[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3923 Introduced in House (IH)]
<DOC>
118th CONGRESS
1st Session
H. R. 3923
To establish State-Federal partnerships to provide students the
opportunity to attain higher education at in-State public institutions
of higher education without debt, to provide Federal Pell Grant
eligibility to DREAMer students, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
June 7, 2023
Mr. Pocan (for himself, Ms. Pressley, Ms. Williams of Georgia, Mr.
Boyle of Pennsylvania, Ms. Clarke of New York, Ms. Chu, Mr. Carter of
Louisiana, Mrs. Watson Coleman, Ms. Jayapal, and Ms. Norton) introduced
the following bill; which was referred to the Committee on Education
and the Workforce
_______________________________________________________________________
A BILL
To establish State-Federal partnerships to provide students the
opportunity to attain higher education at in-State public institutions
of higher education without debt, to provide Federal Pell Grant
eligibility to DREAMer students, 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 ``Debt-Free College Act of 2023''.
SEC. 2. DEBT-FREE COLLEGE PARTNERSHIP.
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--DEBT-FREE COLLEGE PARTNERSHIP
``SEC. 499A-1. PURPOSE.
``The purpose of this part is to establish State-Federal
partnerships that will--
``(1) increase investment in public higher education; and
``(2) provide students the opportunity to attain higher
education at in-State public institutions of higher education
without debt (`debt-free college').
``SEC. 499A-2. DEFINITIONS.
``In this part:
``(1) Cost of attendance.--The term `cost of attendance'
has the meaning given the term in section 472.
``(2) Debt-free college commitment.--The term `debt-free
college commitment' means a commitment by a State participating
in the State-Federal partnership under this part to cover the
unmet financial need for all eligible students.
``(3) Eligible student.--The term `eligible student' means
an individual who--
``(A) is enrolled, or is eligible to enroll, in a
public institution of higher education in the State in
which the individual resides; and
``(B) completes a Free Application for Federal
Student Aid or demonstrates eligibility for a Federal
Pell Grant through institutional financial aid
eligibility forms.
``(4) Headcount.--The term `headcount' means the
unduplicated number of students enrolled over a 12-month
period, which shall be defined and calculated in the manner
determined most appropriate by the Secretary.
``(5) Net state operating support.--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 and
financial aid programs in the State, calculated in accordance
with subparagraphs (A) and (B).
``(A) 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 (B).
``(B) Exclusions.--Net State operating support does
not include funds for--
``(i) student aid programs that provide
grants to students attending out-of-State
institutions of higher education, proprietary
institutions of higher education, and
institutions of higher education not accredited
by an agency or association recognized by the
Secretary pursuant to section 496;
``(ii) capital outlays;
``(iii) deferred maintenance;
``(iv) financial aid to students awarded
predominantly on the basis of merit;
``(v) hospitals, athletics, or other
auxiliary enterprises;
``(vi) research and development; or
``(vii) any other funds that the Secretary
determines shall not be included in the
calculation of net State operating support for
higher education for such State.
``(6) Net state operating support per student.--The term
`net State operating support per student' means, for a fiscal
year--
``(A) the net State operating support for the
previous fiscal year; divided by
``(B) the headcount for the previous fiscal year.
``(7) Partnership office.--The term `Partnership Office'
means the Office created under section 499A-4(a).
``(8) Public institution of higher education.--The term
`public institution of higher education' means an educational
institution in any State that--
``(A) admits as regular students only persons
having a certificate of graduation from a school
providing secondary education, or the recognized
equivalent of such a certificate, or persons who are
eligible students;
``(B) is legally authorized within such State to
provide a program of education beyond secondary
education;
``(C) provides an educational program for which the
institution awards a bachelor's degree or provides not
less than a 2-year program that is acceptable for full
credit toward such a degree, or awards a degree that is
acceptable for admission to a graduate or professional
degree program, subject to review and approval by the
Secretary;
``(D) has the full faith and credit of the State;
and
``(E) is accredited by a nationally recognized
accrediting agency or association, or if not so
accredited, is an institution that has been granted
preaccreditation status by such an agency or
association that has been recognized by the Secretary
for the granting of preaccreditation status, and the
Secretary has determined that there is satisfactory
assurance that the institution will meet the
accreditation standards of such an agency or
association within a reasonable time.
``(9) Relevant committees of congress.--The term `relevant
committees of Congress' means the Committee on Health,
Education, Labor, and Pensions and the Committee on
Appropriations of the Senate and the Committee on Education and
the Workforce and the Committee on Appropriations of the House
of Representatives.
``(10) Student success program.--The term `student success
program' means a program or service at an institution of higher
education that is dedicated to addressing barriers to degree
attainment, particularly for low-income students, for the
purpose of increasing the percentage of students completing
programs of study in their entirety and attaining related
degrees.
``(11) Unmet need.--The term `unmet need' means the
difference between a student's cost of attendance to attend an
in-State public institution of higher education and the
student's student aid index plus any Federal, State, or local
sources of grant aid.
``SEC. 499A-3. ESTABLISHMENT OF A STATE-FEDERAL PARTNERSHIP GRANT
PROGRAM.
``(a) Grants Authorized.--The Secretary shall award grants to
States to establish State-Federal partnerships with a goal of providing
debt-free college for all eligible students at in-State public
institutions of higher education.
``(b) Application.--A State that desires to participate in the
State-Federal partnership under this part shall submit an application
to the Secretary at such time, in such manner, and accompanied by such
information as the Secretary may require.
``(c) Amount of Grants.--
``(1) In general.--The Secretary shall award a grant to a
State that submits an application under subsection (b) for a
fiscal year in an amount that is equal to State's net State
operating support.
``(2) Ratable reduction.--If the amount appropriated to
carry out this part for a fiscal year is insufficient to award
each State the State's full grant amount pursuant to paragraph
(1), the Secretary shall establish procedures for ratably
reducing each State's award amount for such fiscal year.
``(d) Amounts Not Expended.--Any amount of a grant awarded under
this part that is not expended on allowable expenditures by the end of
the fiscal year for which the grant was awarded shall be applied to the
following year's grant award amount, if the State remains eligible to
receive a grant under this part for such following year. If such State
is not eligible to receive a grant under this part for such following
year, the State shall return the unexpended balance amount to the
Federal Government.
``SEC. 499A-4. STATE-FEDERAL PARTNERSHIP RESPONSIBILITIES.
``(a) Federal Activities.--
``(1) In general.--The Secretary shall create an office in
the Department of Education to administer the State-Federal
partnerships established under this part. Such Partnership
Office shall be responsible for--
``(A) administering grant awards;
``(B) monitoring compliance with partnership
requirements;
``(C) providing technical assistance to States in
applying for participation in, and implementing, a
partnership; and
``(D) providing information to students in
participating States.
``(2) Evaluations.--The Partnership Office shall develop
metrics of evaluation and perform an annual evaluation of each
State participating in a State-Federal partnership under this
part. The evaluation shall assess the State's success in
meeting the partnership's goals, including--
``(A) providing debt-free college for all eligible
students;
``(B) increasing State investment in higher
education;
``(C) maintaining access to in-State public
institutions of higher education for low-income and
underserved students;
``(D) maintaining and improving rates of student
success and academic quality;
``(E) maintaining or reducing the cost of public
higher education and the price charged to students; and
``(F) investing in improving capacity, access,
quality, and student achievement of in-State public
institutions of higher education.
``(3) Annual report.--The Partnership Office shall submit
an annual report to the relevant committees of Congress and
include information gained from the annual evaluation under
paragraph (2).
``(4) Website.--The Partnership Office shall create a
public, consumer-oriented website with information about State-
Federal partnerships established under this part, including
information from the annual evaluation under paragraph (2).
``(b) State Activities.--
``(1) In general.--A State that receives a grant under this
part to establish a State-Federal partnership shall--
``(A) distribute the grant funds according to the
allowable uses of funds described in section 499A-5 in
a manner designed to best achieve the partnership's
goal of providing debt-free college for all eligible
students at in-State public institutions of higher
education;
``(B) maintain access at each in-State public
institution of higher education for low-income and
underserved students;
``(C) cap tuition and fees at public institutions
of higher education in the State at levels as of the
date of enactment of the Debt-Free College Act of 2023,
with a yearly increase allowed based on the Consumer
Price Index (as determined by the Secretary);
``(D) commit to working with in-State public
institutions of higher education to reduce tuition and
fees as the net State operating support increases;
``(E) maintain State need-based financial aid
programs in effect on the date of enactment of the
Debt-Free College Act of 2023 or use State funds for
such programs to further the debt-free commitment made
under the State-Federal partnership;
``(F) maintain or increase levels of net State
operating support in effect on the date of enactment of
the Debt-Free College Act of 2023, subject to the
maintenance of effort provisions contained in this
part;
``(G) develop, adopt, and implement a State formula
for calculating the cost of attendance at in-State
public institutions of higher education;
``(H) develop statewide credit transfer policies
to--
``(i) facilitate credit transfers among in-
State public institutions of higher education;
and
``(ii) provide students with clear and
timely information about credit transfer
policies at in-State public institutions of
higher education; and
``(I) clearly communicate to prospective students,
their families, and the general public how the State
plans to implement the State-Federal partnership and
how eligible students can attend a public institution
of higher education in the State without debt,
including early notification for students of their
eligibility for financial aid under the partnership.
``(2) 5-year plan.--
``(A) In general.--In order to receive a grant
under this part, a State shall provide to the Secretary
a 5-year plan for achieving the goals of the State-
Federal partnership. A State shall update and resubmit
a plan every 5 years thereafter.
``(B) Plan to meet goals.--The 5-year plan shall
detail how the State plans to meet the goal of
providing debt-free college for all eligible students
at in-State public institutions of higher education
within 5 years and increase the State's investment in
higher education, with specific benchmarks detailed for
each year.
``(C) Approved by the secretary.--The 5-year plan,
and the State's annual progress, shall be approved by
the Secretary in order for the State to be eligible to
receive, or continue receiving, grant funds under the
State-Federal Partnership award.
``(D) Waiver of 5-year deadline.--A State may apply
for a waiver from the deadline of meeting all of the
State-Federal partnership's goals within 5 years if the
State--
``(i) provides a credible plan for making
progress towards the goals; and
``(ii) is able to demonstrate that the
State will, at a minimum, provide debt-free
college within 5 years to eligible students who
are Federal Pell Grant recipients under subpart
1 of part A.
``(3) Reforms and innovative practices.--After receiving a
grant under this part, a State shall provide to the Secretary a
description of the promising and evidence-based institutional
reforms and innovative practices to improve student outcomes,
including transfer and completion rates, that have been or will
be adopted by each public institution of higher education in
the State that will receive grant funds, such as--
``(A) providing comprehensive academic, career, and
student support services (including mentoring,
advising, case management services, and career pathway
navigation), especially for low-income, first-
generation, and adult students, and other students
belonging to racial and other groups that are
historically underrepresented in higher education; or
``(B) providing direct support services, or
assistance in applying for such services, such as--
``(i) child care, transportation, and
emergency financial assistance;
``(ii) assistance in obtaining health
insurance coverage and accessing health care
services, including behavioral and mental
health services;
``(iii) assistance in obtaining affordable
housing; and
``(iv) nutrition assistance programs or
free or discounted food; and
``(C) helping to enroll eligible students in means-
tested Federal benefit programs, or similar State,
tribal, or local benefit programs, including--
``(i) the Affordable Connectivity Program
established under section 904(b) of division N
of the Consolidated Appropriations Act, 2021
(47 U.S.C. 1752(b));
``(ii) the Medicaid program under title XIX
of the Social Security Act (42 U.S.C. 1396 et
seq.);
``(iii) the supplemental nutrition
assistance program under the Food and Nutrition
Act of 2008 (7 U.S.C. 2011 et seq.);
``(iv) the program of block grants for
States for temporary assistance for needy
families established under part A of title IV
of the Social Security Act (42 U.S.C. 601 et
seq.);
``(v) the special supplemental nutrition
program for women, infants, and children
established by section 17 of the Child
Nutrition Act of 1966 (42 U.S.C. 1786); and
``(vi) benefits through the Child Care
Development Fund under the Child Care and
Development Block Grant Act of 1990 (42 U.S.C.
9857 et seq.).
``(4) No additional eligibility requirements.--A State that
receives a grant under this part to establish a State-Federal
partnership may not impose additional eligibility requirements
on students other than those contained in this part.
``SEC. 499A-5. USES OF FUNDS.
``(a) In General.--
``(1) Need-based aid for pell recipients.--From amounts
remaining after reserving funds in accordance with subsections
(b) through (d), a State that receives a grant under this part
to establish a State-Federal partnership shall disburse funds
from the net State operating support and the partnership grant
funds on the basis of need, as determined by the Free
Application for Federal Student Aid or an institutional
financial aid eligibility form, to cover the unmet need for
each eligible student who receives a Federal Pell Grant under
subpart 1 of part A.
``(2) Disbursement of remaining funds.--
``(A) In general.--Any funds that remain after a
State disburses funds in accordance with paragraph (1)
shall be used by the State to cover part or all of the
unmet need for eligible students who do not receive a
Federal Pell Grant under subpart 1 of part A, with
priority based on student financial need, in a manner
determined by the State.
``(B) Private aid not taken into account.--In
disbursing funds under this paragraph, the State shall
not take into account any private sources of aid or
loans available to an eligible student.
``(b) Student Success Programs.--
``(1) In general.--A State that receives a grant under this
part for a fiscal year to establish a State-Federal partnership
shall use 4 percent of the grant funds for such fiscal year to
establish or increase funding for student success programs.
``(2) Distribution.--From the total amount of grant funds
available under paragraph (1) for a fiscal year, the State
shall provide to each public institution of higher education in
the State that is eligible to participate in programs under
this title for such fiscal year an amount that bears the same
relation to such total amount as the number of students
enrolled in such institution of higher education who are
eligible to receive a Federal Pell Grant bears to the number of
students enrolled in all public institutions of higher
education in the State who are eligible to receive a Federal
Pell Grant.
``(3) Allowable uses.--An institution of higher education
that receives funds under paragraph (2) shall use such funds to
establish, implement, or expand a student success program,
including for the following purposes:
``(A) Providing information to prospective and
current students to assist and improve completion,
including creating materials clarifying different
program completion requirements and costs, holding
seminars for prospective or current students on course
schedules and program costs, and updating school
websites to make information publically available.
``(B) Hiring additional counselors and advisors to
focus on student completion support and training
existing personnel to implement the student success
program.
``(C) Increasing academic support programs, such as
writing coaches, tutors, prerequisite skill courses,
and study materials, and enhancing academic facilities
for students.
``(D) Providing microgrants for students
participating in the student success program who
maintain good academic standing and progress toward on-
time graduation.
``(4) Reporting.--
``(A) Reports from institutions.--An institution of
higher education that receives funds under paragraph
(2) shall submit to the State in which the institution
is located at the end of each fiscal year a report that
details the uses of funds, changes in the ratios of
students to counselors, and 2-year and 4-year degree
attainment rates, disaggregated by race and Federal
Pell Grant recipient status.
``(B) Suspension.--If a State determines that an
institution of higher education that receives funds
under paragraph (2) for a fiscal year used such funds
for activities that were not allowable uses under
paragraph (3), the State may suspend distribution of
funds to the institution for the following fiscal year
and require the institution to submit proposed
expenditures for approval before receiving funds again
under paragraph (2).
``(C) Report from state.--A State that receives a
grant under this part for a fiscal year to establish a
State-Federal partnership shall submit to the Secretary
at the end of each fiscal year a report that details
the uses of grant funds under this subsection in public
institutions of higher education in the State that are
eligible to participate in programs under this title,
changes in the ratio of students to counselors in such
institutions in the State, and 2-year and 4-year degree
attainment rates in such institutions in the State,
disaggregated by race and Federal Pell Grant recipient
status.
``(c) Higher Education Related Activities.--A State that receives a
grant under this part to establish a State-Federal partnership may use
not more than 5 percent of the grant funds for the following higher
education related activities:
``(1) Increasing the capacity within the public higher
education system of the State, including through the following:
``(A) Construction of new facilities.
``(B) Renovation of existing facilities.
``(C) Hiring of faculty.
``(D) Student support services.
``(2) Increasing the enrollment of low-income and
underserved students.
``(3) Improving student outcomes, including meeting student
learning goals, increasing completion rates, and improving
post-graduate job placement, in consultation with faculty and
staff at in-State public institutions of higher education.
``(4) Providing information to prospective students and
families.
``(5) Developing new higher education programs to meet the
State's workforce needs, in consultation with faculty and staff
at in-State public institutions of higher education, employers,
and other relevant stakeholders.
``(6) Programs and student support services at public
secondary schools if those programs and services directly
support an activity described in any of paragraphs (1) through
(5).
``(7) Other activities as approved by the Secretary to
improve the State's public higher education system,
particularly for low-income and underserved students.
``(d) Administration and Other Uses.--A State that receives a grant
under this part to establish a State-Federal partnership may use not
more than 1 percent of the grant funds--
``(1) to administer the partnership; and
``(2) for--
``(A) higher education research and data tools,
such as those that link education and employment data
systems;
``(B) forming agreements with other States
participating in the partnership for reciprocal student
eligibility; and
``(C) developing and implementing systems to
provide early notification to students and families of
their eligibility for financial aid.
``(e) Prohibition on Use of Funds.--A State that receives a grant
under this part to establish a State-Federal partnership may not use
grant funds for--
``(1) endowments; or
``(2) the construction of athletic or commercial venues.
``SEC. 499A-6. MAINTAINING NET STATE OPERATING SUPPORT FOR HIGHER
EDUCATION.
``A State that receives a grant under this part to establish a
State-Federal partnership shall maintain net State operating support
for a fiscal year at a level that is not less than the level that is
equal to the average of such net State operating support per full-time
equivalent student for the 3 most recent consecutive State fiscal years
preceding such fiscal year.
``SEC. 499A-7. OVERSIGHT.
``(a) In General.--If a State that receives a grant under this part
to establish a State-Federal partnership breaches a term of the
partnership, the Partnership Office shall notify the State and provide
the State an opportunity to correct the record or cure the breach
within 30 days of the notification.
``(b) Recommendation.--Based on the State's response to a
notification under subsection (a), the Partnership Office shall
recommend that the Secretary--
``(1) take no action;
``(2) place the State on probation; or
``(3) deem the State ineligible to continue to participate
in the partnership.
``(c) Implementation.--
``(1) In general.--Except as provided in paragraph (2), the
Secretary shall implement the recommendation of the Partnership
Office under subsection (b).
``(2) Exception.--
``(A) In general.--Subject to subparagraph (B), the
Secretary may choose not to implement the
recommendation of the Partnership Office under
subsection (b).
``(B) Reasons and report.--If the Secretary chooses
not to implement the recommendation of the Partnership
Office under subsection (b), the Secretary shall--
``(i) provide an explanation for such
decision; and
``(ii) notify the relevant committees of
Congress in a report.
``(d) Probation.--
``(1) In general.--If a State is placed on probation by the
Secretary due to a breach of a term of the partnership, the
State shall develop a plan to remedy the breach.
``(2) Withholding.--With respect to a State that is placed
on probation by the Secretary due to a breach of a term of the
partnership, the Secretary shall withhold half of the State's
partnership grant award until the breach has been remedied or
the State has demonstrated credible progress towards remedying
the breach.
``(e) Ineligibility.--
``(1) In general.--If a State is determined to be
ineligible to continue to participate in a partnership due to a
breach of a term of the partnership, the State shall not
receive its partnership grant award for the subsequent year.
``(2) Remaining ineligible.--A State that is determined to
be ineligible to continue to participate in a partnership due
to a breach of a term of the partnership, shall remain
ineligible for participation until the State has demonstrated
that the State meets the partnership's requirements.
``SEC. 499A-8. STATE WITHDRAWAL OR INELIGIBILITY.
``(a) In General.--If a State that receives a grant under this part
to establish a State-Federal partnership intends to withdraw from the
partnership or becomes ineligible to continue participation under this
part, the State shall comply with the requirements of this section,
including, if the State intends to withdraw, notifying the Secretary
and the Partnership Office 60 days prior to the withdrawal.
``(b) Continued Coverage.--
``(1) In general.--Any unexpended balance from a State-
Federal partnership grant award that remains after a State
notifies the Partnership Office of the State intention to
withdraw from the partnership or becomes ineligible to continue
participation under this part shall be placed into an escrow
account at the Department and used solely to provide need-based
grant aid to an eligible student who has received a Federal
Pell Grant under subpart 1 of part A and who was enrolled
before the State notified the Partnership Office of the State's
intention to withdraw from the partnership or the State became
ineligible.
``(2) Coverage until students finish program.--
``(A) In general.--A State that withdraws from a
State-Federal partnership or becomes ineligible to
continue participation under this part shall continue
to cover the unmet need for each eligible student who
received a Federal Pell Grant under subpart 1 of part A
and who was enrolled before the State notified the
Partnership Office of the State's intention to withdraw
from the partnership or became ineligible until each
such student completes the student's program of study
at the institution or until the allotted time for
completion of such program of study expires.
``(B) Priority.--In carrying out subparagraph (A),
a State shall prioritize funding based on students'
financial need.
``(3) Communication of information.--A State that withdraws
from a State-Federal partnership or becomes ineligible to
continue participation under this part shall communicate its
withdrawal or ineligibility, as appropriate, to students and
families in the State and provide clear information to eligible
students described in paragraph (2)(A) that the students may
continue to have their cost of attendance at an in-State public
institution of higher education covered.
``SEC. 499A-9. AUTHORIZATION OF APPROPRIATIONS.
``(a) In General.--There are authorized to be appropriated to carry
out this part--
``(1) $84,000,000,000 for fiscal year 2024; and
``(2) such sums as may be necessary for each of fiscal
years 2024 through 2033.
``(b) Availability.--Funds made available under subsection (a)
shall be available for obligation through September 30 of the fiscal
year succeeding the fiscal year for which such sums were
appropriated.''.
SEC. 3. DEBT-FREE COLLEGE GRANT PROGRAM FOR HBCUS AND MSIS.
Part F of title III of the Higher Education Act of 1965 (20 U.S.C.
1067q et seq.) is amended by adding at the end the following:
``SEC. 372. DEBT-FREE COLLEGE GRANT PROGRAM FOR HBCUS AND MSIS.
``(a) Definition of Eligible Institution.--
``(1) In general.--In this section, except as provided in
paragraph (2), the term `eligible institution' means an
institution of higher education that is--
``(A) a private, nonprofit 2-year or 4-year part B
institution (as defined in section 322);
``(B) a Tribal College or University (as defined in
section 316); or
``(C) a private, nonprofit 2-year or 4-year
institution--
``(i) that is--
``(I) a Hispanic-serving
institution (as defined in section
502);
``(II) an Alaska Native-serving
institution (as defined in section
317(b));
``(III) a Native Hawaiian-serving
institution (as defined in section
317(b));
``(IV) a Predominantly Black
Institution (as defined in section
318);
``(V) an Asian American and Native
American Pacific Islander-serving
institution (as defined in section
320(b)); or
``(VI) a Native American-serving,
nontribal institution (as defined in
section 319); and
``(ii) in which not less than 35 percent of
the students enrolled at the institution are
eligible to receive a Federal Pell Grant.
``(2) For-profit institution that converted to a nonprofit
institution.--Notwithstanding paragraph (1), an institution of
higher education is not an eligible institution if the
institution was a for-profit institution of higher education
that converted to a nonprofit institution of higher education
and less than 25 years have passed since the date of such
conversion.
``(b) Grant Program Authorized.--
``(1) In general.--The Secretary shall award grants to
eligible institutions to enable the institutions to provide
need-based financial aid to cover unmet need for students
enrolled at the institutions.
``(2) Duration.--Grants awarded under this section shall be
for a period of 5 years.
``(c) Application.--An eligible institution that desires a grant
under this section shall submit an application to the Secretary at such
time, in such manner, and accompanied by such information as the
Secretary may require, including a plan detailing how--
``(1) the eligible institution will use grant funds to
provide debt-free college to the students enrolled at the
institution; and
``(2) the institution plans to meet the requirements of the
grant program.
``(d) Awarding of Grants.--
``(1) In general.--
``(A) In general.--A grant amount awarded to an
eligible institution under this section for a year--
``(i) shall be in an amount equal to the
amount of the institution's expenditures on
student undergraduate instruction and academic
support for the year; and
``(ii) shall not be disbursed for the year
until the Partnership Office created under
section 499A-4(a) reviews and approves the
annual update submitted by the institution
pursuant to subsection (f).
``(B) Ratable reduction.--If the amount
appropriated to carry out this section for a fiscal
year is insufficient to award each eligible institution
the institution's full grant amount pursuant to
subparagraph (A), the Secretary shall establish
procedures for ratably reducing each institution's
award amount for such fiscal year.
``(2) Waivers.--
``(A) In general.--Subject to subparagraph (B), if
the percentage of students eligible to receive a
Federal Pell Grant who are enrolled at an eligible
institution that receives a grant under this section
decreases to less than 35 percent after the first year
of the grant award, such institution may apply to the
Secretary for a waiver of the requirement that an
institution to be eligible to receive a grant under
this section have not less than 35 percent of the
students enrolled at the institution eligible to
receive a Federal Pell Grant.
``(B) Restrictions on waiver.--The Secretary shall
grant a waiver under subparagraph (A)--
``(i) only if the decrease in percentage
is--
``(I) small relative to the size of
the student body; or
``(II) the result of unexpected or
uncontrollable circumstances; and
``(ii) not more than 2 times during the 5-
year grant period.
``(e) Use of Grant Funds.--
``(1) In general.--An eligible institution that receives a
grant under this section shall use the grant funds as follows:
``(A) 95 percent of the grant funds shall be--
``(i) used to cover the unmet need for
financial assistance to attend the institution
of students who have not yet earned a
bachelor's degree; and
``(ii) disbursed according to financial
need.
``(B) 5 percent of the grant funds shall be used
for the following activities:
``(i) Increasing capacity through
construction or renovation of facilities.
``(ii) Hiring faculty.
``(iii) Student support services.
``(iv) Other activities to increase
enrollment of low-income and underserved
students, improve student outcomes, and provide
information to prospective students and
families, and other activities as approved by
the Secretary to improve access, affordability,
or quality of the education provided by the
institution.
``(2) Prohibition on use of funds.--An eligible institution
that receives a grant under this section may not use grant
funds for endowments or the construction of athletic or
commercial venues.
``(f) Annual Update.--An eligible institution that receives a grant
under this section shall submit to the Secretary an annual update--
``(1) with any changes to the institution's expenditures on
student instruction and academic support; and
``(2) on how the institution is fulfilling the terms of the
grant.
``(g) Terms of the Grant.--
``(1) Grantee commitment.--An eligible institution that
receives a grant under this section shall carry out the
following:
``(A) Cap tuition and fees at the institution at
the level as of the date of enactment of the Debt-Free
College Act of 2023, with a yearly increase allowed
based on the Consumer Price Index (as determined by the
Secretary).
``(B) Maintain expenditures on instruction and
academic support at the institution at a level that is
not less than the average of such expenditures at the
institution over the period of 3 years preceding the
date of enactment of the Debt-Free College Act of 2023.
``(C) Maintain the enrollment of low-income
students, as defined by the Secretary, at the
institution at a level that is not less than the level
of such enrollment as of the date of enactment of the
Debt-Free College Act of 2023.
``(D) Maintain institutional aid at a level that is
not less than the average of such aid over the period
of 3 years preceding the date of enactment of the Debt-
Free College Act of 2023.
``(E) Submit to the Secretary for approval the
institution's calculation of the cost of attendance at
such institution.
``(F) Clearly communicate to prospective students
and their families the following:
``(i) How students can attend the
institution without debt.
``(ii) That a debt-free college education
provided pursuant to this section is
conditioned upon institutional eligibility and
participation under this section and may not
apply for each year that the student is
enrolled at the institution.
``(2) Breach of terms of grant.--
``(A) In general.--If an eligible institution that
receives a grant under this section breaches a term of
the grant, the Partnership Office created under section
499A-4(a) shall notify the institution and provide the
institution with an opportunity to correct the record
or cure the breach not later than 30 days after the
date of the notification.
``(B) Recommendation.--The Partnership Office
created under section 499A-4(a) shall, after
considering the eligible institution's response to a
notification under subparagraph (A) or lack of
response, make a recommendation to the Secretary that
the Secretary--
``(i) take no action with respect to the
eligible institution;
``(ii) place the eligible institution on
probation; or
``(iii) revoke the eligible institution's
eligibility for the grant program under this
section.
``(C) Probation.--An eligible institution that is
placed on probation by the Secretary shall develop a
plan to remedy the breach of the term of the grant. If
the eligible institution does not remedy the breach,
the Secretary may levy a fine against the institution
of an amount not to exceed 1 percent of the annual
grant amount.
``(D) Ineligibility.--If an eligible institution's
eligibility for the grant program under this section
has been revoked by the Secretary, such institution
shall--
``(i) place into escrow any unexpended
grant funds described in subsection (e)(1)(A)
to be disbursed directly to students enrolled
at the institution;
``(ii) return to the Secretary any
unexpended funds described in subsection
(e)(1)(B);
``(iii) remain ineligible to receive a
grant under this section during the 3-year
period after the date eligibility was revoked;
and
``(iv) notify prospective and enrolled
students at the institution and their families
of such ineligibility for participation in the
grant program under this section.
``(h) Withdrawal.--An eligible institution that receives a grant
under this section that intends to withdraw from the grant program
under this section shall--
``(1) notify the Partnership Office created under section
499A-4(a) not less than 60 days prior to the withdrawal;
``(2) place into escrow any unexpended grant funds to be
disbursed directly to students enrolled at the institution; and
``(3) notify prospective and enrolled students at the
institution and their families of such withdrawal.
``(i) Authorization of Appropriations.--
``(1) In general.--There are authorized to be appropriated
to carry out this section--
``(A) $3,000,000,000 for fiscal year 2024; and
``(B) such sums as may be necessary for each of
fiscal years 2024 through 2033.
``(2) Availability.--Funds made available under paragraph
(1) shall be available for obligation through September 30 of
the fiscal year succeeding the fiscal year for which such sums
were appropriated.''.
SEC. 4. TITLE IV ELIGIBILITY FOR DREAMER STUDENTS.
Section 484 of the Higher Education Act of 1965 (20 U.S.C. 1091) is
amended--
(1) in subsection (a)(5), by inserting ``, or be a Dreamer
student, as defined in subsection (u)'' after ``becoming a
citizen or permanent resident''; and
(2) by adding at the end the following:
``(u) Dreamer Students.--
``(1) In general.--In this section, the term `Dreamer
student' means an individual who--
``(A) was younger than 16 years of age on the date
on which the individual initially entered the United
States;
``(B) has provided a list of each secondary school
that the student attended in the United States; and
``(C)(i) has earned a high school diploma, the
recognized equivalent of such diploma from a secondary
school, or a high school equivalency diploma in the
United States or is scheduled to complete the
requirements for such a diploma or equivalent before
the next academic year begins;
``(ii) has acquired a degree from an institution of
higher education or has completed not less than 2 years
in a program for a baccalaureate degree or higher
degree at an institution of higher education in the
United States and has made satisfactory academic
progress, as defined in subsection (c), during such
time period;
``(iii) at any time was eligible for a grant of
deferred action under--
``(I) the June 15, 2012, memorandum from
the Secretary of Homeland Security entitled
`Exercising Prosecutorial Discretion with
Respect to Individuals Who Came to the United
States as Children'; or
``(II) the November 20, 2014, memorandum
from the Secretary of Homeland Security
entitled `Exercising Prosecutorial Discretion
with Respect to Individuals Who Came to the
United States as Children and with Respect to
Certain Individuals Who Are the Parents of U.S.
Citizens or Permanent Residents'; or
``(iv) has served in the uniformed services, as
defined in section 101 of title 10, United States Code,
for not less than 4 years and, if discharged, received
an honorable discharge.
``(2) Hardship exception.--The Secretary shall issue
regulations that direct when the Department shall waive the
requirement of subparagraph (A) or (B), or both, of paragraph
(1) for an individual to qualify as a Dreamer student under
such paragraph, if the individual--
``(A) demonstrates compelling circumstances for the
inability to satisfy the requirement of such
subparagraph (A) or (B), or both; and
``(B) satisfies the requirement of paragraph
(1)(C).''.
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