II 117th CONGRESS 2d Session S. 4897 IN THE SENATE OF THE UNITED STATES September 20, 2022 Mr. Cotton introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To make reforms at institutions of higher education.

1. Short title This Act may be cited as the Student Loan Reform Act of 2022 . 2. PLUS Loan Reforms (a) In general Section 455(a) of the Higher Education Act of 1965 ( 20 U.S.C. 1087e(a) ) is amended by adding at the end the following: (4) Termination and restriction of authority to make Federal Direct PLUS Loans (A) Termination of authority to make Federal Direct Plus Loans to graduate or professional students who are not covered healthcare students Notwithstanding any provision of this part or part B, for any period of instruction beginning on or after July 1, 2023, a graduate or professional student (except for a covered healthcare student) shall not be eligible to receive a Federal Direct PLUS Loan under this part for the student's graduate or professional studies. (B) Exception for parent borrowers and covered healthcare students Notwithstanding any provision of this part or part B, for any period of instruction beginning on or after July 1, 2023 and for any parent borrower of a Federal Direct PLUS loan or any covered healthcare student— (i) the maximum annual amount of any Federal Direct PLUS Loan shall not exceed $10,000; and (ii) the maximum aggregate lifetime amount of any Federal Direct PLUS Loans shall not exceed $40,000. (C) Covered healthcare student In this paragraph, the term covered healthcare student means— (i) a student who is in a course of study to— (I) become a Doctor of Allopathic Medicine, Doctor of Osteopathic Medicine, Doctor of Dentistry, Doctor of Optometry, Doctor of Podiatric Medicine, Doctor of Naturopathic Medicine, Doctor of Naturopathy, Doctor of Veterinary Medicine, Doctor of Pharmacy, or Doctor of Chiropractic; or (II) earn a doctoral degree in clinical psychology or a masters or doctoral degree in health administration; and (ii) a student who is in a course of study to become a nurse who will have the same scope of practice as a doctor or degree program described in clause (i). . (b) Report (1) In general By not later than 3 years after the date of enactment of this Act, the Secretary of Education shall submit a report to Congress offering recommendations on other critical STEM-based professions with a high return on investment for which graduate and professional students should be allowed to access Federal Direct PLUS Loans under part D of title IV of the Higher Education Act of 1965 (20 U.S.C.1087a et seq.) for their graduate and professional studies. (2) Considerations In carrying out paragraph (1), the Secretary shall consider— (A) how expanding Federal Direct PLUS Loans to graduate and professional students as described in paragraph (1) would benefit low-income students; and (B) how Congress could index the maximum amount of Federal Direct PLUS Loans for each graduate or professional student borrower to the median earnings for graduates of the borrower's program of study at the borrower's institution of higher education, or the borrower's program of study at a peer institution of higher education. (3) Definition of stem-based In this subsection, the term STEM-based means based in science, technology, engineering, or mathematics. 3. Loan default penalty Section 454 of the Higher Education Act of 1965 ( 20 U.S.C. 1087d(a) ) is amended— (1) in subsection (a)— (A) in paragraph (5), by striking and after the semicolon; (B) by redesignating paragraph (6) as paragraph (8); and (C) by inserting after paragraph (5) the following: (6) provide that the institution accepts the loan default penalty requirements under subsection (d); ; and (2) by adding at the end the following: (d) Loan default penalty requirements (1) In general Beginning with the second fiscal year that begins after the date of enactment of the Student Loan Reform Act of 2022 , and each succeeding fiscal year, each institution of higher education participating in the direct student loan program under this part shall remit to the Secretary, at such times as the Secretary may specify, a student loan default penalty, as determined under paragraph (2). (2) Student loan default penalty For each fiscal year, the student loan default penalty shall be an amount equal to 25 percent of the total amount of loans under this part received for attendance at the institution— (A) that entered into default loan status in the previous fiscal year; (B) for which a borrower entered default loan status for the first time; and (C) for which the borrower did not exit default loan status within the first 60 days after entering such status. . 4. Institutional responsibility for loan repayment Section 454 of the Higher Education Act of 1965 ( 20 U.S.C. 1087d(a) ), as amended by section 3, is further amended— (1) in subsection (a), by inserting after paragraph (6) the following:— (7) provide that the institution accepts the institutional responsibility guarantee requirements under subsection (e); and ; (2) by adding at the end the following: (e) Institutional responsibility guarantee (1) In general Beginning with respect to loans under this part that are disbursed during the first award year that begins after the date of enactment of the Student Loan Reform Act of 2022 , and each succeeding fiscal year, each institution of higher education participating in the Direct student loan program under this part shall provide a written agreement to the Secretary asserting that the institution will remit to the Secretary, at such times as the Secretary may specify, an institutional responsibility payment, as determined under paragraph (2). (2) Institutional responsibility payment The institutional responsibility payment shall be, for each borrower who was enrolled in the institution, an amount equal to the lesser of— (A) a percentage of the total outstanding balance of that borrower that was received for attendance at the institution by that borrower that is equal to 1 percent for each $1000 of the total amount under this part received for attendance at the institution by that borrower; or (B) 50 percent of the total outstanding balance of that borrower that was received under this part for attendance at the institution by that borrower. (3) Use of institutional responsibility payment The Secretary shall apply all of an institutional responsibility payment received under this subsection for a borrower to the outstanding Direct student loan obligation of such student, and shall notify the student of the reduction in the balance of the student's Direct student loan obligations. (4) Total outstanding balance In this subsection, the term total outstanding balance means the total amount of loans under this part— (A) that have gone into default status and remain unpaid after a period of 10 years or more; and (B) that remain unpaid after the period described in subparagraph (A) and after the Secretary has exhausted attempts to recover repayment from the borrower, including through wage garnishment under section 488A, an administrative offset under section 3716 of title 31, United States Code, a Federal salary offset, or any other legal means through which the Secretary may recover repayment of Federal student loans. . 5. Limit on administrative staff (a) Program participation agreement Section 487(a) of the Higher Education Act of 1965 ( 20 U.S.C. 1094(a) ) is amended by adding at the end the following: (30) The institution will agree to the limit on administrative staff requirements described in section 487C. . (b) Limit on administrative staff Part G of title IV of the Higher Education Act of 1965 ( 20 U.S.C. 1088 et seq. ) is amended by inserting after section 487B the following: 487C. Limit on administrative staff (a) Definitions In this section: (1) Administrative staff The term administrative staff — (A) means staff whose duties are primarily non-academic, non-instructional, and non-research; (B) includes any institutional support staff, such as human resources, marketing, public relations, government relations, executive, administrative, or managerial staff; (C) includes student services staff, such as diversity, equity, and inclusion staff; (D) includes members of the academic administration, such as deans or provosts; and (E) excludes grounds and maintenance staff, cafeteria staff, healthcare practitioners, campus security, religious clergy supported by the institution, and information technology support staff. (2) Covered institution (A) In General The term covered institution — (i) means an institution that— (I) charged an amount for undergraduate tuition and fees equal to or greater than $20,000 for an academic year after the date of enactment of the Student Loan Reform Act of 2022 , as determined by the Secretary on an annual basis; and (II) for the first covered year, had 200 or more individuals serving as administrative staff; and (ii) excludes— (I) an institution that is controlled by or that is closely identified with the tenets of a particular religious organization, as described in section 106.12(c) of title 34, Code of Federal Regulations (as in effect on the date of enactment of the Student Loan Reform Act of 2022 ); and (II) an institution that is a medical school, as determined by the Secretary. (B) Special Rule If an institution charges separate amounts of undergraduate tuition and fees and for in-State and out-of-State students, the amount of tuition and fees for the purposes of this paragraph shall be determined based on the amount that is an average of in-State and out-of-State undergraduate tuition and fees. (3) First covered year The term first covered year , when used with respect to a covered institution, means the first academic year after the date of enactment of the Student Loan Reform Act of 2022 for which the institution's undergraduate tuition and fees exceeded $20,000, as determined in accordance with paragraph (2). (b) In general Beginning for the second academic year after the date of enactment of the Student Loan Reform Act of 2022 , a covered institution that participates in a program under this title shall be required— (1) each year of a school’s participation in a program under this title, to reduce 10 percent of administrative staff at the institution, as compared to the total amount of such administrative staff at the institution in the first covered year, until the completion of the 5th year of such reductions, at which time the institution shall be required to demonstrate to the Secretary that the institution has reduced 50 percent of the administrative staff at the institution, as compared to the administrative staff at the institution in the first covered year; (2) to ensure that after the completion of the 5-year period described in paragraph (1), the institution shall not increase the number of administrative staff at the institution by more than 1 percent annually for the remainder of the institution's participation in a program under this title; (3) to eliminate administrative staff in the order specified under subsection (c); and (4) to submit an annual certification to the Secretary asserting that the institution meets the requirements of paragraphs (1), (2), and (3). (c) Priority for administrative staff reductions An institution shall reduce administrative staff in the following order: (1) First, reducing diversity, equity, and inclusion staff by not less than 95 percent. (2) Second, reducing executive or management staff. (3) Third, reducing human resources staff. . 6. Affirmative Action (a) Institution of higher education The term institution of higher education has the meaning given that term in section 102 of the Higher Education Act of 1965 ( 20 U.S.C. 1002 ). (b) Prohibition on preferential treatment or discrimination An institution of higher education receiving Federal funds shall not grant preferential treatment to, or discriminate against, any individual or group on the basis of race, color, ethnicity, or national origin, including treatment or discrimination related to employment and student admissions. 7. Critical race theory (a) Definitions (1) Institution of higher education The term institution of higher education has the meaning given that term in section 102 of the Higher Education Act of 1965 ( 20 U.S.C. 1002 ). (2) Race-based theory The term race-based theory means a theory that— (A) any race is inherently superior or inferior to any other race; (B) the United States is a fundamentally racist country; (C) the Declaration of Independence or the Constitution of the United States is a fundamentally racist document; (D) an individual's moral worth is determined by the race of the individual; (E) an individual, by virtue of the race of the individual, is inherently racist or oppressive, whether consciously or unconsciously; or (F) an individual, because of the race of the individual, bears responsibility for the actions committed by members of the race of the individual. (b) Prohibition on award of funds to certain institutions of higher education No Federal funds may be awarded to an institution of higher education if such institution compels teachers or students to affirm, adhere to, adopt, or profess race-based theories or beliefs contrary to title VI of the Civil Rights Act of 1964 ( 42 U.S.C. 2000d et seq. ). (c) Rules of construction (1) Protected speech not restricted Nothing in this section shall be construed to restrict the speech of a student, a teacher, or any other individual outside of an instructional setting of an institution of higher education. (2) Access to materials for the purpose of research or independent study Nothing in this section shall be construed to prevent an individual from accessing materials that advocate race-based theories for the purpose of research or independent study. 8. Excise taxes on certain colleges and universities (a) Excise tax on certain large private college and university endowments (1) In general Subchapter H of chapter 42 of the Internal Revenue Code of 1986 is amended by adding at the end the following new section: 4969. Excise tax on certain large private college and university endowments (a) Tax imposed There is hereby imposed on each specified applicable educational institution for the taxable year a tax equal to 1 percent of the aggregate fair market value of the assets of the institution at the end of the preceding taxable year. (b) Specified applicable educational institution For purposes of this subchapter, the term specified applicable educational institution means any applicable educational institution, other than an institution which is religious in nature, the aggregate fair market value of the assets of which at the end of the preceding taxable year (other than those assets which are used directly in carrying out the institution's exempt purpose) is at least $2,500,000,000. (c) Other terms For purposes of this section— (1) Assets The rules of section 4968(d) shall apply. (2) Student The rules of section 4968(b)(2) shall apply. . (2) Clerical amendment The table of sections for subchapter H of chapter 42 of the Internal Revenue Code of 1986 is amended by adding at the end the following new item: Sec. 4969. Excise tax on certain large private college and university endowments. . (b) Failure To distribute endowment assets (1) In general Subchapter H of chapter 42 of the Internal Revenue Code of 1986, as amended by subsection (a), is amended by adding at the end the following new section: 4970. Failure to distribute endowment assets (a) Tax imposed There is hereby imposed on the undistributed excess endowment amount of each specified applicable educational institution for the taxable year, which has not been distributed before the first day of the second (or any succeeding) taxable year following such taxable year (if such first day falls within the taxable period), a tax equal to 30 percent of such undistributed excess endowment amount remaining undistributed at the beginning of such second (or succeeding) taxable year. The tax imposed by this section shall not apply to the undistributed excess endowment amount of a specified applicable educational institution to the extent that the foundation failed to distribute any amount solely because of an incorrect valuation of assets, if— (1) the failure to value the assets properly was not willful and was due to reasonable cause, (2) such amount is distributed as qualifying distributions by the institution during the allowable distribution period, (3) the institution notifies the Secretary that such amount has been distributed as qualifying distributions to correct such failure, and (4) such distribution is treated, by reason of subsection (e)(2), as made out of the undistributed income for the taxable year for which a tax would (except for this paragraph) have been imposed under this subsection. (b) Additional tax In any case in which an initial tax is imposed under subsection (a) on the undistributed excess endowment amount of any specified applicable educational institution for any taxable year, if any portion of such amount remains undistributed at the close of the taxable period, there is hereby imposed a tax equal to 100 percent of the amount remaining undistributed at such time. (c) Undistributed excess endowment amount For purposes of this section, the term undistributed excess endowment amount means, with respect to any specified applicable educational institution for any taxable year as of any time, the amount by which— (1) the distributable amount for such taxable year, exceeds (2) the qualifying distributions made before such time out of such distributable amount. (d) Distributable amount For purposes of this section, the term distributable amount means, with respect to any specified applicable educational institution for any taxable year, an amount equal to 5 percent of the aggregate fair market value of the assets of the institution at the end of the preceding taxable year. The rules of section 4968(d) shall apply for purposes of this section. (e) Qualifying distributions For purposes of this section— (1) In general The term qualifying distribution has the meaning given such term in section 4942(g). (2) Other rules The rules of subsections (h) and (i) of section 4942 shall apply. (f) Taxable period; allowable distribution period The rules of paragraphs (1) and (2) of section 4942(j) shall apply for purposes of this section. . (2) Clerical amendment The table of sections for subchapter H of chapter 42 of the Internal Revenue Code of 1986, as amended by subsection (a), is further amended by adding at the end the following new item: Sec. 4970. Failure to distribute endowment assets. . (c) Establishment of excise tax on excessive tuition (1) In general Subchapter H of chapter 42 of the Internal Revenue Code of 1986, as amended by subsections (a) and (b), is amended by adding at the end the following new section: 4970A. Excise tax on excessive tuition (a) Tax imposed There is hereby imposed on each applicable institution of higher education for the taxable year a tax equal to 20 percent of the total amount of excessive tuition received by such applicable institution of higher education during such taxable year. (b) Excessive tuition (1) In general In this section, the term excessive tuition means, with respect to any individual enrolled at the undergraduate level in the applicable institution of higher education during any taxable year, the amount (if any) equal to the excess of— (A) the amount of undergraduate tuition and fees paid by such individual to such applicable institution of higher education during such taxable year, over (B) $40,000. (2) Tuition and fees For purposes of paragraph (1)(A), the term tuition and fees has the same meaning given the term qualified tuition and related expenses under section 25A(f)(1). (c) Applicable institution of higher education In this section, the term applicable institution of higher education means an institution of higher education as defined in section 102 of the Higher Education Act of 1965 ( 20 U.S.C. 1002 ) that is not— (1) an institution which is controlled by or which is closely identified with the tenets of a particular religious organization; or (2) a medical school, as described in section 487C(a)(2)(A)(ii)(II) of the Higher Education Act of 1965. . (2) Clerical amendment The table of sections for subchapter H of chapter 42 of such Code, as amended by subsections (a) and (b), is amended by adding at the end the following new item: Sec. 4970A. Excise tax on excessive tuition. . (d) Transfer of funds The Secretary of the Treasury (or such Secretary's delegate) shall from time to time transfer from the general fund of the Treasury to the Secretary of Commerce amounts equal to the increase in revenues by reason of the enactment of subsections (a), (b), and (c), for the purpose of expanding opportunities relating to employer-led apprenticeship programs and on-the-job workforce training. Such funds shall be available until expended to carry out such activities through grants, cooperative agreements, contracts and other arrangements, with States and other appropriate entities. (e) Effective date The amendments made by this section shall apply to taxable years beginning after the date of enactment of this Act. 9. Ban on requiring FAFSA for families who are not using Federal student aid Section 487(a) of the Higher Education Act of 1965 ( 20 U.S.C. 1094(a) ), as amended by section 5, is further amended by adding at the end the following: (31) The institution will not require or pressure any prospective, accepted, or enrolled student at the institution to submit a Free Application for Federal Student Aid under section 483 if such student does not wish to apply for or accept Federal student aid. . 10. Campus Free Speech Restoration (a) Protection of student speech and association rights Section 112(a) of the Higher Education Act of 1965 ( 20 U.S.C. 1011a(a) ) is amended— (1) by redesignating paragraph (2) as paragraph (4); and (2) by inserting after paragraph (1) the following: (2) It is the sense of Congress that— (A) every individual should be free to profess, and to maintain, the opinion of such individual in matters of religion or philosophy, and that professing or maintaining such opinion should in no way diminish, enlarge, or affect the civil liberties or rights of such individual on the campus of an institution of higher education; and (B) no public institution of higher education directly or indirectly receiving financial assistance under this Act should limit religious expression, free expression, or any other rights provided under the First Amendment to the Constitution of the United States. (3) It is the sense of Congress that— (A) free speech zones and restrictive speech codes are inherently at odds with the freedom of speech guaranteed by the First Amendment to the Constitution of the United States; (B) bias reporting systems are susceptible to abuses that may put them at odds with the freedom of speech guaranteed by the First Amendment to the Constitution of the United States; and (C) no public institution of higher education directly or indirectly receiving financial assistance under this Act should restrict the speech of such institution’s students through improperly restrictive zones, codes, or bias reporting systems. . (b) Campus speech policies at institutions of higher education Title IV of the Higher Education Act of 1965 (20 U.S.C. 1070 et. seq.) is amended— (1) in section 487(a), as amended by sections 5 and 9, by adding at the end the following: (32) In the case of an institution that is— (A) a public institution, the institution will comply with the expressive activity protections described in section 493E; and (B) not a public institution, the institution will comply with the policies in section 493F. ; and (2) in part G, by inserting after section 493D the following: 493E. Campus speech policies at public universities (a) Definition of expressive activities (1) In general In this section, the term expressive activity includes— (A) peacefully assembling, protesting, speaking, or listening; (B) distributing literature; (C) carrying a sign; (D) circulating a petition; or (E) other expressive rights guaranteed under the First Amendment to the Constitution of the United States. (2) Exclusions In this section, the term expressive activity does not include unprotected speech (as defined by the precedents of the Supreme Court of the United States). (b) Expressive activities at an institution (1) In general Each public institution of higher education participating in a program under this title may not prohibit, subject to paragraph (2), a person from freely engaging in noncommercial expressive activity in a generally accessible outdoor area on the institution's campus if the person's conduct is lawful. (2) Restrictions An institution of higher education described in paragraph (1) may not maintain or enforce time, place, or manner restrictions on an expressive activity in a generally accessible outdoor area of the institution's campus unless the restriction— (A) is necessary to achieve a compelling governmental interest; (B) is the least restrictive means of furthering that compelling governmental interest; (C) is based on published, content-neutral, and viewpoint-neutral criteria; (D) leaves open ample alternative channels for communication; and (E) provides for spontaneous assembly and distribution of literature. (3) Application The protections provided under paragraph (1) do not apply to expressive activity in an area on an institution's campus that is not a generally accessible outdoor area. (4) Nonapplication to service academies This section shall not apply to an institution of higher education whose primary purpose is the training of individuals for the military services of the United States, or the merchant marine. (c) Causes of action (1) Authorization The following persons may bring an action in a Federal court of competent jurisdiction to enjoin a violation of subsection (b) or to recover compensatory damages, reasonable court costs, or reasonable attorney fees: (A) The Attorney General. (B) A person claiming that the person's expressive activity rights, as described in subsection (b)(1), were violated. (2) Actions Notwithstanding any other provision of law, in an action brought under this section, the Federal court shall decide de novo all relevant questions of fact and law, including the interpretation of constitutional, statutory, and regulatory provisions, unless the parties stipulate otherwise. In an action brought under this subsection, if the court finds a violation of subsection (b), the court— (A) shall— (i) enjoin the violation; and (ii) if a person whose expressive activity rights were violated brought the action, award the person— (I) not less than $500 for an initial violation; and (II) if the person notifies the institution of the violation, $50 for each day the violation continues after the notification if the institution did not act to discontinue the cause of the violation; and (B) may award a prevailing plaintiff— (i) compensatory damages; (ii) reasonable court costs; or (iii) reasonable attorney fees. (d) Statute of limitations (1) In general Except as provided in paragraph (3), an action under subsection (c) may not be brought later than 1 year after the date of the violation. (2) Continuing violation Each day that a violation of subsection (b) continues after an initial violation of subsection (b), and each day that an institution's policy in violation of subsection (b) remains in effect, shall constitute a continuing violation of subsection (b). (3) Extension For a continuing violation described in paragraph (2), the limitation described in paragraph (1) shall extend to 1 year after the date on which the most recent violation occurs. (e) Federal review of speech policies (1) No eligibility for funds (A) In general No public institution of higher education shall be eligible to receive funds under this Act, including participation in any program under this title, if the Secretary determines that the institution— (i) maintains a policy that infringes upon the expressive rights of students under the First Amendment to the Constitution of the United States; or (ii) maintains or enforces time, place, or manner restrictions on an expressive activity in a generally accessible outdoor area of the institution's campus that do not comply with subparagraphs (A) through (E) of subsection (b)(2). (B) Court review Notwithstanding any other provision of law, the Secretary’s determinations under this subsection shall be reviewed de novo with respect to all relevant questions of fact and law, including the interpretation of constitutional, statutory, and regulatory provisions, unless the parties stipulate otherwise. (2) Designation of an employee to receive complaints The Secretary shall designate an employee in the Office of Postsecondary Education of the Department to receive complaints from students or student organizations at a given public institution of higher education, or from any other person or organization, regarding policies at the institution— (A) that infringe upon the expressive rights of students under the First Amendment to the Constitution of the United States; or (B) that maintain or enforce time, place, or manner restrictions on an expressive activity in a generally accessible outdoor area of the institution's campus that do not comply with subparagraphs (A) through (E) of subsection (b)(2). (3) Complaint A complaint submitted under subparagraph (2)— (A) shall include the provision of the institution’s policy the complainant believes either infringes upon the expressive rights of students under the First Amendment to the Constitution of the United States or maintains or enforces time, place, or manner restrictions on an expressive activity in a generally accessible outdoor area of the institution's campus that does not comply with subparagraphs (A) through (E) of subsection (b)(2), along with any evidence regarding the operation and enforcement of such policy the complainant deems relevant; and (B) may include an argument as to why the policy in question either infringes upon the expressive rights of students under the First Amendment to the Constitution of the United States or maintains or enforces time, place, or manner restrictions on an expressive activity in a generally accessible outdoor area of the institution's campus that does not comply with subparagraphs (A) through (E) of subsection (b)(2). (4) System of review (A) First stage review (i) Request for response Not later than 7 days after the date of receipt of a complaint under paragraph (2), the Secretary shall review the complaint and request a response to the complaint from the institution. (ii) Institution response Not later than 30 days after the date the Secretary requests a response under clause (i), the institution shall— (I) certify to the Secretary that the institution has entirely withdrawn the policy that occasioned the complaint; (II) submit a revised policy for review by the Secretary; or (III) submit a defense of the policy that occasioned the complaint. (iii) Availability to complainant (I) In general Not later than 7 days after the date of receipt of a revised policy or defense of the original policy as submitted by the institution pursuant to clause (ii), the Secretary shall make available to the complainant a copy of such revised policy or defense. (II) Response by complainant Not later than 60 days after the date of receipt of a revised policy or defense of the original policy under subclause (I), the complainant may submit to the Secretary a response to the revised policy or defense of the original policy. (III) Submission to the institution of response Not later than 7 days after the date of receipt of a response under subclause (II), the Secretary shall submit to the institution a copy of such response. (iv) Determinations If the institution declines to entirely withdraw the policy that occasioned the complaint and either submits a revised policy for review or submits a defense of the policy that occasioned the complaint, the Secretary shall, not later than 60 days after the date of the deadline for a response by the complaint as described in clause (iii)(II), make one of the following determinations: (I) Determine that the complaint in question has insufficient merit to proceed to Second Stage Review described in subparagraph (B). (II) Determine that the complaint in question has sufficient merit to proceed to Second Stage Review described in subparagraph (B). (v) Notification Not later than 7 days after the date the Secretary makes a determination under clause (iv), the Secretary shall notify the institution and the complainant of such determination. (vi) End The determination under clause (iv) shall constitute the end of First Stage Review. (B) Second stage review (i) In general In a Second Stage Review, the Secretary shall notify the institution and the complainant of the commencement of the Second Stage Review, and shall give the institution the option of entirely withdrawing the policy that occasioned the complaint or submitting a revised policy for review within 30 days of the commencement of the Second Stage Review. In such notification submitted to the institution and complainant, the Secretary shall indicate the relevant sections of the institution’s policy in question and explain why these sections may be out of compliance. (ii) Determination Not later than 90 days from the commencement of the Second Stage Review, the Secretary shall determine whether the policy that occasioned the complaint, or the revised policy submitted during the First Stage Review, or the revised policy submitted within the first 30 days of the Second Stage Review, is in violation of student rights under the First Amendment to the Constitution of the United States or of the restrictions on the regulation of speech by time, place, and manner set forth in this section, thereby ending Second Stage Review. (iii) Investigation During Second Stage Review, the Secretary may conduct an investigation in which further information may be sought or requested from the complainant, the institution, or any other source the Secretary determines pertinent. (iv) Certification of withdrawal At any point during the Second Stage Review, the institution in question may certify to the Secretary that it has entirely withdrawn the policy that occasioned the complaint, thereby ending the Second Stage Review. (v) Notification and justification If the Secretary determines by the conclusion of Second Stage Review that the policy that occasioned the complaint or the revised policy submitted for review during First Stage Review or Second Stage Review is consistent with the expressive rights of students under the First Amendment to the Constitution of the United States and the restrictions on the regulation of speech by time, place, and manner set forth in this Act— (I) the Secretary shall notify the complainant and the institution of such determination not more than 7 days after the date of the determination; and (II) the Secretary shall explain and justify such determination in a written decision citing relevant legal precedent, copies of which shall be sent to the complainant, the institution, and made available for public inspection, including for online reading by the public. (C) Determination that institution is out of compliance (i) In general If, upon completion of the Second Stage Review, the Secretary determines that the policy that occasioned the complaint, or the revised policy submitted for review during the First Stage Review or Second Stage Review, violates the First Amendment to the Constitution of the United States or the restrictions on the regulation of speech set forth in this section, the Secretary shall notify the complainant and the institution not more than 7 days after the date of completion of Second Stage Review that the institution is out of compliance with the requirements for receiving funds under this Act, including participation in any program under this title, but will be granted a grace period of 120 days to return to compliance before being formally stripped of eligibility. (ii) Posting; explanation; final review As part of the notification under clause (i), the Secretary shall— (I) require the institution to post the determination of the Secretary on the website of the institution within 2 clicks of the homepage, without a paywall, email login, or other restriction to access; (II) explain and justify the determination of the Secretary in a written decision citing relevant legal precedent, copies of which shall be sent to the complainant, the institution, and made available for public inspection, including for online reading by the public; and (III) inform the institution that Final Review has begun and that the institution must either certify to the Secretary that it has entirely withdrawn the policy that occasioned the complaint, or submit a revised policy for review to the Secretary not later than 60 days after the date of receipt of notice of the conclusion of Second Stage Review. (D) Final review (i) In general If an institution submits a revised policy for review as described in subparagraph (C)(ii)(III), the Secretary shall review such revised policy and determine not later than 120 days after the date of commencement of Final Review whether the revised policy is consistent with the expressive rights of students under the First Amendment to the Constitution of the United States and with the restrictions on the regulation of speech by time, place, and manner set forth in this Act. (ii) Determination of compliance If the Secretary determines, as described in clause (i), that the revised policy is consistent with the expressive rights of students under the First Amendment to the Constitution of the United States and with the restrictions on the regulation of speech by time, place, and manner set forth in this Act, the Secretary shall notify the complainant and the institution of such determination not more than 7 days after the date the determination is made, thereby ending the final Stage Review. (iii) Determination of violation If the Secretary determines, as described in clause (i), that the revised policy violates the expressive rights of students under the First Amendment to the Constitution of the United States or the restrictions on the regulation of speech by time, place, and manner set forth in this Act, the Secretary shall— (I) notify the complainant and the institution of such determination not more than 7 days after the date the determination is made, thereby ending the final Stage Review; and (II) explain and justify the determination in a written decision citing relevant legal precedent, copies of which shall be sent to the complainant, the institution, and made available for public inspection, including for online reading by the public. (E) Loss of eligibility (i) In general If the Secretary determines, during the Final Stage Review, that the institution’s policy in question violates the expressive rights of students under the First Amendment to the Constitution of the United States or the restrictions on the regulation of speech by time, place, and manner set forth in this Act, the Secretary shall— (I) notify the complainant and the institution not more than 7 days after the date of the determination that the institution will lose eligibility to receive funds under this Act, including participation in any program under this title, in accordance with this subparagraph; (II) notify the institution that the loss of eligibility shall go into effect beginning with any student notified of acceptance for admission to the institution during the academic year subsequent to the academic year during which the determination is made, and that no restoration of eligibility for ineligible students in subsequent academic years will occur prior to the beginning of the third academic year subsequent to the academic year during which the determination is made; (III) explain and justify the determination in a written decision citing relevant legal precedent, copies of which shall be sent to the complainant, the institution, and made available for public inspection, including for online reading by the public; and (IV) require the institution to post the determination of the Secretary on the website of the institution, within two clicks of the homepage, without a paywall, email login, or other restriction to access. (ii) Continued eligibility Each student enrolled at the institution during the academic year in which eligibility is lost as described in this subparagraph, and each student notified of acceptance for admission to the institution during the academic year in which eligibility is lost as described in this subparagraph, shall continue to be eligible to participate, through the institution, in programs funded under this Act during the 5-year period after the date of the loss of eligibility. (F) Restoration of eligibility (i) In general Not later than 7 days after the loss of eligibility under subparagraph (E), the Secretary shall inform the institution that it may restore eligibility, either by certifying to the Secretary that it has entirely withdrawn the policy that precipitated loss of eligibility, or by submitting a revised policy for review at any time following the failure of the Final Review. (ii) Review of revised policy The Secretary shall review a revised policy submitted for review after the loss of eligibility and determine not later than 120 days after the date the revised policy is submitted whether it is consistent with the expressive rights of students under the First Amendment to the Constitution of the United States and with the restrictions on the regulation of speech by time, place, and manner set forth in this Act. (iii) Investigation While conducting a review to restore eligibility under this subparagraph, the Secretary may conduct an investigation in which further information may be sought or requested from the institution, or any other source the Secretary determines pertinent. (iv) Written decision In making a determination of whether a revised policy submitted for review after the loss of eligibility is either consistent or inconsistent with the expressive rights of students under the First Amendment to the Constitution of the United States and with the restrictions on the regulation of speech by time, place, and manner set forth in this Act, the Secretary shall explain and justify the determination in a written decision citing relevant legal precedent, copies of which shall be sent to the complainant, the institution, and made available for public inspection, including for online reading by the public. (v) Limit on review The Secretary may conduct not more than 1 review to restore eligibility for a single institution in any given academic year. (vi) Restoration If an institution certifies to the Secretary that the policy that precipitated the loss of eligibility has been entirely withdrawn, or if Secretary determines that the revised policy submitted for review is consistent with the expressive rights of students under the First Amendment to the Constitution of the United States and with the restrictions on the regulation of speech by time, place, and manner set forth in this Act, the institution’s eligibility to receive funds under this Act, including participation in any program under this title, shall be restored not earlier than the beginning of the third academic year following the year in which notification of loss of eligibility was received. (G) Good faith representation (i) In general The Secretary shall inform any institution undergoing review of its campus speech policies that it expects the institution to represent its policies, along with any proposed revisions in such policies, in good faith. (ii) Misrepresentation (I) Complaints A student, student organization, or any other person or organization may file, with the employee in the Office of Postsecondary Education of the Department designated by the Secretary under paragraph (2) to receive complaints, a complaint that an institution has substantially misrepresented its speech policies, or withheld information requested by the Secretary during an investigation, or attempted to circumvent the review process by reinstituting a policy under review in a substantially similar form without informing the Secretary. (II) Loss of eligibility If the Secretary determines upon investigation, or after receiving a complaint under subclause (I), that an institution has substantially misrepresented its speech policies, or withheld information requested by the Secretary during an investigation, or attempted to circumvent the review process by reinstituting a policy under review in a substantially similar form without informing the Secretary, the institution shall lose eligibility to receive funds under this Act, including participation in any program under this title. (iii) Loss of eligibility If an institution loses eligibility under clause (ii), the Secretary shall notify the institution, not later than 7 days after the determination, that the loss of eligibility shall go into effect beginning with any student notified of acceptance for admission to the institution during the academic year subsequent to the academic year during which the determination is made, and that no restoration of eligibility for students admitted in subsequent academic years will occur prior to the beginning of the third academic year subsequent to the academic year during which the determination is made. (f) Retaliation prohibited (1) In general No person may intimidate, threaten, coerce, or discriminate against any individual because the individual has made a report or complaint, testified, assisted, or participated or refused to participate in any manner in an investigation, proceeding, or hearing under this section. (2) Specific circumstances (A) Exercise of first amendment rights The exercise of rights protected under the First Amendment to the Constitution of the United States does not constitute retaliation prohibited under paragraph (1). (B) Code of conduct violation for materially false statement Charging an individual with a code of conduct violation for making a materially false statement in bad faith in the course of a grievance proceeding under this section does not constitute retaliation prohibited under paragraph (1). A determination regarding responsibility, alone, is not sufficient to conclude that any party made a materially false statement in bad faith. 493F. Campus speech policies at private universities (a) In general Each private institution of higher education eligible to receive funds under this Act, including any program under this title, shall— (1) post in one place on the website of the institution all policies that pertain to the protection and regulation of the expressive rights of students, including the right to submit a complaint under this section, within 2 clicks of the homepage, without a paywall, email login, or other restriction to access; (2) include a copy of such policies in a handbook distributed to new students; and (3) send a copy of— (A) such policies to the employee of the Department designated by the Secretary to receive such policies; and (B) any updates to such policies to such employee not later than 60 days after the date of a change to such policies. (b) Responsibility for full policy disclosure Each private institution of higher education described in subsection (a) shall include with the copy of the policies described in subsection (a)— (1) a statement affirming that all policies pertinent to the protection and regulation of the expressive rights of students have been disclosed in the manner required by this section, along with an acceptance of contractual obligation to publicly disclose all such policies; and (2) a statement affirming that publication of such policies as required by this section establishes a contractual obligation on the part of the institution to its students to maintain and enforce the disclosed policies, and only those policies, in matters pertaining to the protection and regulation of the expressive rights of students. (c) Cause of action (1) Authorization A student claiming that a private institution of higher education in which the student is enrolled has violated any requirement or contractual obligation imposed by this section may bring an action in a Federal court of competent jurisdiction to enjoin such violation or to recover compensatory damages, reasonable court costs, or reasonable attorney fees. (2) Actions Notwithstanding any other provision of law, in an action brought under this subsection, the Federal court shall decide de novo all relevant questions of fact and law, including the interpretation of constitutional, statutory, and regulatory provisions, unless the parties stipulate otherwise. In an action brought under this subsection, if the court finds a violation of subsection (b), the court— (A) shall— (i) enjoin the violation; and (ii) award the student— (I) not less than $500 for an initial violation; and (II) if the student notifies the institution of the violation, $50 for each day the violation continues after the notification if the institution did not act to discontinue the cause of the violation; and (B) may award a prevailing plaintiff— (i) compensatory damages; (ii) reasonable court costs; or (iii) reasonable attorney fees. (d) Secretarial requirements (1) Designation of an employee The Secretary shall designate an employee in the Office of Postsecondary Education in the Department who shall— (A) receive and compile updated copies of all policies pertaining to the protection and regulation of the expressive rights of students at private institutions of higher education that receive funds under this section, including any programs under this title; (B) preserve all records of such policies for a period of not less than 10 years and make such policies, and the dates they were disclosed, modified, or withdrawn, available for public inspection, including for online reading by the public; (C) receive complaints from students, student organizations, or from any other person or organization, that believes a private institution of higher education has not disclosed a policy pertaining to the protection and regulation of the expressive rights of students as required by this section, is enforcing a policy pertaining to the expressive rights of students that has not been disclosed as required by this section, or has failed to make and publish a statement affirming contractual responsibility for full policy disclosure, or affirming contractual responsibility for the enforcement of speech policies, as required by this section; (D) not more than 7 days after the date of receipt of a complaint under subparagraph (C), review the complaint and request a response from the institution; (E) undertake an investigation, in response to a complaint under subparagraph (C) or at the Secretary’s independent initiative, to determine whether a private institution of higher education has failed to disclose a policy pertaining to the protection and regulation of the expressive rights of students as required by this section, is enforcing a policy pertaining to the expressive rights of students that has not been disclosed as required by this section, or has failed to make and publish a statement affirming contractual responsibility for full policy disclosure, or affirming contractual responsibility for the enforcement of speech policies, as required by this section; and (F) determine, not later than 120 days after the date of receipt of a complaint or 120 days after the date of the start of an investigation opened at the Secretary’s independent initiative, whether the private institution of higher education in question has failed to disclose a policy pertaining to the protection and regulation of the expressive rights of students as required by this section, is enforcing a policy pertaining to the expressive rights of students that has not been disclosed as required by this section, or has failed to make and publish a statement affirming contractual responsibility for full speech policy disclosure, or affirming contractual responsibility for the enforcement of speech policies, as required by this section. (2) Loss of eligibility (A) In general If the Secretary determines that a private institution of higher education has failed to disclose a policy pertaining to the protection and regulation of the expressive rights of students as required by this section, is enforcing a policy pertaining to the expressive rights of students that has not been disclosed as required by this section, or has failed to make and publish a statement affirming contractual responsibility for full speech policy disclosure, or affirming contractual responsibility for the enforcement of speech policies, as required by this section, the Secretary shall notify the institution and, if applicable, the complainant, not more than 7 days after the date of such determination, that the institution is out of compliance with the requirements for receiving funds under this Act, including participation in any program under this title, but will be granted a grace period of 60 days to return to compliance before formally losing eligibility for receiving funds under this Act, including participation in any program under this title. (B) Specifications in notification As part of the notification under subparagraph (A), the Secretary shall specify which policies need to be disclosed and which statements affirming contractual responsibility for speech policy disclosure and contractual responsibility for speech policy enforcement need to be made and published in order for eligibility to be restored. (C) Notification of loss of eligibility (i) In general If the Secretary determines that, 60 days after being notified that it is out of compliance as described in subparagraph (A), the institution has failed to return to compliance by making the appropriate speech policy disclosures, or statement affirming contractual responsibility for full speech policy disclosure, or statement affirming contractual responsibility for speech policy enforcement, the Secretary shall notify the institution and, if applicable, the complainant, not more than 7 days after the date of such determination— (I) that the institution will lose eligibility to receive funds under this Act, including participation in any program under this title; (II) that the loss of eligibility shall go into effect beginning with any student notified of acceptance for admission to the institution during the academic year subsequent to the academic year during which the determination is made, and that no restoration of eligibility for ineligible students in subsequent years will occur prior to the beginning of the third academic year subsequent to the academic year during which the determination is made; and (III) that the institution shall post the determination of the Secretary on the website of the institution, within two clicks of the homepage, without a paywall, email login, or other restriction to access. (ii) Continued eligibility Each student enrolled at the institution during the academic year in which eligibility is lost as described in this subparagraph, and each student notified of acceptance for admission to the institution during the academic year in which eligibility is lost as described in this subparagraph, shall continue to be eligible to participate, through the institution, in programs funded under this Act during the 5-year period after the date of the loss of eligibility. (3) Restoration of eligibility (A) In general Not later than 7 days after the loss of eligibility under paragraph (2), the Secretary shall inform the institution that it may restore eligibility by making the appropriate speech policy disclosures, or statement affirming contractual responsibility for full speech policy disclosure, or statement affirming contractual responsibility for speech policy enforcement, as directed by the Secretary in conformity with this section. (B) Review The Secretary shall review any policy disclosures, or statement affirming contractual responsibility for full speech policy disclosure, or statement affirming contractual responsibility for speech policy enforcement, and determine whether they are sufficient to restore eligibility for receiving funds under this Act, including participation in any program under this title, not later than 120 days after the date of receipt of such disclosures or statement. (C) Investigation While conducting a review to restore eligibility under this paragraph, the Secretary may conduct an investigation in which further information may be sought or requested from the institution, or any other source the Secretary determines pertinent. (D) Restoration If the Secretary determines that the institution under review to restore eligibility under this paragraph has made the policy disclosures, and issued the statement affirming contractual responsibility for full speech policy disclosure, and the statement affirming contractual responsibility for speech policy enforcement, as required by this section, the institution’s eligibility to receive funds under this Act, including participation in any program under this title, shall be restored not earlier than the beginning of the third academic year following the year in which notification of loss of eligibility was received. (E) Limit on review The Secretary may conduct not more than 1 review to restore eligibility for a single institution in any given academic year. (e) Nonapplication to certain institutions This section shall not apply to an institution of higher education that is controlled by a religious organization. . 11. Severability If any provision of this Act, or the application of such provision to any person or circumstance, is held to be unconstitutional, the remainder of this Act, and the application of the remaining provisions of this Act to any person or circumstance shall not be affected.