[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 1455 Introduced in Senate (IS)]







106th CONGRESS
  1st Session
                                S. 1455

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


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             July 28, 1999

  Mr. Abraham (for himself and Mr. Feingold) introduced the following 
    bill; which was read twice and referred to the Committee on the 
                               Judiciary

_______________________________________________________________________

                                 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.

SEC. 3. ENHANCED CRIMINAL PENALTIES FOR COLLEGE EDUCATION FINANCIAL 
              SERVICE ASSISTANCE FRAUD.

    (a) Enhanced Penalties.--Chapter 63 of title 18, United States 
Code, is amended by adding at the end the following:
``Sec. 1348. Enhanced penalties for college education financial service 
              assistance fraud
    ``(a) In General.--A person who is convicted of an offense under 
section 1341, 1342, or 1343 of this title in connection with 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 shall be 
fined under this title, imprisoned not more than 10 years, or both.
    ``(b) Other Penalties.--Any penalties imposed under this section 
shall be in addition to any penalties under any of the sections 
referred to in subsection (a).
    ``(c) Institution of Higher Education Defined.--In this section, 
the term `institution of higher education' has the meaning given that 
term in section 101 of the Higher Education Act of 1965 (20 U.S.C. 
1001).''.
    (b) Clerical Amendment.--The table of sections at the beginning of 
that chapter is amended by adding at the end the following:

``1348. Enhanced penalties for college education financial service 
                            assistance fraud.''.

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. LIST OF BUSINESSES AND ORGANIZATIONS OFFERING COLLEGE EDUCATION 
              FINANCIAL ASSISTANCE SERVICES.

    (a) List.--The Secretary of Education shall maintain on the 
Internet web site of the Department of Education a web page that--
            (1) lists businesses and organizations that offer financial 
        assistance (including scholarships, grants, loans, tuition, 
        awards, and other assistance) for purposes of financing an 
        education at institutions of higher education; and
            (2) provides the Internet web site address of such 
        businesses and organizations.
    (b) Application for Placement on the List.--A business or 
organization may apply to the Secretary of Education for placement on 
the list.
    (c) Consultation.--The Secretary of Education shall consult with 
the Chairman of the Federal Trade Commission in an effort to ensure 
that a business or organization applying for placement on the list is a 
legitimate business or organization.
    (d) Ineligibility.--A business or organization shall not be listed 
on the page if--
            (1) the business or organization was prosecuted by the 
        Federal Trade Commission and convicted of using an unfair or 
        deceptive act or practice under the Federal Trade Commission 
        Act (15 U.S.C. 41 et seq.) during the 5-year period preceding 
        the submission of an application under subsection (b);
            (2) the business or organization is operated by an 
        individual who operated a business or organization that was 
        prosecuted by the Federal Trade Commission and convicted of 
        using an unfair or deceptive act or practice under such Act 
        during the 5-year period preceding the submission of an 
        application under subsection (b);
            (3) the Department of Education receives a significant 
        number of complaints, as determined by the Secretary of 
        Education, from students alleging the business or organization 
        has not in good faith delivered on promises made by the 
        business or organization; or
            (4) the business or organization is under investigation by 
        the Federal Trade Commission.
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