119 S994 IS: Preventing Risky Operations from Threatening the Education and Career Trajectories of Students Act of 2025
U.S. Senate
2025-03-12
text/xml
EN
Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.
1.This Act may be cited as the Preventing Risky Operations from Threatening the Education and Career Trajectories of Students Act of 2025
or the PROTECT Students Act of 2025
.2.The table of contents for this Act is as follows: Sec. 1. Short title.Sec. 2. Table of contents.Sec. 3. References.TITLE I—Student and taxpayer protectionsSec. 101. Gainful employment and financial value transparency.Sec. 102. Borrower defense and substantial misrepresentations.Sec. 103. Closed school discharge.Sec. 104. Prohibition on institutions limiting student legal action.Sec. 105. Incentive compensation.TITLE II—Ensuring integrity at institutions of higher education and institutional contractorsSec. 201. Updating Federal oversight of third-party servicers.Sec. 202. Job placement rates.Sec. 203. Allocation of tuition and fee revenue by title IV institutions.Sec. 204. Past performance.Sec. 205. Recoupment.TITLE III—Improving oversightSec. 301. Enforcement in the Office of Federal Student Aid.Sec. 302. For-Profit Education Oversight Coordination Committee.Sec. 303. Establishment and maintenance of complaint resolution and tracking system.Sec. 304. Reforms to eligibility and certification procedures.Sec. 305. State oversight.Sec. 306. Accrediting agency oversight.Sec. 307. Mandatory spending for administrative costs of operating the student aid programs.TITLE IV—Improving access to student and taxpayer informationSec. 401. Reporting and disclosures from institutions of higher education.Sec. 402. Transparency of oversight activities.3.Except as otherwise expressly provided in this Act, wherever in this Act an amendment or repeal is expressed in terms of an amendment to, or a repeal of, a section or other provision, the reference shall be considered to be made to that section or other provision of the Higher Education Act of 1965 (20 U.S.C. 1001 et seq.).<enum>I</enum><header>Student and taxpayer protections</header><section id="idbe7918b2caae4ecba66af3390f6cbbcd"><enum>101.</enum><header>Gainful employment and financial value transparency</header><subsection id="ide2f17b60d2564bb89df0271f3567834b"><enum>(a)</enum><header>Defining gainful employment programs</header><paragraph id="idd96db4f2fc474ad5831884d569af5423"><enum>(1)</enum><header>Additional institutions</header><text>Section 101(b) (<external-xref legal-doc="usc" parsable-cite="usc/20/1001">20 U.S.C. 1001(b)</external-xref>) is amended in paragraph (1), by inserting <quote>, including that meets the standards for debt-to-earnings and earnings premium in section 498C,</quote> after <quote>gainful employment in a recognized occupation</quote>.</text></paragraph><paragraph id="id08b789164c4c453892bc0b15faccea50"><enum>(2)</enum><header>Proprietary institution of higher education</header><text>Section 102(b)(1)(A)(i) (<external-xref legal-doc="usc" parsable-cite="usc/20/1002">20 U.S.C. 1002(b)(1)(A)(i)</external-xref>) is amended, by inserting <quote>, including that meets the standards for debt-to-earnings and earnings premium in section 498C</quote> after <quote>gainful employment in a recognized occupation</quote>.</text></paragraph><paragraph id="idd006d0f2231c45dc8307ba234c08a3d1"><enum>(3)</enum><header>Postsecondary vocational institution</header><text>Section 102(c)(1)(A) (<external-xref legal-doc="usc" parsable-cite="usc/20/1002">20 U.S.C. 1002(c)(1)(A)</external-xref>) is amended, by inserting <quote>, including that meets the standards for debt-to-earnings and earnings premium in section 498C</quote> after <quote>gainful employment in a recognized occupation</quote>.</text></paragraph><paragraph id="id43cceb71c6d3486182061d63615c57a9"><enum>(4)</enum><header>Eligible program</header><text>Section 481(b)(1)(A)(i) (<external-xref legal-doc="usc" parsable-cite="usc/20/1088">20 U.S.C. 1088(b)(1)(A)(i)</external-xref>) is amended, by inserting <quote>, including that meets the standards for debt-to-earnings and earnings premium in section 498C</quote> after <quote>gainful employment in a recognized profession</quote>.</text></paragraph></subsection><subsection id="id6ad64d7a85fd46b5b36e0a27b8bd2c71"><enum>(b)</enum><header>Debt-to-Earnings and earnings premium</header><text>Subpart 3 of part H of title IV (<external-xref legal-doc="usc" parsable-cite="usc/20/1099c">20 U.S.C. 1099c et seq.</external-xref>) is amended by adding at the end the following: </text><quoted-block style="OLC" display-inline="no-display-inline" id="id680E3218A41F44F5812055ECA197400C"><section id="id5cd0c3051dd3415fa848eaa2914c8479"><enum>498C.</enum><header>Debt-to-earnings and earnings premium</header><subsection id="idbe10efa804764070b2199a40cdf6b078"><enum>(a)</enum><header>Definitions</header><text>In this section: </text><paragraph id="ide6bee4b731c7413887038102c84b8c7a"><enum>(1)</enum><header>Annual debt-to-earnings rate</header><text>The term <term>annual debt-to-earnings rate</term> means the rate that is calculated for a cohort of students by taking the annual loan payment for such cohort, as calculated by the Secretary, divided by the median annual earnings for such cohort. </text></paragraph><paragraph commented="no" display-inline="no-display-inline" id="id89b8eff61a844825b8fafbaddff8f5dc"><enum>(2)</enum><header>Annual loan payment</header><text>The term <term>annual loan payment</term> means, for a cohort of students, as defined by the Secretary, who completed an eligible program, their total annual payment on loans borrowed to enroll in the institution that offered the eligible program, measured not less than 2 and not more than 4 years after their completion.</text></paragraph><paragraph id="id93703cc8a05342d9925e93f393a1fc5b"><enum>(3)</enum><header>Discretionary debt-to-earnings rate</header><text>The term <term>discretionary debt-to-earnings rate</term> means the rate that is calculated for a cohort of students by taking the annual loan payment for such cohort, as calculated by the Secretary, divided by the discretionary earnings for such cohort.</text></paragraph><paragraph id="id619d9bab795b41cbbb70d685a73434be"><enum>(4)</enum><header>Discretionary earnings</header><text>The term <term>discretionary earnings</term> means, for a cohort of students, as defined by the Secretary, who completed an eligible program, the median annual earnings minus the amount that is 150 percent of the poverty level for an individual, as determined by the Department of Health and Human Services.</text></paragraph><paragraph id="idd3c37625eefc457db2e26a931d418753"><enum>(5)</enum><header>Earnings premium</header><text>The term <term>earnings premium</term> means the amount by which the median annual earnings exceed the median earnings for working adults with not more than a high school diploma, as determined using data from the Bureau of the Census—</text><subparagraph id="idcad36e59449a4117aca3737659b059c3"><enum>(A)</enum><text>in the State where the institution that provides the eligible program is located; or</text></subparagraph><subparagraph id="id3aa9e1b60af5427ba862b6a4bcb24e81"><enum>(B)</enum><text>if fewer than half of the students in the eligible program are from the State where the institution that provides the eligible program is located, or if the institution is a foreign institution, nationally.</text></subparagraph></paragraph><paragraph id="id827a48032b5c4b0c9910a9fd975f66ec"><enum>(6)</enum><header>Median annual earnings</header><text>The term <term>median annual earnings</term> means, for a cohort of students, as defined by the Secretary, who completed an eligible program, the midpoint of their annual earnings measured not less than 2 and not more than 4 years after their completion.</text></paragraph></subsection><subsection id="id3f1dcdebe3b9400ba3e07388bab37d09"><enum>(b)</enum><header>Standards</header><paragraph commented="no" display-inline="no-display-inline" id="id238cb58a38204e6aae93228729c95923"><enum>(1)</enum><header display-inline="yes-display-inline">In general</header><text>An eligible program does not meet the standards for debt-to-earnings or earnings premium if it fails the debt-to-earnings rates or fails the earnings premium, as described in paragraph (2), in 2 out of any 3 consecutive years.</text></paragraph><paragraph id="idc9054a39dbea482aadc31417709ac5b0"><enum>(2)</enum><header>Failing</header><text>An eligible program—</text><subparagraph commented="no" display-inline="no-display-inline" id="id79404363b5044f63a9cce6e7ccc2fa75"><enum>(A)</enum><text display-inline="yes-display-inline">fails the debt-to-earnings rates if it has—</text><clause commented="no" display-inline="no-display-inline" id="idd88c4299447348c2b43fc871d489157c"><enum>(i)</enum><text display-inline="yes-display-inline">a discretionary debt-to-earnings rate equal to or greater than 20 percent; and </text></clause><clause commented="no" display-inline="no-display-inline" id="id007961b531cf46c980116d3d002e6248"><enum>(ii)</enum><text display-inline="yes-display-inline">an annual debt-to-earnings rate equal to or greater than 8 percent; and </text></clause></subparagraph><subparagraph id="id812ad0c2f35c41d294c099122091747a"><enum>(B)</enum><text>fails the earnings premium if it has an earnings premium of zero or a negative amount.</text></subparagraph></paragraph></subsection><subsection id="idebc250488e7b4a53a5a796997c9e4e64"><enum>(c)</enum><header>Process</header><paragraph commented="no" display-inline="no-display-inline" id="idec9e6f54c3e44defab8b722939c30389"><enum>(1)</enum><header>Data match</header><text display-inline="yes-display-inline">In order to ensure compliance with paragraph (2), the Commissioner of the Internal Revenue Service, the Commissioner of the Social Security Administration, and the head of any other Federal agency that administers the database of individual-level earnings data shall, in coordination with the Secretary, timely ensure secure, annual data matches of earnings data with Department of Education data to produce the median annual earnings of each eligible program.</text></paragraph><paragraph commented="no" display-inline="no-display-inline" id="id872d5d12f5ee488aab7b5bba3f93a36e"><enum>(2)</enum><header>Requirements of the secretary</header><text display-inline="yes-display-inline">The Secretary shall—</text><subparagraph id="id8343cbb699c343bea813a1b776752745"><enum>(A)</enum><text>on an annual calendar year basis—</text><clause commented="no" display-inline="no-display-inline" id="id29f95820468344b990acd9af675df879"><enum>(i)</enum><text display-inline="yes-display-inline">for each eligible program—</text><subclause commented="no" display-inline="no-display-inline" id="iddcbf55a6cd784f408ca1096df85585ab"><enum>(I)</enum><text display-inline="yes-display-inline">calculate for each award year the discretionary debt-to-earnings rate, the annual debt-to-earnings rate, and the earnings premium for the program; and</text></subclause><subclause commented="no" display-inline="no-display-inline" id="id289fe387112a4c5b96753957b84ab054"><enum>(II)</enum><text>publish the discretionary debt-to-earnings rate, the annual debt-to-earnings rate, and the earnings premium for the eligible program for each award year on a website established and maintained by the Secretary; </text></subclause></clause><clause id="id7cb1c6bcd2dd4eebba3fd6231d1fe487"><enum>(ii)</enum><text>for each eligible program that is a program of training to prepare students for gainful employment in a recognized occupation or a graduate or professional degree program offered by an institution of higher education described in section 101(a), issue a notice of determination not later than 45 days after completing the data match described in paragraph (1), informing the institution that provides the program—</text><subclause id="id5253c234c24945029597fa79f950e100"><enum>(I)</enum><text>of the final discretionary debt-to-earnings rate, the annual debt-to-earnings rate, and the earnings premium for the program, which may not be appealed by the institution unless the institution believes that the Secretary erred in the calculation of any such measure;</text></subclause><subclause id="id6580cc104bd3459dbcf76cd34588b05e"><enum>(II)</enum><text>of the final determination regarding whether the program fails the debt-to-earnings rates or fails the earnings premium, as described in subsection (b)(2);</text></subclause><subclause id="ida68dd641d1e548d094f1606d2f6dc67c"><enum>(III)</enum><text>whether the program does not meet the standards for debt-to-earnings or earnings premium as described in subsection (b)(1) or could not meet such standards in the next year if it fails the debt-to-earnings rates or fails the earnings premium, as described in subsection (b)(2), in such next year; and</text></subclause><subclause id="id287e7398fe0b44bd88f0360fb4b8cb8c"><enum>(IV)</enum><text>whether the institution is required to provide warnings to enrolled students and prospective students of the program’s failure, or risk of failure, to meet the standards, as determined under subclause (III); and </text></subclause></clause><clause commented="no" display-inline="no-display-inline" id="ida1b6563695114f2589e1805a6586da7d"><enum>(iii)</enum><text>for each eligible program that is a program of training to prepare students for gainful employment in a recognized occupation that does not meet the standards for debt-to-earnings and earnings premium as described in subsection (b)(1), enforce the consequences under subsection (d); and</text></clause></subparagraph><subparagraph id="ide159ded57aba47f59d4edc7ceedd46bb"><enum>(B)</enum><text>develop processes to verify, on an annual calendar year basis—</text><clause commented="no" display-inline="no-display-inline" id="id2c10c82c05304f6e9aff2139167f5842"><enum>(i)</enum><text display-inline="yes-display-inline">that each eligible program that is a program of training to prepare students for gainful employment in a recognized occupation or a graduate or professional degree program offered by an institution of higher education described in section 101(a), provides the warning described in subparagraph (A)(ii)(IV), if applicable; and</text></clause><clause id="id50ce1c4aec0e4f2e8402e69d618d717c"><enum>(ii)</enum><text>that each eligible program that is a program of training to prepare students for gainful employment in a recognized occupation that does not meet the standards for debt-to-earnings or earnings premium as described in subsection (b)(1), does not receive funds as described in subsection (d). </text></clause></subparagraph></paragraph></subsection><subsection id="ide60f218131594f8eb4c2afd0c798da4b"><enum>(d)</enum><header>Consequences of not meeting standards</header><paragraph id="id10b7fd7326644c9b894dcdbc77f4eca3"><enum>(1)</enum><header>No disbursement of funds for enrollment in ineligible programs</header><text>An institution may not disburse program funds under this title to students enrolled in a program of training to prepare students for gainful employment in a recognized occupation that does not meet the standards for debt-to-earnings and earnings premium as described in this section.</text></paragraph><paragraph id="id3b52489465d14d718a58d02c395836c0"><enum>(2)</enum><header>Time period to reestablish eligibility</header><text>An institution may not seek to reestablish the eligibility of a program of training to prepare students for gainful employment in a recognized occupation that does not meet the standards for debt-to-earnings and earnings premium as described in this section or establish the eligibility of a program of training to prepare students for gainful employment in a recognized occupation that is substantially similar to the program that did not meet such standards until the date that is 3 years after the date of the notice of determination issued under subsection (c)(2)(A)(ii) that the program of training to prepare students for gainful employment in a recognized occupation does not meet the standards.</text></paragraph></subsection><subsection id="idc6404adeb1c641eea75717227f30f7f7"><enum>(e)</enum><header>Regulations</header><text>The Secretary shall issue regulations to carry out this section not later than 1 year after the date of enactment of the <short-title>Preventing Risky Operations from Threatening the Education and Career Trajectories of Students Act of 2025</short-title>, except that such regulations shall not be subject to the requirements of sections 482 or 492.</text></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></subsection></section><section id="id9d022501d9a64200a8b021ecb3d022f2"><enum>102.</enum><header>Borrower defense and substantial misrepresentations</header><subsection commented="no" display-inline="no-display-inline" id="id64f403b517784c2082a90073dd19cdeb"><enum>(a)</enum><header display-inline="yes-display-inline">Borrower defense to repayment</header><text display-inline="yes-display-inline">Section 455(h) (<external-xref legal-doc="usc" parsable-cite="usc/20/1087e">20 U.S.C. 1087e(h)</external-xref>) is amended to read as follows:</text><quoted-block style="OLC" display-inline="no-display-inline" id="id45BDFE0842FB4B9492617FF9799F5F4A"><subsection id="idd99620eabfbd47c491b0eba7324d5d9c"><enum>(h)</enum><header>Borrower defenses</header><paragraph commented="no" display-inline="no-display-inline" id="id6ef00d83b1bb42d2889a9be7a99744c9"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">Notwithstanding any other provision of State or Federal law, the Secretary shall discharge a covered loan in repayment made to a borrower with a defense to repayment of the loan, as described in this section.</text></paragraph><paragraph commented="no" display-inline="no-display-inline" id="idd5e847fb03054bc898f13d3c7d3252b3"><enum>(2)</enum><header>Definitions</header><text display-inline="yes-display-inline">In this subsection:</text><subparagraph id="id25d8549e39ce45f3b4dfc88862c4c21b"><enum>(A)</enum><header>Repayment</header><text>The term <term>repayment</term> means the period after any in-school deferment or grace period and before a loan is paid in full other than by a consolidation loan made under this title, including, without limitation, a loan in default.</text></subparagraph><subparagraph id="idb8a1c5112a844aa2b2d03c375f6efede"><enum>(B)</enum><header>Covered loan</header><text>The term <term>covered loan</term> means a loan made, insured, or guaranteed under this title that has an outstanding balance comprised in whole or in part by repayment obligations incurred to cover the cost of attendance at an institution of higher education. </text></subparagraph></paragraph><paragraph id="idc256d6a6e0634c78b48c9a69174678e2"><enum>(3)</enum><header>Basis for defense to repayment</header><subparagraph commented="no" display-inline="no-display-inline" id="idf1152007c81e444aa1d8dbcd149e5aa2"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">For purposes of discharge under this section, a borrower defense to repayment is established when the Secretary concludes by a preponderance of the evidence that a qualifying act, omission, or event occurred, and the student whose cost of attendance was paid in whole or in part by the proceeds of a covered loan suffered detriment in the nature and degree warranting a borrower defense discharge.</text></subparagraph><subparagraph id="id1cbc1f8190cc40089bd57b05dba87e55"><enum>(B)</enum><header>Qualifying acts, omissions, or events</header><text>A qualifying act, omission, or event includes without limitation any of the following:</text><clause id="idfc4824dc8c6b4da8988ee6ac3fadbed6"><enum>(i)</enum><text>The institution, one of its representatives, or a third-party servicer of the institution made a substantial misrepresentation (as described in section 481(g)), directly or indirectly, to the borrower in connection with the borrower’s decision to attend, or to continue attending, the institution or the borrower’s decision to take out a covered loan.</text></clause><clause id="id85075c33abe2400f81a0d9093c9856ad"><enum>(ii)</enum><text>The institution failed to perform its obligations under the terms of a contract with the student and such obligation was undertaken as consideration or in exchange for the borrower’s decision to attend, or to continue attending, the institution, for the borrower’s decision to take out a covered loan, or for funds disbursed in connection with a covered loan.</text></clause><clause id="id81533c3554ca40e689f4d6fdfbe49f46"><enum>(iii)</enum><text>The institution engaged in aggressive and deceptive recruitment conduct or tactics in connection with the borrower’s decision to attend, or to continue attending, the institution or the borrower’s decision to take out a covered loan. Aggressive and deceptive recruitment tactics or conduct include actions by the institution, any of its representatives, or any entity, organization, or person with whom the institution has an agreement to provide educational programs, marketing, recruitment, or lead generation services that pressure a student to make enrollment or loan-related decisions, take unreasonable advantage of a student’s lack of knowledge, discourage a student or prospective student from consulting an advisor prior to making enrollment or loan-related decisions, use threatening or abusive language, or repeatedly engage in unsolicited contact.</text></clause><clause id="id8d78c8d3b7734d4b9573f76386aa3d3d"><enum>(iv)</enum><text>The borrower, whether as an individual or as a member of a class, or a governmental agency has obtained against the institution a favorable judgment based on State or Federal law in a court or administrative tribunal of competent jurisdiction based on the institution’s act or omission relating to the making of a covered loan, or the provision of educational services for which the loan was provided, notwithstanding any possible appeal.</text></clause><clause id="id8893361ba89a4ccfae2ea44d0b0831b7"><enum>(v)</enum><text>The Secretary sanctioned or otherwise took adverse action against the institution at which the borrower enrolled, based on the institution’s acts or omissions that could give rise to a borrower defense under clause (i), (ii), or (iii). </text></clause><clause id="id78a1c950ab1e4cc79e13e3a838755bcf"><enum>(vi)</enum><text>The institution committed any act or omission that relates to the making of the covered loan for enrollment at the institution or the provision of educational services for which the covered loan was provided that would give rise to a cause of action against the institution under applicable State law without regard to any statute of limitations.</text></clause></subparagraph><subparagraph id="ida4177a24e1d5481f89711038b979acf4"><enum>(C)</enum><header>Determination whether detriment warrants discharge</header><text>In determining whether the nature and degree of detriment warrants a borrower defense discharge, the Secretary shall consider the totality of the circumstances, including the nature and degree of detriment shown by previous recipients of borrower defense discharge, and drawing all inferences and presumptions warranted by the evidence under the circumstances. </text></subparagraph></paragraph><paragraph id="ide1e8189c52bc43d7844e96ba7d78a4a8"><enum>(4)</enum><header>Effect of discharge</header><text>To effectuate a borrower defense discharge of a covered loan in repayment, the Secretary shall carry out the following:</text><subparagraph id="idf8051cc1b8e946f393da7794a11d8df4"><enum>(A)</enum><text>Discharge all amounts owed to the Secretary, including interest and fees, on the covered loan, subject to the limitation in paragraph (5). In the case of a covered loan that is a Federal Direct Consolidation Loan or a Federal Consolidation Loan under section 428C comprised only in part of repayment obligations incurred to cover the cost of attendance at the institution whose acts or omissions are the basis of the discharge, the Secretary may discharge less than the total amount of the covered loan when loan account records clearly establish the portion of the covered loan not subject to the defense to repayment.</text></subparagraph><subparagraph id="id3c3e08777eef41e593d9242d3f34ab18"><enum>(B)</enum><text>Reimburse all payments previously made to the Secretary on the covered loan, subject to the limitation in paragraph (5).</text></subparagraph><subparagraph id="id9c4809e11bcb4fc0bcf4074b87d2a43a"><enum>(C)</enum><text>For borrowers in default, determine that the borrower is not in default on the covered loan and therefore not ineligible to receive assistance under this title on the basis of default on the covered loan.</text></subparagraph><subparagraph id="id0926a0e878314a639ae67b5725d8c8de"><enum>(D)</enum><text>Update or delete adverse reports the Secretary previously made to consumer reporting agencies regarding the covered loan.</text></subparagraph><subparagraph id="id098b3df675384ce5bd791810b42a7323"><enum>(E)</enum><text>Remove the discharged covered loan and any grant made under this title related to the student’s attendance at the institution whose acts are omissions are the basis of the discharge from the borrower’s loan history for purposes of calculating eligibility for further grants and loans under this title.</text></subparagraph></paragraph><paragraph id="id480de00df6214e388a935276e47b8b8e"><enum>(5)</enum><header>Limitation on discharge and reimbursement</header><text>The Secretary may reduce the amount of discharge and reimbursement provided for in paragraph (4) if the borrower received a money payment from the institution or related entity in compensation for the acts or omissions forming the basis of the borrower defense. In deciding whether a reduction is warranted, and in what amount, the Secretary shall consider the extent to which the payment received by the borrower compensated for non-economic damages, out-of-pocket expenses, or payments previously made directly to the institution, and whether the borrower has non-Federal student loans as a result of attending the institution. The Secretary may not reduce the amount of discharge and reimbursement provided for in a covered loan in paragraph (4) because the borrower received funds from a State tuition recovery fund.</text></paragraph><paragraph id="idab2a73f424cb4faaa4bf0b869c68554f"><enum>(6)</enum><header>Finality</header><text>A borrower defense discharge is final upon the Secretary’s notification to the borrower. The Secretary may not thereafter revoke or reduce the amount of discharge or reimbursement, absent a finding of fraud on the part of the borrower.</text></paragraph><paragraph id="iddfbaa495acc44427ba8e777ceb178697"><enum>(7)</enum><header>Group process</header><text>Where substantial misrepresentations are widespread, the Secretary shall seek to assess the eligibility of all potentially affected borrowers as a group or in multiple groups to expedite the process. If such discharges are approved, the Secretary shall discharge the covered loans of all eligible borrowers in the group, in accordance with the processes in this section and without requiring application materials, to the extent practicable. </text></paragraph><paragraph id="id57a24e9a3582482d9fe01980fcaa43a2"><enum>(8)</enum><header>Regulations</header><text>The Secretary may promulgate regulations or otherwise prescribe procedures in relation to borrower defense discharge, consistent with the provisions of this section. Nothing in this section modifies or displaces existing powers, authorities, and obligations of the Secretary, including obligations imposed under <external-xref legal-doc="usc-chapter" parsable-cite="usc-chapter/5/5">chapter 5</external-xref> of title 5, United States Code (commonly known as the <quote>Administrative Procedures Act</quote>).</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection><subsection commented="no" display-inline="no-display-inline" id="id32e0aa8d0c4b4b11886d8dde1906e9a5"><enum>(b)</enum><header>Substantial misrepresentation</header><text>Section 481 (<external-xref legal-doc="usc" parsable-cite="usc/20/1088">20 U.S.C. 1088</external-xref>) is amended by adding at the end the following:</text><quoted-block style="OLC" display-inline="no-display-inline" id="id7B54F2AE92DA40129240F241F9BC672D"><subsection id="id345f937b40aa483dac9ba03a0d95b100"><enum>(g)</enum><header>Substantial misrepresentation</header><text>In this title, the term <term>substantial misrepresentation</term>, when used with respect to an institution of higher education, includes—</text><paragraph commented="no" display-inline="no-display-inline" id="id4b6a447c0cd447938cfdf8e4f3888782"><enum>(1)</enum><text display-inline="yes-display-inline">any statement about the nature of the institution’s educational program, its financial charges, or the employability or earnings of its graduates that is false, erroneous, or has the likelihood or tendency to mislead under the circumstances, on which the person to whom it was made could reasonably be expected to rely, or has reasonably relied, to that person’s detriment; and</text></paragraph><paragraph id="idc38d7a0056cd4f3b80eb9e3914dd3f10"><enum>(2)</enum><text>any omission of fact, such as the concealment, suppression, or absence of material information about the nature of the institution’s educational program, its financial charges, the employability or earnings of its graduates, the availability of enrollment openings in the student’s desired program, the factors that would prevent an applicant from meeting the legal or other requirements to be employed, licensed, or certified in the field for which the training is provided which a reasonable person would have considered in making a decision to attend, or to continue attending, the institution or to take out a covered loan.</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection></section><section id="id3a1007c4a8f4427b9b732cdb9c4a8a47"><enum>103.</enum><header>Closed school discharge</header><text display-inline="no-display-inline">Section 437(c)(1) (<external-xref legal-doc="usc" parsable-cite="usc/20/1087">20 U.S.C. 1087(c)(1)</external-xref>) is amended to read as follows:</text><quoted-block style="OLC" display-inline="no-display-inline" id="idda0478740a4049d581916951139495eb"><paragraph id="id9b2bf465933142328756562eeded3e65"><enum>(1)</enum><header>In general</header><subparagraph commented="no" display-inline="no-display-inline" id="id56480c15d5a242d68e84fdbe5089ab97"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">If a borrower who received, on or after January 1, 1986, a loan made, insured, or guaranteed under this part and the student borrower, or the student on whose behalf a parent borrowed, is unable to complete the program in which such student is enrolled due to the closure of the institution or if such student’s eligibility to borrow under this part was falsely certified by the eligible institution or was falsely certified as a result of a crime of identity theft, or if the institution failed to make a refund of loan proceeds which the institution owed to such student’s lender, then the Secretary shall discharge the borrower’s liability on the loan (including interest and collection fees) by repaying the amount owed on the loan. </text></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="id1865292b4f5a417ba6be1d408696d2e6"><enum>(B)</enum><header>Additional discharge</header><clause commented="no" display-inline="no-display-inline" id="id60935be8dbaf4d81aa455e58a65287b7"><enum>(i)</enum><header>In general</header><text display-inline="yes-display-inline">In addition to the authorization of discharge under subparagraph (A), the Secretary shall discharge a borrower's (including an endorser's) liability on a Federal Direct Loan made under part D if—</text><subclause id="id06f4388948c6484faa58155fe4c9f138"><enum>(I)</enum><text>the institution at which the borrower who took the loan (or on whose behalf it was taken or endorsed) was enrolled, ceased to provide educational instruction as a whole, or ceased to provide instruction in the programs in which more than 50 percent of the students were enrolled; or</text></subclause><subclause id="id161d775e9c6f4adb86dc9112713aa47e"><enum>(II)</enum><text>the borrower who took the loan (or on whose behalf it was taken or endorsed) was enrolled in an institution at any time within the period not earlier than 180 days before the date of the closure of the institution.</text></subclause></clause><clause id="ide03b39293b024a3593b452d6913e552d"><enum>(ii)</enum><header>Extension of 180 days</header><text>The Secretary may extend the 180 day period described in clause (i)(II) in cases where exceptional circumstances are demonstrated, including if—</text><subclause id="idc8bda5c25741451a9b4f141f18780b49"><enum>(I)</enum><text>the institution was placed on probation or order to show cause or approval was withdrawn or terminated by an accrediting agency or association or an institution's institutional accreditor, or a State authorizing or licensing authority;</text></subclause><subclause id="id9e946e8458c0459bb911a012bf026dea"><enum>(II)</enum><text>the institution was placed on Heightened Cash Monitoring status by the Department or was placed on Provisional Program Participation Approval status, or the institution's participation in a program under this title was terminated by the Department;</text></subclause><subclause id="ida6d3a3a1581d4316acad58aba2a112bd"><enum>(III)</enum><text>the institution was found to have violated Federal or State law related to enrolling or providing education services to students by a Federal or State Government agency, or is the subject of a Federal or State court judgment that the institution violated laws related to enrolling or providing education services to students;</text></subclause><subclause id="id46fe3711ee3a4a4b8b480b3c56462ab1" commented="no"><enum>(IV)</enum><text>the teach-out plan (as required under section 487(f)) of the borrower's educational program exceeds the 180 day period described in clause (i)(II);</text></subclause><subclause commented="no" display-inline="no-display-inline" id="id68a50699c63441bd9f1695c07330b1ec"><enum>(V)</enum><text display-inline="yes-display-inline">the institution responsible for the teach-out of the borrower's educational program fails to perform the material terms of the teach-out plan (as required under section 487(f)), such that the borrower does not have a reasonable opportunity to complete the borrower's program of study; and </text></subclause><subclause id="ide5ddf16e4cc243d99d41ac65f9fa2de7"><enum>(VI)</enum><text>the institution permanently closed all or most of its in-person locations while maintaining online programs or permanently closed many programs. </text></subclause></clause></subparagraph><subparagraph id="id3295c5e316e94400b66cab919631e6de"><enum>(C)</enum><header>No application requirement</header><text>A borrower who took a loan (or on whose behalf it was taken or endorsed) that is eligible for discharge under this paragraph due to institutional closure is entitled to discharge without an application or statement from the borrower 1 year after the institution's closure date if the student did not complete the program at the institution. </text></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="id11674093427f40febe6efbb93f421bd4"><enum>(D)</enum><header>Pursing claims</header><text display-inline="yes-display-inline">After discharging liability on a loan under this paragraph, the Secretary shall pursue any claim available to a borrower against the institution and its affiliates and principals or settle the loan obligation pursuant to the financial responsibility authority under subpart 3 of part H.</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></section><section id="id4097d36fd473473c826ee7c26a52c8e2"><enum>104.</enum><header>Prohibition on institutions limiting student legal action</header><subsection id="id0e7f25f7d1704de09c22898ff4e129e0"><enum>(a)</enum><header>Enforcement of arbitration agreements</header><paragraph id="idb9c2377849a54962ae005ede7071781c"><enum>(1)</enum><header>In general</header><text><external-xref legal-doc="usc-chapter" parsable-cite="usc-chapter/9/1">Chapter 1</external-xref> of title 9, United States Code, (relating to the enforcement of arbitration agreements) shall not apply to an enrollment agreement made between a student and an institution of higher education.</text></paragraph><paragraph id="id1d9f40565e384878adfaed608c4755df"><enum>(2)</enum><header>Definition</header><text>In this section, the term <term>institution of higher education</term> has the meaning given such term in section 102 of the Higher Education Act of 1965 (<external-xref legal-doc="usc" parsable-cite="usc/20/1002">20 U.S.C. 1002</external-xref>). </text></paragraph></subsection><subsection id="id3077c1f0c23a47579efb5c8dbcdc3341"><enum>(b)</enum><header>Prohibition on limitations on ability of students To pursue claims against certain institutions of higher education</header><text>Section 487(a) (<external-xref legal-doc="usc" parsable-cite="usc/20/1094">20 U.S.C. 1094(a)</external-xref>) is amended by adding at the end the following:</text><quoted-block style="OLC" display-inline="no-display-inline" id="idA93ECDAF6DE148A384EC07F23542BB7F"><paragraph id="id1e0b59e58d8a4de7946fb0053d9c5665"><enum>(30)</enum><text>The institution—</text><subparagraph commented="no" display-inline="no-display-inline" id="idfe65005ec00447fb810bb342410c070a"><enum>(A)</enum><text display-inline="yes-display-inline">will not require any student to agree to, and will not enforce, any limitation or restriction (including a limitation or restriction on any available choice of applicable law, a jury trial, or venue) on the ability of a student to pursue a claim, individually or with others, against an institution in court; and</text></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="idc1c5f50cdc0b4701b36b2440b46c6ca8"><enum>(B)</enum><text display-inline="yes-display-inline">will provide written notification to students enrolled at the institution that any limitation or restriction on the ability of a student to pursue a claim, individually or with others, against an institution in court contained in any enrollment or other agreement with a student will not be enforced.</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection><subsection commented="no" id="id044ede401618453bbe887db4df5198b3"><enum>(c)</enum><header>Private right of action</header><paragraph id="id4346eff43e3a4c49b788cedbbeefa3e5"><enum>(1)</enum><header>In general</header><subparagraph id="ide5cb974c6ad2450ab2f44aff5e24472c"><enum>(A)</enum><header>Private right of action</header><text>A violation described in subparagraph (B) shall be subject to a private right of action enforceable by a student or former student of an institution of higher education, on behalf of such individual or such individual and a class, in an appropriate district court of the United States or any other court of competent jurisdiction that also has jurisdiction over the defendant. The student or former student may seek any relief provided under section 455(h) for such violation, or any remedies otherwise available to the individual under law and equity. </text></subparagraph><subparagraph id="id0dc467711fb941a8830730952bd0b756"><enum>(B)</enum><header>Violations</header><text>A violation described in this subparagraph is any of the following:</text><clause id="idbea78185288b4b9fb2f4fdd42bd49e86"><enum>(i)</enum><text>A substantial misrepresentation, including a substantial omission of fact.</text></clause><clause id="idb654cd5bbaeb4b4694a269d7c9144d65"><enum>(ii)</enum><text>A violation of section 487(a)(20) of the Higher Education Act of 1965 (<external-xref legal-doc="usc" parsable-cite="usc/20/1094">20 U.S.C. 1094(a)(20)</external-xref>).</text></clause><clause id="id1bf1660ad39d4ff785faadf7483d53a0"><enum>(iii)</enum><text>A violation of the default rate regulations promulgated by the Secretary under section 435(m)(3) of the Higher Education Act of 1965 (<external-xref legal-doc="usc" parsable-cite="usc/20/1085">20 U.S.C. 1085(m)(3)</external-xref>). </text></clause><clause id="id983102646bac48058020be7ef64d2aeb"><enum>(iv)</enum><text>A violation of the program integrity regulations promulgated by the Secretary under the Higher Education Act of 1965 (<external-xref legal-doc="usc" parsable-cite="usc/20/1001">20 U.S.C. 1001 et seq.</external-xref>), including regulations promulgated to carry out section 102, section 455, and part H of such Act.</text></clause></subparagraph></paragraph><paragraph id="id733f9501ec324dc1a41acdeb8e39b56c"><enum>(2)</enum><header>Amount of damages</header><subparagraph id="id0ed37070754c4f9d8866e8c88f1fa8fd"><enum>(A)</enum><header>In general</header><text>Any institution of higher education, third party servicer that contracts with such institution, or third party contractor that commits a substantial misrepresentation may be held liable to a student or former student of that institution in an amount equal to the sum of—</text><clause id="id0e815cdec43c4aef98ac8445fdf4aceb"><enum>(i)</enum><text>any actual damage sustained by such individual as a result of each substantial misrepresentation;</text></clause><clause id="id9c40b97ebaac465281cdff909f1996ca"><enum>(ii)</enum><text>any additional damages as the court may allow; and</text></clause><clause id="ida923ccf418764d7ba8307704e979ee00"><enum>(iii)</enum><text>in the case of any successful action to enforce the foregoing liability, the costs of the action, together with a reasonable attorney’s fee as determined by the court.</text></clause></subparagraph><subparagraph id="id8db4c09eee3b4f589a067af352bf2459"><enum>(B)</enum><header>Ability to assess punitive damages</header><clause id="id11f70885fa4140939836d620afc605ca"><enum>(i)</enum><header>In general</header><text>On a finding by the court that an institution of higher education, third party servicer that contracts with such institution, or third party contractor has committed a violation described in paragraph (1)(B) with actual or constructive knowledge or reckless disregard for such violation, the court may assess punitive damages not to exceed threefold the sum of actual damages sustained by the plaintiff or class, including court costs and a reasonable attorney’s fee.</text></clause><clause id="id3c3356822dc54d4fb369e4024189fcf3"><enum>(ii)</enum><header>Factors considered by the court</header><text>In determining the amount of liability in any action under clause (i), the court shall consider, among other relevant factors—</text><subclause id="id69d8913737fc4eb684552bff33f9e9c0"><enum>(I)</enum><text>in any individual action under this subsection, the frequency and persistence of noncompliance by the institution of higher education, third party servicer that contracts with such institution, or third party contractor and the nature of such noncompliance; or</text></subclause><subclause id="id33ff1a40343b4e819315e8c9c118907c"><enum>(II)</enum><text>in any class action under this subsection, in addition to the factors listed in subclause (I), the financial resources of the institution of higher education, third party servicer that contracts with such institution, or third party contractor and the number of persons adversely affected.</text></subclause></clause></subparagraph></paragraph><paragraph id="id03fa225f664e4c418683cc197e5e8257"><enum>(3)</enum><header>Jurisdiction</header><text>An action to enforce any liability created by this subsection may be brought in any appropriate United States district court without regard to the amount in controversy, or in any other court of competent jurisdiction.</text></paragraph></subsection><subsection id="idc47c0fdd1f68479ba2f775bf2bd0fee1"><enum>(d)</enum><header>Prohibition on transcript withholding</header><text>Section 487(a) (<external-xref legal-doc="usc" parsable-cite="usc/20/1094">20 U.S.C. 1094(a)</external-xref>), as amended by subsection (b), is further amended by adding at the end the following:</text><quoted-block style="OLC" display-inline="no-display-inline" id="id18F524177A954501A080BDF118FC60AD"><paragraph id="id6050d19d40914a26b1502bb8af02241d"><enum>(31)</enum><text>The institution—</text><subparagraph commented="no" display-inline="no-display-inline" id="id7086465899f04355983b6d4762d6b92d"><enum>(A)</enum><text display-inline="yes-display-inline">will not withhold official transcripts related to a balance owed by the student to the institution; and</text></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="idc009aa75f0a241efa50bbe2e263b3bff"><enum>(B)</enum><text display-inline="yes-display-inline">will provide an official transcript to a student upon request by the student.</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection></section><section id="iddf94b290b36f47e9a8d8648a61be1e85"><enum>105.</enum><header>Incentive compensation</header><subsection id="id5a0c74f2aded40618b0ff7bab381c524"><enum>(a)</enum><header>Incentive compensation</header><paragraph commented="no" id="id8d3efa9c7a7a4d5e930f49112d583659"><enum>(1)</enum><header>Revocation</header><text>Example 2–B of Question 2 of the Department of Education Dear Colleague Letter GEN–11–05 (March 17, 2011) is revoked.</text></paragraph><paragraph id="id9bbe414307d5423db46541341f210617"><enum>(2)</enum><header>Prohibition</header><text>The Department of Education may not issue a regulation or subregulatory guidance that would establish an exception to the prohibition provided in section 487(a)(20) of the Higher Education Act of 1965 (<external-xref legal-doc="usc" parsable-cite="usc/20/1094">20 U.S.C. 1094(a)(20)</external-xref>).</text></paragraph></subsection><subsection id="idab694aa338c84cabb9119e1957209e56"><enum>(b)</enum><header>Institutional compliance with the incentive compensation ban</header><text display-inline="yes-display-inline">Section 487(a)(20) (<external-xref legal-doc="usc" parsable-cite="usc/20/1094">20 U.S.C. 1094(a)(20)</external-xref>) is amended—</text><paragraph commented="no" display-inline="no-display-inline" id="id2347ab510fd84907ae2358f3cd87da4c"><enum>(1)</enum><text display-inline="yes-display-inline">by striking <quote>The institution</quote> and inserting <quote>(A) The institution</quote>; and </text></paragraph><paragraph commented="no" display-inline="no-display-inline" id="id5d5122fd24064610b6222f222a710006"><enum>(2)</enum><text display-inline="yes-display-inline">by adding at the end the following:</text><quoted-block style="OLC" display-inline="no-display-inline" id="idB591431A2F904A0CAA32656FB645DCFE"><subparagraph id="ida06dbd66b3ca4d43a9b9c23db17869b4" indent="up1"><enum>(B)</enum><text>Not later than 1 year after the date of enactment of the <short-title>Preventing Risky Operations from Threatening the Education and Career Trajectories of Students Act of 2025</short-title>, the institution shall attest to the Secretary that the institution is in compliance with subparagraph (A) notwithstanding the guidance provided in Department of Education Example 2–B of Question 2 of Dear Colleague Letter GEN–11–05 (March 17, 2011), in such form as required by the Secretary. If the institution is not in compliance as of the date of enactment of the <short-title>Preventing Risky Operations from Threatening the Education and Career Trajectories of Students Act of 2025</short-title>, the Secretary shall revoke the institution’s program participation agreement under this section.</text></subparagraph><subparagraph id="idd0b013ed46f54cbeb8043f150622f95b" indent="up1"><enum>(C)</enum><text>Following the attestation required under subparagraph (B), the institution shall annually provide verification from an independent auditor that the institution is in compliance with subparagraph (A).</text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection></section><enum>II</enum><header>Ensuring integrity at institutions of higher education and institutional contractors</header><section id="id45177073a6c6411e946dc28d62b3ec54"><enum>201.</enum><header>Updating Federal oversight of third-party servicers</header><text display-inline="no-display-inline">Section 481(c)(1) (<external-xref legal-doc="usc" parsable-cite="usc/20/1088">20 U.S.C. 1088(c)(1)</external-xref>) is amended by inserting <quote>, including related to the delivery of funds under this title, recruitment or retention of students, compliance with cohort default rate (as defined in section 435(m)) requirements, the development and delivery of instructional content, and other applicable activities as described by the Secretary</quote> after <quote>title</quote>.</text></section><section id="ida39e7b07ed1544cfbdb432cbba461bae"><enum>202.</enum><header>Job placement rates</header><subsection id="id1c202255826a4780a6531416a44628e6"><enum>(a)</enum><header>Definition</header><text>Section 481 (<external-xref legal-doc="usc" parsable-cite="usc/20/1088">20 U.S.C. 1088</external-xref>), as amended by section 102(b), is further amended by adding at the end the following:</text><quoted-block style="OLC" display-inline="no-display-inline" id="idEFF0AC4743E447CEB5E676C7FA6162CA"><subsection id="idb6a30bf606d94eb9b4dc2e591dc5811e"><enum>(h)</enum><header>Job placement rates</header><text>The Secretary shall establish a single definition of <quote>job placement rate</quote> for purposes of this Act that ensures consistent determinations across institutions and accrediting agencies regarding when students are placed in a job, to improve accuracy and minimize the opportunity for misleading or deceptive information.</text></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection><subsection id="id7caf55171aee4477be1791e1c251103d"><enum>(b)</enum><header>Program participation agreement</header><text>Section 487(a)(8) (<external-xref legal-doc="usc" parsable-cite="usc/20/1094">20 U.S.C. 1094(a)(8)</external-xref>) is amended to read as follows:</text><quoted-block style="OLC" display-inline="no-display-inline" id="idCA3F5ADE21624DDABB45F5FAAD2F8149"><paragraph id="idac8962e77ed14acba4fb5135869eaa29"><enum>(8)</enum><text>In the case of an institution that advertises or discloses job placement rates to prospective students or that is required to provide regular reporting of job placement rates to an accrediting agency, State authorizer, or other regulator, the institution will utilize the definition provided under section 481(h), and shall make available to prospective students, at or before the time of application—</text><subparagraph id="id31e8ed03d9c94104bed2780068b1a115"><enum>(A)</enum><text>the most recent available data concerning employment statistics, graduation statistics, the methodology used by the institution to calculate the job placement rate, and any other information necessary to substantiate the truthfulness of the advertisements or disclosures, and</text></subparagraph><subparagraph id="id157faafd4bbd418ca9b38347ca1452d4"><enum>(B)</enum><text>relevant State licensing requirements of the State in which such institution is located for any job for which the course of instruction is designed to prepare such prospective students.</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection><subsection commented="no" id="id6c327e57f24a4684a7c371b987428ff8"><enum>(c)</enum><header>Accrediting agency recognition</header><text>Section 496(a)(5)(A) (<external-xref legal-doc="usc" parsable-cite="usc/20/1099b">20 U.S.C. 1099b(a)(5)(A)</external-xref>) is amended by inserting <quote>, as defined pursuant to section 481(h)</quote> before the semicolon.</text></subsection><subsection id="id1b7f9d183c8047bdbf16abe3ccc0d886"><enum>(d)</enum><header>Nonapplicability of rulemaking requirements</header><text>The amendments made under this section shall not be subject to the requirements provided under section 492 (<external-xref legal-doc="usc" parsable-cite="usc/20/1098a">20 U.S.C. 1098a</external-xref>).</text></subsection></section><section id="idb23c57ccac17495bbb46e6692b42b71c"><enum>203.</enum><header>Allocation of tuition and fee revenue by title IV institutions</header><text display-inline="no-display-inline">Section 498(c) (<external-xref legal-doc="usc" parsable-cite="usc/20/1099c">20 U.S.C. 1099c(c)</external-xref>) is amended by inserting at the end the following:</text><quoted-block style="OLC" display-inline="no-display-inline" id="idaca262e4729b44f98113b847edad1836"><paragraph id="id62c8bf9a077444f39c3e0d49717163c5" indent="up1"><enum>(7)</enum><header>Requirement to spend revenue</header><subparagraph id="idf364335206d7483dbf37d7c08c80193f"><enum>(A)</enum><header>In general</header><clause id="idf32b501815e748078f96019b7b54d891"><enum>(i)</enum><text>Beginning in academic year 2026–2027 and in each academic year thereafter through 2031–2032, each institution of higher education, in order to be eligible to participate in programs under this title, shall spend an amount equal to not less than 30 percent of their tuition and fee revenue (net of allowances and discounts) on instruction.</text></clause><clause id="idd2b1823489624729bac38708f53e62c6"><enum>(ii)</enum><text>Beginning in academic year 2027–2028 and in each academic year thereafter through 2030–2031, the Secretary shall assess the data described in subparagraph (B) and issue a report that identifies the following:</text><subclause id="idc7abd3c035964c25a2ec44c7b743514c"><enum>(I)</enum><text>The total amount of spending on instruction for each institution.</text></subclause><subclause id="id49817ffc17024ff68fab3ce22cb411b9"><enum>(II)</enum><text>The total amount of spending on student services for each institution, excluding advertising, recruiting, marketing, compensation of executives or officers, lobbying, and other pre-enrollment expenses, consistent with section 132(l).</text></subclause><subclause id="idb630cff33bdc49a58cd84f5b4be87306"><enum>(III)</enum><text>Tuition and fee revenue (net of allowances and discounts) for each institution.</text></subclause><subclause id="id6bc4ec93cb914346b212b7d29601fb29"><enum>(IV)</enum><text>The median increase in total spending on student services and instruction combined relative to spending on instruction relative to tuition and fee revenue (net of allowances and discounts).</text></subclause><subclause id="id6dcb91ed792b48a88c1d58802e06087b"><enum>(V)</enum><text>Other relevant information the Secretary determines appropriate to include.</text></subclause></clause><clause id="id952d747821c64bb8be4218c3b9d2114e"><enum>(iii)</enum><text>In academic year 2031–2032, the Secretary shall issue a regulation that establishes a minimum threshold percentage for institutional spending on instruction and student services combined that shall be—</text><subclause commented="no" display-inline="no-display-inline" id="idf4eebfa299e242eabcd4d0ce37ccb88f"><enum>(I)</enum><text display-inline="yes-display-inline">not less than 30 percent; and</text></subclause><subclause commented="no" display-inline="no-display-inline" id="id3ccf881e4e464ddc9d78f9f5086ee184"><enum>(II)</enum><text display-inline="yes-display-inline">consistent with the median increase in total spending, as identified under clause (ii)(IV) averaged across academic years 2028–2029, 2029–2030, and 2030–2031. </text></subclause></clause><clause id="id546c11db5d404e31a5407df0aec8c75b"><enum>(iv)</enum><text>Beginning in academic year 2031–2032 and in each academic year thereafter, each institution of higher education, in order to be eligible to participate in programs under this title, shall spend an amount equal to not less than the threshold percentage established under clause (iii) of their tuition and fee revenue (net of allowances and discounts) on instruction and student services combined. </text></clause></subparagraph><subparagraph id="id861fa64a6aba4d4b94a9f10efc05fb87"><enum>(B)</enum><header>Reporting from institutions</header><text>The Secretary shall use data from reports received and definitions established under section 132(l) to carry out this paragraph. </text></subparagraph><subparagraph id="idb119903e2cdb4ecf8699bde00475830c"><enum>(C)</enum><header>Warnings</header><text>The Secretary shall—</text><clause id="idb96c972934354be28af008a605824824"><enum>(i)</enum><text>establish through regulation appropriate thresholds for an institution of higher education that meets the spending requirements under clauses (i) and (iv) of subparagraph (A), but which is at risk of missing such thresholds; and</text></clause><clause id="id822823d1968f42d09032ed874dccd4cc"><enum>(ii)</enum><text>require each institution of higher education that is at risk of missing such thresholds to provide warnings to prospective students and enrolled students of the institution regarding the low instructional spending.</text></clause></subparagraph><subparagraph id="id03d2a7a4844c464d999d47b0c50d202c"><enum>(D)</enum><header>Regulations</header><text>The Secretary shall issue such regulations as determined necessary by the Secretary to ensure compliance with the requirements of this paragraph, taking into consideration cost and convenience.</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></section><section id="id35a8c96d30c44f52ba1e05ab37252a09"><enum>204.</enum><header>Past performance</header><text display-inline="no-display-inline">Section 487(a)(16) (<external-xref legal-doc="usc" parsable-cite="usc/20/1094">20 U.S.C. 1094(a)(16)</external-xref>) is amended by inserting at the end the following:</text><quoted-block style="OLC" display-inline="no-display-inline" id="idf6ab21311bb24982bc6f9ff962e3cf20"><subparagraph id="id5dbb6d53a98c4e40b10a4fc4f34e0eba" indent="up1"><enum>(C)</enum><text>The institution will not knowingly employ an individual who was an owner, director, officer, or employee who exercised substantial control over an institution that owes a liability.</text></subparagraph><subparagraph id="idfaf2cfc0fd254166afe1ff91d93dc3dc" indent="up1"><enum>(D)</enum><text>The institution will not knowingly—</text><clause commented="no" display-inline="no-display-inline" id="id28b75c50985e4f5faac92113650893c7"><enum>(i)</enum><text display-inline="yes-display-inline">employ an individual who was—</text><subclause commented="no" display-inline="no-display-inline" id="idcf722f79619741d4bb9e527fb29b2fef"><enum>(I)</enum><text display-inline="yes-display-inline">an owner, director, officer, or employee of an institution that has—</text><item id="id28E66CB36DDA422FB6A15F7F3BBE6D24"><enum>(aa)</enum><text>been found to have engaged in fraud, misuse of funds, or any material violation of law; or</text></item><item id="id025AD7735D174903B1DB931571453F24"><enum>(bb)</enum><text>had its participation in programs under this title terminated, its certification revoked, or its application for certification or recertification for participation in such programs denied; or</text></item></subclause><subclause id="idCF2B664C5F2D41CB86D2DFABA4497ACA"><enum>(II)</enum><text>a 10 percent-or-higher equity owner, director, officer, principal, or executive of, or contractor affiliated with, another institution in any year in which the other institution incurred a loss of Federal funds, as determined by the Secretary, in excess of 5 percent of the other institution’s annual funds under this title; or </text></subclause></clause><clause commented="no" display-inline="no-display-inline" id="id4fb017a9fbb74dd9843b79cccf4fe723"><enum>(ii)</enum><text display-inline="yes-display-inline">contract with any institution, third-party servicer, individual, agency, or organization that has, or whose owners, officers, or employees have—</text><subclause id="ida900657e27a949629c7429a3d71df6e1"><enum>(I)</enum><text>been found to have engaged in fraud, misuse of funds, or any material violation of law;</text></subclause><subclause id="id203da3b75dd0423d806bc6c936931a4d"><enum>(II)</enum><text>had its participation in programs under this title terminated, its certification revoked, or its application for certification or recertification for participation in such programs denied; or</text></subclause><subclause id="id5de424f95b2a4386967d78a65fa7f262"><enum>(III)</enum><text>been a 10 percent-or-higher equity owner, director, officer, principal, executive of, or contractor affiliated with, another institution in any year in which the other institution incurred a loss of Federal funds, as determined by the Secretary, in excess of 5 percent of the other institution’s annual funds under this title.</text></subclause></clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></section><section id="id685e1047b744414fb82dee7db605c618"><enum>205.</enum><header>Recoupment</header><subsection commented="no" display-inline="no-display-inline" id="id496bfe412b1941eabfe20424531917f2"><enum>(a)</enum><header display-inline="yes-display-inline">Clarifying the authority To recoup liabilities from title IV institutions</header><text display-inline="yes-display-inline">Section 487(c)(1) (<external-xref legal-doc="usc" parsable-cite="usc/20/1094">20 U.S.C. 1094(c)(1)</external-xref>) is amended by striking subparagraph (F) and inserting the following: </text><quoted-block style="OLC" display-inline="no-display-inline" id="id5254DE6D5D604C8F88DC59D3BB655B01"><subparagraph id="idfb36142a1fde40d1973b8c6d9db9dc08"><enum>(F)</enum><text>the limitation, suspension, or termination of the participation in any program under this title of an eligible institution, the recoupment of liabilities established pursuant to section 493E, or the imposition of a civil penalty under paragraph (3)(B) whenever the Secretary has determined, after reasonable notice and opportunity for hearing, that such institution has violated or failed to carry out any provision of this title, any regulation prescribed under this title, or any applicable special arrangement, agreement, or limitation, except that no period of suspension under this section shall exceed 60 days unless the institution and the Secretary agree to an extension or unless limitation or termination proceedings are initiated by the Secretary within that period of time.</text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection><subsection commented="no" display-inline="no-display-inline" id="id4eebb51d1edc4d88b7f8abfe8f8101a9"><enum>(b)</enum><header>Recoupment of liabilities</header><text>Part G of title IV (<external-xref legal-doc="usc" parsable-cite="usc/20/1088">20 U.S.C. 1088 et seq.</external-xref>) is amended by adding at the end the following: </text><quoted-block style="OLC" display-inline="no-display-inline" id="id24B37D30C2CA40AFA05846D7BA3B574B"><section id="id4380ed08201e4912adfa1e46c5ff34d7"><enum>493E.</enum><header>Recoupment</header><subsection commented="no" display-inline="no-display-inline" id="idebe4b11df09a485fa25e87e1e7a59516"><enum>(a)</enum><header display-inline="yes-display-inline">In general</header><text display-inline="yes-display-inline">The Secretary shall assess liabilities and seek to recoup funds provided under this title from an institution of higher education as a result of student loan discharges, findings from program reviews or compliance audits, or due to other forms of misconduct or noncompliance. </text></subsection><subsection commented="no" display-inline="no-display-inline" id="id2a19bd8babef449bb3ec37183f82bb5d"><enum>(b)</enum><header>Waiver authority</header><text display-inline="yes-display-inline">The Secretary may waive some or all of the liabilities described in subsection (a) based on the individual circumstances of the institution.</text></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></subsection><subsection id="id45b77cea4d95489f8aeb896ed0bb61bc"><enum>(c)</enum><header>Owner signatures</header><text>Section 498(b) of the Higher Education Act of 1965 (<external-xref legal-doc="usc" parsable-cite="usc/20/1099c">20 U.S.C. 1099c(b)</external-xref>) is amended—</text><paragraph commented="no" display-inline="no-display-inline" id="idd7020333d038465a828ab06fac4f0535"><enum>(1)</enum><text display-inline="yes-display-inline">in paragraph (4), by striking <quote>and</quote> after the semicolon; </text></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ida936e9eaaf494e1ab494e064ddbe4e34"><enum>(2)</enum><text>in paragraph (5), by striking the period at the end and inserting <quote>; and</quote>; and</text></paragraph><paragraph commented="no" display-inline="no-display-inline" id="id8f6b7ae81e0c43929ec7afc246e3ffc9"><enum>(3)</enum><text display-inline="yes-display-inline">by adding at the end the following:</text><quoted-block style="OLC" display-inline="no-display-inline" id="id08E181A7778448AE95546D214037569D"><paragraph id="id1a7739054a37434683fedd2f57707dee"><enum>(6)</enum><text>requires both an authorized representative of the institution and, if applicable, an authorized representative of any entity with ownership and substantial control over the institution to sign the program participation agreement, as described under section 487, for the institution, which shall ensure that the institution and its owner, if applicable, agree to repay any liabilities assessed against the institution by the Secretary.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection></section><enum>III</enum><header>Improving oversight</header><section id="id89b90ea8d87b48448b83ca8ea695aa65"><enum>301.</enum><header>Enforcement in the Office of Federal Student Aid</header><subsection commented="no" display-inline="no-display-inline" id="ide89b71f67bc949ddae39a55d38e72ce4"><enum>(a)</enum><header>Enforcement unit established in the Office of Federal Student Aid</header><text display-inline="yes-display-inline">Section 141 (<external-xref legal-doc="usc" parsable-cite="usc/20/1018">20 U.S.C. 1018</external-xref>) is amended—</text><paragraph id="idfb1467e7436c4ee0b1a11bf629a467fb"><enum>(1)</enum><text>by redesignating subsections (g) through (i) as subsections (h) through (j), respectively; and</text></paragraph><paragraph id="ida53e3a63c63b49e6b003b298f1c04502"><enum>(2)</enum><text>by inserting after subsection (f) the following:</text><quoted-block style="OLC" display-inline="no-display-inline" id="idbcf4b3624520492fb6cb5633f99ab2ea"><subsection id="idb875336e74234f0c87d0448bec95d7f5"><enum>(g)</enum><header>Enforcement unit</header><paragraph id="id26d044f1dd4348cb9293cf40ba3f7b99"><enum>(1)</enum><header>In general</header><text>The Chief Operating Officer, in consultation with the Secretary, shall establish an enforcement unit within the PBO (referred to in this section as the <quote>enforcement unit</quote>).</text></paragraph><paragraph id="idcbc0d277ac24491da7b4bf991c021e8f"><enum>(2)</enum><header>Appointment</header><subparagraph id="id18ed0d53c03b4680bdb845cd48352d28"><enum>(A)</enum><header>Chief enforcement officer</header><text>The Chief Operating Officer, in consultation with the Secretary, shall appoint a Chief Enforcement Officer as a senior manager, in accordance with subsection (e), to perform the functions described in this subsection. The Chief Enforcement Officer shall report solely and directly to the Chief Operating Officer.</text></subparagraph><subparagraph id="id9a334741bf054a73928a4a5f91246a9f"><enum>(B)</enum><header>Bonus</header><text>Notwithstanding subsection (e), the Chief Enforcement Officer may receive a bonus, separately determined from the methodology which applies to the calculation of bonuses for other senior managers, based upon the Chief Operating Officer’s evaluation of the Chief Enforcement Officer’s performance in relation to the goals set forth in a performance agreement related to the specific duties of the enforcement unit.</text></subparagraph></paragraph><paragraph id="ideab03e7eff8341e3a3d909e0b6e173f0"><enum>(3)</enum><header>Duties</header><text>The enforcement unit shall—</text><subparagraph id="ide5fda5b98f4d49b3be058c06afe8e267"><enum>(A)</enum><text>receive, process, and analyze allegations and complaints regarding the potential violation of Federal or State law (including civil and criminal law) or other unfair, deceptive, or abusive acts or practices, by institutions of higher education, third-party servicers that contract with such institutions, and loan servicers;</text></subparagraph><subparagraph id="idbc73c6d6ed1d4b6582115e891393523a"><enum>(B)</enum><text>investigate and coordinate investigations of potential or actual misconduct of institutions of higher education, third-party servicers that contract with such institutions, and loan servicers, including engaging in a regular program of secret shopping at online and campus-based institutions of higher education;</text></subparagraph><subparagraph id="id7196c0216cd841e881e473868512af47"><enum>(C)</enum><text>develop and implement a written policy for the enforcement of the ban on prohibited incentive compensation not less than annually, which may include automatic triggers for inquiries by the Department or regular <quote>secret shopper</quote> or audit-based investigations, and shall update such policy as needed; and</text></subparagraph><subparagraph id="idf99002772a994ee888592004a4ac1cc6"><enum>(D)</enum><text>enforce compliance with laws governing Federal student financial assistance programs under title IV, including through the use of an emergency action in accordance to section 487(c)(1)(I), the limitation, suspension, or termination of the participation of an eligible institution in a program under title IV, or the imposition of a civil penalty in accordance with section 487(c)(3)(B).</text></subparagraph></paragraph><paragraph id="idad8f84677f994bad98b4cff6348f28c6"><enum>(4)</enum><header>Coordination and staffing</header><text>The enforcement unit shall—</text><subparagraph id="id39ace4d2a3cf472abf0027090cf88e78"><enum>(A)</enum><text>coordinate with relevant Federal and State agencies and oversight bodies, including the For-Profit Education Oversight Coordination Committee established under section 124; and</text></subparagraph><subparagraph id="id7d88a677d7db4a7894e48f23c61e06d0"><enum>(B)</enum><text>hire staff, (including by appointing not more than 10 individuals in positions of excepted service, as described in subsection (h)(3)) with such expertise as is necessary to conduct investigations, respond to allegations and complaints, and enforce compliance with laws governing Federal student financial assistance programs under title IV.</text></subparagraph></paragraph><paragraph id="id2804c40dad7140a7802bba16a6b084e7"><enum>(5)</enum><header>Divisions</header><subparagraph id="id01761ec6982249f892efc6f5423819a1"><enum>(A)</enum><header>In general</header><text>The enforcement unit shall have separate divisions with the following focus areas:</text><clause id="id0f154898f918488280956c3374076783"><enum>(i)</enum><text>An investigations division to investigate potential or actual misconduct at institutions of higher education, third-party servicers that contract with such institutions, and loan servicers.</text></clause><clause id="id5dda2a6c0c4043d5a9c2ec425e9bfbdc"><enum>(ii)</enum><text>A division focused on evaluating the claims of borrowers who assert a defense to repayment of Federal student loans, or groups of borrowers who qualify to assert such a defense to repayment, under section 455(h).</text></clause><clause id="idfdb8b29717184e69946343d147c47dc9"><enum>(iii)</enum><text>A division focused on oversight of the Jeanne Clery Disclosure of Campus Security Policy and Campus Crime Statistics Act, the reporting of crime and fire statistics by institutions of higher education, and the oversight and enforcement of section 120 (relating to drug and alcohol abuse prevention).</text></clause><clause id="ide6d2b6ab331b4e4a8c7a3422e30f5f79"><enum>(iv)</enum><text>A division to administer the Secretary’s authority to fine, limit, suspend, terminate, or take action against institutions of higher education, and third-party servicers that contract with such institutions, participating in the Federal student financial assistance programs under title IV.</text></clause><clause id="id9b2772d87e144ae39f54cb26578beabb"><enum>(v)</enum><text>A division that administers a program of compliance monitoring and oversight of institutions of higher education, and third-party servicers that contract with such institutions, including systems and procedures to support the eligibility, certification, and oversight of program participants, for all institutions of higher education participating in the Federal student financial assistance programs under title IV.</text></clause><clause id="id2dfc63ebd3b343b1892db153cc1522ae"><enum>(vi)</enum><text>Any other division that the Chief Enforcement Officer, in coordination with the Chief Operating Officer and the Secretary, determines is necessary.</text></clause></subparagraph><subparagraph id="id46b21d08aad4498e89152cf52704a90f"><enum>(B)</enum><header>Reporting</header><text>The staff of each division described in subparagraph (A) shall report to the Chief Enforcement Officer.</text></subparagraph></paragraph><paragraph id="id65f1c283eb1847999961bb4680592acb"><enum>(6)</enum><header>Actions recommended</header><text>The Chief Enforcement Officer may recommend, as appropriate to the particular circumstance, that the Chief Operating Officer—</text><subparagraph id="ide173f7cfcfb2418cad0a7567883a3ad9"><enum>(A)</enum><text>terminate, suspend, or limit an institution of higher education or a third-party servicer that contracts with such institution from participation in 1 or more programs under title IV (in accordance with section 487), or provisionally certify such participation (in accordance with section 498(h));</text></subparagraph><subparagraph id="idb06e9b2ea4ba498aa759ff3d1daf855a"><enum>(B)</enum><text>impose a civil penalty in accordance with section 487(c)(3)(B);</text></subparagraph><subparagraph commented="no" id="id06f81b27765f4fce8217f815ec1ff220"><enum>(C)</enum><text>for a student loan servicer, obtain all relief, including any penalties and suspension or termination of the agreement, provided in the loan servicer agreement to the contract of the servicer; or </text></subparagraph><subparagraph id="ideda8c3354d2f48bc848b63b83dba0fb6"><enum>(D)</enum><text>make a recommendation to the Secretary about whether to approve or deny the claims of borrowers, including groups of borrowers, who assert a defense to repayment in accordance with section 455(h).</text></subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection><subsection id="id5db3045378b84e6c9c9b5df80b9e9cf7"><enum>(b)</enum><header>Extend subpoena power To assist with investigations</header><text>Section 490A(a) (<external-xref legal-doc="usc" parsable-cite="usc/20/1097a">20 U.S.C. 1097a(a)</external-xref>) is amended to read as follows:</text><quoted-block style="OLC" display-inline="no-display-inline" id="id7386D124CDF049968B2E5868F3A6B6BA"><subsection commented="no" display-inline="no-display-inline" id="idcc258b0bb3c14cc5bf9617229b935eec"><enum>(a)</enum><header>Authority</header><text display-inline="yes-display-inline">To assist the Secretary in the conduct of investigations of possible violations of the provisions of this title, the Secretary is authorized to—</text><paragraph commented="no" display-inline="no-display-inline" id="id078d518dca27423ebf911a6ffb1f3dc1"><enum>(1)</enum><text display-inline="yes-display-inline">require by subpoena the production of information, documents, reports, answers, records, accounts, papers, and other documentary evidence pertaining to participation in any program under this title, the production of which may be required from any place in a State; and</text></paragraph><paragraph commented="no" display-inline="no-display-inline" id="idf439c62d1d7c48a99c1933fc676a4367"><enum>(2)</enum><text display-inline="yes-display-inline">require by subpoena oral testimony by any person, including any legal entity, concerning information pertaining to participation in any title IV program, the appearance for which may be required at any place in a State.</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection><subsection id="idd7989a8d6bfa415d83960a2cb0a4f9f1"><enum>(c)</enum><header>Program reviews</header><text>Section 498A of the Higher Education Act of 1965 (<external-xref legal-doc="usc" parsable-cite="usc/20/1099c-1">20 U.S.C. 1099c–1</external-xref>) is amended—</text><paragraph id="idb640f977a69c477f80c2594f9f1d9e97"><enum>(1)</enum><text>in subsection (a)—</text><subparagraph commented="no" display-inline="no-display-inline" id="id795c2f00911b43b2b7a6ab4b0531d908"><enum>(A)</enum><text display-inline="yes-display-inline">in the matter preceding paragraph (1), by striking <quote>and financial responsibility</quote> and inserting <quote>, financial responsibility, and other eligibility-related</quote>; and</text></subparagraph><subparagraph id="id1142667864c9457188bcd052c2d637e2"><enum>(B)</enum><text>in paragraph (2)—</text><clause commented="no" display-inline="no-display-inline" id="ida36dcfe5bfce4d8b9a5964e29da2c280"><enum>(i)</enum><text display-inline="yes-display-inline">by redesignating subparagraphs (A) through (F) as subparagraphs (B) through (G), respectively; </text></clause><clause id="id9B597CDC476441A6AA545424963602EF"><enum>(ii)</enum><text>by inserting before subparagraph (B), as so redesignated, the following:</text><quoted-block style="OLC" display-inline="no-display-inline" id="idB9F96F76F1B747099B1FD1875EF05BEB"><subparagraph id="idc21ea209490b42cc93ed45603797c9b5"><enum>(A)</enum><text>identified as <quote>high-risk</quote> institutions based on a risk-review process developed by the Department that shall include risk factors, including— </text><clause id="id542e9a057e8f4a579b9be4c989a2cccb"><enum>(i)</enum><text>significant changes in enrollment;</text></clause><clause id="idd3dd9e526e39452d9b6891850c288e46"><enum>(ii)</enum><text>high volumes of student complaints or borrower defense claims;</text></clause><clause id="idb799c42813a94179b590b41d793263b0"><enum>(iii)</enum><text>indicators of issues related to financial capability;</text></clause><clause id="id5667a9e6f44742cb97710028a1628f40"><enum>(iv)</enum><text>low completion rates;</text></clause><clause id="idd37cae2daf2a4f7796950189c48dcb2b"><enum>(v)</enum><text>indications of misleading or deceptive practices, aggressive recruiting, or substantial misrepresentation;</text></clause><clause id="idd07abb696e444e4ca1bc4cab9d61221e"><enum>(vi)</enum><text>significant completion gaps between students of different demographic groups; or</text></clause><clause id="idf05c6b32b0054fbfa27412cf7f7453d0"><enum>(vii)</enum><text>other indicators of risk to students or taxpayers;</text></clause></subparagraph><after-quoted-block>; and </after-quoted-block></quoted-block></clause><clause id="id65d720db8c84444aa02c4929d91ff1b9"><enum>(iii)</enum><text>in subparagraph (G), as so redesignated, by striking <quote>or financial responsibility</quote> and inserting <quote>, financial responsibility, or other eligibility-related</quote>;</text></clause></subparagraph></paragraph><paragraph id="id8c45aa5b1951430bae853c1d2c92a3da"><enum>(2)</enum><text>in subsection (d), by striking <quote>criminal investigative training</quote> and inserting <quote>criminal and civil investigative training (including training in identifying misrepresentations in marketing and recruitment materials)</quote>;</text></paragraph><paragraph id="idbfd1b7f217e04124a929d1983b6fa80b"><enum>(3)</enum><text>by redesignating subsection (e) as subsection (f); and</text></paragraph><paragraph id="id2f2922dbdcc74865a0cb78c6d5c1d321"><enum>(4)</enum><text>by inserting after subsection (d) the following:</text><quoted-block style="OLC" display-inline="no-display-inline" id="id78097D15D5B44BA3AF8B9C194F4FEFE0"><subsection id="id68f3e050562e4f2e8553916394607e90"><enum>(e)</enum><header>Program reviews</header><text>Program reviews shall, at minimum, include a review of all—</text><paragraph id="id7cd99b02e1414515b32d655a7f028ec7"><enum>(1)</enum><text>recruiting and marketing materials, including scripts and training materials provided to institution and third-party servicer staff involved in recruiting, admissions, or financial aid;</text></paragraph><paragraph id="id5d842fab18454b2e80ddbfea59188e26"><enum>(2)</enum><text>consumer complaints held by the institution and consumer agencies, borrower defense claims, the institution’s response to such complaints or claims, and any related investigative materials;</text></paragraph><paragraph id="idf9beb959474d40b1a071f5191fc98851"><enum>(3)</enum><text>actions against the institution by State or Federal regulators or enforcement agencies, including State authorizing agencies and State attorneys general, or through qui tam actions; and</text></paragraph><paragraph id="id4bcb2ef9c461437fbcf5839a6d7602d7"><enum>(4)</enum><text>actions against the institution by accreditors.</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection><subsection id="idaacbdee8ddac4d5990d352601491dcab"><enum>(d)</enum><header>Enhanced civil penalties</header><text>Section 487(c)(3)(B) of the Higher Education Act (<external-xref legal-doc="usc" parsable-cite="usc/20/1094">20 U.S.C. 1094(c)(3)(B)</external-xref>) is amended— </text><paragraph id="ide8a7215240c943d590f311ead39ce2e1"><enum>(1)</enum><text>in clause (i)—</text><subparagraph id="id7F9CBE1862974B04B4889869B499A040"><enum>(A)</enum><text>by inserting <quote>or its third-party servicer</quote> after <quote>eligible institution</quote>; and</text></subparagraph><subparagraph id="id1f5a915a51b747dd8c1d056671a835e4"><enum>(B)</enum><text>by striking <quote>$25,000 for each violation or misrepresentation</quote> and inserting </text><quoted-block style="OLC" display-inline="yes-display-inline" id="idD3B4FDD8435D484B9DB1721A75541C91"><text>$100,000 for each violation or misrepresentation, or—</text><subclause id="id18bb7190048d445ea769762839f4b1a5"><enum>(I)</enum><text>in the case of an institution, 1.0 percent of the amount of funds the institution received through this title in the most recent award year prior to the determination for each such violation; and</text></subclause><subclause id="id4faa9c9021bd49f59af4e798a5666aea"><enum>(II)</enum><text>in the case of a third-party servicer that contracts with such institution, the amount of the contract with the institution.</text></subclause><after-quoted-block>; </after-quoted-block></quoted-block></subparagraph></paragraph><paragraph id="idd4948e2e664e41ffa5fcae8c35fa763c"><enum>(2)</enum><text>by redesignating clause (ii) as clause (iii);</text></paragraph><paragraph id="id4514F1B5DFD8418A807F17C6F4855E14"><enum>(3)</enum><text>by inserting after clause (i) the following:</text><quoted-block style="OLC" display-inline="no-display-inline" id="idE3AA7FF2E48B4B5BAA4CC9EBDEF6B3BB"><clause commented="no" display-inline="no-display-inline" id="id9286ff7b50e54cc1b60a45adac658480" indent="up2"><enum>(ii)</enum><text display-inline="yes-display-inline">The Secretary may consider each time a substantial misrepresentation is viewed or experienced, including static or standing misrepresentations, as a separate violation or misrepresentation.</text></clause><after-quoted-block>; and </after-quoted-block></quoted-block></paragraph><paragraph id="id032d0ffae87d4b6b8c696e1b4fc576c0"><enum>(4)</enum><text>by adding at the end the following:</text><quoted-block style="OLC" display-inline="no-display-inline" id="id814059752CF84E2AA45BB4D95B73FB69"><clause id="id47cb6b72f7494b01b20ca4b2e6254090" indent="up2"><enum>(iv)</enum><text>For the purpose of determining the amount of civil penalties under this subsection, any violation by a particular institution will accrue against all institutions or affiliates with common ownership.</text></clause><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection></section><section id="iddb3a45478fa3437bbf2f32b23d13a894"><enum>302.</enum><header>For-Profit Education Oversight Coordination Committee</header><text display-inline="no-display-inline">Part B of title I (<external-xref legal-doc="usc" parsable-cite="usc/20/1011">20 U.S.C. 1011 et seq.</external-xref>) is amended by adding at the end the following: </text><quoted-block style="OLC" display-inline="no-display-inline" id="id250bb3ca0d094d81abc91b21ea940cc2"><section id="id8821821c3d3f4e49abaedcdd95230057"><enum>124.</enum><header>For-Profit Education Oversight Coordination Committee</header><subsection id="idcecf8119e6094ed3bbf9f713ac55c746"><enum>(a)</enum><header>Establishment of committee</header><paragraph id="id177f239029d642a19709c35434a6de98"><enum>(1)</enum><header>In general</header><text>There is established in the executive branch a committee to be known as the <quote>For-Profit Education Oversight Coordination Committee</quote> (referred to in this section as the <quote>Committee</quote>) and to be composed of the head (or the designee of such head) of each of the following Federal entities:</text><subparagraph id="id53ab3dcd97654ff0a72681b4c5ca2327"><enum>(A)</enum><text>The Department of Education.</text></subparagraph><subparagraph id="idacec7ef158fc463492003b7f0ea67bb5"><enum>(B)</enum><text>The Bureau of Consumer Financial Protection.</text></subparagraph><subparagraph id="idd739b3b9c4aa4650a17eb99825c45859"><enum>(C)</enum><text>The Department of Justice.</text></subparagraph><subparagraph id="id384d0f0adbea45529a097ca9bccffdf4"><enum>(D)</enum><text>The Securities and Exchange Commission.</text></subparagraph><subparagraph id="idd4f56aedfd974e8c966da6e3d721ef52"><enum>(E)</enum><text>The Department of Defense.</text></subparagraph><subparagraph id="id2da54277ccba4781a012096daba2f90d"><enum>(F)</enum><text>The Department of Veterans Affairs.</text></subparagraph><subparagraph id="id87329dbf4a104df5bf3207026cf0df43"><enum>(G)</enum><text>The Federal Trade Commission.</text></subparagraph><subparagraph id="idd1636a97ce9d47cebb9929f6d9dc0076"><enum>(H)</enum><text>The Department of Labor.</text></subparagraph><subparagraph id="id174ece56341b44ddbfa1963cd51d57ce"><enum>(I)</enum><text>The Internal Revenue Service.</text></subparagraph><subparagraph id="id9a2ef313c47041f7b6ed3bf6b9795648"><enum>(J)</enum><text>The enforcement unit of the Performance-Based Organization established under section 141(g).</text></subparagraph><subparagraph id="id8a3fe571f58a48838ba8501204f6458b"><enum>(K)</enum><text>At the discretion of the Chairperson of the Committee, any other relevant Federal agency or department.</text></subparagraph></paragraph><paragraph id="ida03654dbf29549de95daa79a8fe74b7b"><enum>(2)</enum><header>Purposes</header><text>The Committee shall have the following purposes:</text><subparagraph id="id888f1354f9c34116b108861785ad07d6"><enum>(A)</enum><text>Coordinate Federal oversight of for-profit institutions of higher education to—</text><clause id="id15de794185d640608653b437eb2e1dd1"><enum>(i)</enum><text>improve enforcement of applicable Federal laws;</text></clause><clause id="id55576657eb4941c7abe31747279d2116"><enum>(ii)</enum><text>increase accountability of for-profit institutions of higher education to students and taxpayers; and</text></clause><clause id="idcb26c9d3daa54d29b53e605f7d04a6c6"><enum>(iii)</enum><text>ensure the promotion of quality education programs.</text></clause></subparagraph><subparagraph id="id0b93e4e20db146b38381a03e54dbae2b"><enum>(B)</enum><text>Coordinate Federal activities to protect students from unfair, deceptive, abusive, unethical, fraudulent, or predatory practices, policies, or procedures of for-profit institutions of higher education.</text></subparagraph><subparagraph id="id822006c36a7e4a288bbfd8e7a7ea46d9"><enum>(C)</enum><text>Encourage information sharing among agencies related to Federal investigations, audits, program reviews, inquiries, complaints, financial statements, and other information relevant to the oversight of for-profit institutions of higher education.</text></subparagraph><subparagraph id="id16811b675b384ea3ad6251826c78291b"><enum>(D)</enum><text>Develop binding memoranda of understanding that the Federal entities represented on the Committee will use regarding the sharing of information to exercise the oversight described in this section.</text></subparagraph><subparagraph id="id7681841bb41b4e6da9e8ef994882e5c1"><enum>(E)</enum><text>Increase coordination and cooperation between Federal and State agencies (including State authorizing agencies, State attorneys general, and State approving agencies designated under section 3671 of title 38, United States Code) with respect to improving oversight and accountability of for-profit institutions of higher education.</text></subparagraph><subparagraph id="id382f32a2d813489f852b5ac5cbb16439"><enum>(F)</enum><text>Develop best practices and consistency among Federal and State agencies in the dissemination of consumer information regarding for-profit institutions of higher education to ensure that students, parents, and other stakeholders have easy access to such information.</text></subparagraph></paragraph><paragraph id="id4f21e39dbfe44e4faf53ecf3ba6c32fa"><enum>(3)</enum><header>Chairperson</header><text>The Secretary of Education or the designee of the Secretary shall serve as the Chairperson of the Committee. </text></paragraph></subsection><subsection id="id6766c11672e74a3eb622c3c2cac42224"><enum>(b)</enum><header>Meetings</header><paragraph id="id20a9d000de534ac78e787c0afc3ad6ee"><enum>(1)</enum><header>Committee meetings</header><text>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 subsection (a)(2).</text></paragraph><paragraph id="id8a8109a47d16412aa5fdbbc45df28d06"><enum>(2)</enum><header>Meetings with state agencies and stakeholders</header><text>The Committee shall meet not less than once each fiscal year, and shall otherwise interact regularly, with State authorizing agencies, State attorneys general, State approving agencies designated under section 3671 of title 38, United States Code, veterans service organizations, and consumer advocates to carry out the purposes described in subsection (a)(2).</text></paragraph></subsection><subsection id="id5f4f5d8ddff84248b304102d0217da45"><enum>(c)</enum><header>Director</header><text>The Chairperson shall appoint a full-time executive director to support the Committee and may appoint and fix the pay of additional staff as the Chairperson considers appropriate.</text></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></section><section id="id513272E8C701447FB9263518DC9AEA18"><enum>303.</enum><header>Establishment and maintenance of complaint resolution and tracking system</header><subsection commented="no" display-inline="no-display-inline" id="id443FEB071B3044258DDADE387B22DB8C"><enum>(a)</enum><header>Complaint tracking system</header><text display-inline="yes-display-inline">Title I (<external-xref legal-doc="usc" parsable-cite="usc/20/1001">20 U.S.C. 1001 et seq.</external-xref>) is amended by adding at the end the following:</text><quoted-block style="OLC" display-inline="no-display-inline" id="idF3F2B6B3985D4945817A58C715DE9152"><part id="id69d385b3d3a643e5a5ee1ef75c918481"><enum>F<?LEXA-Enum F?></enum><header>Complaint tracking system</header><section id="id75df17d387494ec688311795752f3fa6"><enum>161.</enum><header>Complaint tracking system</header><subsection id="id826ea66f6ae04fb29b682128ede32cb6"><enum>(a)</enum><header>Definitions</header><text>In this section:</text><paragraph commented="no" display-inline="no-display-inline" id="id16ca247881fc44ac97765fa04d7bb099"><enum>(1)</enum><header>Complainant</header><text>The term <term>complainant</term> means an individual making a complaint, or report of suspicious activity, through the complaint tracking system.</text></paragraph><paragraph commented="no" display-inline="no-display-inline" id="id945da7f8b50b4eadba6b725cbb17b5fc"><enum>(2)</enum><header display-inline="yes-display-inline">Complaint tracking system</header><text>The term <term>complaint tracking system</term> means the tracking system established under subsection (b).</text></paragraph><paragraph id="idff0673e4a45249b7a0fd0eb3a8368840"><enum>(3)</enum><header>Third-party servicer</header><text>The term <term>third-party servicer</term> has the meaning given the term in section 481(c).</text></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="idf86e5d5e121a401eb2a591236ce87cf6"><enum>(b)</enum><header display-inline="yes-display-inline">In general</header><text>The Secretary shall—</text><paragraph id="idd0d97a93d5184e648ed1d0671561d4ab"><enum>(1)</enum><text>establish and operate, in coordination with the Student Loan Ombudsman, a complaint tracking system that includes a single, toll-free telephone number and a website to facilitate the centralized collection of, monitoring of, and response to complaints or reports of suspicious activity regarding—</text><subparagraph id="id8eaaa115921b417c9dda13fa61cebe65"><enum>(A)</enum><text>Federal student financial aid and the servicing of postsecondary education loans by loan servicers;</text></subparagraph><subparagraph id="id22fce37aeaa24ebe84233e88177b9bac"><enum>(B)</enum><text>educational practices and services of institutions of higher education or third-party servicers; and</text></subparagraph><subparagraph id="id1c9d5646fe514d1883e3dd953dc3c36d"><enum>(C)</enum><text>the recruiting and marketing practices of institutions of higher education or third-party servicers; and</text></subparagraph></paragraph><paragraph id="id1250cca1801843d6a0341967a36f9896"><enum>(2)</enum><text>ensure that—</text><subparagraph id="idb31ecb708171486e8785cf3f17ac5539"><enum>(A)</enum><text>complaints or reports submitted by students, borrowers of student loans, staff of loan servicers, institutions of higher education, or third-party servicers, or the general public—</text><clause id="id4c557c457252497b8781b1c1b5c85533"><enum>(i)</enum><text>may remain anonymous if the complainant so chooses, including by providing complainants with an option for the individual complaint to not be reported to the loan servicer, institution, or third-party servicer, as the case may be; and</text></clause><clause id="id9101fffd47734b9bbf75df383c3018c5"><enum>(ii)</enum><text>may describe problems that are systematic in nature and not associated with a particular student or institution; </text></clause></subparagraph><subparagraph id="id452057b86d7a46239f746cd7475c34f4"><enum>(B)</enum><text>complaints and reports are provided to the loan servicers, institutions of higher education, or third-party servicers that are the subject of such complaints or reports;</text></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="idbbb78ef55c5049c5adc4b39d38907d88"><enum>(C)</enum><text display-inline="yes-display-inline">such loan servicer, institution of higher education, or third-party servicer provides a timely response to the complainant; and</text></subparagraph><subparagraph id="id834ffb39922d4e0092b732ca35dc4e19"><enum>(D)</enum><text>the complaint tracking system has the capacity to retrieve, search, and categorize complaints or reports for purposes of identifying problematic trends and systemic practices.</text></subparagraph></paragraph></subsection><subsection id="id94423d0ba43e48e587c06352fb61ed46"><enum>(c)</enum><header>Handling of complaints or reports</header><paragraph id="id3ffa7b1ba7374ca092a57a6e09034c48"><enum>(1)</enum><header>In general</header><text>The Secretary shall establish, in consultation with the heads of appropriate agencies (including the Director of the Bureau of Consumer Financial Protection), reasonable procedures to provide a timely response to individuals who file a complaint or report of suspicious activity in the complaint tracking system.</text></paragraph><paragraph commented="no" display-inline="no-display-inline" id="idbd95d262b8414488a305d955c62f3291"><enum>(2)</enum><header>Timely response to complaints</header><text display-inline="yes-display-inline">The Secretary shall provide a response to a complainant not more than 90 days after receiving the complaint, or report of suspicious activity, through the system, in writing where appropriate. Each response shall include a description of—</text><subparagraph id="iddcab3599253e4ad4a86325967ac23b4d"><enum>(A)</enum><text>the steps that have been taken by the Secretary in response to the complaint or report;</text></subparagraph><subparagraph id="id89b19e325f52436fae9c3a2a74639959"><enum>(B)</enum><text>any responses received by the Secretary from the loan servicer, institution of higher education, or third-party servicer; and</text></subparagraph><subparagraph id="iddc7e76b968e446f2ae987ce9094ec083"><enum>(C)</enum><text>any additional actions that the Secretary has taken, or plans to take, in response to the complaint or report.</text></subparagraph></paragraph><paragraph id="id59feb592791b4292b7e019ace1f3fd15"><enum>(3)</enum><header>Timely response to Secretary by institution of higher education or servicer</header><subparagraph commented="no" display-inline="no-display-inline" id="id1b549bb49e7544eeae0ad8a0247607b3"><enum>(A)</enum><header>Notice</header><text display-inline="yes-display-inline">If the Secretary determines that it is necessary, the Secretary shall—</text><clause commented="no" display-inline="no-display-inline" id="id8026aaa11dc14e54840846ccf328196a"><enum>(i)</enum><text display-inline="yes-display-inline">notify a loan servicer, institution of higher education, or third-party servicer that is the subject of a complaint, or report of suspicious activity, through the complaint tracking system regarding the complaint or report; and </text></clause><clause commented="no" display-inline="no-display-inline" id="id4a6ac8aecaf24bf89bbd456c916f3bd1"><enum>(ii)</enum><text display-inline="yes-display-inline">directly address and resolve the complaint or report in the system. </text></clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="id6af1e0dfacec481ca623a8ca84c87a02"><enum>(B)</enum><header>Institution or servicer response</header><text display-inline="yes-display-inline">Not later than 60 days after receiving a notice under subparagraph (A), a loan servicer, institution of higher education, or third-party servicer shall provide a response to the Secretary concerning the complaint or report, including—</text><clause id="id2d91cbb353dd43a6afcb8498a9ae373d"><enum>(i)</enum><text>the steps that have been taken by the loan servicer, institution, or third-party servicer to respond to the complaint or report;</text></clause><clause id="id97bffee69e7f415c9f034f49d83ab1a2"><enum>(ii)</enum><text>all responses received by the loan servicer, institution, or third-party servicer from the complainant; and</text></clause><clause id="id9c30d4d127954ee494d3044bf8ebe7f6"><enum>(iii)</enum><text>any additional actions that the loan servicer, institution, or third-party servicer has taken, or plans to take, in response to the complaint or report.</text></clause></subparagraph><subparagraph id="idcbcd6d8a85634d4c811602f0f0680fb9"><enum>(C)</enum><header>Further investigation</header><text>In the event that a complaint or report received by the complaint tracking system is not adequately resolved or addressed by the responses of the loan servicer, institution of higher education, or third-party servicer under subparagraph (B), the Secretary may—</text><clause commented="no" display-inline="no-display-inline" id="id78edd273179f4de395f257701d0cc317"><enum>(i)</enum><text display-inline="yes-display-inline">ask additional questions of such loan servicer, institution, or third-party servicer; or </text></clause><clause commented="no" display-inline="no-display-inline" id="id5e0dfb06513d4eb69bbc50c2a07b8338"><enum>(ii)</enum><text display-inline="yes-display-inline">seek additional information from or action by the loan servicer, institution, or third-party servicer.</text></clause></subparagraph></paragraph><paragraph id="id28e7edf509ee424c8eb3b3a363aa306a"><enum>(4)</enum><header>Provision of information</header><subparagraph id="idabe9c234513b452f9f701239d9da7a7a"><enum>(A)</enum><header>In general</header><text>A loan servicer, institution of higher education, or third-party servicer shall, in a timely manner, comply with a request by the Secretary for information in the control or possession of such loan servicer, institution, or third-party servicer, respectively, concerning a complaint or report of suspicious activity received by the Secretary under the complaint tracking system, including supporting written documentation, subject to subparagraph (B).</text></subparagraph><subparagraph id="id929e12648f884c91b04163f3541cfa1b"><enum>(B)</enum><header>Exceptions</header><text>A loan servicer, institution of higher education, or third-party servicer shall not be required to make available under this paragraph—</text><clause id="id58ca7f5100a7487baac07e46f7d22afa"><enum>(i)</enum><text>any nonpublic or confidential information, including any confidential commercial information;</text></clause><clause id="id0d9e25ba10e641ac818aa7fe0c02e970"><enum>(ii)</enum><text>any information collected by the loan servicer, institution, or third-party servicer for the purpose of preventing fraud or detecting or making any report regarding other unlawful or potentially unlawful conduct; or</text></clause><clause id="id092cdd14c86e4ffe99d1cffcbb51797c"><enum>(iii)</enum><text>any information required to be kept confidential by any other provision of law.</text></clause></subparagraph></paragraph><paragraph id="idc159eca1c5624956803fa87bfd3279f2"><enum>(5)</enum><header>Compliance</header><text>A loan servicer, institution of higher education, or third party servicer shall comply with the requirements to provide responses and information, in accordance with this subsection, as a condition of receiving funds under title IV or as a condition of the contract with the Department, as applicable.</text></paragraph></subsection><subsection id="id94fbfca1708e4557b398cb15b2eb94fd"><enum>(d)</enum><header>Transparency</header><paragraph id="id193b4697b78c4565a54f854aa7fb994f"><enum>(1)</enum><header>Data publication</header><text>The Secretary shall, on an annual basis, publish data on the website of the Department that shall include, for each loan servicer, institution, and third-party servicer—</text><subparagraph id="id7ed7978ff88a46358ffebf58e79ecc8a"><enum>(A)</enum><text>the number of complaints and reports received;</text></subparagraph><subparagraph id="idc268fb4cda4f4078aa550130a1da780b"><enum>(B)</enum><text>the types of complaints and reports received; </text></subparagraph><subparagraph id="id4177094196ad420b9455dfe3bf15dd9a"><enum>(C)</enum><text>information about the resolution of the complaints and reports; and</text></subparagraph><subparagraph id="id7cd7bc8763094cd8bb9d215a9100d609"><enum>(D)</enum><text>if the complainant consents, the narrative content of the complaint or report.</text></subparagraph></paragraph><paragraph id="id13b4858620a4417080dc08c8e86cf0ad"><enum>(2)</enum><header>Report</header><text>Each year, the Secretary shall prepare and submit to the authorizing committees a report describing—</text><subparagraph id="id8738193998dd458ab067116f2e40da62"><enum>(A)</enum><text>the types and nature of complaints or reports the Secretary has received under the complaint tracking system;</text></subparagraph><subparagraph id="id15c6885bb3214737bdac8d9c94b419f2"><enum>(B)</enum><text>the extent to which complainants are receiving adequate resolution pursuant to this section;</text></subparagraph><subparagraph id="id5e227579437c4d60834b9febb62d87e2"><enum>(C)</enum><text>whether particular types of complaints or reports are more common in a given sector of institutions of higher education or with particular loan servicers or third-party servicers;</text></subparagraph><subparagraph id="idaee53a661fd241f19067d91347d36db6"><enum>(D)</enum><text>any concerning trends or systemic practices identified;</text></subparagraph><subparagraph id="idbfa124b2b5b54729bd870b0107a15d4f"><enum>(E)</enum><text>any legislative recommendations that the Secretary determines are necessary to better assist students and families regarding the activities described in subsection (c)(1); and</text></subparagraph><subparagraph id="id0f45cd717c5c41a78109c16fcb7b42ee"><enum>(F)</enum><text>the loan servicers, institutions of higher education, and third-party servicers with the highest volume of complaints and reports, as determined by the Secretary.</text></subparagraph></paragraph></subsection></section></part><after-quoted-block>.</after-quoted-block></quoted-block></subsection><subsection id="id58cbea5938a04f42a713e18cb5952620"><enum>(b)</enum><header>Program participation agreement requirement</header><text>Section 487(a) (<external-xref legal-doc="usc" parsable-cite="usc/20/1094">20 U.S.C. 1094(a)</external-xref>) is amended by adding at the end the following:</text><quoted-block style="OLC" display-inline="no-display-inline" id="idDF304D3CDC1A4FEF8995EF1E5467346B"><paragraph id="idfd765ffea5ff432e848f39301979adee"><enum>(32)</enum><text>The institution will comply with any requirement under section 161, or any other requirement by the Department, to provide information or responses with respect to a complaint or report of suspicious activity about the institution.</text></paragraph><after-quoted-block>. </after-quoted-block></quoted-block></subsection></section><section id="id45e038f4b3ac41f9ae85958d334930f5"><enum>304.</enum><header>Reforms to eligibility and certification procedures</header><subsection commented="no" display-inline="no-display-inline" id="idf21f6981ddfc4c509579481737cb934d"><enum>(a)</enum><header>Eligibility and certification procedures</header><text display-inline="yes-display-inline">Section 498 (<external-xref legal-doc="usc" parsable-cite="usc/20/1099c">20 U.S.C. 1099c</external-xref>) is amended—</text><paragraph id="id5e955553849241f7b3faf4a7434a2549"><enum>(1)</enum><text>in subsection (a)—</text><subparagraph commented="no" display-inline="no-display-inline" id="id42f122473945433eb83c44ade9da8d1c"><enum>(A)</enum><text>by striking <quote>For purposes</quote> and inserting the following:</text><quoted-block style="OLC" display-inline="no-display-inline" id="id250FDE50D4674AD189314FCE5E30170B"><paragraph commented="no" display-inline="no-display-inline" id="ided9ff890e09d40f8bc69381d87d0c31a"><enum>(1)</enum><header>In general</header><text>For purposes</text></paragraph><after-quoted-block>;</after-quoted-block></quoted-block></subparagraph><subparagraph id="iddb5b727441224ee4a496d15868b4ba98"><enum>(B)</enum><text>by striking <quote>status, and</quote> and inserting <quote>status,</quote>; </text></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ida2aeae0f57f147fda07771215199ddc7"><enum>(C)</enum><text display-inline="yes-display-inline">by inserting <quote>, and the institution’s compliance with all other eligibility requirements in accordance with paragraph (2),</quote> after <quote>an institution of higher education</quote>; and</text></subparagraph><subparagraph commented="no" id="idcb4e4f0f96534a6e9effbb5e01a1a560"><enum>(D)</enum><text>by adding at the end the following: </text><quoted-block style="OLC" display-inline="no-display-inline" id="id7EEF2BCB4E11408083A7446BB2109A7B"><paragraph commented="no" display-inline="no-display-inline" id="id4a41ec8f5710404687d24624b18f928c"><enum>(2)</enum><header>Compliance</header><subparagraph commented="no" display-inline="no-display-inline" id="ida3e03c6cfd5842af85ed9383b2afe912"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">In making a determination of institutional eligibility under this section, the Secretary shall—</text><clause commented="no" display-inline="no-display-inline" id="id2d7a715f185d4db681498b816210c4cf"><enum>(i)</enum><text display-inline="yes-display-inline">require that an institution demonstrate compliance with each provision required under this title in order to receive a full, non-provisional certification of eligibility for purposes of this section;</text></clause><clause commented="no" display-inline="no-display-inline" id="idf97b1aa066f7453581f6e5bedfb7b738"><enum>(ii)</enum><text display-inline="yes-display-inline">reflect that an institution is not entitled to continued participation in programs under this title absent a demonstration of full compliance; and</text></clause><clause commented="no" display-inline="no-display-inline" id="idef0a6e97b7f74cd78bc8de22d47be385"><enum>(iii)</enum><text display-inline="yes-display-inline">determine that an institution is not eligible for participation in programs under this title if it is not in full compliance with section 487(a)(16).</text></clause></subparagraph></paragraph><after-quoted-block>; and</after-quoted-block></quoted-block></subparagraph></paragraph><paragraph id="id8bec1b76da194d53a0c0a039ed4b4cec"><enum>(2)</enum><text>in subsection (f)—</text><subparagraph commented="no" display-inline="no-display-inline" id="ide8c55464bfd54d87b99b0cea1b923dd4"><enum>(A)</enum><text display-inline="yes-display-inline">by striking <quote>The Secretary shall ensure</quote> and inserting the following:</text><quoted-block style="OLC" display-inline="no-display-inline" id="id703AE3698EE64E0183D69DF5F0E71468"><paragraph commented="no" display-inline="no-display-inline" id="id5d84e2bb83474b2792fc736d5cdbf90d"><enum>(1)</enum><header>In general</header><text>The Secretary shall ensure</text></paragraph><after-quoted-block>; and</after-quoted-block></quoted-block></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="id1645a62656234721abc9f468454709da"><enum>(B)</enum><text display-inline="yes-display-inline">by striking <quote>The personnel</quote> and inserting the following: </text><quoted-block style="OLC" display-inline="yes-display-inline" id="idF0AC10FA3B2E4B8AAEAE182BDCA0808D"><text>The Secretary shall not automatically certify or recertify an institution for participation in a program under this title as a result of delay in conducting a full review of the institution’s application.</text><paragraph commented="no" display-inline="no-display-inline" id="id8fe1fe0c58024f5d912d64439d8cf890"><enum>(2)</enum><header>Site visits</header><text display-inline="yes-display-inline">The personnel</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subparagraph></paragraph></subsection><subsection id="id73f3a64dca4a4af798dcf2b497ff91ad"><enum>(b)</enum><header>Provisional certification of high-Risk institutions</header><text>Section 498 (<external-xref legal-doc="usc" parsable-cite="usc/20/1099c">20 U.S.C. 1099c</external-xref>) is amended—</text><paragraph commented="no" id="id173058c72b244477b9e58b78e235cb15"><enum>(1)</enum><text>in subsection (h)—</text><subparagraph commented="no" id="idC348038B2B5F4435A1511BABAAABB203"><enum>(A)</enum><text>in paragraph (1)(B)—</text><clause commented="no" id="id5B4D2B7A344847DAB037A2FBA45668AD"><enum>(i)</enum><text>in clause (ii), by striking <quote>or</quote> after the semicolon;</text></clause><clause commented="no" id="id4335F4F5CA0841DA930324D39C608F6F"><enum>(ii)</enum><text>in clause (iii), by striking the period at the end and inserting a semicolon; and</text></clause><clause commented="no" id="idB46418B916924DC8A4830E561240FF09"><enum>(iii)</enum><text>by adding at the end the following:</text><quoted-block style="OLC" display-inline="no-display-inline" id="idD8D5E1A112B24319989642702543E692"><clause id="ida5b0024279364509ac723b8f5f64da63"><enum>(iv)</enum><text>the institution has violated any requirement of this title;</text></clause><clause id="id4218cd8fff9b43a0b74ac470f7ad036f"><enum>(v)</enum><text>the institution has violated the terms of its program participation agreement under section 487; or</text></clause><clause id="id67551584ef5a473b8df9f6bc7d7af337"><enum>(vi)</enum><text>the Secretary determines that the institution’s continued participation in programs under this title poses a significant risk to students and taxpayers.</text></clause><after-quoted-block>;</after-quoted-block></quoted-block></clause></subparagraph><subparagraph commented="no" id="id3b61897ffd1e49a4b20e5a0e36187c06"><enum>(B)</enum><text>by redesignating paragraphs (2) and (3) as paragraphs (3) and (4), respectively; and</text></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="idfc5526d4b26b44efa7a0e4bedc991f19"><enum>(C)</enum><text display-inline="yes-display-inline">by inserting after paragraph (1) the following:</text><quoted-block style="OLC" display-inline="no-display-inline" id="id25105F84F0B14159A129052E5317B6A7"><paragraph id="id7287668a6aa44ea8bf8625f45f87eb08"><enum>(2)</enum><header>Additional conditions</header><text>The Secretary shall require a provisionally certified institution to comply with such additional conditions as the Secretary determines necessary or appropriate based on the circumstances of the institution, as specified in the institution’s program participation agreement under section 487.</text></paragraph><after-quoted-block>;</after-quoted-block></quoted-block></subparagraph></paragraph><paragraph id="ide9650e7cef944a3abaa584420654f482"><enum>(2)</enum><text>by redesignating subsections (i), (j), and (k) as subsections (j), (k), and (l), respectively; and</text></paragraph><paragraph id="id8d9a3b006c6741b8bd78a4d497fd602f"><enum>(3)</enum><text>by inserting after subsection (h) the following:</text><quoted-block style="OLC" display-inline="no-display-inline" id="idB588764924C94C8FA74C8DFBF286B87B"><subsection id="id40970614134c499c88e856d658969878"><enum>(i)</enum><header>Termination action</header><text>If an institution that is provisionally certified under subsection (h) is unable to meet its responsibilities under its program participation agreement or is in violation of any requirement established under this title (including if the institution has engaged in substantial misrepresentations), or if a final administrative finding or judicial judgment determines that the institution violated a State or Federal consumer protection law or regulation, the Secretary may terminate the institution’s participation in the programs under this title.</text></subsection><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection><subsection commented="no" id="idc6adc8ca3ef440f48441b39c45940812"><enum>(c)</enum><header>Program participation agreement claims</header><paragraph commented="no" display-inline="no-display-inline" id="idc48580eb849b4a778343cd770aa68591"><enum>(1)</enum><header>False claims</header><text display-inline="yes-display-inline">Section 487(c) (<external-xref legal-doc="usc" parsable-cite="usc/20/1094">20 U.S.C. 1094(c)</external-xref>) is amended by adding at the end the following:</text><quoted-block style="OLC" display-inline="no-display-inline" id="id800C4C2EC6F84D6B985E8C4F2123055D"><paragraph commented="no" display-inline="no-display-inline" id="id531a3188318b43438ee044d7ad85c589" indent="up1"><enum>(8)</enum><header>False claims</header><subparagraph commented="no" display-inline="no-display-inline" id="id49db60f8dbe34851a2b250ebc02ce03b"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">An institution that submits a misrepresentation or false claim on an application for funds under this title, or knowingly (as defined in section 3729 of title 31, United States Code) fails to comply with the requirements of the program participation agreement under this section, shall be subject to sections 3729 through 3733 of such title.</text></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ide88b200d104e4bd9a21117f0f39dab2c"><enum>(B)</enum><header>Amount of damages</header><text>For purposes of section 3729(a) of title 31, United States Code, the amount of damages that the Government sustains because of the act of the institution described in subparagraph (A) shall be the total amount of funds distributed to the institution for loans made to students under part D during the period beginning on the date of the submission of the application or the failure to comply (as the case may be) and ending on the date on which a final decision finding a violation of section 3729 of such Code is made.</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph><paragraph commented="no" display-inline="no-display-inline" id="id1897deb6c4ce441d8c811186508afdc5"><enum>(2)</enum><header>Certification of compliance</header><text display-inline="yes-display-inline">Paragraph (21) of section 487(a) (<external-xref legal-doc="usc" parsable-cite="usc/20/1094">20 U.S.C. 1094(a)(21)</external-xref>) is amended to read as follows:</text><quoted-block style="OLC" display-inline="no-display-inline" id="idA31F2CEB07954537B5BCA722E350E346"><paragraph commented="no" display-inline="no-display-inline" id="id7794655901bb401baec729b6baabb31d"><enum>(21)</enum><text>The institution—</text><subparagraph commented="no" display-inline="no-display-inline" id="id0c84073e860d41f790a5ab3e653143d6"><enum>(A)</enum><text display-inline="yes-display-inline">acknowledges that the agreement certifies the institution's compliance with all terms of the program participation agreement and all applicable Federal laws and regulations that govern an institution's eligibility to receive funds under this title; </text></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="id88abfd5df7904351bba5ad0abee2206c"><enum>(B)</enum><text display-inline="yes-display-inline">agrees that any violation of the terms of a program participation agreement or any other Federal law or regulation described in subparagraph (A) constitutes material noncompliance with a condition of payment; and</text></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="id060fe1506bb24f3eb0ccd98d3f2ec06e"><enum>(C)</enum><text display-inline="yes-display-inline">will meet the requirements established by the Secretary and accrediting agencies or associations, and will provide evidence to the Secretary that the institution has the authority to operate within a State.</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection></section><section id="id1aa3fdfd896b4bffaa9076262fa70e26"><enum>305.</enum><header>State oversight</header><subsection commented="no" display-inline="no-display-inline" id="id5e32d2705e214f4a8e2eee6277c9b84b"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Section 101 (<external-xref legal-doc="usc" parsable-cite="usc/20/1001">20 U.S.C. 1001</external-xref>) is amended—</text><paragraph commented="no" display-inline="no-display-inline" id="id74da3cbaddbd45fc8572816b858414d9"><enum>(1)</enum><text>in subsection (a)—</text><subparagraph id="idc59a6f6a62e64459b3a0a9e5d0de8b94"><enum>(A)</enum><text>by redesignating paragraphs (3), (4), and (5) as paragraphs (4), (5), and (6), respectively; and</text></subparagraph><subparagraph id="idacb0b21a06cb4b798b611b8ae1e050e4"><enum>(B)</enum><text>by inserting after paragraph (2) the following:</text><quoted-block style="OLC" display-inline="no-display-inline" id="idFDF25B95907F4ECF8E00E70A63177A3B"><paragraph id="id370db80b1f2b4b35b66ff1bf0e6ef49b"><enum>(3)</enum><text>if providing education through distance education or correspondence in a State in which the institution is not located—</text><subparagraph id="id55bc51149c5340a6be230975284d71b9"><enum>(A)</enum><text>meets the requirements of such State for offering postsecondary education; or</text></subparagraph><subparagraph id="ide7b372972c44472684e3b52e8ddac8ce"><enum>(B)</enum><text>if the institution is authorized by a State pursuant to an interstate reciprocity agreement—</text><clause id="id4121c629c467494594bf2c0bfc9d8e34"><enum>(i)</enum><text>the institution must have fewer than 200 students in such State enrolled annually;</text></clause><clause id="idb67cc200669b4a68b4899883fb77ce6d"><enum>(ii)</enum><text>the agreement must allow States to enforce all non-registration and non-fee laws with respect to out-of-State institutions; and</text></clause><clause id="id9b800a2661f543ef89e02b5cabde2897"><enum>(iii)</enum><text>decisions regarding eligibility to participate in the reciprocity agreement and the standards that apply to participating institutions shall be made exclusively by representatives of member State regulatory agencies or State attorneys general offices;</text></clause></subparagraph></paragraph><after-quoted-block>; and</after-quoted-block></quoted-block></subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="id56df26092b334d6cbfdc04f307acc6c4"><enum>(2)</enum><text>in subsection (b)(1), by striking <quote>paragraphs (1), (2), (4), and (5) of subsection (a)</quote> and inserting <quote>paragraphs (1), (2), (3), (5), and (6) of subsection (a)</quote>.</text></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="id2190425931854995bc7e0e7de39df92e"><enum>(b)</enum><header>Conforming amendments</header><text>Section 102 (<external-xref legal-doc="usc" parsable-cite="usc/20/1002">20 U.S.C. 1002</external-xref>) is amended—</text><paragraph commented="no" display-inline="no-display-inline" id="idd3e762e92ccf4def9565dba6249651ca"><enum>(1)</enum><text display-inline="yes-display-inline">in subsection (a)(2)(A), by striking <quote>section 101(a)(4)</quote> each place the term appears and inserting <quote>section 101(a)(5)</quote>;</text></paragraph><paragraph commented="no" display-inline="no-display-inline" id="idddc3185aa47a40c6ad4a84c1bcc4a006"><enum>(2)</enum><text>in subsection (b)(1)—</text><subparagraph commented="no" display-inline="no-display-inline" id="id94d274f01a01438ba3da8b579b7b4667"><enum>(A)</enum><text display-inline="yes-display-inline">in subparagraph (B), by striking <quote>paragraphs (1) and (2) of section 101(a)</quote> and inserting <quote>paragraphs (1), (2), and (3) of section 101(a)</quote>; and</text></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="id1411de34bf3c438bab8099e9b9141f50"><enum>(B)</enum><text>in subparagraph (C), by striking <quote>paragraph (4) of section 101(a)</quote> and inserting <quote>paragraph (5) of section 101(a)</quote>; and</text></subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="id910202d6a8dd4ea4b453a2cce234f21a"><enum>(3)</enum><text>in subsection (c)(1)(B), by striking <quote>requirements of paragraphs (1), (2), (4), and (5) of section 101(a)</quote> and inserting <quote>requirements of paragraphs (1), (2), (3), (5), and (6) of section 101(a)</quote>.</text></paragraph></subsection></section><section id="id1e770bd9ab42435697bcbc1c06b0aa5a"><enum>306.</enum><header>Accrediting agency oversight</header><text display-inline="no-display-inline">Section 496(c) ((<external-xref legal-doc="usc" parsable-cite="usc/20/1099b">20 U.S.C. 1099b(c)</external-xref>) is amended—</text><paragraph commented="no" display-inline="no-display-inline" id="id0a05d20630a94b84b353cf55df03035a"><enum>(1)</enum><text>in paragraph (8), by striking <quote>and</quote> after the semicolon;</text></paragraph><paragraph commented="no" display-inline="no-display-inline" id="iddfeb8ebc126c485dab20ce283db4821c"><enum>(2)</enum><text>in paragraph (9)(B), by striking the period at the end and inserting <quote>; and</quote>; and</text></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ida0d9e15ce54146ee81a28bcb80e87931"><enum>(3)</enum><text display-inline="yes-display-inline">by adding at the end the following:</text><quoted-block style="OLC" display-inline="no-display-inline" id="id4EFF65682D6145B185C3357F024CF3B5"><paragraph id="id6cac49ccae0643e991b8219784e18030"><enum>(10)</enum><subparagraph commented="no" display-inline="yes-display-inline" id="idd23b3d9ddeed45d9aea5974dd9298ccc"><enum>(A)</enum><text>assesses the risk to students of any institution or program, including assessing the risk to students and institutions of any program managed by a third-party servicer, in accordance with factors provided by the Secretary;</text></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="id5cb82138a9e9417d96ec29cffc8363ec" indent="up1"><enum>(B)</enum><text display-inline="yes-display-inline">effectively determines whether each such institution or program warrants additional oversight or action; and</text></subparagraph><subparagraph commented="no" display-inline="no-display-inline" indent="up1" id="id6e6352e1624a4611a9b49a92ca1b25e7"><enum>(C)</enum><text display-inline="yes-display-inline">provides adequate monitoring of the quality and risk of such institutions or programs.</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></section><section id="id0fb2ea7040fe415e8d746b8a3e75f515"><enum>307.</enum><header>Mandatory spending for administrative costs of operating the student aid programs</header><text display-inline="no-display-inline">Paragraph (3) of section 458(a) (<external-xref legal-doc="usc" parsable-cite="usc/20/1087h">20 U.S.C. 1087h(a)(3)</external-xref>) is amended to read as follows: </text><quoted-block style="OLC" display-inline="no-display-inline" id="id0873899B76CC4E518C6416F59AE1664F"><paragraph id="id6ed4cabf4571453eb2dfe8c5ebd55b9e"><enum>(3)</enum><header>Funds for administrative costs</header><subparagraph commented="no" display-inline="no-display-inline" id="id93fc95f574b84e269dc630991c07374f"><enum>(A)</enum><header display-inline="yes-display-inline">In general</header><text>Each fiscal year, there shall be available to the Secretary from funds not otherwise appropriated, funds to be obligated for administrative costs under this part, including the costs of the student loan program under this part, except that the total expenditures by the Secretary under this subparagraph shall not exceed 5 percent of the amount of the average outstanding Federal student loan portfolio under this part for the preceding fiscal year. </text></subparagraph><subparagraph id="ide213ea2d30c64721bf9d5a2a0919b5b0"><enum>(B)</enum><header>Availability</header><text>Funds made available under subparagraph (A) shall remain available until expended. The Secretary is authorized to use funds available under this paragraph for a fiscal year for a subsequent fiscal year.</text></subparagraph><subparagraph id="ide7c6b952a828476d8977d339ae642913"><enum>(C)</enum><header>Budget</header><text>No funds may be expended under this paragraph unless the Secretary includes in the annual budget request of the Department to Congress a detailed description of—</text><clause commented="no" display-inline="no-display-inline" id="iddbf20087e1714f64808311a1b2b375c6"><enum>(i)</enum><text display-inline="yes-display-inline">the specific activities for which the funds made available by this paragraph have been used in the most recent fiscal year;</text></clause><clause commented="no" display-inline="no-display-inline" id="idede92903bc3b49eca4ae138033f8a5d5"><enum>(ii)</enum><text display-inline="yes-display-inline">the activities and costs planned for the fiscal year for which the request is made; and </text></clause><clause commented="no" display-inline="no-display-inline" id="idc2abc01317654f70aaae2511b6f8136c"><enum>(iii)</enum><text display-inline="yes-display-inline">the projection of activities and costs for the fiscal year immediately following the fiscal year for which administrative expenses under this paragraph are made available.</text></clause></subparagraph></paragraph><after-quoted-block>. </after-quoted-block></quoted-block></section><enum>IV</enum><header>Improving access to student and taxpayer information</header><section id="id4fd72af1f3fa4b16a494a64703346b4a"><enum>401.</enum><header>Reporting and disclosures from institutions of higher education</header><subsection commented="no" display-inline="no-display-inline" id="id2eb2c49075674b68830d215c6fea1ab7"><enum>(a)</enum><header display-inline="yes-display-inline">Gainful employment and financial value transparency disclosures and warnings</header><text display-inline="yes-display-inline">Section 498C, as added by section 101(b), is amended—</text><paragraph commented="no" display-inline="no-display-inline" id="id6b52c95f30b4472287b6cd8356911c39"><enum>(1)</enum><text display-inline="yes-display-inline">by redesignating subsection (e) as subsection (f); and</text></paragraph><paragraph commented="no" display-inline="no-display-inline" id="id0cf0c760177f4726bda610db8842f3ae"><enum>(2)</enum><text display-inline="yes-display-inline">by inserting after subsection (d) the following: </text><quoted-block style="OLC" display-inline="no-display-inline" id="idCCA8139C76F540F6B990631FD8C8D51F"><subsection id="ida976bde4778d4ece939ca2394579725f"><enum>(e)</enum><header>Disclosures and warnings</header><paragraph id="id91699ed60c254350b63a51cc9e95a743"><enum>(1)</enum><header>In general</header><text>For each gainful employment program or graduate or professional degree program of an institution that does not meet the standards described in subsection (b), the institution shall— </text><subparagraph commented="no" display-inline="no-display-inline" id="idd284f75960a144818fbe9bd5b6a89467"><enum>(A)</enum><text display-inline="yes-display-inline">provide warnings to prospective students and enrolled students of the institution regarding the failing program status in a manner specified by the Secretary; and </text></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="id6e30a068010f481e83be60428838e72b"><enum>(B)</enum><text display-inline="yes-display-inline">shall require prospective students to acknowledge receipt of the warning.</text></subparagraph></paragraph></subsection><subsection id="idb27b2c0054cf43538980758321069f80"><enum>(f)</enum><header>Disclosure</header><text>An institution of higher education shall provide the link to the website described in subsection (c)(2)(A)(ii) to prospective and enrolled students in a manner specified by the Secretary.</text></subsection><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection><subsection id="id17a11608710446c2862eb70345c24b0a" commented="no"><enum>(b)</enum><header>Instructional spending data and disclosures</header><text>Section 132 (<external-xref legal-doc="usc" parsable-cite="usc/20/1015a">20 U.S.C. 1015a</external-xref>) is amended—</text><paragraph id="idcb3403f82b7646ac8aa777339bad9f0d" commented="no"><enum>(1)</enum><text>by redesignating subsection (l) as subsection (n); and</text></paragraph><paragraph id="id8e9732037ed440c6951e434617b537c3" commented="no"><enum>(2)</enum><text>by inserting after subsection (k) the following: </text><quoted-block style="OLC" display-inline="no-display-inline" id="idF25C49AB9A69432A80415AB72BF8E8D5"><subsection id="id18717f8162264406bbcb05c926825305"><enum>(l)</enum><header>Investments in instruction and student services</header><paragraph id="idb293661b05fa420593f655ba3b711a23"><enum>(1)</enum><header>Institutional expenditures</header><subparagraph id="id42b968c1f55247d7ac3d504038bc4f55"><enum>(A)</enum><header>In general</header><text>The Secretary shall establish definitions for calculating instructional expenditures that shall separately account for the expenditures of an institution of higher education on each of the following:</text><clause id="id73fda22d5bc74b91891841d0bdd76667"><enum>(i)</enum><text>Instruction.</text></clause><clause id="id115791476f9b405ca16e3cc99811c396"><enum>(ii)</enum><text>Student services.</text></clause><clause id="id24a018f4b55e4f9bab1a7b8c0efd6621"><enum>(iii)</enum><text>Marketing.</text></clause><clause id="id1f9745eeb44c4fbbb55acd25a7478a1b"><enum>(iv)</enum><text>Recruitment.</text></clause><clause id="idf439f383bea4480288d9938e3a8ceaca"><enum>(v)</enum><text>Advertising.</text></clause><clause id="id0ce183b0310747f2a21d4a51d9a33ce2"><enum>(vi)</enum><text>Lobbying.</text></clause></subparagraph><subparagraph id="id5887c81950bd4e75b576b703e2fc1f93"><enum>(B)</enum><header>Exclusions</header><text>Expenditures on instruction and student services, as defined in accordance with clauses (i) and (ii) of subparagraph (A), shall not include expenditures on marketing, recruitment, advertising, compensation of executives or officers, or lobbying, or other pre-enrollment expenditures.</text></subparagraph></paragraph><paragraph id="id87c230068ad945e88e49c92fcb8d5ef3"><enum>(2)</enum><header>Reporting</header><text>Each institution of higher education receiving Federal funds under title IV shall report to the Secretary—</text><subparagraph id="id2478fede4a954c92a33d6bd262722772"><enum>(A)</enum><text>the total dollar amount of title IV funds received by the institution;</text></subparagraph><subparagraph id="idabf1552fcd914a2a8607b5f19b2cde4b"><enum>(B)</enum><text>the proportion of title IV funds spent on recruitment activities and marketing activities;</text></subparagraph><subparagraph id="idabee5681584546e29cd09b7c6a9e534b"><enum>(C)</enum><text>the proportion of title IV funds spent on instruction and student services; and</text></subparagraph><subparagraph id="idb9f030a3b1f84cacb3292932e12e394a" commented="no"><enum>(D)</enum><text>for each program of education or division of the institution for which the tuition is charged, the price of tuition relative to the institution’s allocation of revenues to spending on instruction and student services.</text></subparagraph></paragraph><paragraph id="id21779067f374454bab292388fd1962a4"><enum>(3)</enum><header>Disclosures by the Department of Education</header><text>The Secretary shall make the disclosures reported under paragraph (2) publicly available on the College Navigator website.</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection><subsection id="id5a131d2ffdd84df785e4e7c8efa1186a"><enum>(c)</enum><header>Transparency of online programs</header><text>Section 132 (<external-xref legal-doc="usc" parsable-cite="usc/20/1015a">20 U.S.C. 1015a</external-xref>), as amended by subsection (b), is further amended by inserting after subsection (l), as added by subsection (b)(2), the following:</text><quoted-block style="OLC" display-inline="no-display-inline" id="id48c46058384c4838b72643ebb5ad915b"><subsection id="id0d16444b0b534a4da9e5276e1a3f865d"><enum>(m)</enum><header>Improving transparency for online and contracted programs</header><paragraph id="id28ef6f556d164d33b3ac8a455dad240e"><enum>(1)</enum><header>Annual reporting requirements for third-party servicer activities</header><text>Each institution of higher education that receives Federal funds under title IV shall report annually to the Secretary—</text><subparagraph id="id066fc3c9733349a3a4567af0462c9c05"><enum>(A)</enum><text>the name of each third-party servicer with which the institution contracts; and</text></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="id3fca730842a74526892f56dffbc98e91"><enum>(B)</enum><text>for each such third-party servicer—</text><clause commented="no" display-inline="no-display-inline" id="id1dae51ba2fe642ca9fc571f5af41e712"><enum>(i)</enum><text display-inline="yes-display-inline">the names of any programs for which each such third-party servicer is contracted to provide support; </text></clause><clause commented="no" display-inline="no-display-inline" id="id72cbde319a644ddfbd399579f883dd68"><enum>(ii)</enum><text display-inline="yes-display-inline">the services each such third-party servicer is contracted to offer for each program;</text></clause><clause id="idedd5ee50f4254372acd0007932f415af"><enum>(iii)</enum><text>the number of students enrolled in any program for which the third-party servicer is contracted to provide services;</text></clause><clause id="id26d6796c87924a15bb36c2b5bc479543"><enum>(iv)</enum><text>whether the third-party servicer administers or provides any private or institutional student loan products; and</text></clause><clause id="id67d83a8f5f3d4ab7bb8d332b5545dfd1"><enum>(v)</enum><text>the third-party servicer’s total expenditures on advertising, marketing, and recruiting on behalf of the institution.</text></clause></subparagraph></paragraph><paragraph id="idc2433d64f49e46e7a43fef17bd31ea27"><enum>(2)</enum><header>Disclosure requirements</header><text>If an institution of higher education receiving Federal funds under title IV contracts with a third-party servicer to offer one or more programs of education, and such third-party servicer provides recruitment activities, retention activities, or similar activities (as specified by the Secretary) for the program—</text><subparagraph id="id0982afdc56a34707bdf3562570b13673"><enum>(A)</enum><text>the institution and third-party servicer shall prominently disclose for each such program of education, in a manner specified by the Secretary and using language developed by the Secretary, the nature of the relationship between the institution and third-party servicer—</text><clause id="idebdd3643867d42afbb6a3b2a4d0c2a7f"><enum>(i)</enum><text>in advertisements;</text></clause><clause id="ida0db86401a6d45f9b1700e887581b236"><enum>(ii)</enum><text>in marketing materials; and</text></clause><clause id="id752d8b02986e4b99b11dc9397d800c28"><enum>(iii)</enum><text>on the website of the institution; and</text></clause></subparagraph><subparagraph id="id77d0fbb181ad447cb9199cbc759fc708"><enum>(B)</enum><text>individuals who are employed by the third-party servicer to provide admissions, recruitment, retention, or advising activities shall prominently disclose to prospective or enrolled students that the individuals are employees of that third-party servicer and not the institution, including in any communication about the program of education.</text></subparagraph></paragraph><paragraph id="idadec00af5a75492992a1ceb150c7d0e2"><enum>(3)</enum><header>Annual reporting requirements for online education</header><text>Each institution of higher education receiving Federal funds under title IV shall report annually to the Secretary—</text><subparagraph id="idb11f8790026244e2a82ab4882918ac4d"><enum>(A)</enum><text>the institution’s expenditures on activities to secure enrollments for each online, on-campus, and hybrid program, and its total expenditures for all activities of the institution;</text></subparagraph><subparagraph id="idfe8da10e007d4241933f19bf3441cfd9"><enum>(B)</enum><text>the status of each student receiving Federal student aid as enrolled online, on-campus, or in a combination of both modalities, sufficient for the Secretary to calculate the total student enrollment, retention and completion rates, student loan borrowing levels, student loan repayment outcomes, and median earnings for each such program; and</text></subparagraph><subparagraph id="id0b351ea1305d40b69058e49043833010"><enum>(C)</enum><text>the annual net price charged for each such program.</text></subparagraph></paragraph></subsection><after-quoted-block>. </after-quoted-block></quoted-block></subsection><subsection id="idff6fab2386fd4f1480101083b6a62a1e"><enum>(d)</enum><header>Disclosure of material facts for proprietary institutions</header><text display-inline="yes-display-inline">Section 498(c) (<external-xref legal-doc="usc" parsable-cite="usc/20/1099c">20 U.S.C. 1099c(c)</external-xref>), as amended by section 203, is further amended by adding at the end the following:</text><quoted-block style="OLC" display-inline="no-display-inline" id="idCD7FEE9F164D48D1AD994CE3EA71F67A"><paragraph id="id1c92b597556a4eccb7eb15d270d4d9b0" indent="up1"><enum>(8)</enum><subparagraph commented="no" display-inline="yes-display-inline" id="ida4aa8080b0504e00a3bad5b4576f0cfd"><enum>(A)</enum><text>The Secretary shall require each proprietary institution of higher education (as defined in section 102(c)) to file promptly with the Secretary—</text><clause id="id59bb3588d155441ca70b1321606fc701" indent="up1"><enum>(i)</enum><text>all public filings that the institution files with the Securities and Exchange Commission that include references to matters that affect students, including—</text><subclause commented="no" display-inline="no-display-inline" id="id4267aba46f49421087896329e3a29ca1"><enum>(I)</enum><text display-inline="yes-display-inline">mergers and acquisitions; </text></subclause><subclause commented="no" display-inline="no-display-inline" id="id451494e183b4433cb2d5b82cf5dcc8a8"><enum>(II)</enum><text display-inline="yes-display-inline">changes of ownership;</text></subclause><subclause commented="no" display-inline="no-display-inline" id="idfd5a34687daa4112b3d4134974c6383f"><enum>(III)</enum><text display-inline="yes-display-inline">changes of leadership and board membership;</text></subclause><subclause commented="no" display-inline="no-display-inline" id="id623142007cbb476e8c19e42c7104dcda"><enum>(IV)</enum><text display-inline="yes-display-inline">school or campus closings;</text></subclause><subclause commented="no" display-inline="no-display-inline" id="idb4d3a919c37640a1a3c1a5a60eed2813"><enum>(V)</enum><text display-inline="yes-display-inline">civil lawsuits; </text></subclause><subclause commented="no" display-inline="no-display-inline" id="id2aa6a996b4db4a458b5a06aaa4cd6d52"><enum>(VI)</enum><text display-inline="yes-display-inline">law enforcement actions, investigations, subpoenas, and demand letters; and </text></subclause><subclause commented="no" display-inline="no-display-inline" id="id538010f5ae4f4796b3782e44228ccf06"><enum>(VII)</enum><text display-inline="yes-display-inline">material change in financial status; and</text></subclause></clause><clause id="idae367637970f4c6992ad2543c19e8927" indent="up1"><enum>(ii)</enum><text>in the case of an institution that is not required to make disclosures to the Securities and Exchange Commission, notifications regarding matters that affect students similar to the filings described in clause (i), in a form and manner determined by the Secretary. </text></clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" indent="up1" id="idcda21081613d488faf80cc72be435883"><enum>(B)</enum><text display-inline="yes-display-inline">The Secretary shall promptly make all information received under subparagraph (A) available on the website of the Department.</text></subparagraph></paragraph><after-quoted-block>. </after-quoted-block></quoted-block></subsection></section><section id="id51e1a6d5348b4969b689cd2de705caa0"><enum>402.</enum><header>Transparency of oversight activities</header><subsection id="id361E440456974C3EAA82B3F18E2555BA"><enum> (a)</enum><header>Borrower defense claims and discharges data</header><text display-inline="yes-display-inline">Section 455(h) (<external-xref legal-doc="usc" parsable-cite="usc/20/1087e">20 U.S.C. 1087e(h)</external-xref>), as amended by section 102(a), is further amended—</text><paragraph commented="no" display-inline="no-display-inline" id="id50332d9ff6374b0ebc56f96b38d84d23"><enum>(1)</enum><text>by redesignating paragraph (8) as paragraph (9); and</text></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ida5e1c48afade4eb98605d83691509dac"><enum>(2)</enum><text>by inserting after paragraph (7) the following:</text><quoted-block style="OLC" display-inline="no-display-inline" id="id17F7FADB2A7B4BC4875334F5CC041FD2"><paragraph id="idbc4ca2e318ab4c69957baf5892e1655d"><enum>(8)</enum><header>Transparency</header><text>The Secretary shall make publicly available, and keep regularly updated, information regarding the number of borrower defense claims filed and discharges granted, disaggregated by institution of attendance, State of residence as of the date of the claim, student loan servicer, and the amount of discharge and reimbursement, based on increments of not less than $10,000.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection><subsection id="id0a242c1618054ad6a3e34b30b6de9f37"><enum>(b)</enum><header><enum-in-header>90/10</enum-in-header> rule transparency</header><text>Paragraph (3) of section 487(d) (<external-xref legal-doc="usc" parsable-cite="usc/20/1094">20 U.S.C. 1094(d)(3)</external-xref>) is amended—</text><paragraph commented="no" display-inline="no-display-inline" id="id61c0216f0632422f897bf2d270c4edcc"><enum>(1)</enum><text display-inline="yes-display-inline">by redesignating subparagraphs (A) and (B) as clauses (i) and (ii), respectively, and adjusting the margins appropriately;</text></paragraph><paragraph commented="no" display-inline="no-display-inline" id="idffbbeced1c8d49f4b2b1762a8ecd9833"><enum>(2)</enum><text>by striking <quote>The Secretary</quote> and inserting the following:</text><quoted-block style="OLC" display-inline="no-display-inline" id="idD79E243AF40A412783D1B8DBE2839987"><subparagraph commented="no" display-inline="no-display-inline" id="id446ace2a32ea4637a0f951a0d1d9ea6c"><enum>(A)</enum><header>Public disclosure of failure to meet requirements</header><text>The Secretary</text></subparagraph><after-quoted-block>; and</after-quoted-block></quoted-block></paragraph><paragraph commented="no" display-inline="no-display-inline" id="id94a6531f9c22461c8f48de1fe1f80789"><enum>(3)</enum><text display-inline="yes-display-inline">by adding at the end the following:</text><quoted-block style="OLC" display-inline="no-display-inline" id="id446746D9BC1F4727BC9EC61984A6D845"><subparagraph id="idd520f039aad840099d418f7f596d3e3d"><enum>(B)</enum><header>Public disclosure of 90/10 data</header><clause commented="no" display-inline="no-display-inline" id="id504114e9361841fc9fe6b8784e45f4b3"><enum>(i)</enum><header>In general</header><text display-inline="yes-display-inline">The Secretary shall publicly disclose on the website of the Department the data provided by proprietary institutions for purposes of this subsection (referred to in this subparagraph as the <quote>90/10 database</quote>) in a prompt, comprehensive, and user-friendly manner. </text></clause><clause commented="no" display-inline="no-display-inline" id="id09a52066196d4570a794f9aa369f8cdc"><enum>(ii)</enum><header>Temporary omissions</header><text display-inline="yes-display-inline">If any data for a proprietary of institution required to be disclosed under clause (i) is omitted because of issues unresolved at a given deadline of the Secretary, the Secretary shall—</text><subclause commented="no" display-inline="no-display-inline" id="id2f4df92b7e7f45ec8c24a481ab9ecf44"><enum>(I)</enum><text display-inline="yes-display-inline">include, in the 90/10 database on the College Navigator website, a notice that the information is omitted for such proprietary institution and a clear explanation of the reason for the delay; and </text></subclause><subclause commented="no" display-inline="no-display-inline" id="id256fa9fc84e940a391c2a088ac5b20b4"><enum>(II)</enum><text display-inline="yes-display-inline">timely amend the 90/10 database to include the information required to be disclosed for the relevant reporting period.</text></subclause></clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection><subsection id="id022dba2bc4ef485a94ded890c1aef342"><enum>(c)</enum><header>Change of ownership and conversion transparency</header><text>Section 498(j) (<external-xref legal-doc="usc" parsable-cite="usc/20/1099c">20 U.S.C. 1099c(j)</external-xref>), as redesignated by section 304(b)(2), is further amended by adding at the end the following:</text><quoted-block style="OLC" display-inline="no-display-inline" id="id3FDF5E6F55054304BC1E3E118B96782F"><paragraph id="idf432376d4a76468989094728d695f156" indent="up1"><enum>(5)</enum><text>The Secretary shall promptly disclose on the website of the Department—</text><subparagraph id="id1fec6195ce2d4bb8b7b4a67147d36577"><enum>(A)</enum><text>any application for a change of ownership of an institution or for a conversion of an institution from proprietary to nonprofit status; and</text></subparagraph><subparagraph id="id5b70fec7029b4afbb7bfdab6d0e41ef4"><enum>(B)</enum><text>any decision by the Secretary regarding approval or disapproval of a change of ownership application, or an application for conversion from proprietary to nonprofit status, and all external communications describing or explaining those decisions.</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection><subsection id="id84fda408752a45788c35992ed8218b5f"><enum>(d)</enum><header>Transparency in financial standing of institutions</header><text>Section 498(c) (<external-xref legal-doc="usc" parsable-cite="usc/20/1099c">20 U.S.C. 1099c(c)</external-xref>), as amended by section 401(d), is further amended by adding at the end the following: </text><quoted-block style="OLC" display-inline="no-display-inline" id="idC307F222C8054014BD2A2719E37ED031"><paragraph id="id85cb948c7c5a4480b25545895e9d1140" indent="up1"><enum>(9)</enum><text>The Secretary shall promptly post on the Department website, for all institutions participating in a program under this title—</text><subparagraph commented="no" display-inline="no-display-inline" id="idf2ea8c2c81b34343b2bdcadf4b55ae2a"><enum>(A)</enum><text display-inline="yes-display-inline">the annual audited financial statements submitted by each institution under this section and a list of any institutions that have failed to timely submit audited financial statements;</text></subparagraph><subparagraph id="idffe7b3d41bf241d389d1c881858d627c"><enum>(B)</enum><clause commented="no" display-inline="yes-display-inline" id="id4fcc93b37bce4f8aa17bb181d5d482af"><enum>(i)</enum><text>the terms, amounts, and withdrawals for letters of credit and other sureties required of institutions of higher education under paragraph (3), including by providing updates as new financial guarantees are required and as changes are made to existing agreements; and</text></clause><clause commented="no" display-inline="no-display-inline" indent="up1" id="id2b2469548163493e826a5cc161d64067"><enum>(ii)</enum><text display-inline="yes-display-inline">all external communications between institutions of higher education and the Department describing or implementing the Secretary's requirements or determinations regarding financial guarantees under paragraph (3); and</text></clause></subparagraph><subparagraph id="idb3b6a0c18ade455b8c5bb2bca94ea796"><enum>(C)</enum><clause commented="no" display-inline="yes-display-inline" id="ide36ae9988c2d4d8bb286ff9c8f1fe6cc"><enum>(i)</enum><text>each decision of the Secretary as to the imposition or removal of heightened cash monitoring status and other financial protections regarding an institution; and</text></clause><clause commented="no" display-inline="no-display-inline" indent="up1" id="id932cca32432649eca539eee7b5210787"><enum>(ii)</enum><text display-inline="yes-display-inline">all external communications between institutions of higher education and the Department describing or implementing such decisions.</text></clause></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection><subsection commented="no" id="idf1dd7b0eb5304bf9a37f649ae3f9cead"><enum>(e)</enum><header>Institutional participation in the title IV programs</header><text>Section 498 (<external-xref legal-doc="usc" parsable-cite="usc/20/1099c">20 U.S.C. 1099c</external-xref>) is amended by adding at the end the following:</text><quoted-block style="OLC" display-inline="no-display-inline" id="id7B8B48D6969C432DBD47EA0F35CC0DE9"><subsection commented="no" id="id0f0a77ec5b014d3d8bfcbffa4bc95caf"><enum>(m)</enum><header>Transparency</header><text>The Secretary shall post on the Department website the full program participation agreement under section 487 for each institution that enters into such an agreement and shall indicate if the institution is on provisional, temporary provisional, or expired certification status.</text></subsection><after-quoted-block>. </after-quoted-block></quoted-block></subsection><subsection commented="no" id="id9b2d934f78684638b45339f96e03eccc"><enum>(f)</enum><header>Accrediting agency transparency</header><text>Section 496 (<external-xref legal-doc="usc" parsable-cite="usc/20/1099b">20 U.S.C. 1099b</external-xref>) is amended—</text><paragraph commented="no" id="id3D4FF97AC3F642EABD685FB6A335D03E"><enum>(1)</enum><text>in subsection (o)—</text><subparagraph commented="no" id="idC469E2C6F47A4589AFF73481FE648903"><enum>(A)</enum><text>by inserting after <quote><header-in-text level="subsection" style="OLC">Regulations</header-in-text>.—</quote> the following:</text><quoted-block style="OLC" display-inline="no-display-inline" id="id205B5CD5ECC74B429086422123790FB4"><paragraph commented="no" display-inline="no-display-inline" id="id33aa1413a95b4dcbbd7d1ace26b8a7b0"><enum>(1)</enum><header>In general</header></paragraph><after-quoted-block>; and</after-quoted-block></quoted-block></subparagraph><subparagraph commented="no" id="id6BE8B0C3C9EA4684888835112E610E01"><enum>(B)</enum><text>by adding at the end the following:</text><quoted-block style="OLC" display-inline="no-display-inline" id="id60C1BEEA1CFB4A3D9C9F430A61EACD32"><paragraph commented="no" id="idA07AF0EA4BC4477D97E891624C2CA75C"><enum>(2)</enum><header>Disclosures</header><subparagraph commented="no" display-inline="no-display-inline" id="idcd9408f1d9c347aa8bce4c00a6947329"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">The Secretary shall publicly disclose on the Department's website—</text><clause commented="no" display-inline="no-display-inline" id="id3c49f8d065624f359c4dc91880256873"><enum>(i)</enum><text display-inline="yes-display-inline">all of the Department’s draft and final accrediting agency or association recognition reports, and monitoring reports and investigations of any accrediting agency or association, under this section; and </text></clause><clause commented="no" display-inline="no-display-inline" id="idf3d3c82f9f2949de9cbf8af24a849394"><enum>(ii)</enum><text display-inline="yes-display-inline">the reports and accompanying exhibits that each accreditation agency or association submits to the Department in the course of recognition and re-recognition reviews under this section. </text></clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="id17fb5d5ae6dc42219a8e83516412c6ce"><enum>(B)</enum><header>Disclosure requirements</header><text display-inline="yes-display-inline">The Secretary shall disclose the information required under subparagraph (A) promptly, so that members of the public may thoroughly and timely respond via public comment in the course of Department reviews of accrediting agencies and associations.</text></subparagraph></paragraph><after-quoted-block>; and</after-quoted-block></quoted-block></subparagraph></paragraph><paragraph commented="no" id="id4B9990328259418989FFC541B3A3D5BD"><enum>(2)</enum><text> by adding at the end the following:</text><quoted-block id="id9A422AD8E85647B8929E21A1DAC17158" display-inline="no-display-inline" style="OLC"><subsection commented="no" id="id177323dc79224f589e16e5c5231c6288"><enum>(r)</enum><header>Transparency of accrediting agency or association actions</header><paragraph commented="no" display-inline="no-display-inline" id="id9f7802be21284fb6b11b89b4936d1a46"><enum>(1)</enum><header>In general</header><text>An accrediting agency or association recognized by the Secretary under this section shall promptly post on the website of the accrediting agency or association and shall submit to the Department, all communications sent from the accrediting agency or association to an institution explaining, or informing an institution of, an action taken by the agency with respect to the institution, including—</text><subparagraph commented="no" display-inline="no-display-inline" id="id88fbdb3caac14912ac5c090d394d5986"><enum>(A)</enum><text display-inline="yes-display-inline">to impose or remove a status of probation, warning, concern, stipulation, or reporting, or similar status; </text></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="id4f5272a8c7b04fc799c4ddaff878b8dd"><enum>(B)</enum><text display-inline="yes-display-inline">to impose or revoke a show cause order; or </text></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="id84fb0a33baf64cb89e53faa166ec13a3"><enum>(C)</enum><text display-inline="yes-display-inline">to impose or revoke a limitation, suspension, or termination action.</text></subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="idad6192005c274a4685cba85285669320"><enum>(2)</enum><header>No redaction</header><text>The communication posted and submitted under paragraph (1) shall be without redaction, except for personally identifiable information.</text></paragraph><paragraph id="id8e46aa31026441cf91dbfd3d6a09c636" commented="no" display-inline="no-display-inline"><enum>(3)</enum><header>Disclosure by the Secretary</header><text>The Secretary shall promptly publicly disclose on the website of the Department all communications submitted pursuant to paragraph (1).</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection></section>