Proprietary Education Interagency Oversight Coordination Improvement Act

Bill: 117-s-5155
Sponsor: full_name: Sen. Durbin, Richard J. [D-IL]
Introduced: 2022-11-30
Policy area: Education
Latest action: action_date: 2022-11-30
text: Read twice and referred to the Committee on Health, Education, Labor, and Pensions.

Summaries:
action_date: 2022-11-30
action_desc: Introduced in Senate
text: <p><b>Proprietary Education Interagency Oversight Coordination Improvement Act</b></p> <p>This bill requires certain actions to increase federal oversight of proprietary (i.e., for-profit) institutions of higher education (IHEs).</p> <p>Specifically, the bill establishes the Proprietary Education Interagency Oversight Coordination Committee and sets forth its duties and membership.</p> <p>The bill also directs the Department of Education (ED) to collect and track student complaints regarding the services or activities of any proprietary IHE that is eligible for federal education assistance. Further, ED must publish a warning list for parents and students that is comprised of proprietary IHEs that have engaged in certain activities, including those that have been sued for financial relief or have pending claims for borrower relief discharge. </p>

tv_txt: II 117th CONGRESS 2d Session S. 5155 IN THE SENATE OF THE UNITED STATES November 30 (legislative day, November 29), 2022 Mr. Durbin (for himself, Ms. Warren , and Ms. Smith ) introduced the following bill; which was read twice and referred to the Committee on Health, Education, Labor, and Pensions A BILL To establish the Proprietary Education Interagency Oversight Coordination Committee and facilitate the disclosure and reporting of information regarding complaints and investigations related to proprietary institutions of higher education eligible to receive Federal education assistance.

1. Short title This Act may be cited as the Proprietary Education Interagency Oversight Coordination Improvement Act . 2. Definitions In this Act: (1) Accrediting agency The term accrediting agency means a private educational association that acts as a reliable authority on the quality of education or training provided by an institution of higher education and is recognized by the Secretary of Education under section 496 of the Higher Education Act of 1965 ( 20 U.S.C. 1099b ). (2) Executive officer The term executive officer , with respect to a proprietary institution of higher education that is a publicly traded corporation, means— (A) the president of such corporation; (B) a vice president of such corporation who is in charge of a principal business unit, division, or function of such corporation, such as sales, administration, or finance; or (C) any other officer or person who performs a policy making function for such corporation, including an executive officer of a subsidiary of the corporation if the officer performs a policy making function for the corporation. (3) Federal education assistance The term Federal education assistance when used with respect to a proprietary institution of higher education, means Federal funds that are disbursed or delivered to or on behalf of a student to be used for tuition, fees, instruction, or any component of the student's cost of attendance (as defined in section 472 of the Higher Education Act of 1965 ( 20 U.S.C. 1087ll )) to attend such institution. (4) Institutional debt The term institutional debt means any debt owed by a student or the parent of a student to an institution of higher education, including— (A) debt owed through a private loan program or income share agreement operated by the institution; (B) debt owed from a return of student assistance made, insured, or guaranteed under title IV of the Higher Education Act 1965 ( 20 U.S.C. 1070 et seq. ) to the Department of Education; and (C) debt owed from the student’s nonpayment of institutional charges or fees. (5) Private education loan The term private education loan means— (A) a loan provided by a private educational lender (as defined in section 140(a) of the Truth in Lending Act ( 15 U.S.C. 1650(a) )) that— (i) is not made, insured, or guaranteed under title IV of the Higher Education Act of 1965 ( 20 U.S.C. 1070 et seq. ); (ii) is issued expressly for postsecondary educational expenses to a borrower, regardless of whether the loan is provided through the educational institution that the subject student attends or directly to the borrower from the private educational lender (as so defined); and (iii) is not made, insured, or guaranteed under title VII or title VIII of the Public Health Service Act ( 42 U.S.C. 292 et seq. and 296 et seq.); and (B) does not include an extension of credit under an open end consumer credit plan, a reverse mortgage transaction, a residential mortgage transaction, or any other loan that is secured by real property or a dwelling. (6) Proprietary institution of higher education The term proprietary institution of higher education has the meaning given the term in section 102(b) of the Higher Education Act of 1965 ( 20 U.S.C. 1002(b) ). (7) Recruiting and marketing activities (A) In general Except as provided in subparagraph (B), the term recruiting and marketing activities means activities that consist of the following: (i) Advertising and promotion activities, including paid announcements in newspapers, magazines, radio, television, billboards, electronic media, naming rights, or any other public medium of communication, including paying for displays or promotions at job fairs, military installations, or college recruiting events, that are made directly or indirectly to a student, a prospective student, the public, an accrediting agency, a State agency, or to the Secretary by an institution of higher education, one of its representatives, or any person with whom the institution has an agreement to provide educational programs, advertising, or admissions services. (ii) Misleading statement, misrepresentation, and substantial misrepresentation (as defined in section 668.71(c) of title 34, Code of Federal Regulations, or any successor regulation). (iii) Efforts to identify and attract prospective students, either directly or through a contractor or other third party, including contact concerning a prospective student’s potential enrollment or application for a grant, a loan, or work assistance under title IV of the Higher Education Act of 1965 ( 20 U.S.C. 1070 et seq. ) or participation in preadmission or advising activities, including soliciting an individual to provide contact information to an institution of higher education, including through websites established for such purpose and funds paid to third parties for such purpose. (iv) Such other activities as the Secretary of Education may prescribe, including paying for promotion or sponsorship of education or military-related associations. (B) Exceptions Any activity that is required as a condition of receipt of funds by an institution under title IV of the Higher Education Act of 1965 ( 20 U.S.C. 1070 et seq. ), is specifically authorized under such title, or is otherwise specified by the Secretary of Education, shall not be considered to be a recruiting and marketing activity under subparagraph (A). (8) State approval agency The term State approval agency means any State agency that determines whether an institution of higher education is legally authorized within such State to provide a program of education beyond secondary education. (9) Veterans service organization The term veterans service organization means an organization that is— (A) recognized by the Secretary of Veterans Affairs for the representation of veterans under section 5902 of title 38, United States Code; (B) congressionally chartered under title 36, United States Code, and serves or represents veterans; (C) recognized by the Secretary of Veteran Affairs under section 14.628 of title 38, Code of Federal Regulations (or a successor regulation), as a national organization, State organization, tribal organization, or regional or local organization; or (D) an organization that has a record of demonstrating expertise in, assists in, or serves the interests of veterans in education. 3. Establishment of committee (a) Establishment There is established a committee to be known as the Proprietary Education Interagency Oversight Coordination Committee (referred to in this Act as the Committee ) and to be composed of the head (or the designee of such head who is designated under subsection (d)) of each of the following Federal entities: (1) The Department of Education. (2) The Consumer Financial Protection Bureau. (3) The Department of Justice. (4) The Securities and Exchange Commission. (5) The Department of Defense. (6) The Department of Veterans Affairs. (7) The Federal Trade Commission. (8) The Department of Labor. (9) The Internal Revenue Service. (10) At the discretion of the President, any other relevant Federal agency or department. (b) Purposes The Committee shall have the following purposes: (1) To improve enforcement of applicable Federal laws and regulations. (2) To increase accountability of proprietary institutions of higher education to students and taxpayers. (3) To ensure the promotion of quality education programs. (4) To reduce and prevent fraud and abuse by proprietary institutions of higher education. (c) Responsibilities To meet the purposes described in subsection (b), the Committee shall have the following responsibilities: (1) Coordinate administrative oversight of proprietary institutions of higher education— (A) such that the Federal agencies represented on the Committee may develop a memorandum of understanding to specify responsibilities of each such Federal agency in creating the report under section 6; (B) to encourage information sharing among the Federal agencies related to Federal investigations, audits, or inquiries of proprietary institutions of higher education; and (C) to increase coordination and cooperation between Federal and State agencies, including State Attorneys General and State approval agencies, with respect to improving oversight and accountability of proprietary institutions of higher education. (2) Synthesize cross-agency industry data on proprietary institutions of higher education to— (A) develop an annual report under section 6; (B) publish a For-Profit College Warning List for Parents and Students , in accordance with section 7; and (C) develop consistency among Federal and State agencies in the dissemination of consumer information regarding proprietary institutions of higher education to ensure that students, parents, and other stakeholders have easy access to such information. (d) Membership (1) Designees The head of a Federal entity described in subsection (a) may designate a high ranking official of the entity to serve as a designee on the Committee. The designee shall be, whenever possible, the head of the portion of the entity that is most relevant to the purposes described in subsection (b). (2) Chairperson The Secretary of Education or the designee of such Secretary shall serve as the Chairperson of the Committee. (3) Committee support The Chairperson of the Committee shall ensure appropriate staff and officials at the Department of Education are available to support Committee-related work. 4. Meetings and advisory committee (a) Committee meetings The members of the Committee shall meet regularly, but not less than once during each quarter of each fiscal year, to carry out the purposes described in section 3(b) and responsibilities described in section 3(c). (b) Proprietary education oversight advisory committee (1) In general The Committee shall establish a Proprietary Education Oversight Advisory Committee to advise the Proprietary Education Interagency Oversight Coordination Committee that meets not less than twice each fiscal year. (2) FACA applicability The activities of the Proprietary Education Oversight Advisory Committee shall be subject to the provisions of the Federal Advisory Committee Act (5 U.S.C. App.). (3) Membership The Proprietary Education Oversight Advisory Committee shall be composed of the following members: (A) State Attorneys General. (B) Representatives from State approval agencies. (C) Representatives from veterans service organizations. (D) Representatives from accrediting agencies. (E) Representatives from civil rights organizations. (F) Representatives from proprietary institutions of higher education. (G) Consumer advocates. (H) Any additional stakeholders deemed relevant by the Proprietary Education Interagency Oversight Coordination Committee to provide input and information to enable the Proprietary Education Interagency Oversight Coordination Committee to carry out the purposes described in section 3(b) and responsibilities in section 3(c). 5. Collection and tracking of complaints (a) In general In consultation with the Committee, the Secretary of Education shall establish a single, toll-free telephone number, a website, and a database (or utilize an existing database) to facilitate the centralized collection of, monitoring of, and response to student complaints regarding the services or activities of any proprietary institution of higher education eligible for Federal education assistance. The Committee shall coordinate with the Federal agencies represented on the Committee to route complaints to such agencies, where appropriate. (b) Routing calls to states To the extent practicable, State approval agencies may receive appropriate complaints from the systems established under subsection (a), if— (1) the State approval agency system has the functional capacity to receive calls or electronic reports routed by the Department of Education systems; (2) the State approval agency has satisfied any conditions of participation in the system that the Department of Education may establish, including treatment of personally identifiable information and sharing of information on complaint resolution or related compliance procedures and resources; and (3) participation by the State approval agency includes measures necessary to provide for protection of personally identifiable information that conform to the standards for protection of the confidentiality of personally identifiable information and for data integrity and security that apply to the Federal agencies described in subsection (c). (c) Data sharing required To facilitate preparation of the reports required under section 6, supervision and enforcement activities, and monitoring of the market for educational services provided by any proprietary institution of higher education eligible for Federal education assistance, the Committee members shall share student complaint information with accrediting agencies, the Federal Trade Commission, other Federal agencies, and State agencies, subject to the standards applicable to Federal agencies for protection of the confidentiality of personally identifiable information and for data security and integrity. The accrediting agencies, the Federal Trade Commission, and other Federal agencies shall share data relating to student complaints regarding educational services provided by any proprietary institution of higher education with the Department of Education, subject to the standards applicable to Federal agencies for protection of confidentiality of personally identifiable information and for data security and integrity. 6. Report (a) In general The Committee shall submit an annual report to the Committee on Health, Education, Labor, and Pensions of the Senate, the Committee on Education and Labor of the House of Representatives, and any other committee of Congress that the Committee determines appropriate. (b) Public access The report described in subsection (a) shall be made available to the public in a manner that is easily accessible to parents, students, and other stakeholders. (c) Contents (1) In general The report shall include— (A) a description of the role of each member of the Committee in achieving the purposes described in section 3(b); (B) an accounting of any action taken by the Federal Government, any member entity of the Committee, or a State to enforce Federal or State laws and regulations applicable to a proprietary institution of higher education; (C) a summary of complaints received, resolved, or pending against each proprietary institution of higher education during the applicable year, including— (i) student complaints collected by the complaint system established under section 5 or received by any member entity of the Committee; (ii) any complaint filed by a Federal or State agency in a Federal, State, local, or tribal court; (iii) any administrative proceeding by a Federal or State agency involving noncompliance of any applicable law or regulation; (iv) any other review, audit, or administrative process by any Federal or State agency that results in a penalty, suspension, or termination from any Federal or State program; and (v) any complaint, review, audit, or administrative process initiated against the proprietary institution of higher education by an accrediting agency or any adverse action taken by an accrediting agency during the applicable year; (D) the data described in paragraph (2) and any other data relevant to proprietary institutions of higher education that the Committee determines appropriate; and (E) recommendations of the Committee for such legislative and administrative actions as the Committee determines are necessary to— (i) improve enforcement of applicable Federal laws; (ii) increase accountability of proprietary institutions of higher education to students and taxpayers; (iii) reduce and prevent fraud and abuse by proprietary institutions of higher education; and (iv) ensure the promotion of quality education programs. (2) Data (A) Industry-wide data The report shall include data on all proprietary institutions of higher education that consists of information regarding— (i) the total amount of Federal education assistance that proprietary institutions of higher education received for the previous academic year, and the percentage of the total amount of Federal education assistance provided to institutions of higher education (as defined in section 102 of the Higher Education Act of 1965 ( 20 U.S.C. 1002 )) for such previous academic year that reflects such total amount of Federal education assistance provided to proprietary institutions of higher education for such previous academic year; (ii) the total amount of Federal education assistance that proprietary institutions of higher education received for the previous academic year, disaggregated by— (I) educational assistance in the form of a loan provided under title IV of the Higher Education Act of 1965 ( 20 U.S.C. 1070 et seq. ); (II) educational assistance in the form of a grant provided under title IV of the Higher Education Act of 1965 ( 20 U.S.C. 1070 et seq. ); (III) educational assistance provided under chapter 33 of title 38, United States Code; (IV) assistance for tuition and expenses under section 2007 of title 10, United States Code; (V) assistance provided under section 1784a of title 10, United States Code; and (VI) Federal education assistance not described in subclauses (I) through (V); (iii) the percentage of the total amount of Federal education assistance provided to institutions of higher education (as defined in section 102 of the Higher Education Act of 1965 ( 20 U.S.C. 1002 )) for such previous academic year for each of the programs described in subclauses (I) through (VI) of clause (ii) that reflects such total amount of Federal education assistance provided to proprietary institutions of higher education for such previous academic year for each of such programs; (iv) the average retention and graduation rates for students pursuing a degree at proprietary institutions of higher education; (v) the average cohort default rate (as defined in section 435(m) of the Higher Education Act of 1965 ( 20 U.S.C. 1085(m) ) for proprietary institutions of higher education, and list of each cohort default rate for each proprietary institution of higher education; (vi) the average pre-enrollment expenditures on a per-enrolled-student basis, including expenditures on recruiting and marketing activities; (vii) the average educational and general expenditures (as defined in section 502 of the Higher Education Act of 1965 ( 20 U.S.C. 1101a )) per student, excluding all pre-enrollment expenditures; (viii) for careers requiring the passage of a licensing examination— (I) the passage rate of individuals who attended a proprietary institution of higher education taking such examination to pursue such a career; and (II) the passage rate of all individuals taking such exam to pursue such a career; and (ix) the use of private education loans at proprietary institutions of higher education that includes— (I) an estimate of the total number of such loans; (II) information on the average debt, default rate, and interest rate of such loans; and (III) the names of each lender providing private education loans to borrowers with respect to each proprietary institution of higher education in the prior academic year, including— (aa) the number of borrowers receiving loans from each lender; and (bb) the volume of dollars provided to borrowers with respect to the proprietary institution of higher education by each lender. (B) Data on publicly traded corporations (i) In general The report shall include data on proprietary institutions of higher education that are publicly traded corporations, consisting of information on— (I) any pre-tax profit of such proprietary institutions of higher education— (aa) reported as a total amount and an average percent of revenue for all such proprietary institutions of higher education; and (bb) reported for each such proprietary institution of higher education; (II) revenue for such proprietary institutions of higher education spent on recruiting and marketing activities, student instruction, and student support services, reported— (aa) as a total amount and an average percent of revenue for all such proprietary institutions of higher education; and (bb) for each such proprietary institution of higher education; (III) total compensation packages of the executive officers of each such proprietary institution of higher education; (IV) a list of institutional loan programs offered by each such proprietary institution of higher education that includes information on the default and interest rates of such programs; and (V) the data described in clauses (ii) and (iii). (ii) Disaggregated by ownership The report shall include data on proprietary institutions of higher education that are publicly traded corporations, disaggregated by corporate or parent entity, brand name, and campus, consisting of— (I) the average total cost of attendance at each such proprietary institution of higher education, and information comparing such total cost for each such program to— (aa) the average total cost of attendance— (AA) at each public institution of higher education; and (BB) at each public institution of higher education that offers the same level of education degree or certification as the proprietary institution of higher education; and (bb) the average total cost of attendance— (AA) at all institutions of higher education, including such institutions that are public and such institutions that are private; and (BB) at all institutions of higher education that offer the same level of education degree or certification as the proprietary institution of higher education, including such institutions that are public and such institutions that are private; (II) total enrollment, disaggregated by— (aa) individuals enrolled in programs taken online; (bb) individuals enrolled in programs that are not taken online; and (cc) individuals enrolled in programs taken both online and not online; (III) the average retention and graduation rates for students pursuing a degree at such proprietary institutions of higher education; (IV) the percentage of students enrolled in such proprietary institutions of higher education who complete a program of such an institution within— (aa) the standard period of completion for such program; and (bb) a period that is 150 percent of such standard period of completion; (V) the average total cost of attendance for each program at such proprietary institutions of higher education; (VI) the average cohort default rate, as defined in section 435(m) of the Higher Education Act of 1965 ( 20 U.S.C. 1085(m) ), for such proprietary institutions of higher education, and an annual list of cohort default rates (as so defined) for all proprietary institutions of higher education; (VII) the median Federal educational debt incurred by students who complete a program at such a proprietary institution of higher education; (VIII) the median Federal educational debt incurred by students who start but do not complete a program at such a proprietary institution of higher education; (IX) the job placement rate for students who complete a program at such a proprietary institution of higher education and the type of employment obtained by such students; (X) for careers requiring the passage of a licensing examination, the rate of individuals who attended such a proprietary institution of higher education and passed such an examination; (XI) the number of complaints from students enrolled in such proprietary institutions of higher education who have submitted a complaint to any member entity of the Committee; and (XII) the volume of institutional debt, number of students who owe institutional debts, and average amount of institutional debt owed by each student. (iii) Department of defense and veterans affairs assistance (I) In general To the extent practicable, the report shall provide information on the data described in clause (ii) for individuals using, to pay for the costs of attending such a proprietary institution of higher education, Federal education assistance provided under— (aa) chapter 33 of title 38, United States Code; (bb) section 2007 of title 10, United States Code; and (cc) section 1784a of title 10, United States Code. (II) Revenue The report shall provide information on the revenue of proprietary institutions of higher education that are publicly traded corporations that is derived from the Federal education assistance described in subclause (I). (C) Comparison data To the extent practicable, the report shall provide information comparing the data described in subparagraph (B) for proprietary institutions of higher education that are publicly traded corporations with such data for public institutions of higher education disaggregated by State. (3) Accounting of any action For the purposes of paragraph (1)(B), the term any action shall include— (A) a complaint filed by a Federal or State agency in a local, State, Federal, or tribal court; (B) an administrative proceeding by a Federal or State agency involving noncompliance of any applicable law or regulation; or (C) any other review, audit, or administrative process by any Federal or State agency that results in a penalty, suspension, or termination from any Federal or State program. 7. For-profit college warning list for parents and students (a) In general Each academic year, the Secretary of Education on behalf of the Committee shall publish a list to be known as the For-Profit College Warning List for Parents and Students to be comprised of proprietary institutions of higher education— (1) that have been sued for financial relief by a Federal or State authority, or through a qui tam action in which the Federal Government has intervened; (2) that are required to pay a debt or incur a liability from a settlement, arbitration proceeding, or final judgment in a judicial proceeding with a Federal or State agency and the case addresses misrepresentation, fraud, liability under sections 3729 through 3733 of title 31, United States Code (commonly known as the False Claims Act ), or other borrower defense to repayment claims; (3) that have pending claims for borrower relief discharge under the borrower defense to repayment regulations from students or former students of the institution and the Secretary of Education has formed a group process to consider the claims; (4) that have had any eligibility for participation withdrawn or suspended with respect to— (A) educational assistance in the form of a loan provided under title IV of the Higher Education Act of 1965 ( 20 U.S.C. 1070 et seq. ); (B) educational assistance in the form of a grant provided under title IV of the Higher Education Act of 1965 ( 20 U.S.C. 1070 et seq. ); (C) educational assistance provided under chapter 33 of title 38, United States Code; (D) assistance for tuition and expenses under section 2007 of title 10, United States Code; (E) assistance provided under section 1784a of title 10, United States Code; or (F) Federal education assistance not described in subparagraphs (A) through (E); or (5) that have been deemed ineligible to receive Federal education assistance for the next year or required to repay Federal education assistance previously received in applicable report year. (b) Summary The For-Profit College Warning List for Parents and Students shall include a summary in plain language of the basis of each proprietary institution of higher education’s inclusion on the list. (c) Procedures The Committee shall establish and apply review procedures for the For-Profit College Warning List for Parents and Students, including evaluation and withdrawal proceedings that provide— (1) for adequate written specification of— (A) the procedure for identifying proprietary intuitions of higher education for inclusion on the list; and (B) identified deficiencies at the proprietary institutions of higher education; and (2) for sufficient opportunity for a written response by a proprietary institution of higher education regarding any deficiencies identified by the Committee— (A) within a timeframe determined by the Committee; and (B) prior to the final publication of the For-Profit College Warning List for Parents and Students. (d) Publication Not later than July 1 of each fiscal year, on behalf of the Committee, the Secretary of Education shall publish the For-Profit College Warning List for Parents and Students prominently and in a manner that is easily accessible to parents, current students, prospective students, and other stakeholders. The Secretary of Education may incorporate the For-Profit College Warning List for Parents and Students into preexisting, widely used platforms.