[Congressional Record Volume 170, Number 115 (Thursday, July 11, 2024)]
[Senate]
[Pages S4556-S4557]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. DURBIN:
  S. 4701. 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. Madam 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. 4701

       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 2024'' or ``POST Act of 2024''.

     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 at the end 
     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) Definitions.--In this paragraph:
       ``(i) Alternative financing arrangement.--The term 
     `alternative financing agreement' means a financing agreement 
     between--

       ``(I) a student of an institution; and
       ``(II)(aa) the institution;
       ``(bb) any entity or individual--

       ``(AA) in the institution's ownership tree; or
       ``(BB) with any common ownership of the institution and the 
     entity providing the funds; or

       ``(cc)(AA) an entity that has any other relationship or 
     agreement with the institution; or
       ``(BB) an entity with common ownership with an entity 
     described in subitem (AA).

       ``(ii) Federal education assistance funds.--The term 
     `Federal education assistance funds' means Federal funds that 
     are disbursed or delivered to or on behalf of a student to be 
     used to attend such institution, as calculated under 
     subparagraph (C).
       ``(B) 85/15 rule.--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 
     education assistance funds, as calculated in accordance with 
     subparagraphs (A) and (C).
       ``(C) Implementation of non-federal revenue requirement.--
     In making calculations under subparagraph (B), 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;
       ``(cc) required to be performed by all students in a 
     specific educational program at the institution; and
       ``(dd) related directly to services performed by students;

       ``(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; and
       ``(IV) funds paid by a student, or on behalf of a student 
     by a party unrelated to the institution, its owners, or 
     affiliates, for an education or training program that is not 
     eligible for assistance under title IV, as long as--

       ``(aa) such noneligible program does not include any 
     courses offered in an eligible program of the proprietary 
     institution;
       ``(bb) such noneligible program is provided by the 
     institution, and taught by an instructor of the institution, 
     at--
       ``(AA) its main campus or one of its additional locations, 
     as approved by the appropriate accrediting agency or 
     association;
       ``(BB) another school facility approved by the appropriate 
     State agency or accrediting agency or association; or
       ``(CC) an employer facility; and
       ``(cc) such noneligible program is not a program where the 
     institution is merely providing facilities for test 
     preparation courses, acting as a proctor, or overseeing a 
     course of self-study;
       ``(iii) presume that any Federal education assistance 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 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, executives, or board members 
     with the institution; and

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

       ``(iv) include no loans made by an institution of higher 
     education as revenue to the school, except for payments made 
     by current or former students to the institution during the 
     fiscal year for which the determination is being made on such 
     loans that are--

       ``(I) used to satisfy tuition, fees, and other 
     institutional charges;
       ``(II) bona fide, as evidenced by standalone repayment 
     agreements between the students and the institution that are 
     enforceable promissory notes;
       ``(III) issued at intervals related to the institution's 
     enrollment periods;
       ``(IV) subject to regular loan repayments and collections 
     by the institution; and
       ``(V) separate from the enrollment contracts signed by the 
     students;

       ``(v) include funds from an income share agreement, or any 
     other alternative financing agreement, with a student only 
     if--

       ``(I) the institution clearly identifies the student's 
     institutional charges, and such charges are the same or less 
     than the stated rate for institutional charges;
       ``(II) the agreement clearly identifies the maximum time 
     and maximum amount a student would be required to pay, 
     including the implied or imputed interest rate and any fees 
     and revenue generated for a related third party, the 
     institution, or an entity described in subparagraph 
     (A)(i)(II), for that maximum time period; and
       ``(III) all payments under the agreement are applied with a 
     portion allocated to the return of capital and a portion 
     allocated to profit, with revenue, interest, and fees not 
     included in the calculation;

       ``(vi) 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, executives, or board members 
     with the institution; and
       ``(vii) 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 education assistance 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.

[[Page S4557]]

       ``(D) Regaining eligibility.--Notwithstanding subparagraph 
     (B), a proprietary institution of higher education that fails 
     to meet the requirements of such subparagraph for a fiscal 
     year shall be ineligible for purposes of this paragraph for a 
     period of not less than 2 institutional fiscal years. To 
     regain eligibility under this paragraph, the proprietary 
     institution shall demonstrate compliance with all eligibility 
     and certification requirements under section 498 for a 
     minimum of 2 institutional fiscal years after the 
     institutional fiscal year in which the institution became 
     ineligible.
       ``(E) Report to congress.--Not later than July 1, 2026, 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 education assistance 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 the matter preceding paragraph (1) of subsection (d) 
     (as redesignated by paragraph (3)), by striking ``(a)(25)'' 
     and inserting ``(a)(24)'';
       (5) in subsection (f)(1) (as redesignated by paragraph 
     (3)), by striking ``subsection (e)(2)'' and inserting 
     ``subsection (d)(2)''; and
       (6) 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)''.

     SEC. 3. EFFECTIVE DATE.

       The amendments made by this Act shall take effect on July 
     1, 2025.
  Mr. DURBIN. Madam 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:

                                 ______