[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5756 Introduced in House (IH)]

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114th CONGRESS
  2d Session
                                H. R. 5756

 To establish Federal-State higher education financing partnerships to 
   drive down the cost of tuition for millions of American students.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             July 13, 2016

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

_______________________________________________________________________

                                 A BILL


 
 To establish Federal-State higher education financing partnerships to 
   drive down the cost of tuition for millions of American students.

    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 ``Degrees Not Debt Act''.

SEC. 2. STATE-FEDERAL COLLEGE AFFORDABILITY AND COMPLETION 
              PARTNERSHIPS.

    Title IV of the Higher Education Act of 1965 (20 U.S.C. 1070 et 
seq.) is amended by adding at the end the following:

     ``PART J--STATE-FEDERAL COLLEGE AFFORDABILITY AND COMPLETION 
                              PARTNERSHIPS

``SEC. 499-1. PURPOSE.

    ``The purpose of this part is to establish a State-Federal 
partnership that incentivizes State investment in public higher 
education.

``SEC. 499-2. DEFINITIONS.

    ``In this part:
            ``(1) Eligible state.--The term `eligible State' means a 
        State that provides, to public institutions of higher 
        education, net State operating support per FTE student in an 
        amount equal to not less than 50 percent of the amount that 
        reflects the maximum Federal Pell Grant award amount for the 
        most recent academic year.
            ``(2) Full-time equivalent student number.--The term `full-
        time equivalent student number' means a number reflecting the 
        number of students enrolled full time at a public institution 
        of higher education in the State, and shall be defined and 
        calculated in the manner determined most appropriate by the 
        Secretary.
            ``(3) Low-income student.--The term `low-income student' 
        means a student who is eligible for a Federal Pell Grant under 
        section 401.
            ``(4) Net state operating support.--
                    ``(A) In general.--The term `net State operating 
                support' means an amount that is equal to the amount of 
                State funds and local government appropriations used to 
                support public higher education annual operating 
                expenses in the State, calculated in accordance with 
                subparagraphs (B) and (C).
                    ``(B) Calculation.--A State's net State operating 
                support shall, for a fiscal year, be an amount that is 
                equal to the difference resulting from the gross amount 
                of State funds appropriated and disbursed by the State 
                and expended by the recipient institutions in the 
                fiscal year for public higher education operating 
                expenses in the State, minus--
                            ``(i) such appropriations that are returned 
                        to the State;
                            ``(ii) State-appropriated funds derived 
                        from Federal sources, including funds provided 
                        under this part;
                            ``(iii) local government funds not 
                        appropriated for operating support for public 
                        higher education;
                            ``(iv) amounts that are portions of multi-
                        year appropriations to be distributed over 
                        multiple years that are not to be spent for the 
                        year for which the calculation is being made;
                            ``(v) tuition charges remitted to the State 
                        to offset State appropriations;
                            ``(vi) State funding for students in non-
                        credit continuing or adult education courses 
                        and non-credit extension courses;
                            ``(vii) sums appropriated to private 
                        nonprofit institutions of higher education, or 
                        to proprietary institutions of higher 
                        education, for capital outlay or operating 
                        expenses; and
                            ``(viii) any other funds excluded under 
                        subparagraph (C).
                    ``(C) Exclusions.--Net State operating support does 
                not include--
                            ``(i) funds for--
                                    ``(I) student aid programs that 
                                provide grants to students attending 
                                in-State private nonprofit institutions 
                                of higher education, in-State 
                                proprietary institutions of higher 
                                education, independent institutions, 
                                in-State public institutions, and out-
                                of-State institutions;
                                    ``(II) capital outlay;
                                    ``(III) deferred maintenance; or
                                    ``(IV) research and development; or
                            ``(ii) any other funds that the Secretary 
                        may exclude.
            ``(5) Net state operating support per fte student.--The 
        term `net State operating support per FTE student' means, for a 
        fiscal year--
                    ``(A) the net State operating support for the 
                previous fiscal year; divided by
                    ``(B) the full-time equivalent student number for 
                the previous fiscal year.
            ``(6) Poverty line.--The term `poverty line' means the 
        poverty line (as defined by the Office of Management and Budget 
        and revised annually in accordance with section 673(2) of the 
        Community Services Block Grant Act) applicable to a family of 
        the size involved.
            ``(7) Public institution.--The term `public institution' 
        means an institution of higher education (as defined in section 
        101) whose liabilities are backed by the full faith and credit 
        of the State or its equivalent, as determined in accordance 
        with section 668.15 of title 34, Code of Federal Regulations, 
        or any successor regulation.
            ``(8) Private nonprofit institution of higher education.--
        The term `private nonprofit institution of higher education' 
        means an institution of higher education, as defined in section 
        102, that is a private nonprofit institution.
            ``(9) Proprietary institution of higher education.--The 
        term `proprietary institution of higher education' has the 
        meaning given the term in section 102(b).

``SEC. 499-3. AUTHORIZATION; USE OF FUNDS.

    ``(a) Authorization.--The Secretary shall award annual block grants 
to eligible States to encourage States to provide additional funding 
for public higher education.
    ``(b) Use of Funds by States.--An eligible State receiving a block 
grant under this part shall allocate 100 percent of block grant funding 
to public institutions for public higher education expenditures in 
accordance with subsection (c).
    ``(c) Use of Funds by Public Institutions.--A public institution 
that receives funds under this part shall--
            ``(1) use a portion of such funds to directly reduce 
        tuition costs or mitigate the need to raise tuition and fees 
        for students residing in the State;
            ``(2) use a portion of such funds to support the enrollment 
        of low-income students in the institution;
            ``(3) use a portion of such funds to support retention and 
        degree completion of low-income students; and
            ``(4) create a publicly available report that documents the 
        institution's efforts to satisfy the requirements described in 
        paragraphs (1) through (3).
    ``(d) Prohibitions.--
            ``(1) No use for endowments.--A public institution may not 
        use funds received under this part to increase the endowment of 
        the public institution.
            ``(2) No use for athletic or commercial venues.--No funds 
        awarded under this part may be used for the modernization, 
        renovation, or repair of stadiums or other facilities of a 
        public institution primarily used for athletic contests or 
        events for which admission is charged to the general public.
    ``(e) State Limitations on Institutions.--Nothing in this section 
shall be construed to prohibit a State from establishing additional 
requirements for public institutions in the State for the purpose of 
increasing the affordability of higher education.

``SEC. 500. GRANT FORMULA.

    ``(a) Grant Formula.--The Secretary shall award a block grant to an 
eligible State for a fiscal year in an amount equal to the product of--
            ``(1) the marginal Federal match amount for the fiscal 
        year, as determined under subsection (b); multiplied by
            ``(2) the full-time equivalent student number for the 
        previous fiscal year.
    ``(b) Federal Match Amount for Eligible States.--The marginal 
Federal match amount shall be the following:
            ``(1) Eligible states with net state operating support per 
        fte student between 50 percent and 130 percent of the maximum 
        federal pell grant.--The marginal Federal match amount for an 
        eligible State with a net State operating support per FTE 
        student for the fiscal year that is equal to or more than 50 
        percent of the amount of the maximum Federal Pell Grant under 
        section 401 for the most recent fiscal year but is less than 
        130 percent of such amount, shall be equal to the product of--
                    ``(A) the amount of the maximum Federal Pell Grant 
                for the most recent fiscal year; multiplied by
                    ``(B) the result of the mathematical expression 
                0.26x\2\ - 0.14x + 0.005, where x represents the ratio 
                obtained by dividing the eligible State's net State 
                operating support per FTE student by the amount of the 
                maximum Federal Pell Grant for the most recent fiscal 
                year.
            ``(2) Eligible states with net state operating support 
        equal to or greater than 130 percent of the maximum federal 
        pell grant.--The marginal Federal match amount for an eligible 
        State with a net State operating support per FTE student for 
        the fiscal year equal to or greater than 130 percent of the 
        amount of the maximum Federal Pell Grant for the most recent 
        fiscal year, shall be equal to the sum of--
                    ``(A) the amount calculated under paragraph (1) for 
                a State with a net State operating support per FTE 
                student equal to 130 percent of the amount of the 
                maximum Federal Pell Grant for the most recent fiscal 
                year; and
                    ``(B) 10 percent of the amount by which the 
                eligible State's net State operating support per FTE 
                student exceeds 130 percent of such maximum Federal 
                Pell Grant,
        except that in no case shall the marginal Federal match under 
        this paragraph exceed an amount equal to 30 percent of the 
        amount of the maximum Federal Pell Grant for the most recent 
        fiscal year.
    ``(c) Ratable Reduction.--If the sums made available under this 
part for any fiscal year are insufficient to pay the full amounts that 
all States are eligible to receive in accordance with this section for 
such year, the Secretary shall establish procedures for ratably 
reducing each State's award amount.

``SEC. 501. ACCOUNTABILITY AND ENFORCEMENT.

    ``(a) Annual Report.--
            ``(1) In general.--Beginning for the first fiscal year 
        after a State receives a block grant under this part, the State 
        shall prepare and submit an annual report to the Secretary, 
        which shall include detailed information about the State's use 
        of the grant funds to increase the affordability of public 
        higher education and increase the enrollment and completion 
        rates of low-income students (as measured by eligibility for a 
        Federal Pell Grant).
            ``(2) Contents.--A report described in paragraph (1) 
        shall--
                    ``(A) describe the cause of any increases in public 
                higher education costs and the sources of new funding 
                to address such increases;
                    ``(B) describe all actions taken to incentivize 
                public institutions to reduce tuition costs, or 
                mitigate the need to raise tuition and fees for in-
                State students;
                    ``(C) explain the extent to which public 
                institutions supported the enrollment of low-income 
                students who are eligible for Federal Pell Grants or 
                other need-based financial assistance;
                    ``(D) disclose how the State distributed the 
                allotment provided under this part to all public 
                institutions, and the rationale for such distribution;
                    ``(E) include, as reported to the State by each 
                public institution in the State, the aggregate 
                graduation rates at such institutions for low-income 
                students (based on eligibility for Federal Pell 
                Grants), part-time students, and transfer students, 
                disaggregated by type of degree or credential;
                    ``(F) detail State efforts to improve the retention 
                and graduation rates of low-income students at both 2-
                year and 4-year institutions of higher education; and
                    ``(G) be publicly available in a manner that is 
                easily accessible to parents, students, and consumer 
                advocates.
    ``(b) Waiver of Unmet Financial Need for Certain Students.--
            ``(1) In general.--Each State receiving an allotment under 
        this part for a fiscal year shall, as a condition of receiving 
        the allotment, ensure that each public institution in the State 
        waives, or provides assistance (such as work study assistance, 
        State grants, or Federal grants) to assist in meeting, any 
        unmet financial need for a course of study (as calculated under 
        paragraph (2)) for any student enrolled in such course of 
        study--
                    ``(A) who is a dependent student from a family with 
                an income at or below 350 percent of the poverty line; 
                or
                    ``(B) who is an independent student with an income 
                at or below 350 percent of the poverty line.
            ``(2) Formula.--For purposes of paragraph (1), a student's 
        unmet financial need for enrollment in a course study shall be 
        equal to--
                    ``(A) the cost of attendance for such course of 
                study for such student, minus
                    ``(B) the expected family contribution for such 
                student, minus
                    ``(C) estimated financial assistance not received 
                under this title (as defined in section 480(j)), minus
                    ``(D) the amount of the Federal Pell Grant awarded 
                to such student for such course of study.
    ``(c) Maintaining Net State Operating Support Per FTE Student.--
            ``(1) In general.--Each State receiving an allotment under 
        this part for a fiscal year shall--
                    ``(A) ensure that the amount expended by the State, 
                from funds derived from non-Federal sources, for net 
                State operating support per FTE student for the 
                preceding fiscal year was not less than the amount 
                expended by the State for net State operating support 
                per FTE student for the second preceding fiscal year; 
                and
                    ``(B) demonstrate the State's compliance with 
                subparagraph (A) by providing the Secretary with a 
                written assurance and detailed documentation.
            ``(2) Penalty.--If a State does not comply with paragraph 
        (1), the State's grant award under this part shall be reduced 
        by an amount equal to the product of--
                    ``(A) the difference between--
                            ``(i) the net State operating support per 
                        FTE student for the second preceding fiscal 
                        year; minus
                            ``(ii) the net State operating support per 
                        FTE student for the preceding fiscal year; 
                        multiplied by
                    ``(B) the full-time equivalent student number for 
                the previous fiscal year.
    ``(d) Maintenance of Effort for State-Based Financial Aid and 
Avoidance of Tuition Inflation.--Each State receiving an allotment 
under this part for a fiscal year shall, as a condition of receiving 
the allotment--
            ``(1) maintain the level of State student need-based 
        financial aid support provided for costs associated with 
        postsecondary education at not less than the average annual 
        level of such support provided for the 3 academic years 
        immediately preceding the year for which the State is receiving 
        the allotment; and
            ``(2) ensure that for the academic year immediately 
        following the academic year for which the State is receiving 
        the allotment, all public institutions of higher education in 
        the State will not increase tuition for in-State students by a 
        percentage greater than the estimated percentage increase in 
        the Consumer Price Index (as determined by the Secretary, using 
        the definition in section 478(f)) for the calendar year for 
        which the State is receiving the allotment.
    ``(e) Authority To Compromise.--Notwithstanding subsections (c) and 
(d), the Secretary may waive any maintenance of support and effort 
requirement, or the avoidance of tuition requirement, described in such 
subsections for a State if there is a clear case of a significant 
economic downturn in the State as evidenced by a reduction in State 
domestic product, real per capita income, and employment. Such 
determination shall only be made by the Secretary following a written 
appeal by the State that documents recent and significant decreases in 
economic activity in the State.
    ``(f) Reporting on Percentage of Low-Income Students.--Each State 
that received an allotment under this part for a fiscal year and that 
desires to receive another such allotment for the succeeding fiscal 
year shall, as a condition of receiving such other allotment, report to 
the Secretary--
            ``(1) on the percentage of enrollment of low-income 
        students at each public institution in the State (out of the 
        total student enrollment in such institution) for the mostly 
        recently completed academic year, as so reported by such 
        institutions to the State; and
            ``(2) with respect to any recently completed academic year 
        for which the percentage of enrollment of such students at a 
        public institution in the State was below the percentage of 
        enrollment of such students in public institutions in the 
        United States as a whole for such year (out of the total 
        student enrollment in such public institutions for such year), 
        an explanation from such institution in the State for the 
        reason for such reduced enrollment for low-income students at 
        the institution for such year.

``SEC. 502. AUTHORIZATION OF APPROPRIATIONS.

    ``There are authorized to be appropriated to carry out this part 
such sums as may be necessary for fiscal year 2017 and each of the five 
succeeding fiscal years.''.
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