[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 3143 Introduced in Senate (IS)]







106th CONGRESS
  2d Session
                                S. 3143

  To improve the integrity of the Federal student loan programs under 
 title IV of the Higher Education Act of 1965 with respect to students 
                        at foreign institutions.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

            October 2 (legislative day, September 22), 2000

 Mr. Sessions (for himself, Mr. Jeffords, Mr. Brownback, Ms. Collins, 
 Mr. Hutchinson, and Mr. Stevens) introduced the following bill; which 
  was read twice and referred to the Committee on Health, Education, 
                          Labor, and Pensions

_______________________________________________________________________

                                 A BILL


 
  To improve the integrity of the Federal student loan programs under 
 title IV of the Higher Education Act of 1965 with respect to students 
                        at foreign institutions.

    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 ``Foreign University Loan Security 
Act''.

SEC. 2. FINDINGS AND PURPOSE.

    (a) Findings.--Congress makes the following findings:
            (1) The number of students applying for loans and claiming 
        to attend foreign institutions has risen from 4,594 students in 
        1993 to over 12,000 students in the 1998-1999 school year.
            (2) Since 1995 there have been 25 convictions of students 
        who fraudulently claimed they were attending a foreign 
        institution, then cashed the check issued directly to them, and 
        did not attend the foreign institution.
            (3) Tighter disbursement controls are necessary to reduce 
        the number of students fraudulently applying for loans under 
        title IV of the Higher Education Act of 1965 and claiming they 
        are going to attend foreign institutions. Funds should not be 
        disbursed for attendance at a foreign institution unless the 
        foreign institution can verify that the student is attending 
        the institution.
    (b) Purposes.--The purposes of this Act are as follows:
            (1) To enhance controls on the loans under title IV of the 
        Higher Education Act of 1965 in relation to attendance at 
        foreign institutions.
            (2) To reduce the number of students who obtain loans under 
        title IV of the Higher Education Act of 1965 for attendance at 
        a foreign institution and do not attend the foreign 
        institution.
            (3) To tighten restrictions on loans under title IV of the 
        Higher Education Act of 1965 for a student claiming to attend a 
        foreign institution by requiring verification that the student 
        is attending the foreign institution.

SEC. 3. PILOT PROGRAM REQUIRED.

    (a) In General.--The Secretary of Education, not later than 2 
months after the date of enactment of this Act, shall carry out a 12-
month fraud control pilot program to reduce the incidence of fraud in 
the student loan programs under title IV of the Higher Education Act of 
1965 with respect to students at foreign institutions. Such program 
shall involve guaranty agencies, lenders, and a representative group of 
foreign institutions.
    (b) Considerations.--In developing the fraud control pilot program, 
the Secretary of Education shall consider a variety of methods to 
reduce fraud with respect to students at foreign institutions that may 
include--
            (1) predisbursement confirmation of enrollment by the 
        guaranty agency;
            (2) postdisbursement confirmation of registration by the 
        foreign institution; and
            (3) dual endorsement.

SEC. 4. RECOMMENDATIONS AND FINDINGS.

    (a) In General.--Not later than 12 months after initiation of the 
fraud control pilot program, the Secretary of Education shall transmit 
to the Committee on Health, Education, Labor, and Pensions of the 
Senate, the Committee on Education and the Workforce of the House of 
Representatives, and the Comptroller General the results of the pilot 
program and steps the Secretary will take to implement the findings 
from the pilot program across the student loan programs under title IV 
of the Higher Education Act of 1965.
    (b) Recommendations for Legislative Actions.--The report shall 
include recommendations for legislative changes, if any, that are 
required to ensure the integrity of such student loan programs.

SEC. 5. EVALUATION BY GAO.

    Not later than 2 months after the Secretary of Education transmits 
the report described in section 4 to Congress, the Comptroller General 
shall evaluate the fraud control pilot program and the report, and 
shall transmit to the Committee on Health, Education, Labor, and 
Pensions of the Senate and the Committee on Education and the Workforce 
of the House of Representatives the results of the evaluation.
                                 <all>