For-Profit Fraud Act

Bill: 116-hr-3112
Sponsor: full_name: Rep. Waters, Maxine [D-CA-43]
Introduced: 2019-06-05
Policy area: Education
Subjects: Education programs funding

Government lending and loan guarantees

Higher education

Military education and training

Student aid and college costs

Veterans' education, employment, rehabilitation
Latest action: action_date: 2019-06-25
text: Referred to the Subcommittee on Economic Opportunity.

Summaries:
action_date: 2019-06-05
action_desc: Introduced in House
text: <p><b>For-Profit Fraud Act</b></p> <p>This bill modifies requirements for a proprietary (i.e., for-profit) institution of higher education (IHE) to participate in federal student aid programs. </p> <p>Current law requires a proprietary IHE to derive at least 10% of its revenue from sources other than federal student aid. The bill requires a proprietary IHE to derive at least 15% of its revenue from sources other than federal funds (i.e., it replaces the so-called 90/10 rule with an 85/15 rule).</p> <p>The bill requires the Department of Education to notify the Department of Defense (DOD) and the Department of Veterans Affairs (VA) when a proprietary institution becomes ineligible to participate in federal student aid programs and when the institution regains such eligibility. Proprietary institutions that lose such eligibility are then ineligible to receive educational assistance from DOD or VA programs.</p>

tv_txt: I 116th CONGRESS 1st Session H. R. 3112 IN THE HOUSE OF REPRESENTATIVES June 5, 2019 Ms. Waters introduced the following bill; which was referred to the Committee on Education and Labor , and in addition to the Committees on Armed Services , and Veterans' Affairs , for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned A BILL To revise the 90–10 rule under the Higher Education Act of 1965, and for other purposes.

1. Short title This Act may be cited as the For-Profit Fraud Act . 2. 85/15 Rule Section 487 of the Higher Education Act of 1965 ( 20 U.S.C. 1094 ) is amended— (1) in subsection (a)(24)— (A) by striking In the case and inserting: (A) In the case ; (B) by striking not less than ten percent of such institution’s revenues from sources other than funds provided under this title and inserting not less than 15 percent of such institution’s revenues from sources other than Federal funds ; and (C) by adding at the end the following: (B) Federal funds In this paragraph, the term Federal funds means any Federal funds provided, under this Act or any other Federal law, through a grant, contract, subsidy, loan, guarantee, insurance, or other means to a proprietary institution, including Federal funds disbursed or delivered to an institution or on behalf of a student or to a student to be used to attend the institution, except that such term shall not include any monthly housing stipend provided under the Post-9/11 Educational Assistance Program under chapter 33 of title 38, United States Code. ; and (2) in subsection (d)— (A) in the heading, by amending the heading to read as follows: Implementation of revenue requirements for non-Federal education assistance funds ; and (B) in paragraph (2)(A), by inserting at the end the following: The Secretary of Education shall notify the Secretary of Defense and the Secretary of Veterans Affairs when, by reason of failing to meet a requirement of subsection (a)(24), a proprietary institution of higher education becomes ineligible to participate in the programs authorized by this title, and when the institution regains such eligibility. ; 3. Ineligibility of certain proprietary institutions of higher education to participate in Department of Defense or Department Of Veterans Affairs programs of educational assistance (a) Department of Defense (1) In general Chapter 101 of title 10, United States Code, is amended by inserting after section 2008 the following new section: 2008a. Ineligibility of certain proprietary institutions of higher education to participate in Department of Defense programs of educational assistance Upon notice from the Secretary of Education under section 487(d)(2)(A) of the Higher Education Act of 1965 ( 20 U.S.C. 1094(d)(2)(A) ) that a proprietary institution of higher education is ineligible to participate in the programs authorized by title IV of such Act ( 20 U.S.C. 1070 et seq.), the Secretary of Defense shall ensure that no educational assistance provided by the Secretary under this title or any other provision of law is available or used for education at the institution for the period of institutional fiscal years during which the institution remains ineligible to participate in the programs authorized by title IV of the Higher Education Act of 1965 ( 20 U.S.C. 1070 et seq.). . (2) Clerical amendment The table of sections at the beginning of chapter 101 of such title is amended by inserting after the item relating to section 2008 the following new item: 2008a. Ineligibility of certain proprietary institutions of higher education to participate in Department of Defense programs of educational assistance. . (b) Department of Veterans Affairs (1) In general Subchapter II of chapter 36 of title 38, United States Code, is amended by inserting after section 3681 the following new section: 3681A. Ineligibility of certain proprietary institutions of higher education to participate in Department of Veterans Affairs programs of educational assistance (a) In general Upon notice from the Secretary of Education under section 487(d)(2)(A) of the Higher Education Act of 1965 ( 20 U.S.C. 1094(d)(2)(A) ) that a proprietary institution of higher education is ineligible to participate in the programs authorized by title IV of such Act ( 20 U.S.C. 1070 et seq.), the Secretary of Veterans Affairs shall ensure that no educational assistance provided by the Secretary under this title or any other provision of law is available or used for education at the institution for the period of institutional fiscal years during which the institution remains ineligible to participate in the programs authorized by title IV of the Higher Education Act of 1965 ( 20 U.S.C. 1070 et seq.). . (2) Clerical amendment The table of sections at the beginning of chapter 36 of such title is amended by inserting after the item relating to section 3681 the following new item: 3681A. Ineligibility of certain proprietary institutions of higher education to participate in Department of Veterans Affairs programs of educational assistance. .