[Congressional Record Volume 159, Number 157 (Wednesday, November 6, 2013)]
[Senate]
[Pages S7878-S7879]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. DURBIN (for himself and Mr. Harkin):
  S. 1659. A bill to amend the Higher Education Act of 1965 regarding 
proprietary institutions of higher education in order to protect 
students and taxpayers; to the Committee on Health, Education, Labor, 
and Pensions.
  Mr. DURBIN. Mr. President, I ask unanimous consent that the text of 
the bill be printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 1659

       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 ``Protecting Our Students and 
     Taxpayers Act of 2013'' or ``POST Act of 2013''.

     SEC. 2. 85/15 RULE.

       (a) In General.--Section 102(b) of the Higher Education Act 
     of 1965 (20 U.S.C. 1002(b)) is amended--
       (1) in paragraph (1)--
       (A) in subparagraph (D), by striking ``and'' after the 
     semicolon;
       (B) in subparagraph (E), by striking the period and 
     inserting ``; and''; and
       (C) by adding at the end the following:
       ``(F) meets the requirements of paragraph (2).'';
       (2) by redesignating paragraph (2) as paragraph (3); and
       (3) by inserting after paragraph (1) the following:
       ``(2) Revenue sources.--
       ``(A) In general.--In order to qualify as a proprietary 
     institution of higher education under this subsection, an 
     institution shall derive not less than 15 percent of the 
     institution's revenues from sources other than Federal funds, 
     as calculated in accordance with subparagraphs (B) and (C).
       ``(B) Federal funds.--In this paragraph, the term `Federal 
     funds' means any Federal financial assistance provided, under 
     this Act or any other Federal law, through a grant, contract, 
     subsidy, loan, guarantee, insurance, or other means to a 
     proprietary institution, including Federal financial 
     assistance that is disbursed or delivered to an institution 
     or on behalf of a student or to a student to be used to 
     attend the institution, except that such term shall not 
     include any monthly housing stipend provided under the Post-
     9/11 Veterans Educational Assistance Program under chapter 33 
     of title 38, United States Code.
       ``(C) Implementation of non-federal revenue requirement.--
     In making calculations under subparagraph (A), an institution 
     of higher education shall--
       ``(i) use the cash basis of accounting;
       ``(ii) consider as revenue only those funds generated by 
     the institution from--

       ``(I) tuition, fees, and other institutional charges for 
     students enrolled in programs eligible for assistance under 
     title IV;
       ``(II) activities conducted by the institution that are 
     necessary for the education and training of the institution's 
     students, if such activities are--

       ``(aa) conducted on campus or at a facility under the 
     control of the institution;
       ``(bb) performed under the supervision of a member of the 
     institution's faculty; and
       ``(cc) required to be performed by all students in a 
     specific educational program at the institution; and

       ``(III) a contractual arrangement with a Federal agency for 
     the purpose of providing job training to low-income 
     individuals who are in need of such training;

       ``(iii) presume that any Federal funds that are disbursed 
     or delivered to an institution on behalf of a student or 
     directly to a student will be used to pay the student's 
     tuition, fees, or other institutional charges, regardless of 
     whether the institution credits

[[Page S7879]]

     such funds to the student's account or pays such funds 
     directly to the student, except to the extent that the 
     student's tuition, fees, or other institutional charges are 
     satisfied by--

       ``(I) grant funds provided by an outside source that--

       ``(aa) has no affiliation with the institution; and
       ``(bb) shares no employees with the institution; and

       ``(II) institutional scholarships described in clause (v);

       ``(iv) include no loans made by an institution of higher 
     education as revenue to the school, except for payments made 
     by students on such loans;
       ``(v) include a scholarship provided by the institution--

       ``(I) only if the scholarship is in the form of monetary 
     aid based upon the academic achievements or financial need of 
     students, disbursed to qualified student recipients during 
     each fiscal year from an established restricted account; and
       ``(II) only to the extent that funds in that account 
     represent designated funds, or income earned on such funds, 
     from an outside source that--

       ``(aa) has no affiliation with the institution; and
       ``(bb) shares no employees with the institution; and
       ``(vi) exclude from revenues--

       ``(I) the amount of funds the institution received under 
     part C of title IV, unless the institution used those funds 
     to pay a student's institutional charges;
       ``(II) the amount of funds the institution received under 
     subpart 4 of part A of title IV;
       ``(III) the amount of funds provided by the institution as 
     matching funds for any Federal program;
       ``(IV) the amount of Federal funds provided to the 
     institution to pay institutional charges for a student that 
     were refunded or returned; and
       ``(V) the amount charged for books, supplies, and 
     equipment, unless the institution includes that amount as 
     tuition, fees, or other institutional charges.

       ``(D) Report to congress.--Not later than July 1, 2014, and 
     by July 1 of each succeeding year, the Secretary shall submit 
     to the authorizing committees a report that contains, for 
     each proprietary institution of higher education that 
     receives assistance under title IV and as provided in the 
     audited financial statements submitted to the Secretary by 
     each institution pursuant to the requirements of section 
     487(c)--
       ``(i) the amount and percentage of such institution's 
     revenues received from Federal funds; and
       ``(ii) the amount and percentage of such institution's 
     revenues received from other sources.''.
       (b) Repeal of Existing Requirements.--Section 487 of the 
     Higher Education Act of 1965 (20 U.S.C. 1094) is amended--
       (1) in subsection (a)--
       (A) by striking paragraph (24);
       (B) by redesignating paragraphs (25) through (29) as 
     paragraphs (24) through (28), respectively;
       (C) in paragraph (24)(A)(ii) (as redesignated by 
     subparagraph (B)), by striking ``subsection (e)'' and 
     inserting ``subsection (d)''; and
       (D) in paragraph (26) (as redesignated by subparagraph 
     (B)), by striking ``subsection (h)'' and inserting 
     ``subsection (g)'';
       (2) by striking subsection (d);
       (3) by redesignating subsections (e) through (j) as 
     subsections (d) through (i), respectively;
       (4) in subsection (f)(1) (as redesignated by paragraph 
     (3)), by striking ``subsection (e)(2)'' and inserting 
     ``subsection (d)(2)''; and
       (5) in subsection (g)(1) (as redesignated by paragraph 
     (3)), by striking ``subsection (a)(27)'' in the matter 
     preceding subparagraph (A) and inserting ``subsection 
     (a)(26)''.
       (c) Conforming Amendments.--The Higher Education Act of 
     1965 (20 U.S.C. 1001 et seq.) is amended--
       (1) in section 152 (20 U.S.C. 1019a)--
       (A) in subsection (a)(1)(A), by striking ``subsections 
     (a)(27) and (h) of section 487'' and inserting ``subsections 
     (a)(26) and (g) of section 487''; and
       (B) in subsection (b)(1)(B)(i)(I), by striking ``section 
     487(e)'' and inserting ``section 487(d)'';
       (2) in section 153(c)(3) (20 U.S.C. 1019b(c)(3)), by 
     striking ``section 487(a)(25)'' each place the term appears 
     and inserting ``section 487(a)(24)'';
       (3) in section 496(c)(3)(A) (20 U.S.C. 1099b(c)(3)(A)), by 
     striking ``section 487(f)'' and inserting ``section 487(e)''; 
     and
       (4) in section 498(k)(1) (20 U.S.C. 1099c(k)(1)), by 
     striking ``section 487(f)'' and inserting ``section 487(e)''.

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