[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3382 Introduced in House (IH)]

103d CONGRESS
  1st Session
                                H. R. 3382

  To amend the Higher Education Act of 1965 to prevent an institution 
from participating in the Pell Grant program if such institution has a 
      high default rate under the Guaranteed Student Loan Program.


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                    IN THE HOUSE OF REPRESENTATIVES

                            October 27, 1993

  Mr. Gordon introduced the following bill; which was referred to the 
                    Committee on Education and Labor

_______________________________________________________________________

                                 A BILL


 
  To amend the Higher Education Act of 1965 to prevent an institution 
from participating in the Pell Grant program if such institution has a 
      high default rate under the Guaranteed Student Loan Program.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. DEFAULT RATE INELIGIBILITY FOR PELL GRANT PROGRAM.

    Section 481(a) of the Higher Education Act of 1965 (20 U.S.C. 
1088a) is amended by adding at the end the following new paragraph:
    ``(7)(A) An institution may not qualify as an institution of higher 
education for purposes of the Pell Grant program under subpart 1 of 
part A of this title for the fiscal year for which the determination is 
made, and for the two succeeding fiscal years, if the cohort default 
rate of such institution as determined under section 435(a) for each of 
the 3 most recent fiscal years for which data are available equals or 
exceeds the percentage specified in subparagraph (B).
    ``(B) For purposes of determinations under subparagraph (A), the 
percentage is--
            ``(i) 35 percent for fiscal year 1994;
            ``(ii) 30 percent for fiscal year 1995; and
            ``(iii) 25 percent for any succeeding fiscal year.
    ``(C) Notwithstanding subparagraph (A), the Secretary may permit an 
institution to continue to participate in the Pell Grant program under 
subpart 1 of part A of this title if there are, in the judgment of the 
Secretary, exceptional mitigating circumstances that would make the 
application of this paragraph inequitable. The Secretary shall give 
special consideration, in making such judgments, to institutions that 
are part B institutions within the meaning of section 322(2) of this 
Act.''.

SEC. 2. EFFECTIVE DATE.

    The amendment made by this Act shall apply with respect to periods 
of enrollment beginning on or after the date of enactment of this Act.

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