            (2) by inserting after subsection (h) the following:
    ``(i) Enforcement Unit.--
            ``(1) In general.--Not later than 180 days after the date 
        of enactment of the PSA Act of 2019, the Secretary shall 
        establish within the PBO an enforcement unit (referred to in 
        this section as the `Unit') to review and investigate 
        violations of this Act and recommend enforcement actions in 
        accordance with paragraph (3).
            ``(2) Chief enforcement officer.--
                    ``(A) Appointment.--The Secretary shall appoint an 
                official to be known as the `Chief Enforcement Officer' 
                who shall serve as the head of the Unit. The Secretary 
                shall appoint an individual to serve as the Chief 
                Enforcement Officer solely on the basis of such 
                individual's integrity and expertise in law and 
                investigations and without regard to such individual's 
                political affiliation.
                    ``(B) Authority.--The Chief Enforcement Officer 
                shall report directly to the Secretary without being 
                required to report through any other official of the 
                Department of Education.
                    ``(C) Term.--The Chief Enforcement Officer shall be 
                appointed for a term of 6 years and may be reappointed 
                for additional terms of 6 years at the discretion of 
                the Secretary.
                    ``(D) Removal.--
                            ``(i) In general.--The Chief Enforcement 
                        Officer may not be removed during the Officer's 
                        term except for cause.
                            ``(ii) Notice to congress.--If the 
                        Secretary removes the Chief Enforcement Officer 
                        before the expiration of the Officer's term, 
                        the Secretary shall submit to the authorizing 
                        committees a report that explains the reasons 
                        for such removal. The report shall be submitted 
                        to the authorizing committees not later than 30 
                        days after the date on which the removal takes 
                        effect.
            ``(3) Duties.--The Chief Enforcement Officer shall have the 
        following duties:
                    ``(A) Receive, process, and analyze allegations 
                that a covered entity has violated Federal law or has 
                engaged in unfair, deceptive, or abusive practices.
                    ``(B) Review and investigate such allegations.
                    ``(C) After reviewing and investigating an 
                allegation under subparagraph (B), in consultation with 
                the Chief Operating Officer--
                            ``(i) if the covered entity subject to such 
                        allegation is an entity described in clause (i) 
                        or (iii) of paragraph (8)(A), make 
                        recommendations with respect to such covered 
                        entity, including--
                                    ``(I) whether such covered entity 
                                should be limited, suspended, or 
                                terminated from participation in one or 
                                more programs under title IV;
                                    ``(II) whether such covered entity 
                                should be subject to an emergency 
                                action under section 487(c)(1)(G); or
                                    ``(III) a combination of any of the 
                                actions described in clauses (II) and 
                                (III);
                            ``(ii) if the covered entity subject to 
                        such allegation is an entity described in 
                        clause (ii) of paragraph (8)(A), make 
                        recommendations with respect to such covered 
                        entity, including whether such covered entity 
                        should be limited, suspended, or terminated 
                        from administering or providing services with 
                        respect to one or more programs under title IV; 
                        and
                            ``(iii) provide the Secretary with such 
                        recommendations.
            ``(4) Secretarial review and action.--After receiving 
        notice of a determination of the Chief Enforcement Officer 
        under paragraph (4)(C), the Secretary shall decide whether or 
        not to pursue enforcement action against the entity concerned. 
        In a case in which the Chief Enforcement Officer recommends 
        enforcement action against an entity, but the Secretary decides 
        not to pursue such enforcement action, the Secretary shall 
        notify the Chief Enforcement Officer, in writing, of the 
        rationale for such decision.
            ``(5) Coordination and staffing.--The Chief Enforcement 
        Officer shall--
                    ``(A) coordinate with relevant Federal and State 
                agencies and oversight bodies; and
                    ``(B) hire staff with the expertise necessary to 
                conduct investigations, respond to allegations against 
                covered entities, and enforce compliance with laws 
                governing Federal student financial assistance programs 
                under title IV.
            ``(6) Information sharing.--The Chief Enforcement Officer 
        shall develop and implement a process for sharing relevant 
        information about allegations against covered entities with--
                    ``(A) the Student Loan Ombudsman appointed under 
                subsection (f);
                    ``(B) personnel of the Department responsible for 
                processing borrower defense claims submitted under 
                section 455(h);
                    ``(C) other relevant Federal agencies;
                    ``(D) States, including State law enforcement and 
                regulatory agencies; and
                    ``(E) recognized accrediting agencies or 
                associations.
            ``(7) Report to congress.--On an annual basis, the Chief 
        Enforcement Officer shall submit to the authorizing committees 
        a report that includes--
                    ``(A) the number of allegations about covered 
                entities received by the Unit in the year covered by 
                the report;
                    ``(B) the number of such allegations investigated 
                by the Unit;
                    ``(C) the number of such allegations that were 
                referred to the Secretary under paragraph (4)(C) and a 
                summary of any action taken by the Secretary with 
                respect to such allegations;
                    ``(D) the number of such allegations that were 
                referred to other Federal agencies and the names of the 
                agencies to which the allegations were referred; and
                    ``(E) the number of such allegations that remain 
                under review or investigation as of the date of the 
                report.
            ``(8) Definitions.--In this subsection:
                    ``(A) Covered entity defined.--In this subsection, 
                the term `covered entity' means--
                            ``(i) an institution of higher education 
                        (as defined in section 102) that participates 
                        in the Federal student financial assistance 
                        programs authorized under title IV;
                            ``(ii) a contractor that contracts with the 
                        PBO to provide services relating to such 
                        programs, or a subcontractor of such 
                        contractor; or
                            ``(iii) a third party servicer.
                    ``(B) Third party servicer.--The term `third party 
                servicer' has the meaning given that term in section 
                481(c).''.

SEC. 3. DEFINITION OF THIRD PARTY SERVICER.

    Section 481(c) of the Higher Education Act of 1965 (20 U.S.C. 
1088(c)) is amended--
            (1) in the matter preceding paragraph (1), by striking 
        ``contract'' and inserting ``contract or other agreement, 
        including a revenue sharing arrangement,''; and
            (2) in paragraph (1), by striking ``, through either manual 
        or automated processing, any aspect of such institution's 
        student assistance programs'' and inserting ``services on 
        behalf of the institution receiving student assistance funds''.
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