[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 2339 Introduced in Senate (IS)]

<DOC>






116th CONGRESS
  1st Session
                                S. 2339

To amend the Higher Education Act of 1965 to provide for accreditation 
    reform, to require institutions of higher education to publish 
     information regarding student success, to provide for fiscal 
 accountability, and to provide for school accountability for student 
                                 loans.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             July 30, 2019

Mr. Lee (for himself and Mrs. Blackburn) introduced the following bill; 
     which was read twice and referred to the Committee on Health, 
                     Education, Labor, and Pensions

_______________________________________________________________________

                                 A BILL


 
To amend the Higher Education Act of 1965 to provide for accreditation 
    reform, to require institutions of higher education to publish 
     information regarding student success, to provide for fiscal 
 accountability, and to provide for school accountability for student 
                                 loans.

    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 ``Higher Education Reform and 
Opportunity Act of 2019''.

                     TITLE I--ACCREDITATION REFORM

SEC. 101. ACCREDITATION REFORM.

    (a) Definition of Institution of Higher Education.--Section 
102(a)(1) of the Higher Education Act of 1965 (20 U.S.C. 1002(a)(1)) is 
amended--
            (1) by redesignating subparagraphs (B) and (C) as 
        subparagraphs (C) and (D), respectively; and
            (2) by inserting after subparagraph (A) the following:
                    ``(B) if accredited by an authorized accreditation 
                authority in a State that has an alternative 
                accreditation agreement with the Secretary, as 
                described in section 498C--
                            ``(i) an institution that provides 
                        postsecondary education;
                            ``(ii) a postsecondary apprenticeship 
                        program; or
                            ``(iii) a postsecondary education course or 
                        program provided by an institution of 
                        postsecondary education, a nonprofit 
                        organization, or a for-profit organization or 
                        business;''.
    (b) State Alternative Accreditation.--Part H of title IV of the 
Higher Education Act of 1965 (20 U.S.C. 1099a et seq.) is amended by 
adding at the end the following:

              ``Subpart 4--State Alternative Accreditation

``SEC. 498C. STATE ALTERNATIVE ACCREDITATION.

    ``(a) In General.--Notwithstanding any other provision of law, a 
State may establish an alternative accreditation system for the purpose 
of establishing institutions that provide postsecondary education and 
postsecondary education courses or programs as eligible for funding 
under title IV if the State submits a plan to the Secretary for the 
establishment of the alternative accreditation system. Such 
institutions, courses, or programs may include--
            ``(1) institutions that provide postsecondary education 
        that culminates in a certification, credential, or degree;
            ``(2) postsecondary apprenticeship programs that culminate 
        in a certification, credential, or degree;
            ``(3) any other postsecondary education course or program 
        offered at an institution of postsecondary education, a 
        nonprofit organization, or a for-profit organization or 
        business, that culminates in a certification, credential, or 
        degree; and
            ``(4) any of the entities described in paragraphs (1) 
        through (3) that do not award a postsecondary certification, 
        credential, or degree, provided that such entity provides 
        credit that will be accepted toward a postsecondary 
        certification, credential, or degree at one or more of the 
        entities described in paragraphs (1) through (3).
    ``(b) Alternative Accreditation Notification.--The alternative 
accreditation plan described in subsection (a) shall include the 
following:
            ``(1) The State's plan for designating one or more 
        authorized accrediting entities within the State, such as the 
        State Department of Education, another State agency, an 
        industry-specific accrediting agency, or another entity, and an 
        explanation of the process through which the State will select 
        such authorized accrediting entities.
            ``(2) The standards or criteria that an institution that 
        provides postsecondary education and a postsecondary education 
        course or program must meet in order to--
                    ``(A) receive an initial accreditation as part of 
                the alternative accreditation system; and
                    ``(B) maintain such accreditation.
            ``(3) A description of the appeals process through which an 
        institution that provides postsecondary education or a 
        postsecondary education course or program may appeal to an 
        authorized accrediting entity if such institution, course, or 
        program is denied accreditation under the State alternative 
        accreditation system.
            ``(4) Any State policy regarding public accessibility to 
        certain information relating to institutions that provide 
        postsecondary education and postsecondary education courses and 
        programs accredited under the State alternative accreditation 
        system, including--
                    ``(A) the information described in subsection 
                (e)(1); and
                    ``(B) information about the rates of job placement 
                for individuals that have graduated from an institution 
                or completed a course or program that is accredited 
                under the State alternative accreditation system, if 
                available.
            ``(5) An assurance by the State that under the State 
        alternative accreditation system, only institutions that 
        provide postsecondary education and postsecondary education 
        courses or programs that provide a postsecondary certification, 
        credential, or degree, or credits toward a postsecondary 
        certification, credential, or degree (as defined by the State 
        in accordance with paragraph (6)) will be accredited.
            ``(6) The State's definition of a postsecondary 
        certification, credential, or degree, as such term applies to 
        the requirement described in paragraph (5).
            ``(7) A description of the agreements that the State will 
        enter into with institutions that provide postsecondary 
        education and postsecondary education courses or programs that 
        are accredited under the alternative accreditation system for 
        purposes of accreditation regarding requirements for 
        instructional time, in lieu of the requirements described under 
        section 481(a)(2).
            ``(8) A description of the agreements that the State will 
        enter into with institutions that provide postsecondary 
        education and postsecondary education courses or programs that 
        are accredited under the alternative accreditation system 
        regarding requirements for credit hours or clock hours, or 
        other measures of student learning, in lieu of the requirements 
        described under section 481(b).
    ``(c) Review and Approval.--Not later than 30 days after the 
Secretary receives a plan from a State regarding an alternative 
accreditation system, the Secretary shall submit to the State and 
Congress, and make publicly available, a response to the State's plan. 
The Secretary shall approve the plan and allow the State to establish 
the alternative accreditation system if the plan meets the requirements 
described in subsection (b).
    ``(d) Time Limit.--Each plan approved under subsection (c) shall 
allow a State to carry out an alternative accreditation system in the 
State for a period of 5 years.
    ``(e) Reporting Requirements.--States that establish an alternative 
accreditation system shall submit a report to the Secretary every 3 
years following the implementation of the alternative accreditation 
system. The report shall include--
            ``(1) in the case of a postsecondary education course or 
        program that is accredited through the State alternative 
        accreditation system--
                    ``(A) the number and percentage of students who 
                successfully complete each such postsecondary education 
                course or program; and
                    ``(B) for postsecondary education courses or 
                programs that lead to a certification, credential, or 
                degree, the number of students in such course or 
                program; and
            ``(2) in the case of an institution that provides 
        postsecondary education that is accredited through the State 
        alternative accreditation system--
                    ``(A) the number and percentage of students who 
                successfully obtain a postsecondary certification, 
                credential, or degree from such institution; and
                    ``(B) the number and percentage of students who do 
                not successfully obtain a postsecondary certification, 
                credential, or degree from such institution but do 
                obtain credit from such institution toward a 
                postsecondary degree, credential, or certification; and
            ``(3) a description of any requirements for third-party 
        verification of information contained in the report.''.
    (c) Title IV Eligibility Requirements.--Part G of title IV of the 
Higher Education Act of 1965 (20 U.S.C. 1088 et seq.) is amended by 
adding at the end the following:

``SEC. 493E. STATE ACCREDITED INSTITUTIONS, PROGRAMS, OR COURSES.

    ``Notwithstanding any other provision of law, an institution, 
program, or course that is eligible for funds under this title in 
accordance with section 102(a)(1)(B) and meets the requirements of 
section 498C--
            ``(1) shall not be required to meet the requirements of 
        section 496; and
            ``(2) shall not be required to meet the requirements 
        described in subsections (a)(2) and (b) of section 481.''.

               TITLE II--TRANSPARENCY IN HIGHER EDUCATION

SEC. 201. TIME FOR TRANSPARENCY IN HIGHER EDUCATION.

    (a) In General.--Title IV of the Higher Education Act of 1965 (20 
U.S.C. 1070 et seq.) is amended--
            (1) in section 487(a), by adding at the end the following:
            ``(30) The institution will publish information in 
        compliance with section 493E.''; and
            (2) in part G, by adding at the end the following:

``SEC. 493E. INSTITUTIONAL PUBLICATION OF INFORMATION.

    ``(a) Publication of Information.--
            ``(1) In general.--Each institution of higher education 
        participating in a program under this title shall publish on 
        the institution's website and in an alternative format, on an 
        annual basis, the information described in paragraphs (2) and 
        (3). To the extent that such data is available, an institution 
        may use data that the institution is already collecting in 
        accordance with other Federal requirements.
            ``(2) Information.--Each institution of higher education 
        described in paragraph (1) shall publish, with respect to the 
        institution as a whole and with respect to each program of 
        study offered by the institution, the following information for 
        the most recent fiscal year for which the information is 
        available:
                    ``(A) For each of the following, the percentage and 
                number of students enrolled at the institution or in 
                the program of study, as applicable, who receive the 
                following:
                            ``(i) Federal grant aid, including Federal 
                        Pell Grants under subpart 1 of part A, Federal 
                        Supplemental Educational Opportunity Grants 
                        under subpart 3 of part A, or any other Federal 
                        postsecondary education grant aid or subsidy.
                            ``(ii) Federal student loans, including 
                        Federal loans under part D.
                            ``(iii) State grant aid.
                            ``(iv) Institutional grants.
                            ``(v) A student loan from a State.
                    ``(B) Student body enrollment status, including as 
                a--
                            ``(i) first-time, full-time student;
                            ``(ii) first-time, part-time student;
                            ``(iii) non-first-time, full-time student; 
                        and
                            ``(iv) non-first-time, part-time student.
                    ``(C) Information about students that includes the 
                following:
                            ``(i) The percentage of students who do not 
                        complete the program of study the student 
                        initially started upon enrollment.
                            ``(ii) The percentage of students who 
                        transfer.
                            ``(iii) The percentage of students who 
                        complete the program of study the student 
                        initially started upon enrollment.
                            ``(iv) The average length of time for a 
                        student to complete the program of study.
                            ``(v) The percentage of students who 
                        continue on to higher levels of education.
                            ``(vi) The percentage of former students 
                        who received financial aid who are employed at 
                        2, 4, and 6 years after graduating, 
                        disaggregated by program of study.
                            ``(vii) The median earnings of former 
                        students who earned a degree or credential and 
                        received financial aid on the date that is 10 
                        years after the date the students first 
                        enrolled in a program of study at the 
                        institution, disaggregated by program of study.
                            ``(viii) The median earnings of former 
                        students who received financial aid on the date 
                        that is 10 years after the date the students 
                        first enrolled in a program of study at the 
                        institution, disaggregated by program of study.
            ``(3) Publication of default and non-repayment rates.--In 
        addition to the information described in paragraph (2), each 
        institution of higher education described in paragraph (1) 
        shall publish, with respect to the institution as a whole and 
        with respect to each program of study offered by the 
        institution, the following information for the most recent 
        fiscal year for which the information is available:
                    ``(A) The average amount of total Federal student 
                loan debt accrued upon graduation.
                    ``(B) The average amount of total Federal student 
                loan debt accrued by students who leave the institution 
                without having graduated.
                    ``(C) Federal student loan default rate.
                    ``(D) Federal student loan non-repayment rate.
                    ``(E) Default and non-repayment rate, including as 
                a--
                            ``(i) first-time, full-time student;
                            ``(ii) first-time, part-time student;
                            ``(iii) non-first-time, full-time student; 
                        and
                            ``(iv) non-first-time, part-time student.
                    ``(F) Default and non-repayment rate, of--
                            ``(i) students who complete a program of 
                        study;
                            ``(ii) students who transfer; and
                            ``(iii) students who do not complete a 
                        program of study.
    ``(b) Privacy.--
            ``(1) Compliance with ferpa.--In carrying out this section, 
        an institution of higher education and any personnel of the 
        institution shall not share any personally identifiable 
        information and shall act in accordance with section 444 of the 
        General Education Provisions Act (20 U.S.C. 1232g, commonly 
        known as the `Family Educational Rights and Privacy Act of 
        1974').
            ``(2) Prohibition on use of information.--Information 
        published pursuant to this section shall not be used by a 
        Federal employee, agency, or officer, or an institution of 
        higher education to take action against an individual.
            ``(3) Penalties.--The Secretary shall establish penalties 
        for a violation of paragraph (1) or (2) that includes both a 
        monetary fine and up to 5 years in prison.
    ``(c) Rule of Construction.--Nothing in this section shall be 
construed to authorize or permit the Secretary or any employee or 
contractor of the Department to mandate, direct, or control the 
selection of practices or curriculum by an institution of higher 
education.''.
    (b) GAO Report.--
            (1) Study.--The Comptroller General of the United States 
        shall conduct a study that compiles all the institutional 
        publication of information pursuant to section 493E of the 
        Higher Education Act of 1965, as added by subsection (a) of 
        this Act.
            (2) Report.--Not later than October 1 of the fourth fiscal 
        year after the date of enactment of this Act, the Comptroller 
        General of the United States shall submit a report containing 
        the results of the study under paragraph (1) to the appropriate 
        committees of Congress.

                    TITLE III--FISCAL ACCOUNTABILITY

SEC. 301. SIMPLIFICATION OF FEDERAL STUDENT LOANS.

    (a) Termination.--Section 451 of the Higher Education Act of 1965 
(20 U.S.C. 1087a) is amended--
            (1) in subsection (a), by adding at the end the following: 
        ``No sums may be expended after September 30, 2026, with 
        respect to loans under this part for which the first 
        disbursement is after such date, except Federal Direct 
        simplification loans under section 460A.''; and
            (2) by adding at the end, the following:
    ``(c) Termination of Authority To Make New Loans.--Notwithstanding 
subsection (a) or any other provision of law--
            ``(1) no new loans may be made under this part after 
        September 30, 2026, except Federal Direct simplification loans 
        under section 460A; and
            ``(2) no funds are authorized to be appropriated, or may be 
        expended, under this Act, or any other Act to make loans under 
        this part for which the first disbursement is after September 
        30, 2026, except Federal Direct simplification loans under 
        section 460A, or as expressly authorized by an Act of Congress 
        enacted after the date of enactment of Higher Education Reform 
        and Opportunity Act of 2019.
    ``(d) Student Eligibility Beginning With Award Year 2022.--
            ``(1) New borrowers.--No loan may be made under this part 
        to a new borrower for which the first disbursement is after 
        June 30, 2022, except Federal Direct simplification loans under 
        section 460A.
            ``(2) Borrowers with outstanding balances.--Subject to 
        paragraph (3), with respect to a borrower who, as of July 1, 
        2022, has an outstanding balance of principal or interest owing 
        on a loan made under this part that is not a Federal Direct 
        simplification loan under section 460A, such borrower may--
                    ``(A) in the case of such a loan made to the 
                borrower for enrollment in a program of undergraduate 
                education, borrow loans made under this part that are 
                not Federal Direct simplification loans under section 
                460A for any program of undergraduate education through 
                the close of September 30, 2026;
                    ``(B) in the case of such a loan made to the 
                borrower for enrollment in a program of graduate or 
                professional education, borrow loans made under this 
                part that are not Federal Direct simplification loans 
                under section 460A for any program of graduate or 
                professional education through the close of September 
                30, 2026; and
                    ``(C) in the case of such a loan made to the 
                borrower on behalf of a dependent student for the 
                student's enrollment in a program of undergraduate 
                education, borrow loans made under this part that are 
                not Federal Direct simplification loans under section 
                460A on behalf of such student through the close of 
                September 30, 2026.
            ``(3) Loss of eligibility.--A borrower described in 
        paragraph (2) who borrows a Federal Direct simplification loan 
        made under section 460A for which the first disbursement is 
        made before September 30, 2026, shall lose the borrower's 
        eligibility to borrow a loan under this part that is not a 
        Federal Direct simplification loan under section 460A in 
        accordance with paragraph (2).''.
    (b) Federal Direct Simplification Loans.--Part D of title IV of the 
Higher Education Act of 1965 (20 U.S.C. 1087a et seq.) is amended by 
adding at the end the following:

``SEC. 460A. FEDERAL DIRECT SIMPLIFICATION LOANS.

    ``(a) In General.--Beginning on July 1, 2022, except as provided in 
section 451(d), the Secretary shall make loans to borrowers under this 
section. Loans made under this section shall be known as Federal Direct 
simplification loans.
    ``(b) Federal Direct Simplification Loans.--The provisions of this 
part shall apply with respect to Federal Direct simplification loans, 
except that Federal Direct simplification loans shall be made in 
accordance with the following:
            ``(1) The applicable rate of interest on a loan made under 
        this section shall, for loans disbursed during any 12-month 
        period beginning on July 1 and ending on June 30, be determined 
        on the preceding June 1 and be equal to--
                    ``(A) a rate equal to the high yield of the 10-year 
                Treasury note auctioned at the final auction held prior 
                to such June 1; plus
                    ``(B) 3.6 percent.
            ``(2) Interest on a loan made under this section shall 
        begin to accrue on the date the loan is disbursed.
            ``(3) The maximum--
                    ``(A) annual amount of loans under this section an 
                undergraduate student may borrow in any academic year 
                (as defined in section 481(a)(2)) or its equivalent 
                shall be equal to $7,500; and
                    ``(B) aggregate amount of loans under this section 
                an undergraduate student may borrow shall be equal to 
                $30,000.
            ``(4) The maximum--
                    ``(A) annual amount of loans under this section a 
                graduate or professional student may borrow in any 
                academic year (as defined in section 481(a)(2)) or its 
                equivalent shall be equal to $12,500; and
                    ``(B) aggregate amount of loans under this section 
                a graduate or professional student may borrow shall be 
                equal to $50,000.
            ``(5) The only length of repayment--
                    ``(A) for a loan borrowed by an undergraduate 
                student shall be 15 years; and
                    ``(B) for a loan borrowed by a graduate or 
                professional student shall be 25 years.
            ``(6) Repayment on a loan made under this section shall 
        begin--
                    ``(A) after 125 percent of the normal time for 
                completion of the program of study for which the 
                borrower receives the loan under this section; or
                    ``(B) if the borrower withdraws from the program of 
                study before the borrower completes the program, 6 
                months after the date the borrower withdraws.
            ``(7) The Secretary shall not repay or cancel any 
        outstanding balance of principal or interest due on a Federal 
        Direct simplification loan as part of a student loan 
        forgiveness program, including such a program under section 
        455(m) and section 493C.
    ``(c) Authorization To Limit Loan Amounts.--An institution of 
higher education that is required under State law to enroll all 
eligible applicants for an academic year may limit the amount of loans 
under this section that a student may borrow for such academic year to 
not more than the tuition and fees at such institution for such 
academic year.
    ``(d) Loan Fee.--The Secretary shall not charge the borrower of a 
loan made under this part an origination fee.
    ``(e) Repayment.--A borrower of a loan made under this section may 
accelerate without penalty repayment of the whole or any part of the 
loan.''.

SEC. 302. PHASING OUT LOAN FORGIVENESS.

    The Higher Education Act of 1965 (20 U.S.C. 1001 et seq.) is 
amended--
            (1) in section 455--
                    (A) in subsection (d)(1), in the matter preceding 
                subparagraph (A), by inserting ``(except a Federal 
                Direct simplification loan)'' after ``borrower of a 
                loan made under this part'';
                    (B) in subsection (e), by adding at the end the 
                following:
            ``(8) Federal direct simplification loans.--Income 
        contingent repayment shall not be available for a Federal 
        Direct simplification loan.''; and
                    (C) in subsection (m), by adding at the end the 
                following:
            ``(5) Elimination of loan forgiveness.--
                    ``(A) In general.--Notwithstanding any other 
                provision of this Act and subject to subparagraph (B), 
                with respect to any loan made on or after July 1, 2022, 
                the Secretary may not cancel any outstanding balance of 
                principal and interest due on the loan for the borrower 
                of the loan pursuant to this subsection.
                    ``(B) Loans for continuing program of study.--In 
                the case of a borrower whose first loan for a program 
                of study is made prior to July 1, 2022, the Secretary 
                may repay or cancel any outstanding balance of 
                principal and interest due on the subsequent loans for 
                that borrower for the same program of study pursuant to 
                this subsection for--
                            ``(i) loans made during the time it takes 
                        to complete that program of study; or
                            ``(ii) loans made before July 1, 2026;
                whichever occurs earlier.''; and
            (2) in section 493C, by adding at the end the following:
    ``(f) Elimination of Loan Forgiveness.--
            ``(1) In general.--Notwithstanding any other provision of 
        this Act and subject to paragraph (2), with respect to any loan 
        made on or after July 1, 2022, the Secretary may not repay or 
        cancel any outstanding balance of principal and interest due on 
        the loan for the borrower of the loan pursuant to this section.
            ``(2) Loans for continuing program of study.--In the case 
        of a borrower whose first loan for a program of study is made 
        prior to July 1, 2022, the Secretary may repay or cancel any 
        outstanding balance of principal and interest due on the 
        subsequent loans for that borrower for the same program of 
        study pursuant to this section for--
                    ``(A) loans made during the time it takes to 
                complete that program of study; or
                    ``(B) loans made before July 1, 2026;
        whichever occurs earlier.''.

           TITLE IV--SCHOOL ACCOUNTABILITY FOR STUDENT LOANS

SEC. 401. SCHOOL ACCOUNTABILITY FOR STUDENT LOANS.

    (a) Default Rate Fine.--Section 487 of the Higher Education Act of 
1965 (20 U.S.C. 1094), as amended by section 201, is further amended--
            (1) in subsection (a), by adding at the end the following:
            ``(31) The institution will pay a default rate fine that is 
        determined pursuant to subsection (k).''; and
            (2) by adding at the end the following:
    ``(k) Default Rate Fine.--
            ``(1) In general.--Each institution described in paragraph 
        (2) shall pay to the Secretary an annual default rate fine in 
        accordance with this subsection.
            ``(2) Applicable institutions.--An institution shall pay a 
        default rate fine under this subsection for a fiscal year based 
        on the cohort default rate (as defined in section 435(m)) on 
        loans made under this title for such fiscal year.
            ``(3) Fine.--
                    ``(A) In general.--Each institution described in 
                paragraph (2) shall pay a default rate fine for a 
                fiscal year that is equal to 10 percent of the 
                applicable amount determined under subparagraph (B)(i) 
                for such fiscal year.
                    ``(B) Applicable amount.--
                            ``(i) In general.--The applicable amount 
                        for a fiscal year with respect to an 
                        institution shall be an amount equal to the 
                        product of the amount of loans made under this 
                        title for such fiscal year, and the applicable 
                        rate determined in clause (ii). If the 
                        applicable rate is equal to or less than zero 
                        percent then the applicable amount shall be 
                        equal to zero.
                            ``(ii) Applicable rate.--The applicable 
                        rate for a fiscal year with respect to an 
                        institution shall be the rate that is equal to 
                        the difference between the cohort default rate 
                        on loans made under this title (as defined in 
                        section 435(m)) for such fiscal year and the 
                        average rate of total unemployment in the 
                        United States for the 3-year period covered by 
                        that cohort default rate (as defined in section 
                        435(m)), as determined by the Secretary of 
                        Labor.
            ``(4) Credit for certain institutions.--Each institution 
        that is described in paragraph (2) shall receive a $400 credit 
        for the fiscal year for each graduate of the institution during 
        such fiscal year who received a Federal Pell Grant while 
        enrolled at the institution.
            ``(5) Flexibility in counsel and advice.--Notwithstanding 
        any other provision of the Act, the Secretary shall grant 
        institutions of higher education flexibility under this Act to 
        counsel and advise students on Federal financial aid, including 
        granting flexibility for institutions to award less than the 
        maximum amount of Federal student aid for which an individual 
        is eligible if the cost of tuition, room, and board at the 
        institution is less than such maximum amount.''.
    (b) Flexibility in Counseling and Advice.--Section 485(l) of the 
Higher Education Act of 1965 (20 U.S.C. 1092(l)) is amended by adding 
at the end the following:
            ``(3) Flexibility in counseling and advice.--In addition to 
        the entrance counseling under paragraph (1), an eligible 
        institution may require any borrower, at or prior to the time 
        of a disbursement to the borrower of a loan made under part D, 
        to receive the information described in paragraph (2) with 
        respect to such loan, or any other financial counseling, 
        including financial literacy counseling.''.
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