[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2981 Introduced in House (IH)]







105th CONGRESS
  1st Session
                                H. R. 2981

    To amend the Higher Education Act of 1965 relating to financial 
  responsibility for refunds and during provisional certification and 
                          change of ownership.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            November 9, 1997

Mr. Allen (for himself and Mr. Baldacci) introduced the following bill; 
   which was referred to the Committee on Education and the Workforce

_______________________________________________________________________

                                 A BILL


 
    To amend the Higher Education Act of 1965 relating to financial 
  responsibility for refunds and during provisional certification and 
                          change of ownership.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Student Loan Protection Act''.

SEC. 2. FINANCIAL RESPONSIBILITY FOR REFUNDS AND DURING PROVISIONAL 
              CERTIFICATION; CHANGE OF OWNERSHIP.

    (a) Financial Responsibility for Refunds and During Provisional 
Certification.--Section 498 of the Higher Education Act of 1965 (20 
U.S.C. 1099c) is amended--
            (1) in subsection (e) by adding at the end the following 
        new paragraphs:
            ``(6) Notwithstanding any other provision of law, any 
        person required to pay, on behalf of a student or borrower, a 
        refund of unearned institutional charges to a lender, or the 
        Secretary, who willfully fails to pay such refund or willfully 
        attempts in any manner to evade payment of such refund, shall, 
        in addition to other penalties provided by law, be liable to 
        the Secretary for the amount of the refund not paid, to the 
        same extent with respect to such refund that such an individual 
        would be liable as a responsible person for a penalty under 
        section 6672(a) of title 26, United States Code, with respect 
        to the nonpayment of taxes.
            ``(7) Notwithstanding any other provision of law, a 
        proprietary institution of higher education, as defined in 
        section 481(b), may be provisionally certified under subsection 
        (h) only if it provides the Secretary with financial grantees 
        from one or more individuals whom the Secretary determines, in 
        accordance with subsection (e)(2), exercise substantial control 
        over such institution. Such financial guarantees shall be in 
        addition to any financial guarantees otherwise required from 
        the institution and shall be in an amount determined by the 
        Secretary to be sufficient to satisfy the institution's 
        potential liability to the Federal Government, student 
        assistance recipients, and other program participants for funds 
        under this title during the period of provisional 
        certification.''; and
            (2) in subsection (i)(2), by striking subparagraph (E) and 
        inserting the following new subparagraph:
                    ``(E) the change in tax filing status of an 
                institution from for-profit to non-profit; or''.
    (b) Effective Date.--The amendments made by--
            (1) subsection (a)(1), relating to responsibility for 
        unpaid refunds, shall be effective with respect to any unpaid 
        refunds that were first required to be paid to a lender or to 
        the Secretary on or after 90 days after the date of enactment 
        of this Act;
            (2) subsection (a)(1), relating to financial guarantees 
        required for provisional certification, shall be effective with 
        respect to any proprietary institution of higher education 
        provisionally certified by the Secretary on or after the date 
        of enactment of this Act; and
            (3) subsection (a)(2) shall be effective on the date of the 
        enactment of this Act.
                                 <all>