II 113th CONGRESS 2d Session S. 1904 IN THE SENATE OF THE UNITED STATES January 9, 2014 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 eligibility requirements for funding under title IV of the Higher Education Act of 1965.

1. Short title This Act may be cited as the Higher Education Reform and Opportunity Act of 2013 . 2. Amendments to the Higher Education Act (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) Each authorized accrediting entity's policy regarding the transfer of credits between institutions that provide postsecondary education and postsecondary education courses or programs within the State that are accredited as part of the 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 subclause (I) of clause (v); 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. (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) Administrative Costs for Pell Grant Students (i) Pell Grants administered by entities In the case of an institution that provides postsecondary education, a postsecondary apprenticeship program, or an entity that provides a postsecondary education course or program that is accredited through the alternative accreditation system and that will administer the Federal Pell Grant, Federal Perkins Loan, Federal Work-Study, and Federal Supplemental Educational Opportunity Grants in accordance with the agreement described in subparagraph (B)(xi), the Secretary shall, in lieu of carrying out section 690.10 of title 34, Code of Federal Regulations, and subject to available appropriations, pay $5.00 to the institution, apprenticeship program, or entity, as the case may be, for each student who receives a Federal Pell Grant at that institution, apprenticeship program, or entity for an award year. (ii) Pell Grants administered by States In the case of an institution that provides postsecondary education, a postsecondary apprenticeship program, or an entity that provides a postsecondary education course or program that is accredited through the alternative accreditation system and will not administer the Federal Pell Grant, Federal Perkins Loan, Federal Work-Study, and Federal Supplemental Educational Opportunity Grants, but will have such programs administered by the State in accordance with the agreement described in subparagraph (B)(xi), the Secretary shall, in lieu of carrying out section 690.10 of title 34, Code of Federal Regulations, and subject to available appropriations, pay $5.00 to the State for each student who receives a Federal Pell Grant at that institution, apprenticeship program, or entity, as the case may be, for an award year. (iii) Use of Funds All funds that an institution, apprenticeship program, entity, or the State receives under this subparagraph shall be used solely to pay the cost of— (I) administering the Federal Pell Grant, Federal Perkins Loan, Federal Work-Study, and Federal Supplemental Educational Opportunity Grants; and (II) carrying out the reporting requirements described under subparagraph (B)(v). (iv) Financial aid services If an institution, apprenticeship program, or entity described in this subparagraph enrolls a significant number of students who are attending less-than-full-time or are independent students, such institution, apprenticeship program, entity, or the State, as the case may be, shall use a reasonable proportion of the funds provided under this subparagraph to make financial aid services available during times and in places that will most effectively accommodate the needs of those students. . (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: 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. .