[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6407 Introduced in House (IH)]
112th CONGRESS
2d Session
H. R. 6407
To ensure that students and taxpayers receive the full value of their
education investments.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
September 13, 2012
Mr. Tierney (for himself and Mr. George Miller of California)
introduced the following bill; which was referred to the Committee on
Education and the Workforce
_______________________________________________________________________
A BILL
To ensure that students and taxpayers receive the full value of their
education investments.
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 Student Rebate Act of
2012''.
SEC. 2. EDUCATIONAL LOSS RATIO.
(a) Program Participation Agreements.--Section 487(a) of the Higher
Education Act of 1965 (20 U.S.C. 1094(a)) is amended by adding at the
end the following:
``(30) In the case of a proprietary institution of higher
education (as defined in section 102(b)), such institution
will--
``(A) expend not less than 80 percent of such
institution's revenues for an institutional fiscal year
on educational and related expenses (as defined in
subsection (i)(4)); or
``(B) for each institutional fiscal year in which
the institution expends less than 80 percent of such
revenues on such educational and related expenses,
issue a rebate for each student who was enrolled at the
institution during such institutional fiscal year,
calculated and distributed in accordance with
subsection (k).''.
(b) Educational Loss Ratio.--Section 487 of such Act (20 U.S.C.
1094) is further amended--
(1) in subsection (i)--
(A) by redesignating paragraphs (4) through (6) as
paragraphs (5) through (7), respectively; and
(B) by inserting after paragraph (3), the
following:
``(4) Educational and related expenses.--The term
`educational and related expenses' shall be defined by the
Secretary by regulation, except that such term shall not
include revenue expended for advertising and promotion
activities, excessive administrative expenses including
excessive executive compensation, recruiting, lobbying
expenses, or payments to shareholders.''; and
(2) by adding at the end the following new subsection:
``(k) Implementation of Rebate Requirement for Insufficient
Educational Expenditures.--
``(1) Calculation of rebate amount for each student.--For
purposes of subsection (a)(30), the amount of a rebate for each
student at an institution subject to subparagraph (B) of such
subsection shall be calculated by--
``(A) determining the difference between 80 percent
and the percentage of the institution's revenues
expended on educational and related expenses (as
defined in subsection (i)(4)); and
``(B) applying the percentage determined under
subparagraph (A) to the total amount of tuition, fees,
and institutional charges provided to the institution
by the student, or on the student's behalf, from all
sources for the applicable period of enrollment.
``(2) Distribution of individual student rebates.--Each
rebate issued for a student by an institution described in
subsection (a)(30)(B) shall be distributed as follows:
``(A) To the Secretary, an amount that bears the
same ratio to the total rebate for such student as the
amount of tuition, fees, and institutional charges
provided to the institution for the student from
sources under this title bears to the total amount of
tuition, fees, and institutional charges provided to
the institution for the applicable period of enrollment
by or on behalf of the student from all sources, which
shall be credited, in a manner consistent with section
484B(b)(3), to outstanding balances on loans, to
awards, and to other assistance made under this title
to the student or on behalf of the student for the
period of enrollment for which a rebate is required.
``(B) To each third party who provided an amount to
the institution for tuition, fees, and institutional
charges on the student's behalf, including the
Secretary of Defense, the Secretary of Veterans
Affairs, or an employer, an amount that bears the same
ratio to the total rebate for such student as the
amount of tuition, fees, and institutional charges
provided to the institution for the student from such
third party bears to the total amount of tuition, fees,
and institutional charges provided to the institution
for the applicable period of enrollment by or on behalf
of the student from all sources.
``(C) To the student, the amount of the total
rebate for such student remaining after payment to the
Secretary and each third party under subparagraphs (A)
and (B).
``(3) Student rebate fee prohibited.--An institution that
is required to issue a rebate for a student under subsection
(a)(30) may not assess a new student fee, increase an existing
student fee, withhold or reduce any portion of financial
assistance provided to any student, or otherwise increase the
cost of attendance for any student, to satisfy such rebate
requirement.
``(4) No change in 90/10 calculations.--Rebates required
under subsection (a)(30) and issued in accordance with this
subsection shall in no way affect or be considered in the
calculation of revenue requirements under subsection (a)(24).
``(5) Calculation of institution's revenues.--In making
calculations under subsection (a)(30) and this subsection, an
institution's revenues for an institutional fiscal year shall
be calculated in accordance with subsection (d)(1), except that
an institution shall not be required to use the cash basis of
accounting.''.
SEC. 3. EFFECTIVE DATE.
This Act and the amendments made by this Act shall take effect on
July 1, 2014.
<all>