[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:
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