[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3210 Introduced in House (IH)]







106th CONGRESS
  1st Session
                                H. R. 3210

   To enhance protections against fraud in the offering of financial 
       assistance for college education, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            November 3, 1999

  Mr. Upton introduced the following bill; which was referred to the 
    Committee on the Judiciary, and in addition to the Committee on 
Education and the Workforce, for a period to be subsequently determined 
 by the Speaker, in each case for consideration of such provisions as 
        fall within the jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL


 
   To enhance protections against fraud in the offering of financial 
       assistance for college education, and for other purposes.

    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 ``College Scholarship Fraud Prevention 
Act of 1999''.

SEC. 2. FINDINGS.

    Congress makes the following findings:
            (1) A substantial amount of fraud occurs in the offering of 
        college education financial assistance services to consumers.
            (2) Such fraud includes the following:
                    (A) Misrepresentations regarding the provision of 
                sources from which consumers may obtain financial 
                assistance (including scholarships, grants, loans, 
                tuition, awards, and other assistance) for purposes of 
                financing a college education.
                    (B) Misrepresentations regarding the provision of 
                portfolios of such assistance tailored to the needs of 
                specific consumers.
                    (C) Misrepresentations regarding the pre-selection 
                of students as eligible to receive such assistance.
                    (D) Misrepresentations that such assistance will be 
                provided to consumers who purchase specified services 
                from specified entities.
                    (E) Misrepresentations regarding the business 
                relationships between particular entities and entities 
                that award or may award such assistance.
                    (F) Misrepresentations regarding refunds of 
                processing fees if consumers are not provided specified 
                amounts of such assistance, and other 
                misrepresentations regarding refunds.
            (3) In 1996, the Federal Trade Commission launched 
        ``Project Scholarscam'', a joint law enforcement and consumer 
        education campaign directed at fraudulent purveyors of so-
        called ``scholarship services''.
            (4) Despite the efforts of the Federal Trade Commission, 
        colleges and universities, and nongovernmental organizations, 
        the continued lack of awareness about scholarship fraud permits 
        a significant amount of fraudulent activity to occur.

SEC. 3. SENTENCING ENHANCEMENT FOR HIGHER EDUCATION FINANCIAL 
              ASSISTANCE FRAUD.

    Pursuant to its authority under section 994(p) of title 28, United 
States Code, the United States Sentencing Commission shall amend the 
Federal sentencing guidelines in order to provide for enhanced 
penalties for any offense involving fraud or misrepresentation in 
connection with the obtaining or providing of, or the furnishing of 
information to a consumer on, any scholarship, grant, loan, tuition, 
discount, award, or other financial assistance for purposes of 
financing an education at an institution of higher education, such that 
those penalties are comparable to the base offense level for 
misrepresentation that the defendant was acting on behalf of a 
charitable, educational, religious, or political organization, or a 
government agency.

SEC. 4. EXCLUSION OF DEBTS RELATING TO COLLEGE FINANCIAL ASSISTANCE 
              SERVICES FRAUD FROM PERMISSIBLE EXEMPTIONS OF PROPERTY 
              FROM ESTATES IN BANKRUPTCY.

    Section 522(c) of title 11, United States Code, is amended--
            (1) by striking ``or'' at the end of paragraph (2);
            (2) by striking the period at the end of paragraph (3) and 
        inserting ``; or''; and
            (3) by adding at the end the following:
            ``(4) a debt in connection with fraud in the obtaining or 
        providing of any scholarship, grant, loan, tuition, discount, 
        award, or other financial assistance for purposes of financing 
        an education at an institution of higher education (as that 
        term is defined in section 101 of the Higher Education Act of 
        1954 (20 U.S.C. 1001)).''.

SEC. 5. SCHOLARSHIP FRAUD ASSESSMENT AND AWARENESS ACTIVITIES.

    (a) Annual Report on Scholarship Fraud.--
            (1) Requirement.--The Attorney General and the Secretary of 
        Education, in conjunction with the Federal Trade Commission, 
        shall jointly submit to Congress each year a report on fraud in 
        the offering of financial assistance for purposes of financing 
        an education at an institution of higher education. Each report 
        shall contain an assessment of the nature and quantity of 
        incidents of such fraud during the one-year period ending on 
        the date of such report.
            (2) Initial report.--The first report under paragraph (1) 
        shall be submitted not later than 18 months after the date of 
        the enactment of this Act.
    (b) National Awareness Activities.--The Secretary of Education 
shall, in conjunction with the Federal Trade Commission, maintain a 
scholarship fraud awareness site on the Internet web site of the 
Department of Education. The scholarship fraud awareness site may 
include the following:
            (1) Appropriate materials from the Project Scholarscam 
        awareness campaign of the Commission, including examples of 
        common fraudulent schemes.
            (2) A list of companies and individuals who have been 
        convicted of scholarship fraud in Federal or State court.
            (3) An Internet-based message board to provide a forum for 
        public complaints and experiences with scholarship fraud.
            (4) An electronic comment form for individuals who have 
        experienced scholarship fraud or have questions about 
        scholarship fraud, with appropriate mechanisms for the transfer 
        of comments received through such forms to the Department and 
        the Commission.
            (5) Internet links to other sources of information on 
        scholarship fraud, including Internet web sites of appropriate 
        nongovernmental organizations, colleges and universities, and 
        government agencies.
            (6) An Internet link to the Better Business Bureau in order 
        to assist individuals in assessing the business practices of 
        other persons and entities.
            (7) Information on means of communicating with the Federal 
        Student Aid Information Center, including telephone and 
        Internet contact information.
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