[House Report 118-739]
[From the U.S. Government Publishing Office]
118th Congress } { Report
HOUSE OF REPRESENTATIVES
2d Session } { 118-739
======================================================================
COLLEGE COST REDUCTION ACT
_______
November 18, 2024.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed
_______
Ms. Foxx, from the Committee on Education and the Workforce, submitted
the following
R E P O R T
together with
MINORITY VIEWS
[To accompany H.R. 6951]
[Including cost estimate of the Congressional Budget Office]
The Committee on Education and the Workforce, to whom was
referred the bill (H.R. 6951) to lower the cost of
postsecondary education for students and families, having
considered the same, reports favorably thereon with an
amendment and recommends that the bill as amended do pass.
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``College Cost
Reduction Act''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; table of contents.
Sec. 2. References.
TITLE I--TRANSPARENCY
Part A--DEFINITIONS
Sec. 101. Definitions.
Part B--COLLEGE COSTS AND FINANCIAL VALUE
Sec. 111. Financial aid offers.
Sec. 112. College scorecard website.
Sec. 113. Postsecondary student data system.
Sec. 114. Database of student information prohibited.
TITLE II--ACCESS AND AFFORDABILITY
Part A--FINANCIAL NEED
Sec. 201. Amount of need; cost of attendance; median cost of college.
Part B--FINANCIAL AID
subpart 1--grants
Sec. 211. Federal Pell Grant program.
Sec. 212. Campus-based aid programs.
subpart 2--loans
Sec. 221. Loan limits.
Sec. 222. Loan repayment.
Sec. 223. Loan rehabilitation.
Sec. 224. Interest capitalization.
Sec. 225. Origination fees.
TITLE III--ACCOUNTABILITY AND STUDENT SUCCESS
Part A--ACCOUNTABILITY
subpart 1--department of education
Sec. 301. Agreements with institutions.
Sec. 302. Regulatory relief.
Sec. 303. Limitation on authority of Secretary to propose or issue
regulations and Executive actions.
Sec. 304. Office of Federal Student Aid.
subpart 2--accreditors
Sec. 311. Accrediting agency recognition.
Sec. 312. National Advisory Committee on Institutional Quality and
Integrity (NACIQI).
Sec. 313. Alternative quality assurance experimental site initiative.
Part B--STUDENT SUCCESS
Sec. 321. Postsecondary student success grants.
Sec. 322. Reverse Transfer Efficiency Act.
Sec. 323. Transparent and fair transfer of credit policies.
SEC. 2. REFERENCES.
(a) Higher Education Act of 1965.--Except as otherwise expressly
provided, whenever in this Act an amendment or repeal is expressed in
terms of an amendment to, or repeal of, a section or other provision,
the reference shall be considered to be made to a section or other
provision of the Higher Education Act of 1965 (20 U.S.C. 1001 et seq.).
(b) FAFSA Simplification Act.--Except as otherwise expressly
provided, whenever in this Act a reference to a section or other
provision of the Higher Education Act of 1965 (20 U.S.C. 1001 et seq.)
refers to such section or other provision as amended or added by the
FAFSA Simplification Act, the reference shall be considered to be made
to the section or other provision as amended or added by--
(1) title VII of division FF of the Consolidated
Appropriations Act, 2021 (title VII of division FF of Public
Law 116-260), subject to the effective date of section 701(b)
of such Act, as amended by section 102(a) of the FAFSA
Simplification Act Technical Corrections Act (division R of
Public Law 117-103) (including the authorization provided under
section 102(c)(1)(A) of such Act); and
(2) the FAFSA Simplification Act Technical Corrections Act
(division R of Public Law 117-103).
TITLE I--TRANSPARENCY
PART A--DEFINITIONS
SEC. 101. DEFINITIONS.
(a) Definitions.--Section 103 of the Higher Education Act of 1965 (20
U.S.C. 1003) is amended by adding at the end the following:
``(25) Cip code.--The term `CIP code' means the six-digit
taxonomic identification code assigned by an institution of
higher education to a specific program of study at the
institution, determined by the institution in accordance with
the Classification of Instructional Programs published by the
National Center for Education Statistics.
``(26) Credential level.--
``(A) In general.--The term `credential level' means
the level of the degree or other credential awarded by
an institution of higher education to students who
complete a program of study of the institution. Each
degree or other credential awarded by an institution
shall be categorized by the institution as either
undergraduate credential level or graduate credential
level.
``(B) Undergraduate credential.--When used with
respect to a credential or credential level, the term
`undergraduate credential' includes credentials such as
an undergraduate certificate, an associate degree, a
bachelor's degree, and a post-baccalaureate
certificate.
``(C) Graduate credential.--When used with respect to
a credential or credential level, the term `graduate
credential' includes credentials such as a master's
degree, a doctoral degree, a professional degree, and a
postgraduate certificate.
``(27) Program of study.--The term `program of study' means
an academic program of study offered to students by an
institution of higher education that--
``(A) upon completion of the program, results in the
award of a credential to a student, including a degree,
diploma, or certificate, for one credential level;
``(B) is certified as a program of study in the
institution's program participation agreement under
section 487; and
``(C) is classified by a combination of--
``(i) a CIP code; and
``(ii) one credential level, determined by
the credential awarded upon completion of the
program.
``(28) Program length.--The term `program length' means the
minimum amount of time in weeks, months, or years that is
specified in the catalog, marketing materials, or other
official publications of an institution of higher education for
a full-time student to complete the requirements for a specific
program of study and to obtain the degree or credential awarded
by such program.
``(29) Time to credential.--The term `time to credential'
means, with respect to a student, the actual amount of time in
weeks, months, or years it takes the student to complete the
requirements for a specific program of study and to obtain the
degree or credential awarded by such program.
``(30) Value-added earnings.--
``(A) Calculation.--With respect to a student who
received Federal financial aid under title IV and who
completed a program of study offered by an institution
of higher education, the term `value-added earnings'
means--
``(i) the annual earnings of such student
measured during the applicable earnings
measurement period for such program (as
determined under subparagraph (C)); minus
``(ii) in the case of a student who completed
a program of study that awards--
``(I) an undergraduate credential
(other than such a credential awarded
by a qualifying undergraduate program
as defined in section
455(a)(4)(B)(ii)), 150 percent of the
poverty line applicable to a single
individual as determined under section
673(2) of the Community Services Block
Grant Act (42 U.S.C. 9902(2)) for such
year; or
``(II) a graduate credential or an
undergraduate credential awarded by a
qualifying undergraduate program as
defined in section 455(a)(4)(B)(ii),
300 percent of the poverty line
applicable to a single individual as
determined under section 673(2) of the
Community Services Block Grant Act (42
U.S.C. 9902(2)) for such year.
``(B) Geographic adjustment.--
``(i) In general.--Except as provided in
clause (ii), the Secretary shall use the
geographic location of the institution at which
a student completed a program of study to
adjust the value-added earnings of the student
calculated under subparagraph (A) by dividing--
``(I) the difference between
subclauses (I) and (II) of such
subparagraph; by
``(II) the most recent regional price
parity index of the Bureau of Economics
Analysis for the State or, as
applicable, metropolitan area in which
such institution is located.
``(ii) Exception.--The value-added earnings
of a student calculated under subparagraph (A)
shall not be adjusted based on geographic
location in accordance with clause (i) if such
student attended principally through distance
education.
``(C) Earnings measurement period.--
``(i) In general.--For the purpose of
calculating the value-added earnings of a
student, except as provided in clause (ii), the
annual earnings of a student shall be
measured--
``(I) in the case of a program of
study that awards an undergraduate
certificate, post baccalaureate
certificate, or graduate certificate,
one year after the student completes
such program;
``(II) in the case of a program of
study that awards an associate's degree
or master's degree, 2 years after the
student completes such program; and
``(III) in the case of a program of
study that awards a bachelor's degree,
doctoral degree, or professional
degree, 4 years after the student
completes such program.
``(ii) Exception.--The Secretary may, as the
Secretary determines appropriate based on the
characteristics of a program of study, extend
an earnings measurement period described in
clause (i) for a program of study that--
``(I) requires completion of an
additional educational program after
completion of the program of study in
order to obtain a licensure associated
with the credential awarded for such
program of study; and
``(II) when combined with the program
length of such additional educational
program for licensure, has a total
program length that exceeds the
relevant earnings measurement period
prescribed for such program of study
under clause (i),
except that in no case shall the annual
earnings of a student be measured more than 5
years after the student completes a program of
study.''.
PART B--COLLEGE COSTS AND FINANCIAL VALUE
SEC. 111. FINANCIAL AID OFFERS.
(a) Institution Financial Aid Offer.--Part B of title I of the Higher
Education Act of 1965 (20 U.S.C. 1011 et seq.) is amended by adding at
the end the following:
``SEC. 124. INSTITUTION FINANCIAL AID OFFER FORM.
``(a) Standard Form and Terminology.--The Secretary, in consultation
with the heads of relevant Federal agencies, shall develop standard
terminology and a standard form for financial aid offers based on
recommendations from representatives of students, veterans,
servicemembers, families of students, institutions of higher education
(including community colleges, for-profit institutions, four-year
public institutions, and four-year private nonprofit institutions),
financial aid experts, secondary school and postsecondary counselors,
college access professionals, nonprofit organizations, and consumer
groups.
``(b) Key Required Contents for Aid Offer.--The standard form
developed pursuant to subsection (a) shall be titled `Financial Aid
Offer' and shall include the following items in a consumer-friendly
manner that is simple and understandable, with costs listed first,
followed by grants and scholarships, clearly separated from each other
with separate headings:
``(1) Cost information.--
``(A) In general.--Information on the student's
estimated cost of attendance, including the following:
``(i) Direct costs.--The total cost of all
items described in section 472 that are billed
to the student by the institution or otherwise
required by the institution for enrollment,
including such total cost disaggregated by the
cost of each such item, including, as
determined under such section--
``(I) tuition and fees (and other
required expenses); and
``(II) housing and food for a student
electing institutionally owned or
operated food services or
institutionally owned or operated
housing.
``(ii) Indirect costs.--The total cost
(including such total cost disaggregated by the
cost of each item) as determined under section
472, of--
``(I) housing and food for a student
not electing institutionally owned or
operated food services and not living
in institutionally owned or operated
housing;
``(II) books, school supplies,
equipment, course materials, and rental
or purchase of a personal computer;
``(III) transportation; and
``(IV) any other item described in
such section and not described in
clause (i) determined to be necessary
by the institution.
``(B) The academic period covered by the financial
aid offer, and an explanation that the amount of
financial aid offered may differ--
``(i) for academic periods not covered by the
aid offer, such as a summer term or future
academic year; or
``(ii) by program.
``(C) An indication of whether cost and aid estimates
are based on full-time or part-time enrollment.
``(D) An indication, as applicable, about whether any
costs described in subparagraph (A)(i) which are
subject to change are--
``(i) estimated based on the previous year;
or
``(ii) set for the academic period indicated
in accordance with subparagraph (B).
``(2) Grants and scholarships.--The aggregate amount of
grants and scholarships, differentiated by source, that the
student does not have to repay, such as grant aid offered under
title IV, grant aid offered through other Federal programs,
grant aid offered by the institution, grant aid offered by the
State, and, if known, grant aid or scholarship from an outside
source to the student for such academic period, including a
disclosure that the grants and scholarships do not have to be
repaid, except that institutions shall be authorized to list
individual grants and scholarships by name at the discretion of
the institution.
``(3) Net price.--
``(A) In general.--The net price that the student, is
estimated to have to pay for the student to attend the
institution for such academic period, including the
following:
``(i) Minimum amount covered by student for
enrollment.--The net price of tuition and fees
(and other required expenses), which is equal
to--
``(I) the sum of the costs described
in paragraph (1)(A) that are required
for students (as determined under
paragraph (5)(B)) for the period
indicated in paragraph (1)(B); minus
``(II) the total amount of grant and
scholarship aid described in paragraph
(2) that is included in the financial
aid offer and available to the student
for the costs described in subclause
(I).
``(ii) Estimated annual net price of
attendance.--The estimated net price of
attendance, which is equal to--
``(I) the cost of attendance for the
student for the period indicated in
paragraph (1)(B); minus
``(II) the total amount of grant and
scholarship aid described in paragraph
(2).
``(B) Disclosure.--A disclosure that the estimated
annual net price of attendance as calculated under
subparagraph (A)(ii) is based on an estimate of the
total cost of attendance for the year and not
necessarily equivalent to the amount the student will
owe directly to the institution.
``(4) Loans.--
``(A) Information on any education loan offered
through any Federal or State program (including any
loan under part D or part E of title IV other than a
Federal Direct PLUS Loan) that the institution offers
for the student for the academic period covered by the
offer, which shall be made--
``(i) with clear use of the word `loan' to
describe the recommended loan amounts; and
``(ii) with clear labeling of subsidized and
unsubsidized loans.
``(B) If applicable, a disclosure that such loans
have to be repaid with interest.
``(C) Information on any other loan that the student
or parent has applied for and been approved for,
regardless of the source.
``(5) Student employment.--Information on work-study
employment opportunities (including work-study programs under
part C of title IV, institutional work-study programs, or State
work-study programs), including--
``(A) the maximum annual amount the student may earn
through the program; and
``(B) a disclosure that any amounts received pursuant
to such a program may be--
``(i) subject to the availability of
qualified employment opportunities upon
students enrollment; and
``(ii) disbursed over time as earned by the
student.
``(6) Process for accepting, adjusting, or declining aid and
next steps.--
``(A) The deadlines and a summary of the process
(including the next steps) for--
``(i) accepting the financial aid offered;
``(ii) adjusting the amount of aid offered;
and
``(iii) declining the aid offered.
``(B) Information on when and how costs described in
paragraph (1)(A)(i) must be paid, including a clear
indication of whether each such cost is required or
optional for the student.
``(C) A disclosure that verification of information
provided on the Free Application for Federal Student
Aid may require the student to submit further
documentation.
``(D) Information about where a student or the
student's family can seek additional information
regarding the financial aid offered, including contact
information for the institution's financial aid office
and the Department of Education's website on financial
aid.
``(E) Information about where a student or a
student's family can seek additional information on
college costs and student outcomes, including a link to
the Department of Education's College Scorecard website
(or successor website).
``(7) Net price calculator.--A link to the universal net
price calculator website described in section 132(c)(4).
``(8) Quick reference box.--A standardized quick reference
box to enable students to compare information on the costs and
financial aid described in paragraphs (1) and (2). The quick
reference box shall include the following two data elements:
``(A) The minimum amount covered by the student for
enrollment described in paragraph (3)(A)(i).
``(B) The estimated annual net price of attendance
described in paragraph (3)(A)(ii).
``(9) Additional information.--Any other information the
Secretary, in consultation with the heads of relevant Federal
agencies, including the Secretary of the Treasury and the
Director of the Bureau of Consumer Financial Protection,
determines necessary, based on the results and input of the
consumer testing under subsection (h)(2), and limited only to
effectively communicating college costs and financial aid
eligibility to students and parents.
``(c) Other Required Contents for Aid Offer.--The standard form
developed under subsection (a) shall include, in addition to the
information described in subsection (b), the following information in a
concise format determined by the Secretary, in consultation with the
heads of relevant Federal agencies and the individuals and entities
described in subsection (a):
``(1) Additional options and potential resources for paying
for the amount listed in subsection (b)(3), such as tuition
payment plans.
``(2) The following information relating to private student
loans and Federal Direct PLUS Loans:
``(A) A disclosure that Federal Direct PLUS Loans,
private education loans, or income share agreements may
be available to cover remaining need, except that the
institution may not include Federal Direct PLUS Loans
or private education loans other than under the
conditions described in subsection (b)(4)(C) and must
include a disclosure that such loans--
``(i) are subject to an additional
application process; and
``(ii) must be repaid by the borrower or
their co-signer, and may not be eligible for
the benefits available for Federal Direct Loans
or Federal Direct Unsubsidized Loans.
``(B) A statement that students considering borrowing
to cover the cost of attendance should consider
available Federal student loans prior to applying for
private education loans, including an explanation that
Federal student loans offer generally more favorable
terms and beneficial repayment options than private
loans.
``(d) Additional Formatting Requirements for Financial Aid Offer.--
The financial aid offer shall meet the following requirements:
``(1) Clearly distinguish between the aid offered under
paragraphs (2) and (4) of subsection (b), by including a
subtotal for the aid offered in each of such paragraphs and by
refraining from commingling the different types of aid
described in such paragraphs.
``(2) Use standard terminology and definitions, as described
in subsection (f)(1), and use plain language where possible.
``(3) Use the standard aid offer described in subsection
(f)(2).
``(e) Additional Requirements for Electronic Financial Aid Offers.--
In the case of an electronic financial aid offer that includes a
requirement that a student confirm receipt of such offer, such
confirmation may not be considered an acceptance or rejection of such
offer.
``(f) Supplemental Content and Disclosures to Be Provided.--In
addition to the standard form described under subsection (a),
institutions shall provide, in supplemental documents or through easily
accessible weblinks to the institution's portal or a website, the
following:
``(1) The renewability requirements and conditions under
which the student can expect to receive similar amounts of such
financial aid for each academic period the student is enrolled
at the institution.
``(2) Whether the aid offer may change if aid from outside
sources is applied after the student receives the initial aid
offer, and, if applicable, how that aid will change.
``(3) If loans under part D or part E of title IV or other
education loans offered through Federal programs are included--
``(A) a disclosure that the interest rates and fees
on such loans are set annually and affect total cost
over time, and a link to any website that includes
current information on interest rates and fees; and
``(B) if an institution's recommended Federal student
loan aid offered in subsection (b)(4) is less than the
Federal maximum available to the student, the
institution shall provide additional information on
Federal student loans including the types and amounts
for which the student is eligible and the process for
requesting higher loan amounts if offered loan amounts
were included.
``(4) If the institution opts not to disclose other items
described in subsection (b)(1)(A)(ii)(V) as part of the aid
offer, a list of such other items and the allowance amount for
each such item.
``(g) Standard Information Established by Secretary.--
``(1) Standard terminology.--Not later than 3 months after
the date of enactment of the College Cost Reduction Act, the
Secretary, in consultation with the heads of relevant Federal
agencies, and the individuals and entities described in
subsection (a) shall establish standard terminology and
definitions for the terms described in subsection (b).
``(2) Standard form.--
``(A) In general.--The Secretary of Education shall
develop multiple draft financial aid offers for
consumer testing, carry out consumer testing for such
forms, and establish a finalized standard financial aid
offer in accordance with--
``(i) the process established under
subsection (h); and
``(ii) the requirements of this section.
``(B) Separate financial aid offers.--The Secretary
shall develop separate financial aid offers for--
``(i) undergraduate students; and
``(ii) graduate students.
``(h) Additional Information; Removal of Information.--Nothing in
this section shall preclude an institution from--
``(1) supplementing the financial aid offer with additional
information, provided that such information utilizes the same
standard terminology identified in subsection (f)(1) and does
not misrepresent costs, financial aid offered, or net price; or
``(2) deleting a required item or disclosure if--
``(A) the student is ineligible for such aid;
``(B) the institution does not participate in the aid
program or type;
``(C) the aid offer does not include the aid program
or type; or
``(D) a cost of attendance item is not applicable to
the student.
``(i) Development of Financial Aid Offer.--
``(1) Draft form.--Not later than 9 months after the date of
enactment of the College Cost Reduction Act, the Secretary of
Education, in consultation with the heads of relevant Federal
agencies and the individuals and entities described in
subsection (a) shall design and produce multiple draft
financial aid offers for consumer testing with postsecondary
students or prospective students. In developing that form, the
Secretary shall ensure that--
``(A) the headings described in paragraphs (1)
through (4) of subsection (b) are in the same font,
appears in the same order, and are displayed
prominently on the financial aid offer, such that none
of that information is inappropriately omitted or
deemphasized;
``(B) the other information required under subsection
(b) appears in a standard format and design on the
financial aid offer; and
``(C) the institution may include a logo or brand
alongside the title of the financial aid offer.
``(2) Consumer testing.--
``(A) In general.--Not later than 9 months after the
date of enactment of the College Cost Reduction Act,
the Secretary, in consultation with the heads of
relevant Federal agencies, shall establish a process to
submit the financial aid offer drafts developed under
paragraph (1) for consumer testing among
representatives of students (including low-income
students, first generation college students, adult
students, veterans, servicemembers, and prospective
students), students' families (including low-income
families, families with first generation college
students, and families with prospective students),
institutions of higher education, secondary school and
postsecondary counselors, and nonprofit consumer
groups.
``(B) Length of consumer testing.--The Secretary
shall ensure that the consumer testing under this
paragraph lasts not longer than 8 months after the
process for consumer testing is developed under
subparagraph (A).
``(C) Nonapplication of paperwork reduction act.--
Subchapter I of chapter 35 of title 44, United States
Code, shall not apply to the consumer testing process
under this paragraph.
``(3) Final form.--
``(A) In general.--The results of consumer testing
under paragraph (2) shall be used in the development of
the finalized standard financial aid offer required
under subsection (f)(2).
``(B) Reporting requirement.--Not later than 3 months
after the date on which the consumer testing under
paragraph (2) concludes, the Secretary shall submit to
Congress, and publish on its website--
``(i) the final standard financial aid offer;
and
``(ii) a report detailing the results of such
testing, including whether the Secretary added,
modified, or moved any additional items to the
standard financial aid offer pursuant to
subsection (b)(6).
``(4) Authority to modify.--The Secretary may modify or
remove the definitions, terms, formatting, and design of the
financial aid offer based on the results of consumer testing
required under this subsection and before finalizing the form,
or in subsequent consumer testing. The Secretary may also
recommend additional changes to Congress.
``(j) Cost of Attendance Defined.--In this section, the term `cost of
attendance' has the meaning given such term in section 472.
``(k) Use of Mandatory Financial Aid Offer and Terms.--
``(1) In general.--Notwithstanding any other provision of
law, each institution of higher education that receives Federal
financial assistance under this Act shall--
``(A) use the financial aid offer developed under
this section in providing paper, mobile-optimized
offers, or other electronic offers to all students who
apply for aid and are accepted at the institution; and
``(B) use the standard terminology and definitions
developed by the Secretary under subsection (f)(1) for
all communications from the institution related to
financial aid offers.
``(2) Effective date.--The requirements under this section
shall take effect on the first date on which the Secretary
releases the Free Application for Federal Student Aid for the
applicable award year associated with that application, if such
date occurs not less than 1 year after the Secretary of
Education finalizes the standard terminology and form developed
in accordance with this section.
``(3) Administrative procedures.--Notwithstanding any other
provision of law, the Secretary shall not have the authority to
prescribe regulations to carry out this section, including with
respect to the definition of `income share agreement' or
`private education loan' (as such term is defined in section
140(a) of the Truth in Lending Act (15 U.S.C. 1650(a))).''.
(b) Relationship to Existing Law.--Section 484 of the Higher
Education Opportunity Act (20 U.S.C. 1092 note) is amended by adding at
the end the following:
``(c) Sunset.--The authority of the Secretary to carry out this
section shall terminate on the date on which the standard form for
financial aid offers under section 124 of the Higher Education Act of
1965 (20 U.S.C. 1001 et seq.) is released.''.
SEC. 112. COLLEGE SCORECARD WEBSITE.
(a) College Scorecard Website.--
(1) Definitions; conforming amendments.--Section 132 of the
Higher Education Act of 1965 (20 U.S.C. 1015a(a)) is amended--
(A) by amending subsection (a) to read as follows:
``(a) Definitions.--In this section:
``(1) College scorecard website.--The term `College Scorecard
website' means the College Scorecard website required under
subsection (c) and includes any successor website.
``(2) Cost of attendance.--The term `cost of attendance' has
the meaning given such term in section 472.
``(3) Total net price required for completion.--The term
`total net price required for completion' means, with respect
to the period of completion of a program of study--
``(A) the sum of the required costs described in
section 124(b)(3)(A)(i)(I) charged to a student for
such period of completion; minus
``(B) the total amount of grant and scholarship aid
described in paragraph (2) of section 124(b) that is
available to the student for the costs described in
subparagraph (A) for completion of a program of
study.'';
(B) by striking subsections (b) through (g); and
(C) by redesignating subsection (h) as subsection
(b).
(2) Scorecard authorized.--Section 132 of the Higher
Education Act of 1965 (20 U.S.C. 1015a) is further amended--
(A) by striking subsection (i); and
(B) by inserting after subsection (b) (as so
redesignated) the following:
``(c) Consumer Information.--
``(1) Availability of information for title iv institutions
and programs.--Not later than 18 months after the date of the
enactment of the College Cost Reduction Act, the Secretary
shall make publicly available on the College Scorecard website
the following aggregated information with respect to each
institution of higher education and each program of study at
such institution, as applicable, that participates in a program
under title IV:
``(A) A link to the website of the institution.
``(B) A link to the net price calculator for such
institution.
``(C) A link to the website of the institution
containing campus safety data with respect to such
institution.
``(D) The geographic location of the institution.
``(E) Information on the type of institution,
including sector, size, predominant and highest
credential awarded, research intensity, programs of
study offered, and other characteristics of the
institution.
``(F) Information on student enrollment, including
the number and percentage of students enrolled full-
time, less than full-time, and enrolled in distance
education.
``(G) Information on student progression and
completion, including time to credential and rates of
withdrawal, retention, transfer, or completion.
``(H) Information on college costs and financial aid,
including average, median, minimum, and maximum values
of--
``(i) the cost of attendance, including such
cost disaggregated by the costs described in
paragraphs (1) through (14) of section 472(a);
``(ii) the grants and scholarships received
by students at the institution and the number
and percentage of such students receiving such
grants and scholarships, disaggregated by
source and whether such aid is need-based,
merit-based, an athletic scholarship, or other
type of grant or scholarship; and
``(iii) the total net price required for
completion for students who received Federal
financial assistance described in paragraph
(2)(I).
``(I) Information on student debt and repayment,
including--
``(i) the average, median, minimum, and
maximum amounts borrowed by students under
title IV; and
``(ii) information with respect to repayment
of loans made under title IV, including
borrower-based repayment rates, dollar-based
repayment rates, and time spent in repayment.
``(J) Information on the earnings of students who
received Federal financial assistance described in
paragraph (2)(I), including the average, median,
minimum, and maximum values of--
``(i) with respect to students who complete a
program of study in an award year--
``(I) the annual earnings of such
students; and
``(II) the value-added earnings of
such students; and
``(ii) with respect to students who do not
complete a program of study in an award year,
the annual earnings of such students.
``(2) Disaggregated information.--The Secretary shall ensure
the information described in paragraph (1) is disaggregated, as
applicable, by the following student characteristics:
``(A) Financial circumstances including--
``(i) household income categories, as
determined by students' adjusted gross income,
family size, and poverty line (as defined in
section 401(a)); and
``(ii) student aid index categories, as
determined by the Secretary.
``(B) Sex.
``(C) Race and ethnicity.
``(E) Classification as a student with a disability.
``(F) Enrollment status, including part-time or full-
time enrollment, and status as a distance education
student.
``(G) Status as an in-district, in-State, or out-of-
State student.
``(H) Status as an international student.
``(I) Status as a recipient of Federal financial
assistance, including--
``(i) a Pell Grant;
``(ii) a loan made under title IV; and
``(iii) assistance described in section
131(f)(4) administered, sponsored, or supported
by the Department of Defense or the Department
of Veterans Affairs.
``(J) Status as a participant in a program described
in section 116(b)(3)(A)(ii) of the Workforce Innovation
and Opportunity Act (29 U.S.C. 3131(b)(3)(A)(ii)).
``(3) Institutional and program comparison.--The Secretary
shall include on the College Scorecard website a method for
users to easily compare institutions and programs, including in
a manner that allows for such comparison based on--
``(A) the institutional and program information
described in paragraph (1); and
``(B) the student characteristics described in
paragraph (2).
``(4) Universal net price calculator.--
``(A) Establishment.--Not later than 18 months after
the date of the enactment of this paragraph, the
Secretary shall establish, on a dedicated website of
the Department, a Universal Net Price Calculator that
provides to an individual, with respect to each
institution of higher education and program of study
offered by such institution--
``(i) the information described in section
124, including the amounts described in clauses
(i) and (ii) of subsection (b)(3) of such
section; and
``(ii) the total net price required for
completion as defined under section 132(a).
``(B) Universal net price calculator inputs.--
``(i) In general.--Except as provided in
clause (ii), the information required under
subparagraph (A) shall be generated based on a
single set of questions developed by the
Secretary for purposes of capturing the
information specified in paragraph (2) and
using the data elements described in section
132(f)(2)(C)(ii).
``(ii) FAFSA-based estimate.--When an
individual submits a Free Application for
Federal Student Aid described in section 483,
the information required under subparagraph (A)
shall be automatically generated based solely
on the contents of such application and the
data elements described in section
132(f)(2)(C)(ii).
``(C) Integration with other federal financial aid
resources.--The Secretary shall ensure that a website
link or other means of accessing the Universal Net
Price Calculator is included on--
``(i) the College Scorecard website; and
``(ii) the FAFSA website.
``(D) Relationship to early estimator tool.--
Beginning on the date on which the Universal Net Price
Calculator becomes operational, the Secretary shall
remove from the FAFSA website the electronic estimator
maintained pursuant to section 485E(b)(4).
``(5) Updates.--
``(A) Data.--The Secretary shall update the Universal
Net Price Calculator Website and College Scorecard
website not less than annually.
``(B) Technology and format.--The Secretary shall
regularly assess the format and technology of the
College Scorecard website and make any changes or
updates that the Secretary considers appropriate.
``(6) Consumer testing.--In developing and maintaining the
College Scorecard website, the Secretary, in consultation with
appropriate departments and agencies of the Federal
Government--
``(A) not later than 6 months after the date of the
enactment of the College Cost Reduction Act, and not
less than once every 3 years thereafter, shall conduct
consumer testing with appropriate persons, including
current and prospective college students, family
members of such students, institutions of higher
education, and experts, to ensure that the College
Scorecard website is usable and easily understandable
and provides useful and relevant information to
students and families; and
``(B) prominently shall display on such website in
simple, understandable, and unbiased terms for the most
recent academic year for which satisfactory data is
available, the information described in paragraphs (1)
and (2) that was determined to be useful and relevant
to students and families based on the consumer testing
described in subparagraph (A) for each institution and
program of study (as applicable).
``(7) Interagency coordination.--The Secretary, in
consultation with each appropriate head of a department or
agency of the Federal Government, shall ensure, to the greatest
extent practicable, that any information related to higher
education that is published by such department or agency is
consistent with the information published on the College
Scorecard website.
``(8) Data collection and duplicated reporting.--
Notwithstanding any other provision of this section, to the
extent that another provision of this section requires the same
reporting or collection of data that is required under this
Act, an institution of higher education, or the Secretary or
Commissioner, shall use the reporting or data required under
this subsection to satisfy both requirements.
``(9) Data privacy.--
``(A) In general.--The Secretary shall ensure any
information made available under this section is made
available in accordance with the privacy laws described
in section 132(f)(1)(C)(iv).
``(B) Small institutions and program of study.--For
purposes of publishing the information described in
paragraphs (1) and (2), for any year for which the
number of students is determined by the Secretary to be
of insufficient size to maintain the privacy of student
data , the Secretary shall--
``(i) aggregate up to 4 years of additional
data for such program of study to obtain data
for a sufficient number of students to maintain
student privacy;
``(ii) in the case of a program of study, if
the method described in clause (i) is
insufficient to maintain student privacy,
aggregate data for students who completed or
who were enrolled in, as applicable, similar
program of study of the institution to obtain
data for a sufficient number of students to
maintain student privacy; and
``(iii) in the case of a program of study, if
the methods described in clauses (i) and (ii)
are insufficient to maintain student privacy,
or additional data described in such clauses is
not available or can not be aggregated,
aggregate data with respect to all students who
completed or were enrolled in, as applicable,
any program of study of the institution of the
same credential level, in lieu of data specific
to students in such program of study.''.
(b) Conforming Amendments.--The Higher Education Act of 1965 (20
U.S.C. 1001 et seq.), as amended by subsection (a) of this section, is
further amended by striking ``College Navigator'' each place it appears
and inserting ``College Scorecard''.
(c) References.--Any reference in any law (other than the Higher
Education Act of 1965 (20 U.S.C. 1001 et seq.)), regulation, document,
record, or other paper of the United States to the College Navigator
website shall be considered to be a reference to the College Scorecard
website.
SEC. 113. POSTSECONDARY STUDENT DATA SYSTEM.
Section 132 of the Higher Education Act of 1965 (20 U.S.C. 1015a) is
further amended--
(1) by redesignating subsections (j) and (k) as subsections
(d) and (e), respectively;
(2) by redesignating subsection (l) as subsection (g); and
(3) by inserting after subsection (e), as so redesignated,
the following:
``(f) Postsecondary Student Data System.--
``(1) In general.--
``(A) Establishment of system.--Not later than 3
years after the date of enactment of the College Cost
Reduction Act, the Commissioner of the National Center
for Education Statistics (referred to in this
subsection as the `Commissioner') in consultation with
the Director of the Institute of Education Sciences
(referred to as `the Director') shall develop and
maintain a secure and privacy-protected postsecondary
student-level data system in order to--
``(i) accurately evaluate student enrollment
patterns, progression, completion, and
postcollegiate outcomes, and higher education
costs and financial aid;
``(ii) assist with transparency,
institutional improvement, and analysis of
Federal aid programs;
``(iii) provide accurate, complete, and
customizable information for students and
families making decisions about postsecondary
education; and
``(iv) to the extent practicable, reduce the
reporting burden on institutions of higher
education in accordance with section 111 of the
College Cost Reduction Act.
``(B) Avoiding duplicate reporting.--Notwithstanding
any other provision of this section, to the extent that
another provision of this section requires the same
reporting or collection of data that is required under
this subsection, an institution of higher education, or
the Secretary or Commissioner, shall use the reporting
or data required for the postsecondary student data
system under this subsection to satisfy both
requirements.
``(C) Development process.--In developing the
postsecondary student data system described in this
subsection, the Commissioner, in consultation with the
Director, shall--
``(i) focus on the needs of--
``(I) users of the data system; and
``(II) entities, including
institutions of higher education,
reporting to the data system;
``(ii) take into consideration, to the extent
practicable--
``(I) the guidelines outlined in--
``(aa) the `United States Web
Design Standards' maintained by
the General Services
Administration; and
``(bb) the `Digital Services
Playbook' and `TechFAR Handbook
for Procuring Digital Services
Using Agile Processes' of the
United States Digital Service;
and
``(II) the relevant successor
documents or recommendations of such
guidelines;
``(iii) use modern, relevant privacy- and
security-enhancing technology, and enhance and
update the data system as necessary to carry
out the purpose of this subsection;
``(iv) ensure data privacy and security is
consistent with any relevant Federal law
relating to privacy or data security,
including--
``(I) the requirements of subchapter
II of chapter 35 of title 44, United
States Code, specifying security
categorization under the Federal
Information Processing Standards or any
relevant successor of such standards;
``(II) security requirements that are
consistent with the Federal agency
responsibilities in section 3554 of
title 44, United States Code, or any
relevant successor of such
responsibilities; and
``(III) security requirements,
guidelines, and controls consistent
with cybersecurity standards and best
practices developed by the National
Institute of Standards and Technology,
including frameworks, consistent with
section 2(c) of the National Institute
of Standards and Technology Act (15
U.S.C. 272(c)), or any relevant
successor of such frameworks;
``(v) follow Federal data minimization
practices to ensure only the minimum amount of
data is collected to meet the system's goals,
in accordance with Federal data minimization
standards and guidelines developed by the
National Institute of Standards and Technology;
and
``(vi) provide notice to students outlining
the data included in the system and how the
data are used.
``(D) Limitation.--The data system developed under
this subsection may only include data with respect to--
``(i) students receiving--
``(I) Federal financial assistance
under title IV of this Act; or
``(II) assistance described in
section 131(f)(4) administered,
sponsored, or supported by the
Department of Defense or the Department
of Veterans Affairs; and
``(ii) participants in a program described in
section 116(b)(3)(A)(ii) of the Workforce
Innovation and Opportunity Act (29 U.S.C.
3131(b)(3)(A)(ii)).
``(2) Data elements.--
``(A) In general.--Not later than 3 years after the
date of enactment of the College Cost Reduction Act,
the Commissioner, in consultation with the
Postsecondary Student Data System Advisory Committee
and the Director, established under subparagraph (B),
shall determine--
``(i) the data elements to be included in the
postsecondary student data system, in
accordance with subparagraphs (C) and (D); and
``(ii) how to include the data elements
required under subparagraph (C), and any
additional data elements selected under
subparagraph (D), in the postsecondary student
data system.
``(B) Postsecondary student data system advisory
committee.--
``(i) Establishment.--Not later than 1 year
after the date of enactment of the College Cost
Reduction Act, the Commissioner, in
consultation with the Director, shall establish
a Postsecondary Student Data System Advisory
Committee (referred to in this subsection as
the `Advisory Committee'), whose members shall
include--
``(I) the Chief Privacy Officer of
the Department or an official of the
Department delegated the duties of
overseeing data privacy at the
Department;
``(II) the Chief Security Officer of
the Department or an official of the
Department delegated the duties of
overseeing data security at the
Department;
``(III) representatives of diverse
institutions of higher education, which
shall include equal representation
between 2-year and 4-year institutions
of higher education, and from public,
nonprofit, and proprietary institutions
of higher education, including
minority-serving institutions;
``(IV) representatives from State
higher education agencies, entities,
bodies, or boards;
``(V) representatives of
postsecondary students;
``(VI) representatives from relevant
Federal agencies;
``(VII) individuals with expertise in
data privacy and security;
``(VIII) the individual within a
State responsible for administering the
statewide, longitudinal data system
described in section 208 of the
Education Sciences Reform Act of 2002
(20 U.S.C. 9607(a)); and
``(IX) other stakeholders (including
individuals with consumer protection
and postsecondary education research).
``(ii) Requirements.--The Commissioner,
working with the Director, shall ensure that
the Advisory Committee--
``(I) adheres to all requirements
under chapter 10 of title 5, United
States Code (commonly known as the
`Federal Advisory Committee Act');
``(II) establishes operating and
meeting procedures and guidelines
necessary to execute its advisory
duties; and
``(III) is provided with appropriate
staffing and resources to execute its
advisory duties.
``(C) Required data elements.--The data elements in
the postsecondary student data system shall include the
following:
``(i) Student-level data elements necessary
to calculate the information within the surveys
designated by the Commissioner as `student-
related surveys' in the Integrated
Postsecondary Education Data System (IPEDS), as
such surveys are in effect on the day before
the date of enactment of the College Cost
Reduction Act, except that in the case that
collection of such elements would conflict with
the prohibition under subparagraph (F), such
elements in conflict with such prohibition
shall be included in the aggregate instead of
at the student level.
``(ii) Student-level data elements reported
by institutions in accordance with section
668.408 of title 34, Code of Federal
Regulations, as in effect on July 1, 2024.
``(iii) Student-level data elements necessary
to allow for reporting student enrollment,
persistence, progression (including credit
accumulation) retention, transfer, completion,
and time and credits to credential measures for
all credential levels separately (including
certificate, associate, baccalaureate, and
advanced degree levels), within and across
institutions of higher education (including
across all categories of institution level,
control, and predominant degree awarded). The
data elements shall allow for reporting about
all such data disaggregated by the following
categories:
``(I) Enrollment status as a first-
time student, recent transfer student,
or other nonfirst-time student.
``(II) Attendance intensity, whether
full-time or part-time.
``(III) Credential-seeking status, by
credential level (including noncredit-
seeking and noncredit credentials).
``(IV) Race or ethnicity, in a manner
that captures all the racial groups
specified in the most recent American
Community Survey of the Bureau of the
Census.
``(V) Age intervals.
``(VI) Sex.
``(VII) Status as a first generation
college student (as defined in section
402A(h)).
``(VIII) Economic status.
``(IX) Measures related to college
readiness, including participation in
postsecondary remedial coursework or
gateway course completion.
``(X) Program of study.
``(XI) Status as an online education
student, whether exclusively or
partially enrolled in online education.
``(XII) Military or veteran benefit
status (as determined based on receipt
of veteran's education benefits, as
defined in section 480(c)).
``(XIII) Federal Pell Grant recipient
status under section 401 and Federal
loan recipient status under title IV.
``(XIV) Status as a participant in a
program described in section
116(b)(3)(A)(ii) of the Workforce
Innovation and Opportunity Act (29
U.S.C. 3131(b)(3)(A)(ii)).
``(D) Reevaluation.--Not less than once every 3 years
after the implementation of the postsecondary student
data system described in this subsection, the
Commissioner, in consultation with the Advisory
Committee described in subparagraph (B) and working
with the Director, shall report to Congress the data
elements included in the postsecondary student data
system and recommend any additional data elements to be
included in such system.
``(E) Prohibitions.--The postsecondary student data
system shall not include individual health data
(including data relating to physical health or mental
health), student discipline records or data, elementary
and secondary education data, an exact address, course
grades, postsecondary entrance examination results,
political affiliation, religion, or any other data in
the postsecondary student data system not described in
this subsection.
``(3) Periodic matching with other federal data systems.--
``(A) Data sharing agreements.--
``(i) In general.--The Commissioner, in
consultation with the Director, shall ensure
secure and privacy-protected periodic data
matches by entering into data sharing
agreements with each of the following Federal
agencies and offices:
``(I) The Secretary of the Treasury
and the Commissioner of the Internal
Revenue Service, in order to calculate
aggregate program- and institution-
level earnings of postsecondary
students described in subparagraph
(B)(ii).
``(II) The Secretary of Defense, in
order to assess the use of
postsecondary educational benefits and
the outcomes of servicemembers who are
receiving veteran's education benefits
(as defined in section 480(c)).
``(III) The Secretary of Veterans
Affairs, in order to assess the use of
postsecondary educational benefits and
outcomes of veterans who are receiving
veteran's education benefits (as
defined in section 480(c)).
``(IV) The Director of the Bureau of
the Census, in order to assess the
employment outcomes of former
postsecondary education students
described in paragraph (1)(D).
``(V) The Chief Operating Officer of
the Office of Federal Student Aid, in
order to analyze the use of
postsecondary educational benefits
provided under this Act.
``(VI) The Commissioner of the Social
Security Administration, in order to
evaluate labor market outcomes of
former postsecondary education students
described in paragraph (1)(D).
``(VII) The Secretary of Health and
Human Services, in order to evaluate
the wages of former postsecondary
education students described in
paragraph (1)(D).
``(ii) Data sharing agreements.--The heads of
Federal agencies and offices described under
clause (i) shall enter into data sharing
agreements with the Commissioner to ensure
secure and privacy-protected periodic data
matches as described in this paragraph.
``(B) Categories of data.--The Commissioner, in
consultation with the Director, shall, at a minimum,
seek to ensure that the secure and privacy-protected
periodic data matches described in subparagraph (A)
permit consistent reporting of the following categories
of data for students described in paragraph (1)(D) who
completed a program of study and who did not complete a
program of study:
``(i) Enrollment, retention, transfer, and
completion outcomes.
``(ii) Financial indicators for postsecondary
students receiving Federal grants and loans,
including grant and loan aid by source,
cumulative student debt, loan repayment status,
and repayment plan.
``(iii) Post-completion outcomes, including
earnings and employment (including industry,
occupation, and location of employment, and
further education, by program of study and
credential level) and as measured at time
intervals appropriate to the credential sought
and earned.
``(C) Periodic data match streamlining and
confidentiality.--
``(i) Streamlining.--In carrying out the
secure and privacy-protected periodic data
matches under this paragraph, the Commissioner
shall--
``(I) ensure that such matches are
not continuous, but occur only
periodically at appropriate intervals,
as determined by the Commissioner to
meet the goals of subparagraph (A); and
``(II) seek to--
``(aa) streamline the data
collection and reporting
requirements for institutions
of higher education;
``(bb) minimize duplicative
reporting across or within
Federal agencies or
departments, including
reporting requirements
applicable to institutions of
higher education under the
Workforce Innovation and
Opportunity Act (29 U.S.C. 3101
et seq.) and the Carl D.
Perkins Career and Technical
Education Act of 2006;
``(cc) protect student
privacy; and
``(dd) streamline the
application process for student
loan benefit programs available
to borrowers based on data
available from different
Federal data systems.
``(ii) Review.--Not less often than once
every 3 years after the establishment of the
postsecondary student data system under this
subsection, the Commissioner, in consultation
with the Advisory Committee and the Director,
shall review methods for streamlining data
collection from institutions of higher
education and minimizing duplicative reporting
within the Department and across Federal
agencies that provide data for the
postsecondary student data system.
``(iii) Confidentiality.--The Commissioner
shall ensure that any periodic matching or
sharing of data through periodic data system
matches established in accordance with this
paragraph--
``(I) complies with the security and
privacy protections described in
paragraph (1)(C)(iv) and other Federal
data protection protocols;
``(II) follows industry best
practices commensurate with the
sensitivity of specific data elements
or metrics;
``(III) does not result in the
creation of a single standing, linked
Federal database at the Department that
maintains the information reported
across other Federal agencies; and
``(IV) discloses to postsecondary
students what data are included in the
data system and periodically matched
and how the data are used.
``(iv) Correction.--The Commissioner, in
consultation with the Advisory Committee and
Director, shall establish a process for
students to request access to only their
personal information for inspection and request
corrections to inaccuracies in a manner that
protects the student's personally identifiable
information. The Commissioner shall respond in
writing to every request for a correction from
a student.
``(4) Publicly available information.--
``(A) In general.--The Commissioner shall make the
summary aggregate information described in subparagraph
(C), at a minimum, publicly available through a user-
friendly consumer information website and analytic tool
for institutional and research use that--
``(i) provides appropriate mechanisms for
users to customize and filter information by
institutional and student characteristics;
``(ii) allows users to build summary
aggregate reports of information, including
reports that allow comparisons across multiple
institutions and programs, subject to
subparagraph (B);
``(iii) uses appropriate statistical
disclosure limitation techniques necessary to
ensure that the data released to the public
cannot be used to identify specific
individuals; and
``(iv) provides users with appropriate
contextual factors to make comparisons, which
may include national median figures of the
summary aggregate information described in
subparagraph (C).
``(B) No personally identifiable information
available.--The summary aggregate information described
in this paragraph shall not include personally
identifiable information.
``(C) Summary aggregate information available.--The
summary aggregate information described in this
paragraph shall, at a minimum, include each of the
following for each institution of higher education:
``(i) Measures of student access, including--
``(I) admissions selectivity and
yield; and
``(II) enrollment, disaggregated by
each category described in paragraph
(2)(C)(iii).
``(ii) Measures of student progression,
including retention rates and persistence
rates, disaggregated by each category described
in paragraph (2)(C)(iii).
``(iii) Measures of student completion,
including--
``(I) transfer rates and outcomes,
completion rates, and time and credits
to credential, disaggregated by each
category described in paragraph
(2)(C)(iii); and
``(II) number of completions,
disaggregated by each category
described in paragraph (2)(C)(iii).
``(iv) Measures of student costs, including--
``(I) tuition, required fees, cost of
attendance, grants and scholarships,
net price, and unmet need disaggregated
by in-State tuition or in-district
tuition status (if applicable), direct
and indirect costs, program of study
(if applicable), and credential level;
and
``(II) typical grant amounts and loan
amounts received by students reported
separately from Federal, State, local,
institutional, employers, and other
sources, and cumulative debt,
disaggregated by--
``(aa) each category
described in paragraph
(2)(C)(iii); and
``(bb) completion status.
``(v) Measures of postcollegiate student
outcomes, including return on investment,
employment rates, earnings, loan repayment and
default rates, and further education rates.
These measures shall--
``(I) be disaggregated by--
``(aa) each category
described in paragraph
(2)(C)(iii); and
``(bb) completion status; and
``(II) be measured immediately after
leaving postsecondary education and at
time intervals appropriate to the
credential sought or earned.
``(D) Development criteria.--In developing the method
and format of making the information described in this
paragraph publicly available, the Commissioner shall--
``(i) focus on the needs of the users of the
information, which will include students,
families of students, potential students,
researchers, and other consumers of education
data;
``(ii) take into consideration, to the extent
practicable, the guidelines described in
paragraph (1)(C)(ii)(I), and relevant successor
documents or recommendations of such
guidelines;
``(iii) use modern, relevant technology and
enhance and update the postsecondary student
data system with information, as necessary to
carry out the purpose of this paragraph;
``(iv) ensure data privacy and security in
accordance with standards and guidelines
developed by the National Institute of
Standards and Technology, and in accordance
with any other Federal law relating to privacy
or security, including complying with the
requirements of subchapter II of chapter 35 of
title 44, United States Code, specifying
security categorization under the Federal
Information Processing Standards, and security
requirements, and setting of National Institute
of Standards and Technology security baseline
controls at the appropriate level; and
``(v) conduct consumer testing to determine
how to make the information as meaningful to
users as possible.
``(5) Permissible disclosures of data.--
``(A) Data reports and queries.--
``(i) In general.--Not later than 3 years
after the date of enactment of the College Cost
Reduction Act, the Commissioner in consultation
with the Director, shall develop and implement
a secure and privacy-protected process for
making student-level, nonpersonally
identifiable information, with direct
identifiers removed, from the postsecondary
student data system available for vetted
research and evaluation purposes approved by
the Commissioner in a manner compatible with
practices for disclosing National Center for
Education Statistics restricted-use survey data
as in effect on the day before the date of
enactment of the College Cost Reduction Act, or
by applying other research and disclosure
restrictions to ensure data privacy and
security. Such process shall be approved by the
National Center for Education Statistics'
Disclosure Review Board (or successor body).
``(ii) Providing data reports and queries to
institutions and states.--
``(I) In general.--The Commissioner
shall provide feedback reports, at
least annually, to each institution of
higher education, each postsecondary
education system that fully
participates in the postsecondary
student data system, and each State
higher education body as designated by
the governor.
``(II) Feedback reports.--The
feedback reports provided under this
clause shall include program-level and
institution-level information from the
postsecondary student data system
regarding students who are associated
with the institution or, for State
representatives, the institutions
within that State, on or before the
date of the report, on measures
including student mobility (including
transfer and completion rates) and
workforce outcomes, provided that the
feedback aggregate summary reports
protect the privacy of individuals.
``(III) Determination of content.--
The content of the feedback reports
shall be determined by the Commissioner
in consultation with the Advisory
Committee and the Director.
``(iii) Permitting state data queries.--The
Commissioner shall, in consultation with the
Advisory Committee and as soon as practicable,
create a process through which States may
submit lists of secondary school graduates
within the State to receive summary aggregate
outcomes for those students who enrolled at an
institution of higher education, including
postsecondary enrollment, retention and
transfer, and college completion, provided that
those data protect the privacy of individuals
and that the State data submitted to the
Commissioner are not stored in the
postsecondary education system.
``(iv) Regulations.--The Commissioner shall
promulgate regulations to ensure fair, secure
and privacy-protected, and equitable access to
data reports and queries under this paragraph.
``(B) Disclosure limitations.--In carrying out the
public reporting and disclosure requirements of this
subsection, the Commissioner shall use appropriate
statistical disclosure limitation techniques necessary
to ensure that the data released to the public cannot
include personally identifiable information or be used
to identify specific individuals.
``(C) Sale of data prohibited.--Data collected under
this subsection, including the public-use data set and
data comprising the summary aggregate information
available under paragraph (4), shall not be sold to any
third party by the Commissioner, including any
institution of higher education or any other entity.
``(D) Limitation on use by other federal agencies.--
``(i) In general.--The Commissioner shall not
allow any other Federal agency to use data
collected under this subsection for any purpose
except--
``(I) for vetted research and
evaluation conducted by the other
Federal agency, as described in
subparagraph (A)(i); or
``(II) for a purpose explicitly
authorized by an Act of Congress.
``(ii) Prohibition on limitation of
services.--The Secretary, or the head of any
other Federal agency, shall not use data
collected under this subsection to limit
services to students.
``(E) Law enforcement.--Personally identifiable
information collected under this subsection shall not
be used for any Federal, State, or local law
enforcement activity or any other activity that would
result in adverse action against any student or a
student's family.
``(F) Limitation of use for federal rankings or
summative rating system.--The comprehensive data
collection and analysis necessary for the postsecondary
student data system under this subsection shall not be
used by the Secretary or any Federal entity to
establish any Federal ranking system of institutions of
higher education or a system that results in a
summative Federal rating of institutions of higher
education.
``(G) Rule of construction.--Nothing in this
paragraph shall be construed to prevent the use of
individual categories of aggregate information to be
used for accountability purposes.
``(H) Rule of construction regarding commercial use
of data.--Nothing in this paragraph shall be construed
to prohibit third-party entities from using publicly
available information in this data system for
commercial use.
``(6) Submission of data.--
``(A) Required submission.--Each institution of
higher education participating in a program under title
IV, or the assigned agent of such institution, shall,
for each instructional program, and in accordance with
section 487(a)(17), collect, and submit to the
Commissioner, the data requested by the Commissioner to
carry out this subsection.
``(B) Voluntary submission.--Any institution of
higher education not participating in a program under
title IV may voluntarily participate in the
postsecondary student data system under this subsection
by collecting and submitting data to the Commissioner,
as the Commissioner may request to carry out this
subsection.
``(C) Personally identifiable information.--In
accordance with paragraph (2)(C)(i), if the submission
of an element of student-level data is prohibited under
paragraph (2)(F) (or otherwise prohibited by law), the
institution of higher education shall submit that data
to the Commissioner in the aggregate.
``(7) Unlawful willful disclosure.--
``(A) In general.--It shall be unlawful for any
person who obtains or has access to personally
identifiable information in connection with the
postsecondary student data system described in this
subsection to willfully disclose to any person (except
as authorized in this Act or by any Federal law) such
personally identifiable information.
``(B) Penalty.--Any person who violates subparagraph
(A) shall be subject to a penalty described under
section 3572(f) of title 44, United States Code, and
section 183(d)(6) of the Education Sciences Reform Act
of 2002 (20 U.S.C. 9573(d)(6)).
``(C) Employee of officer of the united states.--If a
violation of subparagraph (A) is committed by any
officer or employee of the United States, the officer
or employee shall be dismissed from office or
discharged from employment upon conviction for the
violation.
``(8) Data security.--The Commissioner shall produce and
update as needed guidance and regulations relating to privacy,
security, and access which shall govern the use and disclosure
of data collected in connection with the activities authorized
in this subsection. The guidance and regulations developed and
reviewed shall protect data from unauthorized access, use, and
disclosure, and shall include--
``(A) an audit capability, including mandatory and
regularly conducted audits;
``(B) access controls;
``(C) requirements to ensure sufficient data
security, quality, validity, and reliability;
``(D) confidentiality protection in accordance with
the applicable provisions of subchapter III of chapter
35 of title 44, United States Code;
``(E) appropriate and applicable privacy and security
protection, including data retention and destruction
protocols and data minimization, in accordance with the
most recent Federal standards developed by the National
Institute of Standards and Technology; and
``(F) protocols for managing a breach, including
breach notifications, in accordance with the standards
of National Center for Education Statistics.
``(9) Data collection.--The Commissioner shall ensure that
data collection, maintenance, and use under this subsection
complies with section 552a of title 5, United States Code.
``(10) Definitions.--In this subsection:
``(A) Institution of higher education.--The term
`institution of higher education' has the meaning given
the term in section 102.
``(B) Minority-serving institution.--The term
`minority-serving institution' means an institution of
higher education listed in section 371(a).
``(C) Personally identifiable information.--The term
`personally identifiable information' means personally
identifiable information within the meaning of section
444 of the General Education Provisions Act.''.
SEC. 114. DATABASE OF STUDENT INFORMATION PROHIBITED.
(a) In General.--Section 134(b) of the Higher Education Act of 1965
(20 U.S.C. 1015c(b)) is amended to read as follows:
``(b) Exception.--The provisions of subsection (a) shall not apply to
a system (or a successor system)--
``(1) that--
``(A) is necessary for the operation of programs
authorized by title II, IV, or VII; and
``(B) was in use by the Secretary, directly or
through a contractor, as of the day before the date of
enactment of the College Cost Reduction Act; or
``(2) required under section 132.''.
(b) Program Participation Agreements.--
(1) In general.--Paragraph (17) of section 487(a) of the
Higher Education Act of 1965 (20 U.S.C. 1094(a)) is amended to
read as follows:
``(17) The institution or the assigned agent of the
institution will collect and submit to the Commissioner for
Education Statistics data in accordance with section 132(f),
the non-student related surveys within the Integrated
Postsecondary Education Data System (IPEDS), or any other
Federal institution of higher education data collection effort
(as designated by the Secretary), in a timely manner and to the
satisfaction of the Secretary.''.
(2) Effective date.--The amendment made by paragraph (1)
shall take effect no later than 3 years after the date of
enactment of this Act.
(c) Reporting Burden.--The Secretary of Education and the
Commissioner for Education Statistics shall take such steps as are
necessary to ensure that the development and maintenance of the
postsecondary student data system required under section 132(f) of the
Higher Education Act of 1965, as added by section 113 of this Act,
occurs in a manner that, to the extent practicable, reduces the
reporting burden for entities that reported into the Integrated
Postsecondary Education Data System (IPEDS).
TITLE II--ACCESS AND AFFORDABILITY
PART A--FINANCIAL NEED
SEC. 201. AMOUNT OF NEED; COST OF ATTENDANCE; MEDIAN COST OF COLLEGE.
(a) Amount of Need.--Section 471 (20 U.S.C. 1087kk), as amended by
the FAFSA Simplification Act, is further amended by amending paragraph
(1) to read as follows:
``(1)(A) for award year 2024-2025, the cost of attendance of
such student; and
``(B) for award year 2025-2026 and each subsequent award
year, the median cost of college of the program of study of
such student, minus''.
(b) Cost of Attendance.--Section 472(c) (20 U.S.C. 1087ll(c)), as
amended by the FAFSA Simplification Act, is further amended by striking
``of the institution'' and inserting ``of each program of study at the
institution''.
(c) Median Cost of College.--Part F of title IV (20 U.S.C. 1087kk),
as amended by the FAFSA Simplification Act, is further amended by
inserting after section 472, as amended by subsection (b), the
following:
``SEC. 472A. DETERMINATION OF MEDIAN COST OF COLLEGE.
``For the purpose of this title, the term `median cost of college',
when used with respect to a program of study offered by one or more
institutions of higher education for an award year, means the median of
the cost of attendance (as defined in section 472) for the program of
study across all institutions of higher education offering such a
program for the preceding award year.''.
(d) Exemption of Certain Assets.--
(1) In general.--Section 480(f)(2) of the Higher Education
Act of 1965, as amended by the FAFSA Simplification Act, is
further amended--
(A) by striking ``net value of the'' and inserting
the following: ``the net value of--
``(A) the'';
(B) by striking the period at the end and inserting a
semicolon; and
(C) by adding at the end the following:
``(B) a family farm on which the family resides; or
``(C) a small business with not more than 100 full-
time or full-time equivalent employees (or any part of
such a small business) that is owned and controlled by
the family.''.
(2) Effective date.--The amendments made by paragraph (1)
shall take effect for award year 2025-2026 and each subsequent
award year.
PART B--FINANCIAL AID
Subpart 1--Grants
SEC. 211. FEDERAL PELL GRANT PROGRAM.
Section 401(b)(3) (20 U.S.C. 1070a(b)(3)), as amended by the FAFSA
Simplification Act, is further amended to read as follows:
``(3) Award may not exceed median cost of college.--With
respect to award year 2025-2026 and each succeeding award year,
no Federal Pell Grant under this subpart shall exceed the
median cost of college (as defined in section 472A) for the
program at which that student is in attendance. If, with
respect to any student, it is determined that the amount of a
Federal Pell Grant for that student exceeds the median cost of
college for such program for that year, the amount of the
Federal Pell Grant shall be reduced until the Federal Pell
Grant does not exceed the median cost of college for such
program for that year.''.
SEC. 212. CAMPUS-BASED AID PROGRAMS.
(a) Termination of Certain Programs.--Notwithstanding subparts 3 and
4 of part A, or part C, of title IV of the Higher Education Act of 1965
(20 U.S.C. 1070 et seq.), or any other provision of law, except as
expressly authorized by an Act of Congress enacted after the date of
enactment of this Act, beginning on October 1, 2026, no funds are
authorized to be appropriated, or may be expended, under this Act or
any other Act to make payments to States for the Leveraging Educational
Assistance Partnership Program under subpart 4 of part A of title IV
(20 U.S.C. 1070c et seq.), and the authority of the Secretary to carry
out such program shall be terminated.
(b) Promise Grants.--Subpart 4 of part A of title IV of the Higher
Education Act of 1965 (20 U.S.C. 1070c et seq.) is amended to read as
follows:
``Subpart 4--Promoting Real Opportunities to Maximize Investments and
Savings in Education
``SEC. 415A. PURPOSE.
``It is the purpose of this subpart to provide performance-based
grants to--
``(1) assist institutions in providing certainty to students
and families about postsecondary affordability;
``(2) increase postsecondary access and economic mobility;
and
``(3) ensure that students, institutions, and taxpayers
receive a financial return for investments in postsecondary
education.
``SEC. 415B. PROMISE GRANTS.
``For award year 2026-2027 and each succeeding award year, from
reserved funds remitted to the Secretary in accordance with section
454(d) and additional funds authorized under section 415E, as
necessary, the Secretary shall award PROMISE grants to eligible
institutions to carry out the purpose of this subpart. PROMISE grants
awarded under this subpart shall be performance-based and shall be
awarded to each eligible institution for a 6-year period in an amount
that is determined in accordance with section 415D.
``SEC. 415C. ELIGIBLE INSTITUTIONS; APPLICATION.
``(a) Eligible Institution.--To be eligible for a PROMISE grant under
this subpart, an institution shall--
``(1) be an institution of higher education under section
102, except that an institution described in section
102(a)(1)(C) shall not be an eligible institution under this
subpart; and
``(2) meet the maximum total price guarantee requirements
under subsection (c).
``(b) Application.--An eligible institution seeking a PROMISE grant
under this subpart (including a renewal of such a grant) shall submit
to the Secretary an application, at such time as the Secretary may
require, that contains the information required in this subsection.
Such application shall--
``(1) demonstrate that the institution--
``(A) meets the maximum total price guarantee
requirements under subsection (c); and
``(B) will continue to meet the maximum total price
guarantee requirements for each award year during the
grant period with respect to students first enrolling
at the institution for each such award year;
``(2) describe how grant funds awarded under this subpart
will be used by the institution to carry out the purposes of
this Act, including activities related to--
``(A) postsecondary affordability, including--
``(i) the expansion and continuation of the
maximum total price guarantee requirements
under subsection (c); and
``(ii) any other activities to be carried out
by the institution to increase postsecondary
affordability and minimize the total net price
required for completion (as defined in section
132(a)) paid by students receiving need-based
student aid;
``(B) postsecondary access, which may include--
``(i) the activities described in section
485E of this Act; and
``(ii) any other activities to be carried out
by the institution to increase postsecondary
access and expand opportunities for low- and
middle-income students; and
``(C) postsecondary student success, which may
include--
``(i) activities to improve completion rates
and reduce time to credential, including the
activities described in section 741 of this
Act, as amended by the College Cost Reduction
Act;
``(ii) activities to align programs of study
with the needs of employers, including with
respect to in-demand industry sectors or
occupations (as defined in section 3 of the
Workforce Innovation and Opportunity Act (29
U.S.C. 3102)); and
``(iii) any other activities to be carried
out by the institution to increase value-added
earnings and postsecondary student success;
``(3) describe--
``(A) how the institution will evaluate the
effectiveness of the institution's use of grant funds
awarded under this subpart; and
``(B) how the institution will collect and
disseminate information on promising practices
developed with the use of such grant funds; and
``(4) in the case of an institution that has previously
received a grant under this subpart, contain the evaluation
required under paragraph (3) for each previous grant.
``(c) Maximum Total Price Guarantee Requirements.--As a condition of
eligibility for a PROMISE grant under this subpart, an institution
shall--
``(1) for each award year beginning after the date of
enactment of the College Cost Reduction Act, not later than one
year before the start of each such award year (except that, for
the first award year beginning after such date of enactment,
the institution shall meet these requirements as soon as
practicable such date of enactment)--
``(A) determine the maximum total price for
completion, in accordance with subsection (e), for each
program of study at the institution--
``(i) applicable to students in each income
category described in section 132(c)(2)(A)(i);
and
``(ii) applicable to students in each student
aid index category determined by the Secretary
in accordance with section 132(c)(2)(A)(ii);
and
``(B) publish such information on the institution's
website and in the institution's catalog, marketing
materials, or other official publications;
``(2) for the award year for which the institution is
applying for a PROMISE grant, and at least one award year
preceding such award year, provide to each student who first
enrolls, or plans to enroll, in the institution during the
award year and who receives Federal financial aid under this
title a maximum total price guarantee, in accordance with this
section, for the minimum guarantee period applicable to the
student; and
``(3) provide to the Secretary an assurance that the
institution will continue to meet each of the maximum total
price guarantee requirements under this subsection for students
who first enroll, or plan to enroll, in the institution during
each award year included in the grant period.
``(d) Duration of Minimum Guarantee Period.--
``(1) In general.--The minimum period during which a student
shall be provided a guarantee under subsection (c) with respect
to the maximum total price for completion of a program of study
at an institution shall be the median time to credential of
students who completed any undergraduate program of study at
the institution during the most recent award year for which
data are available, except that such minimum guarantee period
shall not be less than the program length of the program of
study in which the student is enrolled.
``(2) Limitation.--An institution shall not be required to
provide a maximum total price guarantee under subsection (c) to
a student after the conclusion of the 6-year period beginning
on the first day on which the student enrolled at such
institution.
``(e) Determination of Maximum Total Price for Completion.--
``(1) In general.--For the purposes of subsection (c), an
institution shall determine, prior to the first award year in
which a student enrolls at the institution, the maximum total
price that may be charged to the student for completion of a
program of study at the institution for the minimum guarantee
period applicable to a student, before application of any
Federal Pell Grants or other Federal financial aid under this
title. Such a maximum total price for completion shall be
determined for students in each income category and student aid
index category (as determined in accordance with section
132(c)(2)(A)). In determining the maximum total price for
completion to be charged to each such category of students, the
institution may consider the ability of a category of students
to pay tuition and fees (including the required costs described
in section 124(b)(3)(A)(i)(I)), but may not include in such
consideration any Federal Pell Grants or other Federal
financial aid awards that may be available to such category of
students under this title.
``(2) Multiple maximum total price guarantees.--In the event
that a student receives more than one maximum total price
guarantee because the student is included in more than one
category of students for which the institution determines a
maximum total price guarantee amount for the purposes of
subsection (c), the maximum total price guarantee applicable to
such student for the purposes of this section shall be equal to
the lowest such guarantee amount.
``SEC. 415D. GRANT AMOUNTS; FLEXIBLE USE OF FUNDS.
``(a) Grant Amount Formula.--
``(1) Formula.--Subject to subsection (b), the amount of a
PROMISE grant for an eligible institution for each year of the
grant period shall be determined by the Secretary annually and
shall be equal to--
``(A) the amount determined by multiplying--
``(i) the lesser of--
``(I) the difference determined by
subtracting one from the quotient of--
``(aa) the average, for the 3
most recent award years for
which data are available, of
the median value-added earnings
(as defined in section 103) for
each such award year of
students who completed any
program of study of the
institution; divided by
``(bb) the average for the 3
most recent award years, of the
maximum total price applicable
for each such award year to
students enrolled in the
institution in any program of
study who received financial
aid under this title; or
``(II) the number two;
``(ii) the average, for the 3 most recent
award years, of the total dollar amount of
Federal Pell Grants awarded to students
enrolled in the institution in each such award
year; and
``(iii) the average, for the 3 most recent
award years, of the percentage of low-income
students who received Federal financial
assistance under this title who were enrolled
in the institution in each such award year
who--
``(I) completed a program of study at
the institution within 100 percent of
the program length of such program; or
``(II) only in the case of a two-year
institution or a less than two-year
institution--
``(aa) transfer to a four-
year institution; and
``(bb) within 4 years after
first enrolling at the two-year
or less than two-year
institution, complete a program
of study at the four-year
institution for which a
bachelor's degree (or
substantially similar
credential) is awarded; minus
``(B) the sum of--
``(i) the amount allocated to the institution
under part C of title IV for the most recent
fiscal year; and
``(ii) the amount allocated to the
institution under subpart 3 of part A of title
IV for the most recent fiscal year.
``(2) Definition of low-income.--In this section, the term
`low-income', when used with respect to a student, means that
the student's family income does not exceed the maximum income
in the lowest income category described in section
132(c)(2)(A)(i).
``(b) Maximum Grant Amount.--Notwithstanding subsection (a), the
maximum amount an eligible institution may receive annually for a grant
under this subpart shall be the amount equal to--
``(1) the average, for the 3 most recent award years, of the
number of students enrolled in the institution in an award year
who receive Federal financial aid under this title; multiplied
by
``(2) $5,000.
``(c) Flexible Use of Funds.--A PROMISE grant awarded under this
subpart shall be used by an eligible institution to carry out the
purposes of this subpart, including--
``(1) carrying out activities included in the institution's
application for such grant related to postsecondary
affordability, access, and student success; and
``(2) evaluating the effectiveness of the activities carried
out with such grant in accordance with section 415C(b)(3)(A);
and
``(3) collecting and disseminating promising practices
related to the activities carried out with such grant, in
accordance with section 415C(b)(3)(B).
``(d) Transfer Authority.--In order to offer an arrangement of types
of aid which best fit the needs of each individual student, an
institution may transfer up to 100 percent of the institution's
allotment under subpart 3 of this part or part C of this title (or
both) to the institution's allotment under this section. Funds
transferred to an institution's allotment under this section may be
used as a part of and for the same purposes as funds allotted under
this subpart. The Secretary shall have no control over such transfer,
except as specifically authorized, except for the collection and
dissemination of information.
``SEC. 415E. AUTHORIZATION OF APPROPRIATIONS.
``(a) Used of Reserved Funds.--
``(1) Primary funds.--To carry out this subpart, there shall
be available to the Secretary any funds remitted to the
Secretary as reimbursements in accordance with section 454(d)
for any award year; and
``(2) Secondary funds.--Beginning award year 2026-2027, if
the amounts made available to the Secretary under paragraph (1)
to carry out this subpart in any award year are insufficient to
fully fund the PROMISE grants awarded under this subpart in
such award year, there shall be available to the Secretary, in
addition to such amounts, any funds returned to the Secretary
under section 484B in the previous award year.
``(b) Insufficient Funds.--If the amounts made available to the
Secretary under subsection (a) to carry out this subpart for are not
sufficient to provide grants to all eligible institutions in the amount
determined under this subpart for an award year, the Secretary shall
first provide grants to the eligible institutions that have the highest
percentage of students who are low-income students (as defined in
section 415D).''.
(c) Institutional Refunds.--Section 484B of the Higher Education Act
of 1965 (20 U.S.C. 1091b) is amended by adding at the end the
following:
``(f) Reservation of Funds for PROMISE Grants.--Notwithstanding any
other provision of law, the Secretary shall reserve the funds returned
to the Secretary under this section for 1 year after the return of such
funds for the purpose of awarding PROMISE grants in accordance with
subpart 4 of part A of this title.''.
Subpart 2--Loans
SEC. 221. LOAN LIMITS.
(a) Stafford Loans.--
(1) Aggregate and annual limits for graduate and professional
students.--Section 455(a) (20 U.S.C. 1087e(a)) is amended--
(A) in paragraph (3)--
(i) in subparagraph (A)(ii), by inserting
before the period at the end the following: ``,
except that for any period of instruction
beginning on or after July 1, 2025, such
maximum annual amount shall be determined in
accordance with subparagraph (C)'';
(ii) in subparagraph (B), by inserting before
the period at the end the following: ``for any
period of instruction through June 30, 2025'';
and
(iii) by adding at the end the following:
``(C) Annual limits.--Notwithstanding any provision
of this part or part B, for any period of instruction
beginning on or after July 1, 2025, the maximum annual
amount of Federal Direct Unsubsidized Stafford loans
that a graduate or professional student may borrow in
any academic year (as defined in section 481(a)(2)) or
its equivalent shall be median cost of college (as
defined in section 472A) of the program of study in
which the student is enrolled, except that the sum of
such annual loan amount and other financial assistance
(as defined in section 480(i)) that the student
receives for such academic year may not exceed the cost
of attendance of such student.
``(D) Aggregate limits.--Notwithstanding any
provision of this part or part B, for any period of
instruction beginning on or after July 1, 2025, the
maximum aggregate amount of Federal Direct Unsubsidized
Stafford loans that--
``(i) a graduate student may borrow shall be
$100,000; and
``(ii) a professional student may borrow
shall be $150,000.
``(E) Exception for certain students.--
``(i) In general.--The provisions listed in
clause (ii) shall not apply with respect to any
individual who, as of June 30, 2025, is
enrolled in a program of study at an
institution of higher education, and has
received a loan (or on whose behalf a loan was
made) under this part for such program, during
the individual's expected time to completion of
such program, as determined by calculating by
the difference between--
``(I) the program length for the
program of study in which such
individual is enrolled; and
``(II) the period of such program
that such individual has completed,
except that such expected time to completion
may not exceed 3 years.
``(ii) Provisions.--An individual described
in clause (i) shall not be subject to
subparagraphs (C) and (D) of this paragraph, or
paragraph (4) or (6).''.
(2) Annual limits for undergraduate borrowers.--Section
455(a) (20 U.S.C. 1087e(a)) is further amended by adding at the
end the following:
``(4) Annual and aggregate loan limits for undergraduate and
all borrowers.--
``(A) Undergraduate students.--
``(i) Annual loan limits.--
``(I) Subsidized loans.--
Notwithstanding any provision of this
part or part B, for any period of
instruction beginning on or after July
1, 2025, the maximum annual amount of
Federal Direct Stafford loans that an
undergraduate student may borrow in any
academic year (as defined in section
481(a)(2)) or its equivalent shall be
the difference between--
``(aa) the median cost of
college (as defined in section
472A) of the program of study
in which the student is
enrolled; and
``(bb) the Federal Pell Grant
under section 401 awarded to
the student for such academic
year,
except that (1) the amount of such
Federal Direct Stafford loans awarded
to the student for such academic year
may not exceed the maximum annual limit
described in section 428(b)(1) that is
applicable to such student; and (2) the
sum of such Federal Direct Stafford
Loans and the amount of such Federal
Pell Grant and other financial
assistance (as defined in section
480(i)) that the student receives for
such academic year may not exceed the
cost of attendance of such student.
``(II) Unsubsidized loans.--
Notwithstanding any provision of this
part or part B, for any period of
instruction beginning on or after July
1, 2025, the maximum annual amount of
Federal Direct Unsubsidized Stafford
loans that an undergraduate student may
borrow in any academic year (as defined
in section 481(a)(2)) or its equivalent
shall be the difference between--
``(aa) the median cost of
college (as defined in section
472A) of the program of study
in which the student is
enrolled; and
``(bb) the sum of--
``(AA) the amount of
Federal Direct Stafford
loans awarded to such
student for such
academic year; and
``(BB) the amount of
the Federal Pell Grant
under section 401
awarded to the student
for such academic year,
except that the sum of all
Federal financial aid under
this title and other financial
assistance (as defined in
section 480(i)) that such
student receives for such
academic year may not exceed
the cost of attendance for such
student.
``(ii) Aggregate limits.--Notwithstanding any
provision of this part or part B, for any
period of instruction beginning on or after
July 1, 2025, with respect to an undergraduate
student--
``(I) the maximum aggregate amount of
Federal Direct Stafford loans and
Federal Direct Unsubsidized Stafford
loans that may be borrowed shall be
$50,000;
``(II) the maximum aggregate amount
of Federal Direct Stafford loans that
may be borrowed shall be $23,000; and
``(III) the maximum aggregate amount
of Federal Direct Unsubsidized Stafford
loans that may be borrowed shall be
$50,000.
``(B) Students in a qualifying undergraduate
program.--
``(i) Aggregate limits.--Notwithstanding the
aggregate limits described in subparagraph
(A)(ii), a student enrolled in a qualifying
undergraduate program shall be subject to the
aggregate limits for professional students
described in paragraph (3)(D)(ii).
``(ii) Qualifying undergraduate program
defined.--For purposes of this subparagraph,
the term `qualifying undergraduate program'
means a program of study--
``(I) for which the total tuition and
fees (including the required costs
described in section
124(b)(3)(A)(i)(I)) exceeds the
aggregate limits for undergraduate
students described in subparagraph
(A)(ii);
``(II) that meets certification
requirements of the Federal agency that
directly regulates the program and
provides final licensing and
credentials to students upon
completion; and
``(III) the institution of higher
education offering such program of
study notifies the Secretary that the
program desires to be a qualifying
undergraduate program.
``(C) All students.--The maximum aggregate amount of
loans made, insured, or guaranteed under this title to
a student shall be $200,000.''.
(3) Institutionally determined limits.--Section 455(a) of the
Higher Education Act of 1965 (20 U.S.C. 1087e(a)) is further
amended by adding at the end the following:
``(5) Institutionally determined limits.--
``(A) In general.--Notwithstanding any other
provision of this subsection, an eligible institution
(at the discretion of a financial aid administrator at
the institution) may prorate or limit the amount of a
loan any student who is enrolled in a program of study
for a period of instruction beginning on or after July
1, 2024, at that institution, may borrow under this
part for an academic year--
``(i) if the institution can reasonably
demonstrate that outstanding amounts owed of
loans made under this title are or would be
excessive for students who complete such
program, based on the most recently available
data from the College Scorecard (or successor
website of the Department) on--
``(I) the median of the value-added
earnings of students who complete such
program; and
``(II) the median debt owed, and the
repayment rate, on loans made under
this part, of such students;
``(ii) in a case in which the student is
enrolled on a less than full-time basis or the
student is enrolled for less than the period of
enrollment to which the annual loan limit
applies under this subsection, based on the
student's enrollment status; or
``(iii) based on the year of the program for
which the student is seeking such loan.
``(B) Application to all students.--Any proration or
limiting of loan amounts under subparagraph (A) shall
be applied in the same manner to all students enrolled
in a program of study.
``(C) Increases for individual students.--Upon the
request of a student whose loan amount for an academic
year has been prorated or limited under subparagraph
(A), an eligible institution (at the discretion of the
financial aid administrator at the institution) may
increase such loan amount to an amount not exceeding
the annual loan amount applicable to such student under
this paragraph for such academic year.''.
(b) Termination of Authority to Make Federal Direct Plus Loans to Any
Student or Parent Borrower.--Section 455(a) of the Higher Education Act
of 1965 (20 U.S.C. 1087e(a)) is amended by adding at the end the
following:
``(6) Termination of authority to make federal direct plus
loans.--Notwithstanding any provision of this part or part B,
except as provided in paragraph (3)(E), for any period of
instruction beginning on or after July 1, 2025, no Federal
Direct PLUS loans may be made to any parent borrower or
graduate or professional student borrower.''.
SEC. 222. LOAN REPAYMENT.
(a) Repayment Plans.--Section 455(d) of the Higher Education Act of
1965 (20 U.S.C. 1087e(d)) is amended--
(1) in paragraph (1)(D) by inserting ``(including a repayment
assistance plan under section 455(e)(9))'' after ``an income
contingent repayment plan''; and
(2) by adding at the end the following:
``(6) Repayment plans for loans made on or after july 1,
2024.--
``(A) Design and selection.--Notwithstanding
paragraph (1), beginning on July 1, 2024, the Secretary
shall offer a borrower of a loan made under this part
on or after July 1, 2024, two plans for repayment of
such loan, including principal and interest on the
loan. The borrower shall be entitled to accelerate,
without penalty, repayment on such loans. The borrower
may choose--
``(i) a standard repayment plan with a fixed
monthly repayment amount paid over a fixed
period of time, not to exceed 10 years; or
``(ii) a repayment assistance plan under
section 455(e)(9).
``(B) Selection by secretary.--If such borrower does
not select a repayment plan described in subparagraph
(A), the Secretary shall provide the borrower with the
repayment plan described in subparagraph (A)(i).
``(C) Changes in selection.--
``(i) In general.--Subject to clause (ii), a
borrower may change the borrower's selection of
a repayment plan under subparagraph (A), or the
Secretary's selection of a plan for the
borrower under subparagraph (B), as the case
may be. Nothing in this subsection shall
prohibit the Secretary from encouraging
distressed borrowers from enrolling in the
repayment assistance plan under section
455(e)(9).
``(ii) Same repayment plan required.--All
loans made under this part on or after July 1,
2024, to a borrower shall be repaid under the
same repayment plan under subparagraph (A),
except that the borrower may repay an excepted
PLUS loan or an excepted consolidation loan (as
such terms are defined in section 455(e)(9))
separately from other loans made under this
part to the borrower.
``(D) Repayment after default.--The Secretary may
require a borrower who has defaulted on a loan made
under this part to--
``(i) pay all reasonable collection costs
associated with such loan; and
``(ii) repay the loan pursuant to the
repayment assistance plan under section
455(e)(9).
``(E) Prohibitions.--The Secretary may not--
``(i) authorize a borrower of a loan made
under this part on or after July 1, 2024, to
repay such loan pursuant to a repayment plan
that is not described in clause (i) or (ii) of
subparagraph (A); or
``(ii) carry out or modify a repayment plan
for any loan made under this part on or after
July 1, 2024, that is not described in such
clause (i) or (ii).''.
(b) Repayment Assistance Plan.--Section 455(e) of the Higher
Education Act of 1965 (20 U.S.C. 1087e(e)) is amended by adding at the
end the following:
``(9) Repayment assistance plan.--
``(A) In general.--Notwithstanding any other
provision of this Act, beginning on July 1, 2024, the
Secretary shall carry out a repayment assistance
program that shall have the terms and conditions of an
income-contingent repayment plan described in
paragraphs (1) through (8), except that--
``(i) a borrower of any loan made under this
part (other than an excepted PLUS loan or
excepted consolidation loan), may elect to have
the borrower's aggregate monthly payment for
all such loans not exceed the applicable
monthly payment for the borrower, except that a
borrower may not be precluded from repaying an
amount that exceeds such applicable monthly
payment for any month;
``(ii) the Secretary shall apply the
borrower's monthly payment under this paragraph
first toward interest due on such a loan, next
toward any fees due on the loan, and then
toward the principal of the loan;
``(iii) any principal due and not paid under
clause (ii) shall be deferred;
``(iv) the amount of time the borrower makes
monthly payments under clause (i) may exceed 10
years;
``(v) notwithstanding paragraph (7), the
Secretary shall repay or cancel any outstanding
balance of principal and interest due on all
loans made under this part (other than excepted
PLUS loans or excepted consolidation loans) to
a borrower--
``(I) who, at any time, elected to
participate in a repayment assistance
plan under clause (i);
``(II) whose final monthly payment
for such loans prior to the loan
cancellation under this clause was made
under such repayment assistance plan;
and
``(III) who has repaid on such loans
(pursuant to a repayment assistance
plan under clause (i), a standard
repayment plan under subsection
(d)(6)(A)(i), or a combination of any
such plan or any of the repayment plans
listed in clause (ii), (iii), (iv), or
(v) of paragraph (7)(B), or, in the
case of a consolidation loan, pursuant
to a repayment schedule described item
(aa)(BB) of this subclause) an amount
that is equal to--
``(aa)(AA) the total amount
of principal and interest that
the borrower would have repaid
under a standard repayment plan
under paragraph (1)(A) or
(6)(A)(i) of subsection (d),
based on a 10-year repayment
period, when the borrower
entered repayment on such
loans; or
``(BB) in the case of a
Federal Direct Consolidation
Loan, the total amount of
principal and interest that the
borrower would have repaid
under the repayment schedule
established for the loan under
section 428C(c)(2) on the date
on which such loan was made;
plus
``(bb) an amount equal to the
amount of any unpaid interest
that has accrued, but was not
included in the calculation of
the total amount of principal
and interest that would have
been repaid under the standard
repayment plan or schedule
described in item (aa)--
``(AA) during any
deferment period
described in clause (i)
or (ii) of subsection
(f)(2)(A); or
``(BB) during any
forbearance period
while serving in a
medical or dental
internship or residency
program as described in
section
428(c)(3)(A)(i)(I); and
``(vi) a borrower who is repaying a loan
pursuant to a repayment assistance plan under
clause (i) may elect, at any time, to terminate
repayment pursuant to such plan and repay such
loan under the standard repayment plan under
subsection (d)(6)(A)(i).
``(B) Repayment assistance for distressed
borrowers.--
``(i) Interest subsidy.--For each month for
which a borrower's aggregate monthly payment
under this paragraph is insufficient to pay the
total amount of interest that accrues on a loan
for the month, the amount of interest accrued
and not paid for the month shall be subtracted
from the total amount of interest due on such
loan for the month.
``(ii) Principal subsidy.--For each month for
which a borrower's aggregate monthly payment
under this paragraph repays an amount due on an
individual loan that is less than twice the
total amount of interest that accrues on such
loan for the month, the amount of the total
principal due on such loan shall be reduced by
an amount equal to half of the monthly payment
under this paragraph on such loan for the
month.
``(C) Definitions.--In this paragraph:
``(i) Adjusted gross income.--The term
`adjusted gross income' has the meaning given
the term in section 62 of the Internal Revenue
Code of 1986.
``(ii) Applicable monthly payment.--The term
`applicable monthly payment' means, when used
with respect to a borrower, the amount obtained
by dividing by 12, 10 percent of the result
obtained by calculating, on at least an annual
basis, the amount by which--
``(I) the adjusted gross income of
the borrower or, if the borrower is
married and files a Federal income tax
return jointly with or separately from
the borrower's spouse, the adjusted
gross income of the borrower and the
borrower's spouse; exceeds
``(II) 150 percent of the poverty
line applicable to the borrower's
family size as determined under section
673(2) of the Community Services Block
Grant Act (42 U.S.C. 9902(2)).
``(iii) Excepted consolidation loan.--The
term `excepted Consolidation Loan' means a
Federal Direct Consolidation Loan, if the
proceeds of such loan were used to the
discharge the liability on--
``(I) an excepted PLUS loan; or
``(II) a Federal Direct Consolidation
loan, if the proceeds of such loan were
used to discharge the liability on an
excepted PLUS loan.
``(iv) Excepted plus loan.--The term
`excepted PLUS Loan' has the meaning given the
term in section 493C.''.
SEC. 223. LOAN REHABILITATION.
Section 428F(a)(5) of the Higher Education Act of 1965 (20 U.S.C.
1078-6(a)(5)) is amended by striking ``one time'' and inserting ``two
times''.
SEC. 224. INTEREST CAPITALIZATION.
(a) Federal Plus Loans.--Section 428B(d)(2) of the Higher Education
Act of 1965 (20 U.S.C. 1078-2(d)(2)) is amended to read as follows:
``(2) No capitalization of interest.--Interest on loans made
under this section for which payments of principal are deferred
pursuant to paragraph (1) shall be paid monthly or quarterly,
if agreed upon by the borrower and the lender.''.
(b) Federal Consolidation Loans Deferrals.--Section
428C(b)(4)(C)(ii)(III) of the Higher Education Act of 1965 (20 U.S.C.
1078-3(b)(4)(C)(III)) is amended by striking ``or capitalized,''.
(c) Loan Limits for Unsubsidized Stafford Loans.--Section 428H(d)(5)
of the Higher Education Act of 1965 (20 U.S.C. 1078-8(d)(5)) is amended
by inserting ``before the date of enactment of the College Cost
Reduction Act'' after ``Interest capitalized''.
(d) Unsubsidized Stafford Loans for Middle Income Borrowers.--Section
428H(e)(2) of the Higher Education Act of 1965 (20 U.S.C. 1078-8(e)(2))
is amended--
(1) in subparagraph (A), in the matter before clause (i), by
striking ``, if agreed upon by the borrower and the lender''
and all that follows through clause (ii)(IV) and inserting ``be
paid monthly or quarterly, if agreed upon by the borrower and
the lender.'';
(2) by striking subparagraph (B); and
(3) by redesignating subparagraph (C) as subparagraph (B).
(e) Income Contingent Repayment.--Section 455(e)(5) of the Higher
Education Act of 1965 (20 U.S.C. 1087e(e)(5)) is amended by striking
the last sentence and inserting ``No interest may be capitalized on
such loan on or after the date of the enactment of the College Cost
Reduction Act, and the Secretary shall promulgate regulations with
respect to the treatment of accrued interest that is not capitalized''.
(f) Effect of Deferment on Principal and Interest.--Section
455(f)(1)(B) of the Higher Education Act of 1965 (20 U.S.C.
1087e(f)(1)(B)) is amended by striking ``capitalized or''.
(g) Income-based Repayment Program.--Section 493C(b)(3)(B) of the
Higher Education Act of 1965 (20 U.S.C. 1098e(b)(3)(B)) is amended by
inserting ``shall accrue but not'' before ``be capitalized''.
SEC. 225. ORIGINATION FEES.
(a) Repeal of Origination Fees.--Subsection (c) of section 455 of the
Higher Education Act of 1965 (20 U.S.C. 1087e(c)) is repealed.
(b) Effective Date.--The amendment made by subsection (a) shall apply
with respect to loans made under part D of title IV of the Higher
Education Act of 1965 (20 U.S.C. 1087a et seq.) for which the first
disbursement of principal is made, or, in the case of a Federal Direct
Consolidation Loan, the application is received, on or after July 1,
2024.
TITLE III--ACCOUNTABILITY AND STUDENT SUCCESS
PART A--ACCOUNTABILITY
Subpart 1--Department of Education
SEC. 301. AGREEMENTS WITH INSTITUTIONS.
Section 454 of the Higher Education Act of 1965 (20 U.S.C. 1087d) is
amended--
(1) in subsection (a)--
(A) in paragraph (5), by striking ``and'' after the
semicolon;
(B) by redesignating paragraph (6) as paragraph (7);
and
(C) by inserting after paragraph (5) the following
new paragraph:
``(6) provide annual reimbursements to the Secretary in
accordance with the requirements under subsection (d); and'';
and
(2) by adding at the end the following new subsection:
``(d) Reimbursement Requirements.--
``(1) Annual reimbursements required.--Beginning in award
year 2024-2025, each institution of higher education
participating in the direct student loan program under this
part shall, for qualifying student loans, remit to the
Secretary, at such time as the Secretary may specify, an annual
reimbursement for each student cohort of the institution, based
on the non-repayment balance of such cohort and calculated in
accordance with paragraph (3).
``(2) Student cohorts.--
``(A) Cohorts established.--For each institution of
higher education, the Secretary shall establish student
cohorts, beginning with award year 2023-2024, as
follows:
``(i) Completing student cohort.--For each
program of study at such institution, a student
cohort comprised of all students who received
Federal financial assistance under this title
and who completed such program during such
award year.
``(ii) Undergraduate non-completing student
cohort.--For such institution, a student cohort
comprised of all students who received Federal
financial assistance under this title, who were
enrolled in the institution during the previous
award year in a program of study leading to an
undergraduate credential, and who at the time
the cohort is established--
``(I) have not completed such program
of study; and
``(II) are not enrolled at the
institution in any program of study
leading to an undergraduate credential.
``(iii) Graduate non-completing student
cohort.--For each program of study leading to a
graduate credential at such institution, a
student cohort comprised of all students who
received Federal financial assistance under
this title, who were enrolled in such program
during the previous award year, and who at the
time the cohort is established--
``(I) have not completed such program
of study; and
``(II) are not enrolled in such
program.
``(B) Qualifying student loan.--For the purposes of
this subsection, the term `qualifying student loan'
means a Federal Direct loan, including a Federal Direct
Consolidation loan, made under this part that--
``(i) was made to a student included in a
student cohort of an institution;
``(ii) except in the case of a loan described
in clause (i) or (ii) of subparagraph (C), is
not included in any other student cohort of any
institution of higher education;
``(iii) is not in--
``(I) a medical or dental internship
or residency forbearance described in
section 428(c)(3)(A)(i)(I), section
428B(a)(2), section 428H(a), or section
685.205(a)(3) of title 34, Code of
Federal Regulations;
``(II) a graduate fellowship
deferment described in section
455(f)(2)(A)(ii)
``(III) rehabilitation training
program deferment described under
section 455(f)(2)(A)(ii);
``(IV) an in-school deferment
described under section
455(f)(2)(A)(i);
``(V) a cancer deferment described
under section 455(f)(3);
``(VI) a military service deferment
described under section 455(f)(2)(C);
or
``(VII) a post-active duty student
deferment described under section 493D;
and
``(iv) is not in default.
``(C) Special circumstances.--
``(i) Multiple credentials.--In the case of a
student who completes two or more programs of
study during the same award year, each
qualifying student loan of the student shall be
included in the student cohort for each of such
program of study for such award year.
``(ii) Treatment of certain consolidation
loans.--A Federal Direct Consolidation loan
made under this title shall not be considered a
qualifying student loan for a student cohort
for an award year if all of the loans included
in such consolidation loan are attributable to
another student cohort.
``(iii) Consolidation after inclusion in a
student cohort.--If a qualifying student loan
is consolidated into a consolidation loan under
this title after such qualifying student loan
has been included in a student cohort, the
percentage of the consolidation loan that was
attributable to such student cohort at the time
of consolidation shall remain attributable to
the student cohort for the life of the
consolidation loan.
``(3) Calculation of reimbursement.--
``(A) Reimbursement payment formula.--For each
student cohort of an institution of higher education
established under this subsection, the annual
reimbursement for such cohort shall be equal to--
``(i) the reimbursement percentage determined
for the cohort in accordance with subparagraph
(B); multiplied by
``(ii) the non-repayment balance for the
cohort for the award year, determined in
accordance with subparagraph (C).
``(B) Reimbursement percentage.--The reimbursement
percentage of a student cohort of an institution shall
be determined by the Secretary when the cohort is
established, shall remain constant for the life of the
student cohort, and shall be determined as follows:
``(i) Completing student cohorts.--The
reimbursement percentage of a completing
student cohort shall be equal to the percentage
determined by--
``(I) subtracting from one the
quotient of--
``(aa) the median value-added
earnings of students who
completed such program of study
in the most recent award year
for which such earnings data is
available; divided by
``(bb) the median total price
charged to students included in
such cohort; and
``(II) multiplying the difference
determined under subclause (I) by 100.
``(ii) Special circumstances for completing
student cohorts.--
``(I) High-risk cohorts.--
Notwithstanding clause (i), if the
median value-added earnings of a
completing student cohort under clause
(i)(I)(aa) is negative, the
reimbursement percentage of the student
cohort shall be 100 percent.
``(II) Low-risk cohorts.--
Notwithstanding clause (i), if the
median value-added earnings of a
completing student cohort under clause
(i)(I)(aa) exceeds the median total
price of such cohort under clause
(i)(I)(bb), the reimbursement
percentage of the student cohort shall
be 0 percent.
``(iii) Non-completing student cohorts.--The
reimbursement percentage of a non-completing
student cohort shall be determined based on the
most recent data available in the award year in
which the cohort is established, and--
``(I) for an undergraduate non-
completing student cohort, shall be
equal to the percentage of
undergraduate students who received
Federal financial assistance under this
title at such institution who--
``(aa) did not complete an
undergraduate program of study
at the institution within 150
percent of the program length
of such program; or
``(bb) only in the case of a
two-year institution, did not,
within 6 years after first
enrolling at the two-year
institution, complete a program
of study at a four-year
institution for which a
bachelor's degree (or
substantially similar
credential) is awarded; and
``(II) for a graduate non-completing
student cohort, shall be equal to the
percentage of students who received
Federal financial assistance under this
title at the institution for the
applicable graduate program of study
and who did not complete such program
of study within 150 percent of the
program length.
``(C) Non-repayment loan balance.--
``(i) In general.--For each award year, the
Secretary shall determine the non-repayment
loan balance for such award year for each
student cohort of an institution of higher
education by calculating the sum of--
``(I) for loans in such cohort, the
difference between the total amount of
payments due from all borrowers on such
loans during such year and the total
amount of payments made by all such
borrowers on such loans during such
year; plus
``(II) the total amount of interest
waived, paid, or otherwise not charged
by the Secretary during such year under
an income-based repayment plan
described in section 493C or an income-
contingent repayment plan described in
section 455(e); plus
``(III) the total amount of principal
and interest forgiven, cancelled,
waived, discharged, repaid, or
otherwise reduced by the Secretary
under any act during such year that is
not included in subclause (II) and was
not discharged or forgiven under
section 437(a) or 428J.
``(ii) Special circumstances.--For the
purpose of calculating the non-repayment loan
balance of student cohorts under this
paragraph, the Secretary shall--
``(I) for each qualifying student
loan in a student cohort that is
included in another student cohort
because the student who borrowed such
loan completed two or more programs of
study during the same award year, the
sum of the amounts described in
subclauses (I) through (III) of clause
(i) for such qualifying student loan
shall be divided equally among each of
the student cohorts in which such loan
is included; and
``(II) for each consolidation loan in
a student cohort--
``(aa) determine the
percentage of the outstanding
principal balance of the
consolidation loan attributable
to such student cohort--
``(AA) at the time of
that loan was included
in such cohort, in the
case of a loan
consolidated before
inclusion in such
cohort; or
``(BB) at the time of
consolidation, in the
case of a loan
consolidated after
inclusion in such
cohort; and
``(bb) include in the
calculations under clause (i)
for such student cohort only
the percentage of the sum of
the amounts described in
subclauses (I) through (III) of
clause (i) for the
consolidation loan for such
year that is equal to the
percentage of the consolidation
loan determined under item
(aa).
``(D) Total price.--With respect to a student who
received Federal financial assistance under this title
and who completes a program of study, the term `total
price' means the total amount, before Federal financial
assistance under this title was applied, a student was
required to pay to complete the program of study. A
student's total price shall be calculated by the
Secretary as the difference between--
``(i) the total amount of tuition and fees
(including the required costs described in
section 124(b)(3)(A)(i)(I)) that were charged
to such student before the application of any
Federal financial assistance provided under
this title; minus
``(ii) the total amount of grants and
scholarships described in section 480(i)
awarded to such student from non-Federal
sources for such program of study.
``(4) Notification and remittance.--Beginning with the first
award year for which reimbursements are required under this
subsection, and for each succeeding award year, the Secretary
shall--
``(A) notify each institution of higher education of
the amounts and due dates of each annual reimbursement
calculated under paragraph (3) for each student cohort
of the institution within 30 days of calculating such
amounts; and
``(B) require the institution to remit such payments
within 90 days of such notification.
``(5) Penalty for late payments.--
``(A) Three-month delinquency.--If an institution
fails to remit to the Secretary a reimbursement for a
student cohort as required under this subsection within
90 days of receiving notification from the Secretary in
accordance with paragraph (4), the institution shall
pay to the Secretary, in addition to such
reimbursement, interest on such reimbursement payment,
at a rate that is the average rate applicable to the
loans in such student cohort.
``(B) Twelve-month delinquency.--If an institution
fails to remit to the Secretary a reimbursement for a
student cohort as required under this subsection, plus
interest owed in under subparagraph (A), within 12
months of receiving notification from the Secretary in
accordance with paragraph (4), the institution shall be
ineligible to make direct loans to any student enrolled
in the program of study for which the institution has
failed to make the reimbursement payments until such
payment is made.
``(C) Eighteen-month delinquency.--If an institution
fails to remit to the Secretary a reimbursement for a
student cohort as required under this subsection, plus
interest owed under subparagraph (A), within 18 months
of receiving notification from the Secretary in
accordance with paragraph (4), the institution shall be
ineligible to make direct loans or award Federal Pell
Grants under section 401 to any student enrolled in the
institution until such payment is made.
``(D) Two-year delinquency.--If an institution fails
to remit to the Secretary a reimbursement for a student
cohort as required under this subsection, plus interest
owed under subparagraph (A), within 2 years of
receiving notification from the Secretary in accordance
with paragraph (4), the institution shall be ineligible
to participate in any program under this title for a
period of not less than 10 years.
``(6) Relief for voluntary cessation of federal direct loans
for a program of study.--The Secretary shall, upon the request
of an institution that voluntarily ceases to make Federal
direct loans to students enrolled in a specific program of
study, reduce the amount of the annual reimbursement owed by
the institution for each student cohort associated with such
program by 50 percent if the institution assures the Secretary
that the institution will not make Federal direct loans to any
student enrolled in such program of study (or any substantially
similar program of study) for a period of not less than 10
award years, beginning with the first award year that begins
after the date on which the Secretary reduces such
reimbursement.
``(7) Reservation of funds for promise grants.--
Notwithstanding any other provision of law, the Secretary shall
reserve the funds remitted to the Secretary as reimbursements
in accordance with this subsection, and such funds shall be
made available to the Secretary only for the purpose of
awarding PROMISE grants in accordance with subpart 4 of part A
of this title.''.
SEC. 302. REGULATORY RELIEF.
(a) 90/10.--
(1) Regulation repealed.--Section 668.28 of title 34, Code of
Federal Regulations (relating to the 90/10 rule), as added or
amended by the final regulations published by the Department of
Education in the Federal Register on October 28, 2022 (87 Fed.
Reg. 65426 et seq.), is repealed and will have no force or
effect.
(2) Amendments.--Section 487 of the Higher Education Act of
1965 (20 U.S.C. 1094) is amended--
(A) in subsection (a), by striking paragraph (24);
(B) by striking subsection (d); and
(C) by redesignating subsections (e) through (j) as
subsections (d) through (i), respectively.
(b) Financial Value Transparency and Gainful Employment.--
(1) Regulation repealed.--Sections 600.10, 600.21, 668.2,
668.13, 668.43, 668.91, 668.402 through 668.409 (excluding
section 668.408), and 668.601 through 668.606 of title 34, Code
of Federal Regulations (relating to financial value
transparency and gainful employment), as added or amended by
the final regulations published by the Department of Education
in the Federal Register on October 10, 2023 (88 FR 70004 et
seq.), are repealed and will have no force or effect.
(2) Prohibition.--The Secretary of Education shall not, on or
after the date of enactment of this Act, promulgate or enforce
any regulation or rule with respect to the definition or
application of the term ``gainful employment'' for any purpose
under the Higher Education Act of 1965 (20 U.S.C. 1001 et
seq.).
(c) Changes in Ownership.--
(1) Regulation repealed.--Sections 600.2, 600.4, 600.20,
600.21, and 600.31 of title 34, Code of Federal Regulations
(relating to changes in ownership), as added or amended by the
final regulations published by the Department of Education in
the Federal Register on October 28, 2022 (87 Fed. Reg. 65426 et
seq.), are repealed and will have no force or effect.
(2) Amendments.--Section 498(i) of the Higher Education Act
of 1965 (20 U.S.C. 1099c(i)) is amended--
(A) in the subsection heading, by inserting ``and
Proposed Changes of Ownership'' after ``Ownership'';
(B) in paragraph (1)--
(i) by striking ``(1) An eligible
institution'', and inserting the following:
``(1)(A) An eligible institution'';
(ii) by striking ``the requirements of
section 102 (other than the requirements in
subsections (b)(5) and (c)(3))'' and inserting
``the applicable requirements of section 102 or
103(13)''
(iii) by adding at the end the following:
``(B)(i) Prior to a change in ownership resulting in a change of
control, an institution may seek a pretransaction determination about
whether the institution will meet the applicable requirements of
section 102 or 103(13) and this section after such proposed change in
ownership by submitting to the Secretary a materially complete
pretransaction review application.
``(ii) In reviewing applications submitted under clause (i), the
Secretary shall only provide a comprehensive review of each such
application, and may not provide an abbreviated or partial review.
``(iii) If an institution submits a materially complete
pretransaction review application at least 90 days prior to the
transaction and the Secretary approves the application, the subsequent
change in ownership application shall also be approved and the
institution shall be certified as meeting the requirements for such
transaction, provided that the institution--
``(I) complies with the applicable terms of this section; and
``(II) the transaction resulting in a change of control does
not differ materially in its terms from the transaction
proposed in the pretransaction review application.'';
(C) in paragraph (2)--
(i) in subparagraph (E), by striking ``or''
at the end;
(ii) in subparagraph (F), by striking the
period at the end and inserting ``; or''; and
(iii) by adding the following at the end:
``(G) in the case of a proprietary institution of higher
education, a conversion to a public or other nonprofit
institution of higher education.'';
(D) by adding at the end the following:
``(5)(A) Subject to subparagraph (B), when any institution submits an
application for a change in ownership resulting in a change in control
under this section or submits a pretransaction review application under
paragraph (1)(B) (other than in the case of a conversion transaction),
the institution shall be required to pay to the Secretary an
administrative fee that shall--
``(i) be in an amount equal to 0.15 percent of the total
institutional revenue derived from this title by such
institution for the most fiscal year for which data is
available; and
``(ii) be used exclusively for expenses related to the
processing of such application, and be available to the
Secretary without further appropriation, exclusively for
expenses related to the processing of such approval or
application.
``(B) In the case of a proprietary institution submitting an
application for conversion, or a pretransaction review application for
conversion, the institution shall be required to pay to the Secretary
an administrative fee that shall--
``(i) be in an amount equal to 0.30 percent of the total
institutional revenue derived from this title by such
institution for the most fiscal year for which data is
available; and
``(ii) be used exclusively for expenses related to the
processing of such application, and of which--
``(I) 50 percent shall be available to the Secretary
without further appropriation, exclusively for expenses
related to the processing of such application; and
``(II) 50 percent shall be remitted by the Secretary
to the Commissioner of the Internal Revenue, and shall
be available, without further appropriation, to the
Commissioner of Internal Revenue exclusively for
purposes of determining whether the institution seeking
such conversion or pretransaction review is an
institution exempt from tax and is otherwise in
compliance with applicable requirements of the Internal
Revenue Code of 1986.
``(C) An institution that pays a fee under subparagraph (A) or (B)
for a pretransaction application with respect to a proposed transaction
shall not be required to pay another fee under such subparagraph for a
change in ownership application with respect to such transaction.
``(D) In no case may any fee remitted under subparagraph (A) or (B)
exceed $120,000 for any transaction (or pretransaction) application,
nor may the Secretary require an institution that has paid a fee under
subparagraph (B) to pay an additional fee under subparagraph (A).
``(6)(A) The Secretary shall approve or deny a materially complete
application (including pretransaction reviews and conversion
applications) submitted under this section as soon as practicable and
not later than the 90-day period beginning on the date of receipt of
such an application, except that in a case in which the Secretary
determines, on a nondelegable basis, that good cause exists to not make
the determination during such 90-day period, the Secretary shall notify
the institution in writing detailing the reasons for a good cause
extension.
``(B) If the Secretary fails to approve or deny a materially complete
application during the period described in subparagraph (A) and does
not find good cause for extension, the materially complete application
shall be deemed approved.
``(C) In no case may the Secretary grant a good cause extension under
this section to an institution for more than one month at a time, or
for a total of more than more than 12 months.
``(D) To ensure timely submission of all relevant documentation, the
Secretary may deny an application if an institution does not make a
good faith effort to submit to the Secretary, in a timely manner--
``(i) all relevant documentation; or
``(ii) a materially complete application.
``(E)(i) Upon approving or denying an application under this
paragraph, the Secretary shall publish in the Federal Register the
reasoning for such approval or denial, including--
``(I) a copy of the approval or denial letter sent to
the institution; and
``(II) any analysis regarding how the Secretary
determined under paragraph 7(A)(iii) that a director of
the institution was an interested or disinterested
party to the transaction.
``(ii) The Secretary shall not publish under clause (i) any
information that is otherwise exempt from disclosure under section 552
of title 5, United States Code (relating to the Freedom of Information
Act), including trade secrets and commercial or financial information
that is privileged or confidential.
``(7)(A) In the case of a proprietary institution that subsequent to
the transaction would be owned and operated by an entity (in this
paragraph referred to as the `buyer') seeking to be recognized as a
public or other nonprofit institution, the buyer shall meet the
definition of a nonprofit institution under section 103(13) if--
``(i) the buyer pays no more than fair market value for any
assets of the proprietary institution;
``(ii) the buyer pays no more than fair market value for any
service or lease contracts, including such service and lease
contracts provided by the entity selling the proprietary
institution; and
``(iii) to prevent self-dealing in the case where one or more
individuals with a substantial ownership or controlling
interests in the proprietary institution will also have
substantial or controlling interests in the institution seeking
to be recognized as a public or other nonprofit institution
(meaning that one or more individuals are on both sides of the
transaction), the change of control transaction, and any
substantial asset acquisition, service, or lease agreements
with the proprietary institution shall be approved by a
disinterested committee of directors of the entity that seeks
to be recognized as a public or other nonprofit institution.
``(B) For the purposes of this paragraph, parties to the transaction
are entitled to a rebuttable presumption that the assets, lease
contracts, and service contracts that are part of the transaction are
purchased at fair market value if--
``(i) the acquiring entity pays no more than fair market
value for such assets, lease contracts, or service contracts;
and
``(ii) the value of the assets, lease contracts, or service
contracts are evaluated by at least one independent third-party
entity hired by parties on both sides of the transaction.
``(8)(A) An institution that has been approved for conversion by the
Secretary shall be subject to a monitoring period for a 5-year period
beginning on the day after the date of such approval. In conducting the
monitoring of the institution under this paragraph, the Secretary--
``(i) shall only conduct monitoring to ensure that the
institution is in compliance with the requirements of section
103(13) and paragraph (7) of this subsection; and
``(ii) may require the institution to submit regular reports
or conduct audits of such institution relating to such
compliance.
``(B) Each institution that is subject to the monitoring period under
this paragraph shall remit an annual fee to the Secretary--
``(i) in an amount equal to 0.15 percent of the total revenue
derived from this title by such institution for the most recent
fiscal year for which data is available; and
``(ii) that shall be exclusively for expenses related to
monitoring of the institution for the period described in
subparagraph (A)--
``(I) of which 50 percent shall be used by the
Secretary, without further appropriation, exclusively
for expenses related to monitoring of the institution
during such period; and
``(II) of which 50 percent shall be remitted by the
Secretary to the Commissioner of Internal Revenue, to
be available to such Commissioner, without further
appropriation, exclusively for monitoring compliance
with the Internal Revenue Code of such institution
during such period.
``(C) An institution may not be subject to an annual fee under
subparagraph (B) for monitoring related to a conversion that exceeds
$60,000.
``(D) If the Secretary determines that an institution should be
subject to the monitoring under this paragraph beyond the 5-year period
described in subparagraph (A), the Secretary shall provide the reasons
justifying an extension in writing to the institution (and in the
Federal Register) at least 30 days before the expiration of such
period.
``(E) Any institution that is subject to monitoring under this
paragraph may seek a waiver to be exempt from such monitoring
(including the annual fee under subparagraph (B)) on an annual basis
for any year during the monitoring period and the Secretary shall grant
such waiver if there is no ongoing contractual or financial
relationship between the institution and the former entity or
individuals that previously owned the institution. The Secretary may
grant a waiver for more than 1 year in the case where the entity that
formerly owned the proprietary institution has closed or no longer
exists and the Secretary determines the institution is not at risk of
violating the requirements of section 103(13) or paragraph (7) of this
subsection.
``(9) Any institution that submits an application for conversion
shall not promote or market itself, in any manner, as a public or other
nonprofit institution of higher education unless--
``(A) the Secretary has provided final approval of the
conversion of the institution to a public or other nonprofit
institution of higher education under this section;
``(B) an accrediting agency or association recognized by the
Secretary pursuant to section 496 has approved such public or
nonprofit status of the institution;
``(C) the State has given final approval to the institution
as a public or nonprofit institution of higher education, as
applicable; and
``(D) in the case of an institution seeking nonprofit status,
the Commissioner of Internal Revenue has approved the
institution as tax exempt pursuant to the Internal Revenue Code
of 1986.
``(10) Not later than 270 days after the date of enactment of the
College Cost Reduction Act, and periodically thereafter, the Secretary
shall publish (and update as necessary) in the Federal Register--
``(A) descriptions of the documents and materials the
Secretary expects or requires institutions of higher education
to submit (including any standardized forms) as part of any
pretransaction application or change in ownership application
under this section, including a description of what the
Secretary considers to be a materially complete application;
and
``(B) after at least a 30-day notice and comment period,
responses to any public comments received with respect to such
descriptions or updates to such descriptions.
``(11) In a case in which the Secretary requests a document under
this section as part of a pretransaction or change in ownership
application that is not described in the Federal Register under
paragraph (10), the Secretary shall--
``(A) substantiate, in writing to the institution, the
reasons why the Secretary is requesting such documents; and
``(B) publish such reasons in the Federal Register, including
whether the Secretary may request other institutions that
submit applications under this section to produce similar
documentation.
``(12)(A) Not later than 18 months after the date of enactment of the
College Cost Reduction Act, and annually thereafter, the Secretary
shall submit a report to authorizing committees, and post such report
on a publicly available website regarding implementation of the
amendments made to this section by such Act, including the following
information:
``(i) The mean and median length of time taken by the
Secretary to review applications under this section during the
preceding 12-month period.
``(ii) The number of applications approved or denied during
the preceding 12-month period.
``(iii) For any application not processed during the 90-day
period beginning on the date of receipt of the application for
which the Secretary found good cause under paragraph (6)(A) to
extend the deadline in which the application shall be
processed, a copy of the letter sent to the institution
explaining why the Secretary believed good cause existed for
such extension.
``(iv) For any application not processed during such 90-day
period, which was deemed to be automatically approved by the
requirements of this section under paragraph (6)(B), the name
of each institution involved and an explanation for why the
application was not processed in a timely manner.
``(v) Any legislative suggestions the Secretary may have to
improve the application or monitoring process under this
section.
``(B) If the Secretary fails to submit a report under this paragraph
by not later than 90 days after the deadline for such submission under
subparagraph (A), the Secretary may not, for the 12-month period
following such failure, spend the fees remitted by institutions under
this section or remit such fees to the Commissioner unless Congress
provides for such use by further appropriation.
``(13) For the purposes of this subsection, the term `conversion'
means any transaction under which--
``(A) a proprietary institution is reorganized and seeks
recognition as a public or other nonprofit institution; or
``(B) the control of a proprietary institution is transferred
as a result of a sale, donation, or other method to an entity
that seeks certification under this section as a public or
other nonprofit institution.''.
(3) Application.--The amendments made by this section shall
be apply with respect to applications submitted for change of
control or conversion submitted on or after January 1, 2023.
(4) Report.--Not later than 5 years after the date of
enactment of this Act, the Comptroller General shall submit to
the Committee on Education and Labor of the House of
Representatives and the Committee on Health, Education, Labor,
and Pensions of the Senate, a report on the implementation of
the amendments made by this subsection, including
recommendations to improve--
(A) the application process under section 498(i) of
the Higher Education Act of 1965 (20 U.S.C. 1099c(i)),
as amended by paragraph (2), for institutions of higher
education seeking a change in ownership resulting in a
change in control; or
(B) the monitoring process under such section for
institutions of higher education that have recently
converted from being recognized as a proprietary
institution to a public or other nonprofit institution.
(d) Financial Responsibility.--
(1) Regulation repealed.--Sections 668.15, 668.23, 668.171,
and 668.174 through 668.177 of title 34, Code of Federal
Regulations (relating to financial responsibility), as added or
amended by the final regulations published by the Department of
Education in the Federal Register on October 31, 2023 (87 Fed.
Reg. 74568 et seq.) are repealed and will have no force or
effect.
(2) Amendments.--Section 498(c) of the Higher Education Act
of 1965 (20 6 U.S.C. 1099c(c)) is amended--
(A) by redesignating paragraphs (3), (4), (5), and
(6) as paragraphs (4), (5), (6), and (7), respectively;
(B) in paragraph (2)--
(i) by striking ``paragraph (1), if'' and
inserting ``paragraph (1), the Secretary shall
prescribe criteria regarding ratios that aid in
the determination financial responsibility.
Such ratios shall be first issued in draft form
to the institution to allow for adequate
review, consisting of an appeals process, by
such institutions of higher education. If'';
and
(ii) by striking ``prescribed by the
Secretary regarding ratios'' and inserting
``prescribed by the Secretary regarding the
final ratios'';
(C) by inserting after paragraph (2) the following:
``(3) Notwithstanding paragraph (2), the Secretary shall take into
account an institution's current total financial circumstances,
including any subsequent change in the institution's overall fiscal
health based on the standards in paragraph (2), when making a
determination of its ability to meet the standards herein required
before any subsequent action is taken under paragraph (4). If an
institution meets the standards in paragraph (2), the institution shall
be seen as financially responsible.'';
(D) in subparagraph (C) of paragraph (4), as so
redesignated, by striking ``establishes to the
satisfaction of the Secretary, with'' and inserting
``establishes, with'';
(E) in paragraph (5), as so redesignated--
(i) in subparagraph (A), by inserting ``and''
after the semicolon at the end;
(ii) in subparagraph (B), by striking ``;
and'' and inserting a period; and
(iii) by striking subparagraph (C);
(F) in paragraph (6), as so redesignated, by striking
``(3)(C)'' and inserting ``(4)(C)''; and
(G) by adding at the end the following new paragraph:
``(8) Not later than 18 months after the date of enactment of the
College Cost Reduction Act, the Secretary shall pursue a process to
update the ratios regarding financial responsibility as identified in
paragraph (2). The Secretary shall report the revised ratios to--
``(A) the Committee on Education and the Workforce of the
House of Representatives; and
``(B) the Committee on Health, Education, Labor, and Pensions
of the Senate.''.
(e) Incentive Compensation; Third Party Servicer.--
(1) Amendments.--Section 487(a)(20) (20 U.S.C. 1094(a)(20))
is amended to read as follows:
``(20) The institution will not provide any commission,
bonus, or other incentive payment based directly or indirectly
on success in securing enrollments or financial aid to any
persons or entities engaged in any student recruiting or
admission activities, or in making decisions regarding the
award of student financial assistance, except that this
paragraph shall not apply--
``(A) to the recruitment of foreign students residing
in foreign countries who are not eligible to receive
Federal student assistance; or
``(B) to a third party where--
``(i) the third party is providing the
institution recruiting or admissions activities
as part of a larger bundle of services not
covered by this paragraph and which may include
marketing or advertising activities that
broadly disseminate or distribute widely
available information;
``(ii) the third party does not provide any
commission, bonus, or other incentive-based
payments to its employees or subcontractors who
are providing services to the institution
covered in this paragraph; and
``(iii) the third party is not awarding or
disbursing Federal financial aid awards.''.
(2) Definition.--Section 481(c) (20 U.S.C. 1088(c)) is
amended to read as follows:
``(c) Third Party Servicer.--
``(1) For purposes of this title, the term `third party
servicer'--
``(A) means any individual, any State, or any
private, for-profit or nonprofit organization, which
enters into a contract with--
``(i) any eligible institution of higher
education to administer, through either manual
or automated processing, any aspect of such
institution's student assistance programs under
this title; or
``(ii) any guaranty agency, or any eligible
lender, to administer, through either manual or
automated processing, any aspect of such
guaranty agency's or lender's student loan
programs under part B of this title, including
originating, guaranteeing, monitoring,
processing, servicing, or collecting loans; and
``(B) does not include any individual, any State, or
any private, for-profit or nonprofit organization,
which conducts activities or interacts with prospective
or enrolled students for the purposes of--
``(i) marketing or recruiting, such as
soliciting potential enrollments through the
dissemination of information and advertising;
``(ii) assisting with the completion of
applications for enrollment, such as screening
pre-enrollment information and offering
admission counseling;
``(iii) administering ability-to-benefit
tests or establishing any aspect of an eligible
career pathway program;
``(iv) conducting activities for the
retention of students, such as monitoring
academic engagement and conducting outreach to
student regarding attendance; and
``(v) providing instructional content, such
as evaluating course completion, delivering
mandatory tutoring, assessing student learning,
including through electronic means, or
developing curricula or course materials.
``(2) The Secretary shall not regulate on the definition of a
`third party servicer'.''.
(f) Other Repeals.--The following regulations (including any
supplement or revision to such regulations) are repealed and shall have
no legal effect:
(1) Closed school discharges.--Sections 674.33(g),
682.402(d), and 685.214 of title 34, Code of Federal
Regulations (relating to closed school discharges), as added or
amended by the final regulations published by the Department of
Education in the Federal Register on November 1, 2022 (87 Fed.
Reg. 65904 et seq.).
(2) Borrower defense to repayment.--Section 685.401 of title
34, Code of Federal Regulations (relating to borrower defense
to repayment), as added or amended by the final regulations
published by the Department of Education in the Federal
Register on November 1, 2022 (87 Fed. Reg. 65904 et seq.).
(3) Pre-dispute arbitration.--Sections 668.41, 685.300, and
685.304 of title 34, Code of Federal Regulations (relating to
pre-dispute arbitration), as added or amended by the final
regulations published by the Department of Education in the
Federal Register on November 1, 2022 (87 Fed. Reg. 65904 et
seq.).
(4) False certification.--Sections 682.402(e), 685.215(c) and
685.215(d) of title 34, Code of Federal Regulations (relating
to false certification), as added or amended by the final
regulations published by the Department of Education in the
Federal Register on November 1, 2022 (87 Fed. Reg. 65904 et
seq.).
(5) Administrative capability.--Sections 668.16 of title 34,
Code of Federal Regulations (relating to administrative
capability), as added or amended by the final regulations
published by the Department of Education in the Federal
Register on October 31, 2023 (87 Fed. Reg. 74568 et seq.).
(6) Certification procedures.--Sections 668.13, 668.14, and
668.43 of title 34, Code of Federal Regulations (relating to
certification procedures) as added or amended by the final
regulations published by the Department of Education in the
Federal Register on October 31, 2023 (87 Fed. Reg. 74568 et
seq.).
(7) Ability to benefit.--Sections 668.2, 668.32, 668.156, and
668.157 of title 34, Code of Federal Regulations (relating to
ability to benefit) as added or amended by the final
regulations published by the Department of Education in the
Federal Register on October 31, 2023 (87 Fed. Reg. 74568 et
seq.).
(8) Personal liability.--The electronic announcement titled
``Establishing Personal Liability Requirements for Financial
Losses Related to the Title IV Programs'' (GENERAL-23-11,
published on March 1, 2023).
(g) Effect of Repeal.--Any regulations repealed by subsections (c)
through (e) that were in effect on June 30, 2023, are restored and
revived as if the repeal of such regulations under such subsections had
not taken effect.
(h) Prohibition.--The Secretary of Education may not implement any
rule, regulation, policy, or executive action specified in this section
(or a substantially similar rule, regulation, policy, or executive
action) unless authority for such implementation is explicitly provided
in an Act of Congress.
(i) Program Review and Data.--Section 498A (20 U.S.C. 1099c-1) is
amended by adding at the end the following:
``(f) Time Limit on Program Review Activities.--In conducting,
responding to, and concluding program review activities, the Secretary
shall--
``(1) provide to the institution the initial report finding
not later than 90 days after concluding an initial site visit;
``(2) upon each receipt of an institution's response during a
program review inquiry, respond in a substantive manner within
90 days;
``(3) upon each receipt of an institution's written response
to a draft final program review report, provide the final
program review report and accompanying enforcement actions, if
any, within 90 days; and
``(4) conclude the entire program review process not later
than 2 years after the initiation of a program review, unless
the Secretary determines that such a review is sufficiently
complex and cannot reasonably be concluded before the
expiration of such 2-year period, in which case the Secretary
shall promptly notify the institution of the reasons for such
delay and provide an anticipated date for conclusion of the
review.''.
SEC. 303. LIMITATION ON AUTHORITY OF SECRETARY TO PROPOSE OR ISSUE
REGULATIONS AND EXECUTIVE ACTIONS.
Part G of title IV of the Higher Education Act of 1965 (20 U.S.C.
1088 et seq.) is amended by inserting after section 492 the following:
``SEC. 492A. LIMITATION ON AUTHORITY OF THE SECRETARY TO PROPOSE OR
ISSUE REGULATIONS AND EXECUTIVE ACTIONS.
``(a) Draft Regulations.--Beginning after the date of enactment of
this section, a draft regulation implementing this title (as described
in section 492(b)(1)) that is determined by the Secretary to be
economically significant shall be subject to the following requirements
(regardless of whether negotiated rulemaking occurs):
``(1) The Secretary shall determine whether the draft
regulation, if implemented, would result in an increase in a
subsidy cost.
``(2) If the Secretary determines under paragraph (1) that
the draft regulation would result in an increase in a subsidy
cost, then the Secretary may take no further action with
respect to such regulation.
``(b) Proposed or Final Regulations and Executive Actions.--Beginning
after the date of enactment of this section, the Secretary may not
issue a proposed rule, final regulation, or executive action
implementing this title if the Secretary determines that the rule,
regulation, or executive action--
``(1) is economically significant; and
``(2) would result in an increase in a subsidy cost.
``(c) Relationship to Other Requirements.--The analyses required
under subsections (a) and (b) shall be in addition to any other cost
analysis required under law for a regulation implementing this title,
including any cost analysis that may be required pursuant to Executive
Order 12866 (58 Fed. Reg. 51735; relating to regulatory planning and
review), Executive Order 13563 (76 Fed. Reg. 3821; relating to
improving regulation and regulatory review), or any related or
successor orders.
``(d) Definition.--In this section, the term `economically
significant', when used with respect to a draft, proposed, or final
regulation or executive action, means that the regulation or executive
action is likely, as determined by the Secretary--
``(1) to have an annual effect on the economy of $100,000,000
or more; or
``(2) adversely to affect in a material way the economy, a
sector of the economy, productivity, competition, jobs, the
environment, public health or safety, or State, local, or
tribal governments or communities.''.
SEC. 304. OFFICE OF FEDERAL STUDENT AID.
(a) Federal Preemption.--Section 456 (20 U.S.C. 1087f) is amended by
adding at the end the following:
``(c) Federal Preemption.--
``(1) In general.--Covered activities shall not be subject to
any law or other requirement of any State or political
subdivision of a State with respect to--
``(A) disclosure requirements;
``(B) requirements or restrictions on the content,
time, quantity, or frequency of communications with
borrowers, endorsers, or references with respect to
such loans; or
``(C) any other requirement relating to the servicing
or collection of a loan made under this title.
``(2) Covered activities defined.--In this subsection, the
term `covered activities' means any of the following
activities, as carried out by a qualified entity:
``(A) Origination of a loan made under this title.
``(B) Servicing of a loan made under this title.
``(C) Collection of a loan made under this title.
``(D) Any other activity related to the activities
described in subparagraphs (A) through (C).''.
(b) Procurement Flexibility.--Section 142 (20 U.S.C. 1018a) is
amended--
(1) by redesignating subsection (l) as subsection (m); and
(2) by inserting after subsection (k) the following:
``(l) Guidance to Student Loan Servicers.--
``(1) In general.--In notifying a student loan servicer of a
final contract modification (as such term is defined in section
2.101 of title 48, Code of Federal Regulations) that instructs
such loan servicer to perform a function that is new or
different from a function such servicer performs pursuant to an
existing contract, the PBO shall, not later than 30 days before
such contract change takes effect, provide such servicers with
written guidance in the form of--
``(A) a change order (as such term is defined in
section 2.101 of title 48, Code of Federal
Regulations);
``(B) a dear colleague letter; or
``(C) an electronic announcement.
``(2) Non-binding directives.--A student loan servicer that
is notified of a final contract modification described in
paragraph (1) and receives guidance in a form other than a form
described in paragraph (1) (including through emails or phone
calls) shall not be subject to such contract modification.''.
Subpart 2--Accreditors
SEC. 311. ACCREDITING AGENCY RECOGNITION.
(a) Criteria Required.--Section 496(a) of the Higher Education Act of
1965 (20 U.S.C. 1099b(a)) is amended--
(1) in the matter preceding paragraph (1), in the first
sentence, by striking ``or training'' and inserting ``skills
development'';
(2) by amending paragraph (1) to read as follows:
``(1) the accrediting agency or association (other than an
accrediting agency or association described in paragraph
(2)(D)) shall be a State or national agency or association and
shall demonstrate the ability to operate as an institutional or
programmatic accrediting agency or association within the State
or nationally, as appropriate;'';
(3) in paragraph (2)--
(A) in subparagraph (A)--
(i) in clause (i), by striking ``principal'';
and
(ii) in clause (ii), by striking ``its
principal'' and inserting ``a''; and
(B) in subparagraph (C), by inserting ``or'' at the
end; and
(C) by adding at the end the following:
``(D) is an entity (such as an industry-specific
quality assurance entity) that has been--
``(i) determined by a State to be a reliable
authority as to the quality of education or
skills development offered in such State for
the purposes of this Act; and
``(ii) designated (in accordance with
subsection (b)(1)) by such State as an
accrediting agency or association with respect
to such State for such purposes;'';
(4) in paragraph (3)--
(A) by amending subparagraph (A) to read as follows:
``(A) subparagraph (A), (C), or (D) of paragraph (2),
then such agency or association is--
``(i) distinctly incorporated or organized;
and
``(ii) both administratively and financially
separate from, and independent of, any related,
associated, or affiliated trade association or
membership organization, by ensuring that--
``(I) the members of the board or
governing body of the accrediting
agency or association are not elected
or selected by the board or chief
executive officer (or the
representative of such board or
officer) of any related, associated, or
affiliated trade association or
membership organization;
``(II) among the membership of the
board or governing body of the
accrediting agency or association--
``(aa) if such board or body
is comprised of 5 or fewer
members, there is a minimum of
one public member who
represents business and who is
not a member of any related,
associated, or affiliated trade
association or membership
organization; and
``(bb) if such board or body
is comprised of 6 or more
members, there is a minimum of
1 such public member for every
6 members;
``(III) guidelines are established
for such members to avoid conflicts of
interest, including specific guidelines
to ensure that no such member is an
employee of any institution accredited
by the agency or association or has a
financial interest in any such
institution;
``(IV) dues to the accrediting agency
or association are paid separately from
any dues paid to any related,
associated, or affiliated trade
association or membership organization;
and
``(V) the budget of the accrediting
agency or association is developed,
decided, and maintained by the
accrediting agency or association
without any review by, consultation
with, or approval by any related,
associated, or affiliated trade
association or membership
organization;'';
(B) by striking ``or'' at the end of subparagraph
(B); and
(C) by striking subparagraph (C);
(5) in paragraph (4)--
(A) in subparagraph (A)--
(i) by inserting ``(in the manner described
in subparagraph (B))'' after ``religious
missions''; and
(ii) by striking ``and'' at the end; and
(B) by striking subparagraph (B) and inserting the
following:
``(B) such accrediting agency or association
consistently applies and enforces standards that
respect the stated religious mission of an institution
of higher education by--
``(i) basing decisions regarding
accreditation and preaccreditation on the
standards of accreditation of such agency or
association; and
``(ii) not using as a negative factor the
institution's religious mission based policies,
decisions, and practices in the areas covered
by subparagraphs (B), (C), (D), (E), and (F) of
paragraph (5), except that the agency or
association may require that the institution's
or a program of study's curricula include all
core components required by the agency or
association that are not inconsistent with the
institution's religious mission; and
``(C) such agency or association demonstrates the
ability to review, evaluate, and assess the quality of
any instruction delivery model or method such agency or
association has or seeks to include within its scope of
recognition, without giving preference to or
differentially treating a particular instruction
delivery model or method offered by an institution of
higher education or program, except that--
``(i) in a case in which the instruction
delivery model allows for the separation of the
student from the instructor, the agency or
association shall not be required to have
separate standards, procedures, or policies for
the evaluation of the quality of any
instruction delivery model or method in order
to meet the requirements of this subparagraph;
and
``(ii) in the case in which the instruction
delivery model allows for the separation of the
student from the instructor--
``(I) the agency or association
requires the institution to have
processes through which the institution
establishes that the student who
registers in a course or program is the
same student who participates in the
program (including, to the extent
practicable, the testing or other
assessments required under the
program), completes the program, and
receives the academic credit; and
``(II) the agency or association
requires that any process used by an
institution to comply with the
requirement under clause (I) does not
infringe upon student privacy and is
implemented in a manner that is
minimally burdensome to the student;'';
and
(6) in paragraph (5)--
(A) by amending subparagraph (A) to read as follows:
``(A) success with respect to student achievement
outcomes in relation to the institution's mission and
to the programs the institution offers, or the mission
of a specific degree, certificate, or credential
program, which may include different standards for
different institutions or programs, and which shall
include--
``(i) standards for consideration of the
median total price charged to students for a
program of study in relation to the median
value-added earnings of students who completed
such program;
``(ii) standards for consideration of
learning outcomes measures (such as competency
attainment and licensing examination passage
rates);
``(iii) standards for consideration of labor
market outcomes measures (such as employer
satisfaction surveys, employability measures,
earnings gains, employment rates, or other
similar approaches); and
``(iv) standards for consideration of student
success outcomes measures (such as completion
rates, retention rates, and loan repayment
rates);'';
(B) by amending subparagraph (I) to read as follows:
``(I) record of student complaints received by, or
available to, the agency or association, and a process
for resolving complaints received by the institution;
and''; and
(C) in subparagraph (J), by inserting ``and the
median total price charged to students for a program of
study in relation to the median value-added earnings of
students who completed such program provided by the
Secretary'' after ``student loan default rate data
provided by the Secretary''.
(b) Secretarial Requirements and Authority.--Subsection (b) of
section 496 of the Higher Education Act of 1965 (20 U.S.C. 1099b) is
amended to read as follows:
``(b) Secretarial Requirements and Authority.--
``(1) State designated accrediting agency.--
``(A) Approval of state plans.--The Secretary shall--
``(i) approve a State's designation of an
entity as an accrediting agency or association
for the purposes described in subsection
(a)(2)(D) for a 5-year period, beginning not
later than 30 days after receipt of the plan
from such State with respect to such
designation, if such plan includes each of the
elements listed in subparagraph (B);
``(ii) submit to the State and the
authorizing committees, and make publicly
available the Secretary's response to the State
with respect to such plan, including whether
the plan includes each of the elements listed
in subparagraph (B); and
``(iii) if a State's designation of an entity
as an accrediting agency or association is
approved pursuant to this subparagraph, publish
in the Federal Register with a 30-day public
comment period--
``(I) the plan submitted by such
State with respect to such designation;
and
``(II) the Secretary's response to
such plan.
``(B) Required plan elements.--The required elements
of a State plan submitted under subparagraph (A) with
respect to the designation of an entity as an
accrediting agency or association are as follows:
``(i) A description of the process the State
used to select the entity for such designation.
``(ii) A justification of the State's
decision to select the entity for such
designation.
``(iii) A description of any requirements (in
addition to the requirements of this section),
that the State required the entity to comply
with as a condition of receiving and
maintaining such designation.
``(iv) A copy of the standards, policies, and
procedures of the entity that the State
considered in selecting the entity for such
designation.
``(v) The State's assessment of how the
standards for accreditation of the entity will
be effective in meeting the requirements of
subsection (a)(5).
``(vi) Evidence that at least one other State
has determined that such entity is a reliable
authority as to the quality of education
offered for the purposes of this Act.
``(vii) An assurance that the State will
comply with the monitoring requirements
described in subparagraph (C).
``(C) State monitoring.--
``(i) In general.--A State that has
designated an entity as an accrediting agency
or association for the purposes described in
subsection (a)(2)(D) shall submit to the
Secretary, and to the State authorizing entity,
as appropriate, a report at the end of the 5-
year period for which the entity has received
such designation, which shall include, with
respect to each postsecondary education program
or institution that has been accredited by such
entity during such period, and disaggregated by
type of credential, certification, or degree--
``(I) the number and percentage of
students who have successfully obtained
a postsecondary education credential,
certification, or degree offered by
such program or institution; and
``(II) the number and percentage of
students who were enrolled and did not
successfully obtain such a credential,
certification, or degree within 150
percent of the program length.
``(ii) Counting transfer students.--For
purposes of clause (i)(I), a student shall be
counted as obtaining a credential,
certification, or degree offered by a program
or institution that was accredited by the
entity during the period for which the report
under this subparagraph is being submitted, if
the student obtains such credential,
certification, or degree after transferring to
another institution during such period.
``(2) Authority to provide an accelerated path to
recognition.--With respect to a prospective accrediting agency
or association that submits to the Secretary an application for
initial recognition under this Act, the Secretary may provide
such recognition to such agency or association within 2 years
after receipt of such application, if such application--
``(A) demonstrates that the agency or association--
``(i) has at least one year of experience in
making accreditation or preaccreditation
decisions; and
``(ii) has policies in place that meet all
the criteria under subsection (a) for
recognition covering the range of the specific
degrees, certificates, institutions, or program
of study for which the agency or association
seeks such recognition; and
``(B) provides an assurance that if the agency or
association receives such recognition, the agency or
association will submit to the Secretary monitoring
reports regarding accreditation or preaccreditation
decisions, as appropriate.
``(3) Development of common terminology.--Not later than 18
months after the date of enactment of the College Cost
Reduction Act, the Secretary shall--
``(A) convene a panel of experts to develop common
terminology for accrediting agencies or associations to
use in making accrediting decisions with respect to
program of study or institutions, such as a common
understanding of monitoring, warning, show cause, and
other relevant statuses, as appropriate; and
``(B) publish the recommendations for such common
terminology in the Federal Register with a 60-day
public comment period.''.
(c) Operating Procedures Required.--
(1) On-site inspections and reviews.--Paragraph (1) of
section 496(c) (20 U.S.C. 1099b(c)) is amended--
(A) by inserting ``(which may vary based on
institutional risk consistent with policies promulgated
by the agency or association to determine such risk and
interval frequency as authorized under subsection
(p))'' after ``intervals''; and
(B) by striking ``, including those regarding
distance education''.
(2) Mechanism to identify institutions and programs
experiencing difficulties.--Section 496(c) (20 U.S.C. 1099b(c))
is further amended--
(A) by redesignating paragraphs (2) through (9) as
paragraphs (3) through (10), respectively; and
(B) by inserting after paragraph (1) the following:
``(2) develops a policy process to identify any institution
or program of study accredited by the agency or association
that is not meeting the standards for accreditation of the
agency or association, with a focus on the standards assessing
an institution's or program of study's student achievement
outcomes described in subsection (a)(5)(A), and other
indicators, which shall include--
``(A) not less than annually, evaluating the extent
to which such an identified institution or program of
study continues to be in compliance with such standards
or other indicators; and
``(B) as appropriate, requiring the institution or
program of study to submit a plan, on an annual basis,
to the accrediting agency or association to--
``(i) address and remedy performance issues
with respect to such compliance; and
``(ii) ensure that such plan is successfully
implemented;''.
(3) Procedures with respect to substantive changes.--
Paragraph (5) of section 496(c) (20 U.S.C. 1099b(c)) (as
redesignated by paragraph (2)(A)) is amended to read as
follows:
``(5) establishes and applies or maintains policies, which
ensure that any substantive change to the educational mission,
program of study, or program of study of an institution after
the agency or association has granted the institution
accreditation or preaccreditation status does not adversely
affect the capacity of the institution to continue to meet the
agency's or association's standards for such accreditation or
preaccreditation status, which shall include policies that--
``(A) require the institution to obtain the agency's
or association's approval of the substantive change
before the agency or association includes the change in
the scope of the institution's accreditation or
preaccreditation status; and
``(B) define substantive change to include, at a
minimum--
``(i) any change in the established mission
or objectives of the institution;
``(ii) any change in the legal status, form
of control, or ownership of the institution,
including the acquisition or addition of any
other institution or new location where more
than 50 percent of a program is offered;
``(iii) the addition of program of study at a
higher credential level from the credential
level previously accredited by the agency or
association; or
``(iv) the entering into a contract under
which an institution or organization not
certified to participate in programs under this
title offers more than 25 percent but less than
50 percent of the instruction of an educational
program of the institution with such
accreditation or preaccreditation status;''.
(4) Public availability.--Section 496(c) (20 U.S.C. 1099b(c))
is further amended--
(A) in paragraph (8) (as redesignated by paragraph
(2)(A))--
(i) in the matter preceding subparagraph (A),
by inserting ``, on the agency's or
association's website,'' after ``public''; and
(ii) in subparagraph (C), by inserting before
the semicolon at the end the following: ``, and
a summary of why such action was taken or such
placement was made'';
(B) in paragraph (9) (as so redesignated), by
striking ``and'' at the end;
(C) in paragraph (10)(B) (as so redesignated), by
striking the period at the end and inserting the
following: ``, including an assurance that the
institution does not deny a transfer of credit based
solely on the accreditation of the institution at which
the credit was earned;''; and
(D) by adding at the end the following:
``(11) such agency or association shall make publicly
available, on the agency or association's website, a list of
the institutions of higher education or program of study
accredited by such agency or association, which includes, with
respect to each such institution or program of study--
``(A) the year accreditation was granted;
``(B) the most recent date of an award of
accreditation or reaccreditation; and
``(C) the anticipated date of the institution's next
evaluation for reaccreditation;''.
(5) Prohibition on litmus tests.--Section 496(c) (20 U.S.C.
1099b(c)) is further amended by adding at the end the
following:
``(12) confirms that the standards for accreditation of the
agency or association do not--
``(A) except as provided in subparagraph (B)--
``(i) require, encourage, or coerce any
institution to--
``(I) support, oppose, or commit to
supporting or opposing--
``(aa) a specific partisan,
political, or ideological
viewpoint or belief or set of
such viewpoints or beliefs; or
``(bb) a specific viewpoint
or belief or set of viewpoints
or beliefs on social, cultural,
or political issues; or
``(II) support or commit to
supporting the disparate treatment of
any individual or group of individuals
on the basis of any protected class
under Federal civil rights law, except
as required by Federal law or a court
order; or
``(ii) assess an institution's or program of
study's commitment to any ideology, belief, or
viewpoint; or
``(B) prohibit an institution--
``(i) from having a religious mission or from
requiring an applicant, student, employee, or
independent contractor (such as an adjunct
professor) of such an institution to--
``(I) provide or adhere to a
statement of faith; or
``(II) adhere to a code of conduct
consistent with the stated religious
mission of such institution or the
religious tenets of such organization;
or
``(ii) from requiring an applicant, student,
employee, or contractor to take an oath to
uphold the Constitution of the United States;
or
``(C) require, encourage, or coerce an institution of
higher education to violate any right protected by the
Constitution;''.
(6) Prohibition on assessment of elected or appointed
officials.--Section 496(c) (20 U.S.C. 1099b(c)) is further
amended by adding at the end the following:
``(13) confirms that the standards for accreditation of the
agency or association do not assess the roles (including
actions or statements) of elected and appointed State and
Federal officials and legislative bodies; and''.
(7) Prohibition of practices that drive credential
inflation.--Section 496(c) (20 U.S.C. 1099b(c)) is further
amended by adding at the end the following:
``(14) confirms that the standards for accreditation of the
agency or association do not require an institution to develop
a program of study leading to a degree, certificate, or
recognized postsecondary credential that is not in response to
the needs of an industry or occupation.''.
(d) Length of Recognition.--Subsection (d) of section 496 (20 U.S.C.
1099b) is amended--
(1) by striking ``No accrediting'' and inserting the
following:
``(1) In general.--Except as otherwise provided in paragraph
(2), no accrediting''; and
(2) by adding at the end the following new paragraph:
``(2) Longer recognition authorized for certain agencies and
associations.--Notwithstanding paragraph (1), an accrediting
agency or association that has been recognized by the Secretary
for the purpose of this Act for a period of 5 years, may be
recognized for an additional period of up to 3 years, if the
Secretary determines, based on the performance of the
accrediting agency or association during its recognition period
under this Act, that the accrediting agency or association--
``(A) has the capability to evaluate the quality of
institutions or program of study; and
``(B) has maintained compliance with the criteria for
accrediting agencies or associations required by this
section.''.
(e) Limitation on Scope of Criteria.--Section 496 (20 U.S.C. 1099b)
is further amended by amending subsection (g) to read as follows:
``(g) Limitation on Scope of Criteria.--
``(1) In general.--The Secretary shall not establish criteria
for accrediting agencies or associations that are not required
by this section.
``(2) Institutional eligibility.--An institution of higher
education shall be eligible for participation in programs under
this title if the institution is in compliance with the
standards of its accrediting agency or association that assess
the institution in accordance with subsection (a)(5),
regardless of any additional standards adopted by the agency or
association for purposes unrelated to participation in programs
under this title.''.
(f) Change of Accrediting Agency.--Section 496 (20 U.S.C. 1099b) is
further amended by amending subsection (h) to read as follows:
``(h) Change of Accrediting Agency or Association.--
``(1) In general.--The Secretary shall recognize the
accreditation of any otherwise eligible institution or program
of study if the institution (or program) is in the process of
changing its accrediting agency or association, unless the
institution (or program) is subject to one or more covered
actions.
``(2) Covered action defined.--For purposes of this
subsection, the term `covered action' means one or more of the
following, when used with respect to an institution or program
of study:
``(A) A pending or final action brought by a State
agency to suspend, revoke, withdraw, or terminate the
institution's legal authority to provide postsecondary
education in the State.
``(B) A decision by a recognized accrediting agency
or association to deny accreditation or
preaccreditation to the institution or program of
study.
``(C) A pending or final action brought by a
recognized accrediting agency or association to
suspend, revoke, withdraw, or terminate the
institution's or program of study's accreditation or
preaccreditation.
``(D) Probation or an equivalent status imposed on
the institution or program of study by a recognized
accrediting agency or association.
``(3) Institutions of higher education not subject to covered
actions.--An institution (or program of study ) that is not
subject to a covered action described in paragraph (1) and that
desires to change its accrediting agency or association for a
reason not related to any such covered action (such as
compliance with State law) may make such a change without the
approval of the Secretary, as long as the institution (or
program) and the new accrediting agency or association of the
institution (or program), not later than 30 days after the
accreditation decision by such agency or association, notify
the Secretary, in writing, of the effective date of the
institution's (or program's)accreditation by such agency or
association.''.
(g) Dual Accreditation Rule.--Section 496 (20 U.S.C. 1099b) is
further amended by amending subsection (i) to read as follows:
``(i) Dual Accreditation Rule.--
``(1) Recognition by secretary.--The Secretary shall
recognize the accreditation of any otherwise eligible
institution of higher education if the institution of higher
education is accredited, as an institution, by more than one
accrediting agency or association.
``(2) Designation by institution.--If the institution is
accredited, as an institution, by more than one accrediting
agency or association, the institution--
``(A) shall designate which agency's or association's
accreditation shall be utilized in determining the
institution's eligibility for participation in programs
under this Act; and
``(B) may change this designation at the end of the
institution's period of recognition.''.
(h) Religious Institutions Rule.--Section 496 (20 U.S.C. 1099b) is
further amended by amending subsection (k) to read as follows:
``(k) Religious Institution Rule.--
``(1) In general.--Notwithstanding subsection (j), the
Secretary shall allow an institution that has had its
accreditation withdrawn, revoked, or otherwise terminated, or
has voluntarily withdrawn from an accreditation agency, to
remain certified as an institution of higher education under
section 102 and subpart 3 of this part for a period sufficient
to allow such institution to obtain alternative accreditation,
if the Secretary determines that the withdrawal, revocation, or
termination--
``(A) is related to the religious mission or
affiliation of the institution; and
``(B) is not related to the accreditation criteria
provided for in this section.
``(2) Administrative complaint for failure to respect
religious mission.--
``(A) In general.--
``(i) Institution.--If an institution of
higher education believes that an adverse
action of an accrediting agency or association
fails to respect the institution's religious
mission in violation of subsection (a)(4)(B),
the institution--
``(I) may file a complaint with the
Secretary to review the adverse action
of the agency or association; and
``(II) prior to filing such
complaint, shall notify the Secretary
and the agency or association of an
intent to file such complaint not later
than 30 days after--
``(aa) receiving the adverse
action from the agency or
association; or
``(bb) determining that
discussions with or the
processes of the agency or
association to remedy the
failure to respect the
religious mission of the
institution will fail to result
in the withdrawal of the
adverse action by the agency or
association.
``(ii) Accrediting agency or association.--
Upon notification of an intent to file a
complaint and through the duration of the
complaint process under this paragraph, the
Secretary and the accrediting agency or
association shall treat the accreditation
status of the institution of higher education
as if the adverse action for which the
institution is filing the complaint had not
been taken.
``(B) Complaint.--Not later than 45 days after
providing notice of the intent to file a complaint, the
institution shall file the complaint with the Secretary
(and provide a copy to the accrediting agency or
association), which shall include--
``(i) a description of the adverse action;
``(ii) how the adverse action fails to
respect the institution's religious mission in
violation of subsection (a)(4)(B); and
``(iii) any other information the institution
determines relevant to the complaint.
``(C) Response.--
``(i) In general.--The accrediting agency or
association shall have 30 days from the date
the complaint is filed with the Secretary to
file with the Secretary (and provide a copy to
the institution) a response to the complaint,
which response shall include--
``(I) how the adverse action is based
on a violation of the agency or
association's standards for
accreditation; and
``(II) how the adverse action does
not fail to respect the religious
mission of the institution and is in
compliance with subsection (a)(4)(B).
``(ii) Burden of proof.--
``(I) In general.--The accrediting
agency or association shall bear the
burden of proving that the agency or
association has not taken the adverse
action as a result of the institution's
religious mission, and that the action
does not fail to respect the
institution's religious mission in
violation of subsection (a)(4)(B), by
showing that the adverse action does
not impact the aspect of the religious
mission claimed to be affected in the
complaint.
``(II) Insufficient proof.--Any
evidence that the adverse action
results from the application of a
neutral and generally applicable rule
shall be insufficient to prove that the
action does not fail to respect an
institution's religious mission.
``(D) Additional institution response.--The
institution shall have 30 days from the date on which
the agency or association's response is filed with the
Secretary to--
``(i) file with the Secretary (and provide a
copy to the agency or association) a response
to any issues raised in the response of the
agency or association; or
``(ii) inform the Secretary and the agency or
association that the institution elects to
waive the right to respond to the response of
the agency or association.
``(E) Secretarial action.--
``(i) In general.--Not later than 30 days of
receipt of the institution's response under
subparagraph (D) or notification that the
institution elects not to file a response under
such subparagraph--
``(I) the Secretary shall review the
materials to determine if the
accrediting agency or association has
met its burden of proof under
subparagraph (C)(ii)(I); or
``(II) in a case in which the
Secretary fails to conduct such
review--
``(aa) the Secretary shall be
deemed as determining that the
adverse action fails to respect
the religious mission of the
institution; and
``(bb) the accrediting agency
or association shall be
required to reverse the action
immediately and take no further
action with respect to such
adverse action.
``(ii) Review of complaint.--In reviewing the
complaint under clause (i)(I)--
``(I) the Secretary shall consider
the institution to be correct in the
assertion that the adverse action fails
to respect the institution's religious
mission and shall apply the burden of
proof described in subparagraph
(C)(ii)(I) with respect to the
accrediting agency or association; and
``(II) if the Secretary determines
that the accrediting agency or
association fails to meet such burden
of proof--
``(aa) the Secretary shall
notify the institution and the
agency or association that the
agency or association is not in
compliance with subsection
(a)(4)(B), and that such agency
or association shall carry out
the requirements of item (bb)
to be in compliance with
subsection (a)(4)(B); and
``(bb) the agency or
association shall reverse the
adverse action immediately and
take no further action with
respect to such adverse action.
``(iii) Final departmental action.--The
Secretary's determination under this
subparagraph shall be the final action of the
Department on the complaint.
``(F) Rule of construction.--Nothing in this
paragraph shall prohibit--
``(i) an accrediting agency or association
from taking an adverse action against an
institution of higher education for a failure
to comply with the agency or association's
standards of accreditation as long as such
standards are in compliance with subsection
(a)(4)(B) and any other applicable requirements
of this section; or
``(ii) an institution of higher education
from exercising any other rights to address
concerns with respect to an accrediting agency
or association or the accreditation process of
an accrediting agency or association.
``(G) Guidance.--
``(i) In general.--The Secretary may only
issue guidance under this paragraph that
explains or clarifies the process for providing
notice of an intent to file a complaint or for
filing a complaint under this paragraph.
``(ii) Clarification.--The Secretary may not
issue guidance, or otherwise determine or
suggest, when discussions to remedy the failure
by an accrediting agency or association to
respect the religious mission of an institution
of higher education referred to in subparagraph
(A)(i)(II)(bb) have failed or will fail.
``(3) Religious mission defined.--In this Act, the term
`religious mission'--
``(A) means a published institutional mission that is
approved by the governing body of an institution of
higher education and that includes, refers to, or is
predicated upon religious tenets, beliefs, or
teachings; and
``(B) may be reflected in any of the institution's
policies, decisions, or practices related to such
tenets, beliefs, or teachings (including any policies
or decisions concerning housing, employment,
curriculum, self-governance, or student admission,
continuing enrollment, or graduation).''.
(i) Independent Evaluation.--Section 496(n)(3) (20 U.S.C.
1099b(n)(3)) is amended by striking the last sentence.
(j) Regulations.--Section 496(o) (20 U.S.C. 1099b(o)) is amended by
inserting before the period at the end the following: ``, or with
respect to the policies and procedures of an accreditation agency or
association described in paragraph (2) or (5) of subsection (c) or how
the agency or association carries out such policies and procedures''.
(k) Risk-based Review Processes or Procedures; Waiver.--Section 496
(20 U.S.C. 1099b) is further amended--
(1) by striking subsections (p) and (q); and
(2) by adding at the end the following:
``(p) Risk-based or Differentiated Review Processes or Procedures.--
``(1) In general.--Notwithstanding any other provision of law
(including subsection (a)(4)(A)), an accrediting agency or
association shall establish risk-based processes or procedures
for assessing compliance with the accrediting agency or
association's standards (including policies related to
substantive change and award of accreditation statuses) under
which the agency or association--
``(A) creates a system for understanding an
institution's or program of study's performance in
comparison with other similarly situated institutions
or programs of study (which may include past
performance with respect to meeting the accrediting
agency or association's standards, including the
standards relating to the student achievement outcomes
described in subclauses (I) through (IV) of subsection
(a)(5)(A));
``(B) requires for each institution and program of
study designated as high-risk, in accordance with the
accrediting agency or association's system in
subparagraph (A), to submit the annual plans described
in subsection (c)(2)(B) to the agency or association
that address the performance issues of such institution
or program of study that resulted in such designation;
``(C) with respect to institutions or program of
study meeting or exceeding performance as described in
subparagraph (A), reduces any compliance requirements
with the standards of accreditation of the agency that
are not assessing an institution or program of study
under subsection (a)(5), such as on-site inspections;
and
``(D) may require an institution or program of study
that has declining performance (such as an institution
or program of study with a high-risk designation under
subparagraph (B)), which has not improved as required
by the annual plan submitted under subsection
(c)(2)(B), to take actions to avoid or minimize the
risks that may lead to revocation of accreditation
(such as limiting certain program of study enrollment
or recommending to the Secretary to limit funds under
this title for such an institution or program.
``(2) Prohibition.--Any risk-based review process or
procedure established pursuant to this subsection shall not
discriminate against, or otherwise preclude, institutions of
higher education based on institutional sector or category,
including an institution of higher education's tax status.''.
(l) Total Price Defined.--Section 496 (20 U.S.C. 1099b) is further
amended by adding at the end the following:
``(q) Total Price Defined.--For purposes of this section, the term
`total price' has the meaning given such term in section 454(d)(3).''.
SEC. 312. NATIONAL ADVISORY COMMITTEE ON INSTITUTIONAL QUALITY AND
INTEGRITY (NACIQI).
Section 114 (20 U.S.C. 1011c) is amended--
(1) in subsection (b)--
(A) in paragraph (2), by redesignating subparagraphs
(A) through (C) as clauses (i) through (iii),
respectively, and adjusting the margins accordingly;
(B) by striking ``Individuals'' and inserting the
following:
``(A) In general.--Individuals'';
(C) in clause (ii), as so redesignated, by striking
``and training'' and inserting ``skills development'';
(D) by adding at the end of paragraph (2) the
following:
``(B) Disqualification.--No individual may be
appointed as a member of the Committee if such
individual has a significant conflict of interest, such
as being a current regulator (such as a State
authorizer), that would require the individual to
frequently be recused from serving as a member of the
Committee.''; and
(E) in paragraph (3), by striking ``Except as
provided in paragraph (5), the term'' and inserting
``The term'';
(2) in subsection (c)--
(A) in paragraph (4), by adding ``and'' at the end;
(B) in paragraph (5), by striking ``; and'' at the
end and inserting a period; and
(C) by striking paragraph (6);
(3) in subsection (d)(2), by inserting at the end the
following: ``The name of any member of the Committee who has
been recused with respect to an agenda item of the meeting
shall be included in such agenda.'';
(4) in subsection (e)(2)(D), by striking ``, including any
additional functions established by the Secretary through
regulation''; and
(5) in subsection (f), by striking ``September 30, 2021'' and
inserting ``September 30, 2028''.
SEC. 313. ALTERNATIVE QUALITY ASSURANCE EXPERIMENTAL SITE INITIATIVE.
Section 487A of the Higher Education Act of 1965 (20 U.S.C. 1094a) is
amended--
(1) by redesignating subsection (c) as subsection (d); and
(2) by inserting after subsection (b) the end the following:
``(c) Alternative Quality Assurance Experimental Site Initiative.--
``(1) Experimental site authorized.--The Secretary shall
select, in accordance with paragraph (4), eligible entities
that voluntarily seek to participate in an Alternative Quality
Assurance experimental site initiative for a duration of 5
years and receive the waivers or other flexibility described in
paragraph (5) to evaluate whether the eligible entities, during
such 5-year period, can maintain high student achievement
outcomes while participating in programs under this title
without being accredited by an accrediting agency or
association recognized under section 496.
``(2) Eligible entity defined.--For purposes of this
subsection, an eligibility entity means--
``(A) an institution of higher education (as defined
in section 102); or
``(B) an educational provider that--
``(i) is not an institution of higher
education;
``(ii) does not receive funding under this
Act;
``(iii) is not accredited by an accrediting
agency or association for the purposes of this
title; and
``(iv) is authorized to operate in the State
in which the provider is located.
``(3) Application.--
``(A) In general.--Each eligible entity desiring to
participate in the experimental site initiative under
this subsection shall submit an application to the
Secretary, at such time and in such manner as the
Secretary may require, which shall contain the
information described in subparagraph (B). The
Secretary may not require any information in such an
application that is not described in subparagraph (B).
``(B) Contents.--Each application under paragraph (1)
shall include--
``(i) a description of which program of study
offered at the eligible entity will be included
in the experimental site initiative,
including--
``(I) in the case of an eligible
entity that is an institution of higher
education, an attestation that such
program meets the standards of
accreditation of the institution's
accrediting agency or association
described in clauses (i) through (iv)
of section 496(a)(5)(A) (including the
standard requiring that the median
value-added earnings of students who
complete the program are greater than
the median total price charged to
students for the program); and
``(II) in the case of an eligible
entity defined in paragraph (2)(B),
documentation and verified
administrative data that the program
meets standards similar to the
standards of accreditation referenced
in subclause (I);
``(ii) a justification of the reason why the
eligible entity seeks to receive the waiver
described in paragraph (5)(A), including
estimates or documentation of the potential
savings to the entity of receiving such waiver;
and
``(iii) a description of how the eligible
entity plans to share the financial risk with
the Secretary of receiving the waivers
described in paragraph (5), such as by--
``(I) providing matching non-Federal
funds to the Secretary to cover the
cost of at least half of the expected
disbursements under this title to the
students that enroll in such program
for the first year of the experiment;
``(II) providing a letter of credit
to the Secretary to cover the cost
described in subclause (I); or
``(III) requesting to be placed on a
reimbursement system of payment.
``(4) Selection.--No later than 6 months after the
experimental site initiative is announced, the Secretary shall
select eligible entities to participate in the initiative based
on the applications submitted under paragraph (3). In making
such selections, the Secretary--
``(A) shall consider--
``(i) the number and quality of applications;
``(ii) each applicant's ability to
effectively share the financial risk as
required under paragraph (3)(B)(iii); and
``(iii) in the case of an applicant that is
an institution of higher education, the
applicant's history of compliance with the
requirements of this Act;
``(B) shall ensure that the selected eligible
entities represent a variety of eligible entities with
respect to size, mission, and geographic distribution;
``(C) shall ensure that the number of eligible
entities selected that are institutions of higher
education described in paragraph (2)(B) is equal to the
number of eligible entities selected that are
educational providers described in paragraph (2)(B);
and
``(D) may not select any eligible entity whose
approval to operate in a State is at risk.
``(5) Waivers.--The Secretary is authorized to waive, for any
eligible entity participating in the experimental site
initiative under this subsection--
``(A) any requirements conditioning an eligible
entity's eligibility to participate in programs under
this title to being accredited by an accrediting agency
or association recognized under section 496; and
``(B) any other requirements of this title determined
necessary by the Secretary to carry out such initiative
(including requirements related to the award process
and disbursement of student financial aid, or other
management procedures or processes), except that the
Secretary shall not waive any provisions with respect
to award rules (other than an award rule related to an
experiment in modular or compressed schedules), grant
and loan maximum award amounts, and need analysis
requirements, unless the waiver of such provisions is
authorized by another provision under this title.
``(6) Review and evaluation.--
``(A) In general.--The Secretary shall review and
evaluate the experimental site initiative conducted
under this subsection, including by evaluating, with
respect to each participating program of each
participating eligible entity, whether--
``(i) the median value-added earnings of
students who complete the program of study are
greater than the median total price charged to
students for such program; and
``(ii) the program of study is meeting other
student achievement outcomes (such as outcomes
based on standards of accreditation described
in section 496(a)(5)(A)), as appropriate for
the program.
``(B) Recommendations.--If, based on such evaluation,
the Secretary determines that participating eligible
entities were able to meet the requirement of
subparagraph (A)(i) and the other student achievement
outcomes evaluated by the Secretary under subparagraph
(A)(ii), the Secretary shall submit to the authorizing
committees recommendations regarding amendments to this
Act that will streamline and enhance the quality
assurance process of institutions of higher education,
and educational providers described in paragraph
(2)(B).''.
PART B--STUDENT SUCCESS
SEC. 321. POSTSECONDARY STUDENT SUCCESS GRANTS.
Part B of title VII of the Higher Education Act of 1965 (20 U.S.C.
1138 et seq.) is amended--
(1) in section 741--
(A) by striking subsections (b), (c), (e), and (f);
(B) by redesignating subsection (d) as subsection
(c); and
(C) by inserting after subsection (a) the following:
``(b) Grants.--
``(1) Definitions.--In this subsection:
``(A) Completion rate.--The term `completion rate'
means--
``(i) the percentage of students from an
initial cohort enrolled at an institution of
higher education that is a 2-year institution
who have graduated from the institution or
transferred to a 4-year institution of higher
education; or
``(ii) the percentage of students from an
initial cohort enrolled at an institution of
higher education in the State that is a 4-year
institution who have graduated from the
institution.
``(B) Eligible entity.--The term `eligible entity'
means--
``(i) an institution of higher education;
``(ii) a partnership between a nonprofit
educational organization and an institution of
higher education; and
``(iii) a consortium of institutions of
higher education.
``(C) Eligible indian entity.--The term `eligible
Indian entity' means the entity responsible for the
governance, operation, or control of a Tribal College
or University.
``(D) Evidence-based.--The term `evidence-based' has
the meaning given the term in section 8101(21)(A) of
the Elementary and Secondary Education Act of 1965 (20
U.S.C. 7801(21)(A)), except that such term shall also
apply to institutions of higher education.
``(E) Evidence tiers.--
``(i) Evidence tier 1 reform or practice.--
The term `evidence tier 1 reform or practice'
means a reform or practice that prior research
suggests has promise for the purpose of
successfully improving student achievement or
attainment for high-need students.
``(ii) Evidence tier 2 reform or practice.--
The term `evidence tier 2 reform or practice'
means a reform or practice described in clause
(i), or other practice meeting similar
criteria, that measures impact and cost
effectiveness of student success activities,
and, through rigorous evaluation (including
through the use of existing administrative
data, as applicable), has been found to be
successfully implemented.
``(iii) Evidence tier 3 reform or practice.--
The term `evidence tier 3 reform or practice'
means a reform or practice described in clause
(ii), or other practice meeting similar
criteria, that has been found to produce
sizable, important impacts on student success
and--
``(I) determines whether such impacts
can be successfully reproduced and
sustained over time; and
``(II) identifies the conditions in
which such reform or practice is most
effective.
``(F) First generation college student.--The term
`first generation college student' has the meaning
given the term in section 402A(h) of the Higher
Education Act of 1965 (20 U.S.C. 1070a-11(h)).
``(G) High-need student.--The term `high-need
student' means--
``(i) a student from low-income background;
``(ii) first generation college students;
``(iii) caregiver students;
``(iv) students with disabilities;
``(v) students who stopped out before
completing;
``(vi) reentering justice-impacted students;
and
``(vii) military-connected students.
``(H) Secretary.--The term `Secretary' means the
Secretary of Education.
``(I) Tribal college or university.--The term `Tribal
College or University' has the meaning given the term
in section 316(b) of the Higher Education Act of 1965
(20 U.S.C. 1059c(b)).
``(2) Reservation of funds for eligible indian entities.--
From the total amount appropriated to carry out this subsection
for a fiscal year, the Secretary shall reserve 2 percent for
grants to eligible Indian entities to increase participation
and completion rates of high-need students.
``(3) Authorization of postsecondary student success
competitive grants.--
``(A) Grant authorization.--For each of fiscal years
2025 through 2030, the Secretary shall award, on a
competitive basis, grants to eligible entities to
provide student services to increase participation,
retention, and completion rates of high-need students.
``(B) Application.--An eligible entity desiring a
grant under this section shall submit an application to
the Secretary at such time, in such manner, and
containing the information required under subparagraph
(C).
``(C) Contents.--An application submitted under this
paragraph shall include the following:
``(i) A plan to increase, with respect to all
students enrolled at the institution of higher
education, attainment and completion rates or
graduation rates, including--
``(I) a description of which evidence
tiers would be met by the evidence-
based reforms or practices; and
``(II) a particular focus on serving
high-need students through student
services and collaboration among 2-year
programs, 4-year programs, and
workforce systems.
``(ii) Annual benchmarks for student outcomes
with respect to evidence-based reforms or
practices.
``(iii) A plan to evaluate the evidence-based
reforms or practices carried out pursuant to a
grant received under this subsection.
``(iv) Rates of enrolled students who
received a Federal Pell Grant under section
401.
``(v) Demographics of enrolled students,
including high-need students.
``(vi) A description of how the eligible
entity will, directly or in collaboration with
institutions of higher education or nonprofit
organizations, use the grant funds to implement
1 or more of the following evidence-based
reforms or practices:
``(I) Providing comprehensive
academic, career, and student services,
which may include mentoring, advising,
or case management services.
``(II) Providing accelerated learning
opportunities, which may include dual
or concurrent enrollment programs and
early college high school programs.
``(III) Reforming course scheduling
or credit-awarding policies.
``(IV) Improving transfer pathways
between the institution of higher
education, or eligible Indian entity,
and other institutions of higher
education.
``(vii) A description of how the evidence-
based reforms or practices carried out pursuant
to a grant under this subsection will be
sustained once the grant expires.
``(D) Evidence-based student success programs.--From
the total amount appropriated to carry out this
subsection for a fiscal year and not reserved under
paragraph (4), the Secretary shall reserve not less
than 20 percent to award grants to eligible entities
with applications that propose to include reforms or
practices--
``(i) at least 1 of which is a tier 3 reform
or practice; and
``(ii) the rest of which are tier 1 or tier 2
reforms or practices.
``(E) Required use of funds.--An eligible entity that
receives a grant under this section shall use the grant
funds to carry out the plans submitted pursuant to
subparagraph (C) and for evidence-based reforms or
practices for improving retention and completion rates
of students that may include the following:
``(i) Student services to support retention,
completion, and success, which may include--
``(I) faculty and peer counseling;
``(II) use of real-time data on
student progress;
``(III) improving transfer student
success; and
``(IV) incentives for students to re-
enroll or stay on track.
``(ii) Direct student support services,
including a combination of--
``(I) tutoring, academic supports,
and enrichment services; and
``(II) emergency financial
assistance.
``(iii) Efforts to prepare students for a
career, which may include--
``(I) career coaching, career
counseling and planning services, and
efforts to lower student to advisor
ratios;
``(II) networking and work-based
learning opportunities to support the
development of skills and professional
relationships;
``(III) utilizing career pathways;
and
``(IV) boosting experiences necessary
to obtain and succeed in high-wage,
high-skilled, (as described in section
122 of the Carl D. Perkins Career and
Technical Education Act of 2006 (20
U.S.C. 2342)) or in-demand industry
sectors or occupations (as defined in
section 3 of the Workforce Innovation
and Opportunity Act (29 U.S.C. 3102)).
``(iv) Efforts to recruit and retain faculty
and other instructional staff.
``(F) Permissive use of funds.--From the total amount
appropriated to carry out this subsection for a fiscal
year, and not reserved under paragraph (4) or
subparagraph (D), the Secretary may set aside--
``(i) not more than 5 percent for
administration, capacity building, research,
evaluation, and reporting; and
``(ii) not more than 2 percent for technical
assistance to eligible entities.
``(G) Evaluations.--
``(i) In general.--For the purpose of
improving the effectiveness of the evidence-
based reforms or practices carried out by
eligible entities pursuant to a grant under
this subsection, the Secretary shall make
grants to or enter into contracts with one or
more organizations to--
``(I) evaluate the effectiveness of
such reforms or practices; and
``(II) disseminate information on the
impact of such reforms or practices in
increasing completion and retention
activities of students, as well as
other appropriate measures.
``(ii) Issues to be evaluated.--The
evaluations required under clause (i) shall
measure the effectiveness of the evidence-based
reforms or practices carried out by eligible
entities pursuant to a grant under this
subsection in--
``(I) whether such eligible entity
implemented the plans, and carried out
the activities, described in
subparagraph (C); and
``(II) comparing the completion and
retention rates of students who
participated in such reforms or
practices with the rates of students of
similar backgrounds who did not
participate in such reforms or
practices.
``(iii) Results.--Not later than 18 months
after the date of the enactment of this
subsection, the Secretary shall submit to the
authorizing committees a final report.
``(H) Grant limit.--An institution with branch
campuses that is an eligible entity may only receive a
grant under this subsection for 1 campus of such
institution at a time.
``(4) Authorization of appropriations.--There are authorized
to be appropriated to carry out this subsection, $45,000,000,
for each of fiscal years 2026 through 2031.''; and
(2) by striking sections 742 through 745.
SEC. 322. REVERSE TRANSFER EFFICIENCY ACT.
Section 444(b)(1) of the General Education Provisions Act (20 U.S.C.
1232g(b)(1)) is amended--
(1) in subparagraph (K)(ii), by striking ``; and'' and
inserting a semicolon;
(2) in subparagraph (L), by striking the period at the end
and inserting ``; and''; and
(3) by inserting after subparagraph (L) the following:
``(M) an institution of postsecondary education in which a
student was previously enrolled, to which records of
postsecondary coursework and credits are sent for the purpose
of applying such coursework and credits toward completion of a
recognized postsecondary credential (as that term is defined in
section 3 of the Workforce Innovation and Opportunity Act (29
U.S.C. 3102)), upon condition that the student provides written
consent prior to receiving such credential.''.
SEC. 323. TRANSPARENT AND FAIR TRANSFER OF CREDIT POLICIES.
Section 485(h) of the Higher Education Act of 1965 (20 U.S.C.
1092(h)) is amended--
(1) in paragraph (1)(A), by inserting ``, including with
respect to the acceptance or denial of such credit'' after
``higher education'';
(2) by redesignating paragraph (2) as paragraph (3); and
(3) by inserting after paragraph (1) the following:
``(2) Denial of credit transfer.--An institution may not
establish a transfer of credit policy which denies credit
earned at another institution based solely on the source of
accreditation of such other institution, provided that such
other institution is accredited by an agency or association
that is recognized by the Secretary pursuant to section 496.''.
Purpose
The purpose of H.R. 6951, the College Cost Reduction Act,
is to lower the cost of postsecondary education for students
and families.
Committee Action
117TH CONGRESS
First Session--Hearings
On March 17, 2021, the Committee's Subcommittee on Higher
Education and Workforce Development held a hearing on ``Rising
to the Challenge: The Future of Higher Education Post COVID-
19'' to examine challenges and opportunities in postsecondary
education following the COVID-19 pandemic. Testifying before
the Subcommittee were Dr. Lindsey M. Burke, Fellow, Heritage
Foundation, Washington, D.C.; Mr. Keith Thorton Jr., Student,
Florida International University, Miami, Florida; Mr. Eloy
Oritz Oakley, Chancellor, California Community Colleges,
Sacramento, California; and Mr. Daniel Zibel, Vice President
and Chief Counsel, National Student Legal Defense Network,
Washington, D.C.
On April 20, 2021, the Full Committee held a hearing on
``For-Profit College Conversions: Examining Ways to Improve
Accountability and Fraud'' to examine ways to improve the
process for and oversight of college mergers, conversions, and
changes of ownership. Testifying before the Committee were Ms.
Melissa Emrey-Arras, Director of Education, Workforce, and
Income Security, Government Accountability Office, Washington,
D.C.; Dr. Andrew Gillen, Senior Policy Analyst, Texas Public
Policy Foundation, Austin, Texas; Ms. Yan Cao, Fellow, The
Century Foundation, Washington, D.C.; and Mr. Brian Galle,
Professor, Georgetown University, Washington, D.C.
On April 28, 2021, the Full Committee held a hearing on
``Building Back Better: Investing in Improving Schools,
Creating Jobs, and Strengthening Families and Our Economy'' to
examine the implications of the proposed Build Back Better Act,
which included provisions offering ``free'' community college
and increased Pell Grants. Testifying before the Committee were
Dr. Neal McCluskey, Director, Center for Educational Freedom,
Cato Institute, Washington, D.C.; Mr. Brian Riedl, Senior
Fellow, Manhattan Institute, New York, New York; Mr. Rasheed
Malik, Senior Policy Analyst, Center for American Progress,
Washington, D.C.; Mr. Mark Mitsui, President, Portland
Community College, Portland, Oregon; Mr. Bob Lanter, Executive
Director, California Workforce Association, Sacramento,
California; and Ms. Mary Filardo, Executive Director, 21st
Century School Fund, Washington, D.C.
On July 29, 2021, the Committee's Subcommittee on Higher
Education and Workforce Development held a hearing on ``Keeping
the Pell Grant Promise: Increasing Enrollment, Supporting
Success'' to examine ways to improve the Pell Grant program as
well as other policies to improve postsecondary opportunities
and success for low-income students. Testifying before the
Subcommittee were Dr. Justin Ortagus, Associate Professor of
Higher Education Administration & Policy and Director of the
Institute of Higher Education, University of Florida,
Gainesville, Florida; Dr. Robert J. Jones, Chancellor,
University of Illinois Urbana-Champaign, Champaign, Illinois;
Dr. Michael B. Poliakoff, President, American Council of
Trustees and Alumni, Washington, D.C.; and Ms. Darleny Suriel,
Student, City College of New York, New York, New York.
On September 30, 2021, the Committee's Subcommittee on
Higher Education and Workforce Development held a hearing on
``Protecting Students and Taxpayers: Improving the Closed
School Discharge Process'' to examine ways to improve the
Department of Education's ability to protect students and
taxpayers from precipitous school closures. Testifying before
the Subcommittee were Ms. Melissa Emrey-Arras, Director of
Education, Workforce, and Income Security, Government
Accountability Office, Washington, D.C.; Ms. Karyn Rhodes,
Student Borrower, Torrance, California; Mr. Preston Cooper,
Research Fellow, Foundation for Research on Equal Opportunity,
Washington, D.C.; and Ms. Robyn Smith, Senior Attorney, Legal
Aid Foundation of Los Angeles, Los Angeles, California.
Second Session--Hearings
On March 2, 2022, the Committee's Subcommittee on Higher
Education and Workforce Development held a hearing on
``Investing in Economic Mobility: The Important Role of
Hispanic Serving Institutions and Other Minority Serving
Institutions'' to examine the role that minority-serving
institutions play in promoting economic mobility, which helped
inform policies such as the PROMISE program included in H.R.
6951. Testifying before the Subcommittee were Dr. Jose Cruz
Rivera, President, Northern Arizona University, Flagstaff,
Arizona; Dr. Patricia Ramsey, President, Medgar Evers College,
Brooklyn, New York; Dr. Janine Davidson, President,
Metropolitan State University, Denver, Colorado; and Dr. Robert
Teranishi, Professor of Social Science and Comparative
Education, University of California Los Angeles, Los Angeles,
California.
118TH CONGRESS
First Session--Hearings
On February 8, 2023, the Committee on Education and the
Workforce held a hearing on ``American Education in Crisis'' to
examine the state of American education, including K-12
education, postsecondary education, and workforce development.
During the hearing, witness Dr. Monty Sullivan responded to a
question from Ranking Member Scott that measuring earnings as a
way to determine value was a key component of separating
effective from ineffective programs. Dr. Sullivan also stated
that America's worker shortage ``is too big for America's
public institutions only to solve.'' Mr. Scott Pulsipher echoed
Dr. Sullivan, stating that the value of a program is more
important than its modality. Testifying before the Committee
were Mrs. Virginia Gentles, Director, Education Freedom Center,
Independent Women's Forum, Arlington, Virginia; Dr. Monty
Sullivan, President, Louisiana Community and Technical College
System, Baton Rouge, Louisiana; Mr. Scott Pulsipher, President,
Western Governors University, Salt Lake City, Utah; and The
Hon. Jared Polis, Governor, State of Colorado, Denver,
Colorado.
On March 23, 2023, the Committee's Subcommittee on Higher
Education and Workforce Development held a hearing on
``Breaking the System: Examining the Implications of Biden's
Student Loan Policies for Students and Taxpayers.'' The purpose
of the hearing was to discuss with policy experts the harms of
the Biden administration's loan cancellation policies for
students, taxpayers, and the economy. Testifying before the
Subcommittee were Mr. Marc Goldwein, Senior Vice President and
Senior Policy Director, Committee for a Responsible Federal
Budget, Washington, D.C.; Dr. Adam Looney, Director, Marriner
S. Eccles Institute for Economics and Quantitative Analysis,
University of Utah, Salt Lake City, UT; Mr. Sameer Gadkaree,
President, the Institute for College Access & Success, Los
Angeles, California; Dr. Carlo Salerno, Economist and Financial
Aid Expert, Los Angeles, California.
On May 16, 2023, the Committee on Education and the
Workforce held a hearing on ``Examining the Policies and
Priorities of the U.S. Department of Education.'' The purpose
of the hearing was to examine the policies and priorities of
the U.S. Department of Education. Testifying before the
Committee was the Honorable Miguel Cardona, Secretary, U.S.
Department of Education, Washington, D.C.
On May 24, 2023, the Committee's Subcommittee on Higher
Education and Workforce Development held a hearing on
``Breaking the System Part II: Examining the Implications of
Biden's Student Loan Policies for Students and Taxpayers.'' The
purpose of the hearing was to discuss with policy experts the
harms of the Biden administration's loan cancellation policies
for students, taxpayers, and the economy. Testifying before the
Subcommittee were the Honorable James Kvaal, Under Secretary of
Education, U.S. Department of Education, Washington, D.C; and
Mr. Richard Cordray, Chief Operating Officer, Office of Federal
Student Aid, U.S. Department of Education, Washington, D.C.
On June 14, 2023, the Committee on Education and the
Workforce held a hearing on ``Postsecondary Innovation:
Preparing Today's Students for Tomorrow's Opportunities.'' The
purpose of the hearing was to examine innovative ways to
improve access, completion, workforce alignment, and student
success in postsecondary education through innovative policies
and practices. Testifying before the Committee were Dr. Tim
Renick, Executive Director, National Institute for Student
Success, Georgia State University; Mr. Keith Shoates, Chief
Operating Officer, Student Freedom Initiative, Washington,
D.C.; Ms. Lanae Erickson, Senior Vice President for Social
Policy, Education and Politics, Third Way, Washington, D.C.;
Dr. Lori Carrell, Chancellor, University of Minnesota Rochester
and Co-Director, College-in-3 Initiative, Rochester, Minnesota.
On July 27, 2023, the Committee's Subcommittee on Higher
Education and Workforce Development held a hearing on
``Lowering the Costs and Increasing Value for Students,
Institutions, and Taxpayers.'' The purpose of the hearing was
to discuss ways in which the accountability system of the HEA
can be reformed. During the hearing, witnesses testified that a
return-on-investment metric would be an appropriate
accountability metric. Testifying before the Subcommittee were
Dr. Andrew Gillen, Senior Policy Analyst, Texas Public Policy
Foundation, Austin, Texas; Mr. Michael Horn, Co-Founder,
Clayton Christensen Institute, Lexington, Massachusetts; Mr.
Stig Leschly, Founder and President, Postsecondary Commission,
Boston, Massachusetts; and Dr. Stephanie Cellini, Professor of
Public Policy and Public Administration, and of Economics, The
George Washington University, Washington, D.C.
Legislative Action
On March 27, 2023, Rep. Bob Good (R-VA) introduced H.J.
Res. 45, providing for congressional disapproval under chapter
8 of title 5, United States Code, of the rule submitted by the
Department of Education relating to ``Waivers and Modifications
of Federal Student Loans. `` The bill was referred solely to
the Committee on Education and the Workforce. On May 10, 2023,
the Committee considered H.J. Res. 45 in legislative session
and reported it favorably to the House of Representatives by a
recorded vote of 24-18. On May 24, 2023, the full House
considered H.J. Res. 45 and passed it by a recorded vote of
218-203. On June 1, 2023, the Senate passed H.J. Res. 45 by a
vote of 52-46. On June 7, 2023, it was presented to and vetoed
by President Biden. On June 21, 2023, the House failed to
override the veto by a vote of 221-206.
On September 5, 2023, Rep. Lisa McClain (R-MI) introduced
H.J. Res. 88, providing for congressional disapproval under
chapter 8 of title 5, United States Code, of the rule submitted
by the Department of Education relating to ``Improving Income
Driven Repayment for the William D. Ford Federal Direct Loan
Program and the Federal Family Education Loan (FFEL) Program.''
The bill was referred solely to the Committee on Education and
the Workforce. On September 14, 2023, the Committee considered
H.J. Res. 88 in legislative session and reported it favorably,
as amended, to the House of Representatives by a recorded vote
of 23 to 19. On December 7, 2023, the full House considered
H.J. Res. 88 and passed it by a recorded vote of 210-189.
On December 5, 2023, Representatives Elise Stefanik (R-NY),
Virginia Foxx (R-NC), Bobby Scott (D-VA), and Mark DeSaulnier
(D-CA) introduced H.R. 6585, the Bipartisan Workforce Pell Act.
The bill was referred solely to the Committee on Education and
the Workforce. On December 12, 2023, the Committee considered
H.R. 6585 in legislative session and reported it favorably, as
amended, to the House of Representatives by a recorded vote of
37-8.
On January 11, 2024, Chairwoman Virginia Foxx introduced
H.R. 6951, the College Cost Reduction Act, with Representatives
Burgess Owens (R-UT), Glenn Grothman (R-WI), Rick Allen (R-GA),
Lloyd Smucker (R-PA), Lisa McClain, Michelle Steel (R-CA), and
Brandon Williams (R-NY) as original co-sponsors. On March 21,
2024, the Committee considered H.R. 6951 in a legislative
session and reported it favorably, as amended, to the House of
Representatives by a recorded vote of 22-19. The Committee
considered the following amendments to H.R. 6951:
1. Rep. Owens offered an Amendment in the Nature of a
Substitute that makes technical changes to the text.
The amendment was adopted by voice vote.
2. Rep. Hayes (D-CT) offered an amendment that would
increase the total maximum Pell Grant amount awarded
during the 2025-2026 award year from the current amount
of $7,395 to $10,000 and increase it incrementally
thereafter. The amendment was included in amendment En
Bloc #1, which failed by a roll call vote of 17-22.
3. Rep. Hayes offered an amendment to that would
provide federal student loan forgiveness for teachers.
The amendment was included in amendment En Bloc #3,
which failed by a roll call vote of 18-22.
4. Rep. Stevens (D-MI) offered an amendment that
would make post baccalaureate students eligible to
receive a Pell Grant. The amendment was included in
amendment En Bloc #1, which failed by a roll call vote
of 17-22.
5. Rep. DeSaulnier (D-CA) offered an amendment that
would increase the total number of semesters a student
can be eligible for Pell Grants from 12 to 18. The
amendment was included in amendment En Bloc #1, which
failed by a roll call vote of 17-22.
6. Rep. Courtney (D-CT) offered an amendment that
would expand the Public Service Loan Forgiveness
program. The amendment was included in amendment En
Bloc #1, which failed by a roll call vote of 17-22.
7. Rep. Wilson (D-FL) offered an amendment that would
allow graduate or professional students to be eligible
to receive a federal Direct Stafford Loan, excluding
graduate medical school, nursing school, veterinary
school or a school located outside the U.S. The
amendment was included in amendment En Bloc #1, which
failed by a roll call vote of 17-22.
8. Rep. Stevens offered an amendment that would
stipulate that nothing under the bill can be construed
to prevent graduate students from exercising collective
bargaining rights under the National Labor Relations
Act. The amendment was included in amendment En Bloc
#2, which failed by a roll call vote of 18-22.
9. Rep. Wilson offered an amendment that would strike
a provision to repeal regulations related to financial
value transparency and gainful employment, and
stipulate that the Department of Education would not be
permitted to promulgate or enforce any regulation or
rules related to the application of the term ``gainful
employment.'' The amendment was included in amendment
En Bloc #4, which failed by a roll call vote of 19-22.
10. Ranking Member Scott (D-VA) offered an amendment
that would establish an interest rate equal to the high
yield of the 10-year Treasury note auctioned at the
final auction prior to June 1, 2025, or 5 percent for
new federal Direct Unsubsidized Stafford loans, federal
Direct Stafford loans, and federal Direct PLUS loans
issued on or after July 1, 2025. It also would
establish a new rate for any federal Direct
Consolidation Loan. The amendment would also authorize
the Department of Education to establish a program to
refinance federal Direct Loans. It also would authorize
the Department to establish a program to refinance
eligible private education loans. It would establish
guidelines for determining the interest rate for
refinanced loans through both programs, which would be
fixed. The amendment failed by a roll call vote of 19-
22.
11. Rep. Leger Fernandez (D-NM) offered an amendment
that would direct the Department of Education, in
consultation with the Consumer Financial Protection
Bureau, Financial Literacy and Education Commission,
and IRS, to establish a personal finance education
portal on a centralized and publicly available
Department website for federal financial aid. Rep.
Leger Fernandez subsequently withdrew the amendment.
12. Rep. Leger Fernandez offered an amendment that
would authorize the Department of Education to award
grants for tuition free community college to eligible
states and tribal colleges and universities. The
amendment was included in amendment En Bloc #5, which
failed by a roll call vote of 19-22.
13. Rep. Takano (D-CA) offered an amendment that
would strike a provision to repeal the current 90/10
regulation that caps the percentage of revenue that a
for-profit school can receive from federal financial
aid sources at 90 percent and stipulate that the other
10 percent of revenue must come from alternative
sources. The amendment failed by a roll call vote of
19-22.
14. Rep. Takano offered an amendment that would add
language to stipulate that the bill's provisions would
not take effect until the inspectors general of the
departments of Education and Veterans Affairs submit a
report to Congress certifying that the bill will not
result in fraud or abuse of veteran students. The
amendment was included in amendment En Bloc #4, which
failed by a roll call vote of 19-22.
15. Rep. Adams (D-NC) offered an amendment that would
stipulate that no claim from a federal student loan can
be collected by administrative offset for any payments
related to Social Security. It would apply to any
payments made after the bill's enactment. The amendment
failed by a roll call vote of 19-22.
16. Rep. Adams offered an amendment that would
require the Department of Education, a guaranty agency,
or an eligible loan holder to remove any adverse item
of information related to a loan from a borrower's
credit history upon the sale or assignment of a loan
after the loan is reported as being in default. The
amendment was included in amendment En Bloc #3, which
failed by a roll call vote of 18-22.
17. Rep. Sablan (D-MP) offered an amendment that
would establish a program to enable college-bound
residents of the Northern Mariana Islands and American
Samoa to have additional choices to attend higher
education institutions. The amendment was included in
amendment En Bloc #5, which failed by a roll call vote
of 19-22.
18. Rep. McBath (D-GA) offered an amendment that
would strike a provision to repeal current regulations
related to closed school loan discharges. The amendment
was included in amendment En Bloc #4, which failed by a
roll call vote of 19-22.
19. Rep. Bonamici (D-OR) offered an amendment that
would add language to require colleges and universities
to accept individualized education programs or plans
describing services or accommodations provided to an
individual with a disability, pursuant to Section 504
of the Rehabilitation Act of 1973, as proper
documentation for disability accommodations. The
amendment failed by a roll call vote of 19-21.
20. Rep. Jayapal (D-WA) offered an amendment that
would strike a provision that would repeal current
regulations related to borrower repayment defense. The
amendment was included in amendment En Bloc #4, which
failed by a roll call vote of 19-22.
21. Rep. Jayapal offered an amendment that would
require the postsecondary student data system to
include data on applications received, students
accepted, and students placed on the wait list
disaggregated by race and ethnic subgroup at each IHE.
The amendment was included in amendment En Bloc #5,
which failed by a roll call vote of 19-22.
22. Rep. Jayapal offered an amendment that would
require the Department of Education to adjust the
median cost of college for a program of study for
institutions located in a metropolitan area to account
for the higher cost of living. The amendment was
included in amendment En Bloc #3, which failed by a
roll call vote of 18-22.
23. Rep. Omar offered an amendment that would strike
a provision that would stipulate that the Department of
Education would not issue a proposed rule, final
regulation, or exhaustive action to carry out the
bill's provisions if it is determined that it would be
economically significant or result in a subsidy cost
increase. The amendment was included in amendment En
Bloc #3, which failed by a roll call vote of 18-22.
24. Rep. Omar offered an amendment that would
authorize a program for the Department of Education to
provide grants for a period of five years to eligible
IHEs to provide childcare services for student parents.
The amendment failed by a roll call vote of 19-22.
25. Rep. Omar offered an amendment that would strike
a provision that would establish annual limits on
federal Direct Unsubsidized Stafford Loans, for any
period of instruction beginning on or after July 1,
2025, which would not exceed the cost of attendance for
an academic year. It also would strike the
establishment of maximum aggregate student loan amounts
professional, graduate, and undergraduate students can
receive through such loans. The amendment was included
in amendment En Bloc #3, which failed by a roll call
vote of 18-22.
26. Rep. Omar offered an amendment that would strike
a provision that would establish two repayment plans
for federal loans made on or after July 1, 2024,
including a standard repayment plan with a fixed
monthly repayment amount paid over a fixed period that
does not exceed 10 years and a standard repayment
assistance plan under the income-driven repayment
program. The amendment was included in amendment En
Bloc #3, which failed by a roll call vote of 18-22.
27. Rep. Bowman (D-NY) offered an amendment that
would stipulate that nothing in the bill can be
construed to require any accreditation agency or
association to promulgate a standard that would
prohibit IHEs from offering programs of study in any
academic subject. The amendment was included in
amendment En Bloc #2, which failed by a roll call vote
of 18-22.
28. Rep. Bowman offered an amendment that would
prohibit institutions of higher education from
providing preferential treatment in the admissions
process for donors and alumni, effective on the first
day of the second award year after the bill's
enactment. The amendment was included in amendment En
Bloc #2, which failed by a roll call vote of 18-22.
29. Rep. Manning (D-NC) offered an amendment that
would strike the amended definition of ``third-party
server,'' which would refer to any individual, state,
or private for-profit or nonprofit organization that
enters into a contract with an institution of higher
education to administer any student assistance programs
under the bill. The amendment was included in amendment
En Bloc #4, which failed by a roll call vote of 19-22.
30. Rep. Manning offered an amendment that would
stipulate that nothing in the bill could be construed
to prevent an institution of higher education from
providing medically accurate and comprehensive
information about sexual and reproductive health
services, including contraception. The amendment failed
by a roll call vote of 20-21.
31. Rep. Scott (D-VA) offered an amendment that would
strike a provision to prohibit the Department of
Education from implementing any substantially similar
rule, regulation, policy or executive action related to
regulations repealed under the bill, including closed
school loan discharges, borrower repayment defense,
pre-dispute arbitration, false certification,
administrative capability, certification procedures,
ability to benefit, and personal liability. The
amendment was included in amendment En Bloc #4, which
failed by a roll call vote of 19-22.
Committee Views
INTRODUCTION
Taxpayer spending postsecondary education is massive and
growing. In the next year alone, the Department of Education
(ED or Department) will disburse over $100 billion in new loans
and grant aid, effectively making it the largest consumer bank
in the United States.\1\ Coupled with state and local funding,
research, private scholarships and other outside resources,
annual support for postsecondary education easily surpasses a
quarter of a trillion dollars.\2\ Investments of this magnitude
ought to be able to demonstrate strong results when it comes to
getting students into, and through, college with the skills
needed for career-sustaining employment and lifelong success.
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\1\https://www.cbo.gov/system/files/2023-05/51310-2023-05-
studentloan.pdf.
\2\https://nces.ed.gov/programs/coe/indicator/cud/postsecondary-
institution-revenue.
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The Need for Reform
In the two decades prior to the pandemic, published tuition
and fees increased an astounding 164 percent, or nearly three
times faster than the rate of inflation, far outpacing rises in
costs of medical services, childcare, housing, and nearly every
other good or service in the economy (Figure 1).\3\ Without
commensurate increases in household income, paying for college
has become an increasingly difficult endeavor. For instance,
the share of Americans' expenditures put towards postsecondary
education nearly doubled between 1989 and 2019.\4\ After
accounting for grants and scholarships, the typical low-income
family today is still expected to pay roughly a third of their
household income for the annual cost of an in-state public
education.\5\
---------------------------------------------------------------------------
\3\https://www.aei.org/carpe-diem/chart-of-the-day-or-century-2/.
\4\https://freopp.org/whitepapers/why-college-is-too-expensive-and-
how-competition-can-fix-it/.
\5\https://nces.ed.gov/programs/coe/indicator/cua.
These price increases are not caused by insufficient
taxpayer support. Despite myths of state disinvestment, state
funding for postsecondary education has increased substantially
since 1980\6\ and reached a record high of $128 billion in
2023.\7\ In fact, if tuition revenue per student had simply
risen at the rate of inflation over the last two decades,
expansions in federal and state financial aid would have
reduced the average in-state public college student's tuition
bill to zero.\8\ Rather, the overwhelming evidence suggests
that the trillions in state and federal funding has subsidized
a spending arms race among colleges who too often care more
about boosting their U.S. News and World Report ranking than
improving college access, affordability, or student success.\9\
Economists estimate that federal financial aid is directly
responsible for approximately 55 percent of the increases in
tuition and fees since 1987.\10\ Some of these expenditures may
have been put towards productive initiatives; however, with
federal student loans making up the largest source of consumer
debt other than housing (Figure 2), it's not unreasonable for
families and policymakers to ask whether spending tens of
millions of dollars on tuition discounts for out-of-state
students or the salaries of diversity, equity, and inclusion
(DEI) administrators would be better served providing thousands
residents a full-ride to their state's flagship university.\11\
---------------------------------------------------------------------------
\6\https://www.mindingthecampus.org/2023/08/17/gillen-state-
disinvestment-is-still-a-myth/.
\7\https://shef.sheeo.org/report/.
\8\https://freopp.org/whitepapers/why-college-is-too-expensive-and-
how-competition-can-fix-it/.
\9\https://www.wsj.com/articles/state-university-tuition-increase-
spending-41a58100.
\10\https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3720860.
\11\https://www.thecollegefix.com/ohio-state-university-doubled-
dei-staff-in-five-years-payroll-costs-almost-tripled/.
\12\https://www.newyorkfed.org/microeconomics/hhdc.
A Broken System
If there is any consensus where student loans are
concerned, it's that the very idea that tens of millions of
borrowers deserve forgiveness is a frank admission that the
system providing those dollars is irreparably broken. Our
broken system is riddled with patches and plugged holes, with
off the cuff solutions implemented to address one-off problems
at one-off periods. This has predictably resulted in patchwork
coverage and patchwork equity. While easy access to federal
credit has certainly provided enabled millions of students to
pursue postsecondary education for whom it would otherwise have
been out of reach, it has also driven countless others to
borrow unmanageable sums. For instance, the PLUS program's
well-intentioned commitment to increasing access and choice for
students with limited means has instead served as a cash cow
for universities' bloated spending habits and a debt sentence
for countless disadvantaged families.\13\ While wealthier
households benefit most from generous safety net programs, it
is the low-income borrower who tends to struggle most during
repayment and ultimately end up in default.\14\
---------------------------------------------------------------------------
\13\https://tcf.org/content/report/parent-plus-borrowers-the-
hidden-casualties-of-the-student-debt-crisis/ https://www.urban.org/
urban-wire/forgiving-plus-debt-low-income-parent-borrowers.
\14\https://www.cbo.gov/publication/58963 https://na-
production.s3.amazonaws.com/documents/zero-marginal-cost.pdf.
\15\https://www.crfb.org/blogs/goldwein-testimony-highlights-970-
billion-student-loan-cancellation https://www.crfb.org/blogs/total-
cost-student-debt-cancellation.
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Repeated patching of this broken system has built up a
behemoth that is increasingly problematic, politically
contentious, and difficult to fix. Almost everyone agrees that
our college financing system is in desperate need of reform,
but recent proposals to ``fix'' it would turn our federal
student aid program into an unsustainable drain on taxpayer
support. Over the last four years alone, the Department has
attempted to spend over $1 trillion transferring student loans
from those who willingly borrowed them to those who never
stepped foot on a college campus (Figure 3).
Let's put that 1 trillion dollars in context: that's over
three times more than taxpayers will spend on the Pell Grant
program over the next decade, 11 times more expensive than
``free'' community college, and more than the federal
government spent on higher education in our entire pre-pandemic
history.\16\ Despite all this spending, however, the vast
majority of borrowers today aren't paying a single penny on
their student loans, and future borrowers are expected take on
greater debt and to default at higher rates than those
borrowing during the height of the COVID-19 pandemic.\17\ At
the same time, taxpayers are being asked to spend hundreds of
billions of dollars providing reparations to those who were
supposedly wronged by our financing system--all this while
taxpayers are somehow also expected to look the other way
nearly half a trillion dollars (or one-third of Pell grants and
federal student loans over the next decade) go out the door to
students who will ultimately be left in a worse position
financially after enrolling in college than if they had never
decided to go in the first place.
---------------------------------------------------------------------------
\16\https://www.crfb.org/blogs/goldwein-testimony-highlights-970-
billion-student-loan-
cancellation.
\17\https://www.cbo.gov/system/files/2024-06/51310-2024-06-
studentloan.pdf https://www2.ed.gov/about/overview/budget/budget25/
justifications/t-sloverview.pdf.
\18\Committee staff estimates using https://freopp.org/whitepapers/
does-college-pay-off-a-
comprehensive-return-on-investment-analysis/ https://www.cbo.gov/
system/files/202406/51310202406-studentloan.pdf.
A Path Forward
The way we fund postsecondary education has reached a
critical inflection point. All the available evidence tells us
that this system is irrevocably broken, and yet legislative
reforms to date have been nothing but bumper sticker policies
that continually fail to find consensus. Few in Congress are
willing to entertain the idea of spending hundreds of billions
of dollars doubling the Pell Grant only for states or IHEs to
displace their own support. At the same time, calls for
``free'' college face their own bipartisan criticisms.\19\ We
need policies that transform the entire college financing
system and deliver the kind of education students need and our
economy demands. That is why Chairwoman Virginia Foxx (R-NC)
introduced the College Cost Reduction Act (CCRA), a landmark
bill that will lower the cost of postsecondary education for
students and families through policies focused on transparency,
access and affordability, and accountability for student
success, all while also saving hardworking taxpayers over $185
billion in the process.\20\
---------------------------------------------------------------------------
\19\https://www.urban.org/urban-wire/free-college-does-not-
eliminate-student-debt#::text=In
%20particular%2C%20free%2Dtuition%20programs,would%20not%20decrease
%20their%20borrowing. http://newamerica.org/education-policy/articles/
the-biden-plan-for-free-community-college-has-a-big-challenge/ https://
www.aei.org/questioning-the-case-for-free-college/.
\20\https://www.cbo.gov/publication/60285.
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ACCESS AND AFFORDABILITY
Through a confusing array of grants, loans, and other
financial support, ED disburses over $100 billion each year in
federal student aid authorized under Title IV of the Higher
Education Act (HEA). While these dollars have certainly
provided access to millions of students who would otherwise be
unable to afford postsecondary education, they have also in
many ways exacerbated the problems they were created to solve.
For example, there is strong evidence that, rather than passing
on subsidies to students, IHEs ``capture'' some or all of these
dollars in the form of higher prices. For example, a 2017 study
by economists at the New York Federal Reserve found that for
every $1 increase in subsidized loan limits, IHEs capture
roughly 60 cents in the form of higher tuition.\21\ The PLUS
loan program, which effectively allows parents of
undergraduates and graduate students to borrow unlimited sums,
has been shown to increase tuition dollar for dollar without
any improvements to college access for disadvantaged students.
Similarly, student loan safety nets like income-driven
repayment (IDR), which were established to provide borrowers
with relatively high-debt and low-earnings affordable monthly
payments, too often provide debt traps rather than debt relief.
Over half of all student loan borrowers owe more than they
originally borrowed six years after entering repayment. In
order to simplify and increase the effectiveness of student
aid, the CCRA improves the need analysis formula by calculating
federal student aid using the Median Cost of College (MCOC),
streamlining loan options and instituting flexible borrowing
limits that vary by field of study, pairing back the maze of
repayment options and eliminating unnecessary expenses such as
origination fees and capitalized interest, and providing
borrowers who fall on hard times a true safety net that
provides targeted relief instead of blanket bailouts to those
who don't need them.
---------------------------------------------------------------------------
\21\https://www.newyorkfed.org/medialibrary/media/research/
staff_reports/sr733.pdf.
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Median Cost of College
The ability of IHEs to exploit federal student aid in the
form of higher prices is a direct result of how the federal
government determines how much financial aid should be
provided. Today, the amount of financial aid a student is
eligible for is determined by the difference between the
government's estimate of what a student can afford to pay for
college (i.e., the ``Student Aid Index'' or SAI) and their
school's cost of attendance (COA), which is a comprehensive
estimate of college expenses (e.g., tuition, fees, room, board,
books, transportation, and other expenses). In general, this
means that if a student's SAI is sufficiently below COA, the
student will receive financial aid to fill the gap; however, it
also means that schools can exploit federal financial aid
programs by strategically raising their prices. Under the
current need analysis system, if an institution raises its
price by $1, the student is eligible for $1 in additional
federal aid. Thus, the higher the price an institution charges,
the more ``needy'' a student is determined to be and thus the
more financial aid students--and colleges--can receive.\22\
---------------------------------------------------------------------------
\22\https://www.texaspolicy.com/wp-content/uploads/2023/07/2023-07-
NG-Testimony-HouseCommittee-LoweringCosts-AndrewGillen.pdf https://
www.luminafoundation.org/wp-
content/uploads/2017/08/proposing-a-federal-risk-sharing-policy.pdf.
---------------------------------------------------------------------------
The current need analysis system not only allows colleges
to capture aid dollars in the form of higher prices; it also
unfairly distributes those dollars indiscriminately amongst
those who lack financial resources and those who, all else
being equal, would be able to afford postsecondary education
without taxpayer support. Recognizing this, the CCRA changes
how the federal government determines financial need from an
individual student's COA to the median cost of college (MCOC)
for all students' enrolled in similar programs nationwide. In
addition to severing the link between price increases and aid
eligibility, using the MCOC for purposes of determining federal
student aid dramatically improves the financial aid process, as
students could be informed of their federal financial aid
awards immediately upon completion of the Free Application for
Federal Student Aid (FAFSA), as opposed to waiting for months
for colleges to inform them of their aid offer. Taken together,
the CCRA's need analysis forms will increase the effectiveness
and delivery of federal student aid, will protect and more
fairly distribute taxpayer dollars, and will ensure
postsecondary education is accessible and affordable to all
those who wish to pursue it.
Loan Limits
The current limits in the federal loan program are complex
and varied. Some students can borrow whatever a college
charges, while others are constrained by arbitrary limits that
Congress set and has not updated for over a decade.\23\
Recognizing this, the CCRA streamlines the types of loans
available to students by eliminating the inflationary and
predatory PLUS program and instituting flexible loan limits
under the Stafford loan program that vary by program of study.
Under the CCRA, borrowers would have access to two loan types
(unsubsidized and subsidized) that have no hidden origination
fees, low interest rates, and access to safety nets for those
who fall on hard times. Rather than the arbitrary and outdated
annual limits that very by dependency status and year of study,
the CCRA allows borrowers to borrow up to the MCOC of their
degree program. With respect to the CCRA's aggregate
limits,\24\ undergraduate borrowing is capped at $50,000 for
undergraduate students, while graduate and professional (e.g.
law, medicine) could borrow $100,000 and $150,000 for their
degrees, respectively; the maximum any student can borrow under
the federal loan program is $200,000.
---------------------------------------------------------------------------
\23\Under current law, the maximum combined amount of Direct
Subsidized and Direct Unsubsidized Loans that undergraduate students
borrow annually is between $5,500 and $12,500 ($31,000 to $57,500 in
aggregate), depending on your year in school and your dependency
status. For graduate/professional students, annual limits are generally
$20,500 (higher for some medical professions) in Direct Unsubsidized
Loans each academic year ($138,500 in aggregate including undergraduate
loans; up to $224,0000 for professional students). However, both
graduates and parents of dependent undergraduates have access to PLUS
loans, which have no annual cap other than what the school determines
is the students cost of attendance; there is no aggregate cap on PLUS
loans.
\24\The CCRA also allows ``qualifying undergraduate programs'' to
access the higher loan amounts available for graduate professional
programs if such programs opt-in to these higher-aid levels in return
for additional accountability (e.g., a higher value-added earnings
threshold of 300 percent of the FPL, which is the threshold for
graduate programs). The Committee intends for this language to include
undergraduate flight education and training programs that are
accredited by the Department and are also certificated pilot training
schools by the Federal Aviation Administration in order to allow
students pursuing these programs to access additional federal student
loans beyond the undergraduate aggregate limit, similar to the
bipartisan Flight Education Access Act (H.R. 2874, 118th).
---------------------------------------------------------------------------
In addition to providing a more rational and consistent
approach to federal student lending, Committee Republicans
believe that the CCRA's loan limit reforms will simplify
college financing and put downward pressure on college prices
without restricting access to postsecondary education
opportunities. For example, while critics claim that
eliminating predatory Parent PLUS loans--which have high
interest rates, hefty loan fees, and are ineligible for
borrower safety nets such as income-driven repayment (IDR)--
will reduce access and leave ``50 percent of students seeking a
college degree without the federal student aid they need,''\25\
these claims are simply unsupported by the evidence, as shown
in Figure 5. For example, over 90 percent of dependent
undergraduate students pursuing associate and bachelor's
degrees borrowed less than CCRA's annual limits. In other
words, they would benefit from the CCRA's reforms to annual
borrowing limits.\26\
---------------------------------------------------------------------------
\25\https://democrats-edworkforce.house.gov/imo/media/doc/
vote_no_on_hr6951republicansextremebilltoraisecollegecostsreturntodevose
raderegulatio nandchaos.pdf.
\26\https://www.urban.org/sites/default/files/2024-06/
How_Access_to_Federal_Student_Loans_Could_Change_under_the_CCRA.pdf.
The small subset of borrowers who do exceed the annual loan
limits (the vast majority of whom are graduate and professional
students who currently have no limits on borrowing) attend
schools that charge above average prices, and Committee
Republicans believe it is not the role of the federal student
aid programs to subsidize the entirety of a student's education
at any cost simply because they chose a more expensive school
when more affordable options remain available. While IHEs may
complain that some students may not be able to afford their
programs, nothing in the CCRA restricts such institutions from
simply lowering their prices or from providing additional
scholarships to help fill the gap. Nor does it prevent students
attending more expensive programs from receiving loan funding
in the private marketplace,\28\ which frequently have terms
that are more favorable than those offered by the PLUS loans
those students access today.\29\
---------------------------------------------------------------------------
\27\https://www.urban.org/research/publication/how-access-federal-
student-loans-could-change-under-college-cost-reduction-act.
\28\Evidence shows the Grad PLUS program replaced private loan
borrowing dollar-for-dollar, suggesting there is an existing market the
government does not need to fill. http://www.economics.illinois.edu/
seminars/documents/Monica.Pdf.
\29\https://x.com/delislealleges/status/1795481484855570798/photo/
1.
---------------------------------------------------------------------------
Loan Repayment
Just as the complexity of multiple loan options makes
college financing decisions difficult for students and
families, the tangled web of repayment options currently
available to borrowers creates unnecessary confusion and
preventable defaults. Under current law, there are over 50 ways
for borrowers to meet their repayment obligations. This makes
it difficult for schools and loan servicers to communicate
options to borrowers, including those who could benefit from
certain repayment plans and safety net options like IDR plans
but often never enroll in such plans because they are unable to
navigate the plans effectively.\30\ The CCRA brings much needed
simplicity to student loan repayment by paring back the maze of
options down to just two plans: (1) a standard, mortgage style
repayment plan that allows borrowers to pay 10 years of fixed
monthly payments and (2) a repayment assistance plan that
offers reduced payments for borrowers with debt loads that are
relatively high based on their incomes. Importantly, CCRA's
repayment assistance plan caps the total amount of payments at
what borrowers would repay under the 10-year standard plan and
replaces time-based forgiveness with monthly repayment
assistance to ensure responsible borrowers always see progress
towards paying off their loans by ensuring at least half of
their monthly payment is applied to their principal.\31\ In
these ways, CCRA's repayment assistance plan provides targeted
relief to borrowers who need it, when they need it, by ensuring
that borrowers making on-time required payments not only never
see their balance grow through the waiver of excessive
interest, but also that they see their balance decrease each
month. Through these structures, the CCRA's repayment
assistance plan allows a hypothetical borrower to pay off their
student loans years faster than existing income-driven
repayment plans and without excessive taxpayer subsidies
(Figure 6).
---------------------------------------------------------------------------
\30\https://www.pewtrusts.org/en/research-and-analysis/reports/
2020/05/borrowers-discuss-the-challenges-of-student-loan-repayment;
https://www.sciencedirect.com/science/article/abs/pii/
S0047272720301626; https://www.urban.org/research/publication/student-
loan-program-
complexity-uncertainty-and-administrative-challenges.
\31\https://www.urban.org/research/publication/student-loan-
repayment-college-cost-reduction-act.
Replacing time-based forgiveness with repayment assistance
and a cap on total payments, as the CCRA does, has the added
benefit of essentially eliminating the moral hazard that exists
under the current repayment system which allows borrowers to
take on additional debt with zero marginal cost to doing so.
For example, whether the hypothetical borrower above borrows
$50,000 or $57,500, he or she will pay the exact same amount
($71,564) under PAYE and repay even less under the SAVE plan
($20,607); in other words, this borrower is incentivized to
borrow more than he or she needs because borrowing more does
not affect how much he or she has to pay back; borrowing only
the minimum needed would be effectively leaving free money on
the table. By contrast, the CCRA's repayment assistance plan
requires borrowers to pay back exactly what they owe--i.e.,
their loan's principal and ten years of interest--no more, no
less (Figure 7). This discourages borrowers from borrowing more
than the minimum they need to cover their postsecondary
education costs.
---------------------------------------------------------------------------
\32\This example follows the methodology in https://www.urban.org/
research/publication/
student-loan-repayment-college-cost-reduction-act.
Additional Reforms
The CCRA also makes other critical reforms to the federal
student loan program that benefit borrowers. For example, the
bill's elimination of origination fees and interest
capitalization alone will save borrowers $20 billion over the
next decade, while the bill's provisions allow those in default
to rehabilitate their loans twice (instead of just once) which
will provide an easier path to repayment for the 5.9 million
borrowers who currently have the black mark of default on their
credit score.\34\ Further, the bill also improves student loan
servicing including maintaining federal preemption and further
clarifying that entities under contract by ED are exempt from
state and local rules seeking to impose their own requirements
on these entities when carrying out federal loan servicing
activities.
---------------------------------------------------------------------------
\33\Ibid.
\34\https://www.jamesgmartin.center/2024/08/the-imminent-student-
loan-disaster-were-not-
talking-about/.
---------------------------------------------------------------------------
ACCOUNTABILITY AND STUDENT SUCCESS
The centerpiece of the CCRA's plan to lower the cost of
postsecondary education for students and families is the
bipartisan notion that institutions should have a stake in
their students' success. Indeed, while the reforms to financial
aid and student loan repayment will go a long way towards
improving postsecondary access and affordability, these reforms
alone will not address the lack of accountability for the tens
of billions of dollars that flow to low-value programs each
year. Nearly one third of postsecondary credentials--including
nearly a quarter of bachelor's degrees and almost half of
master's degrees--provide the majority of students they enroll
a negative return on investment (ROI). Building off previous
bipartisan congressional proposals,\35\ H.R. 6951 establishes
an outcomes-focused, sector-neutral system for ensuring that
postsecondary education delivers value. Incorporating objective
and proven metrics measuring return on investment and student
success, the CCRA uses both carrots (e.g., PROMISE Grants) and
sticks (e.g., risk-sharing) to align the incentives between
students, institutions, and taxpayers, thus creating a more
accountable, efficient, and effective system for financing
postsecondary education.
---------------------------------------------------------------------------
\35\https://www.congress.gov/congressional-report/118th-congress/
house-report/337/1?outputFormat=pdf.
---------------------------------------------------------------------------
Defining Value
If postsecondary credentials are supposed to provide
students and taxpayers with positive financial returns, the
most appropriate way to measure the extent to which they do so
is to evaluate them like any other financial investments.\36\
Just like investors measure the ROI of a stock or bond, the
CCRA directs ED to calculate the earnings-price-ratio (EPR) for
each program offered at each IHE receiving federal funds:
---------------------------------------------------------------------------
\36\https://www.thirdway.org/report/price-to-earnings-premium-a-
new-way-of-measuring-return-on-investment-in-higher-ed.
Earnings-Price-Ratio = (Value-Added Earnings/Total Price) -
---------------------------------------------------------------------------
1
The EPR measures the financial value of postsecondary
credentials by tracking dollar for dollar the extent to which
graduates' ``value-added earnings'' (i.e., their earnings
boost)\37\ align with the ``total price'' the IHE charges them
for their education.\38\ To illustrate, the University of North
Carolina (UNC) Chapel Hill charges students a total price of
$33,400 for their English degree and graduates' value-added
earnings are approximately $32,000. Dividing the value-added
earnings by the total price (and subtracting one) yields an EPR
of -0.04; the negative value indicates that the program's price
exceeds the earnings boost students received by 4 percent. On
the other hand, a positive value would mean that students earn
more than enough to recoup the costs of a program, such as in
the case of the University of South Dakota's nursing degree
program (see Table 1). Thus, the higher the EPR, the more
students and taxpayers benefit from investment in a given
degree program; the lower the EPR, the greater the risk that
those investments will result in financial losses rather than
financial returns.
---------------------------------------------------------------------------
\37\``Value-added earnings'' are the annual earnings of graduates
that exceeds 150 percent (or 300 percent for graduate students) of the
federal poverty line, adjusted for the geographic location of the
program the student is enrolled in. Earnings are measured at time
points commensurate with the typical length of the program students
graduated from (e.g., two years for associates degrees, four-years for
bachelor degrees), though the bill allows the Secretary to increase the
earnings measurement period to five years for programs shown to have
abnormal earnings growth (e.g. medicine). The Committee intends for
value-added earnings to encompass graduates who are in the workforce
and exclude graduates who subsequently went on to earn a higher
credential.
\38\``Total price'' is defined as the total amount of tuition and
fees (and other required expenses) graduates were charged for their
credential or degree, minus all grants and scholarships received by
graduates from non-federal sources.
TABLE 1.--EARNINGS-PRICE-RATIO (EXAMPLE)
------------------------------------------------------------------------
Value Added
Earnings Total Price EPR
------------------------------------------------------------------------
U. of North Carolina--English $32,000 $33,400 -0.04
(Bachelor's)....................
U. of South Dakota--Nursing $45,700 $19,400 +1.40
(Associate's)...................
George Washington U.--Film $3,400 $137,600 -0.98
(Master's)......................
------------------------------------------------------------------------
Using the EPR metric for purposes of accountability is
valuable not only because it is understandable and comparable
to other financial investments;\39\ it is also valuable because
it provides institutions considerable flexibility to shape the
result. For example, institutions can do various things to
increase their programs' EPR, such as eliminating unneeded
course requirements to reduce time to degree\40\ or investing
in evidence-based efforts that are shown to increase the value-
added earnings of graduates. Alternatively, they can simply
lower their price. Regardless of the mechanism, improving the
EPR of programs is to the financial benefit of institutions
just as it is to the financial benefit of students and the
taxpayers who subsidize them. That said, no single metric can
perfectly capture all the benefits of postsecondary education
nor predict the extent to which students will ultimately be
left better off for investing in postsecondary education. For
example, while the EPR measures the financial value of a degree
for those who graduate, approximately four in 10 students who
enroll in college never achieve this milestone and one in six
end up with debt and no degree to show for it.\41\ Recognizing
this, H.R. 6951 incorporates multiple metrics (e.g., loan
repayment, low-income enrollment, completion rates) to
compliment the EPR when assessing the extent to which IHEs
should be held financially responsible under risk-sharing or
financially rewarded through performance-based PROMISE
grants.\42\
---------------------------------------------------------------------------
\39\https://www.thirdway.org/report/price-to-earnings-premium-a-
new-way-of-measuring-return-on-investment-in-higher-ed.
\40\https://nscresearchcenter.org/signaturereport11/.
\41\https://nces.ed.gov/pubsearch/
pubsinfo.asp?pubid=2024022&utm_medium=email&utm_source=newsflash.
\42\Committee Republicans recognizes that there are other benefits
to postsecondary education (e.g., improved health, critical thinking,
etc.). However, such benefits are both difficult to quantify and
challenging to measure. Moreover, they are outside of both the scope
and purpose of the federal financial assistance programs established
under Title IV of the HEA and thus the accountability system
established in the CRRA. https://www.postsecondaryvalue.org/wp-content/
uploads/2021/10/PVC_Matsudaira.pdf.
---------------------------------------------------------------------------
Risk-Sharing
Today, the risk of non-repayment is not evenly distributed
among borrowers, taxpayers, and institutions. Students
borrowing for low-quality programs are still obligated to repay
the loans their institution expected them to take out, while
taxpayers are forced to cover the costs of default and debt
write-offs if they ultimately are unable to do so. On the other
hand, despite the overwhelming evidence that the cost and
quality of the education they received strongly influences
borrowers' repayment ability,\43\ IHEs receive and retain every
penny of tuition revenue up-front regardless of whether
students drop out or graduate with unmanageable debt burdens.
---------------------------------------------------------------------------
\43\According to research, ROI explains roughly half of the
variation in student loan repayment rates across programs and schools
according to some estimates. That is, if a program provides stronger
ROI, its students are far more likely to pay down their loans because
their payments will be more manageable when earnings are higher and
costs are lower. https://freopp.org/aligning-higher-educations-cost-to-
its-value-ed593545a5f9.
---------------------------------------------------------------------------
To ensure that schools have skin in the game, H.R. 6951
requires IHEs to co-sign the loans they expect their students
to take out and, as co-signers, be responsible for a portion of
any taxpayer losses if those loans go unpaid. Specifically, the
CCRA instructs ED to establish student cohorts based on whether
students graduated from a particular program of study or
otherwise ceased enrollment at the IHE and calculates a risk-
sharing percentage, which represents the percentage of loan
losses (i.e., the ``non-repayment balance'') the school is
responsible for if those loans go unpaid or require taxpayer
assistance through borrower safety nets like IDR. For non-
completers, the risk-sharing percentage is based on the IHE's
or program's completion rate.\44\ For completer cohorts, the
risk-sharing percentage is based on the EPR of the program; for
example, building off the example in Table 1, the EPR for UNC's
bachelor's degree in English is -0.04, meaning that UNC is
responsible for 4 percent of any taxpayer losses each year the
cohort of borrowers remains in repayment.
---------------------------------------------------------------------------
\44\For example, if 50 percent of an IHE's Master of Business
Administration program fail to ultimately graduate, then the risk-
sharing percentage for the program's non-completer cohort is 50
percent. As completion rates fall, the risk-sharing percentage
increases and vice versa (e.g., a 20 percent completion rate is
associated with a risk-sharing percentage of 80 percent). For purposes
of risk-sharing, the completion rate is measured based on 150 percent
of the program length (e.g. six-years for bachelor's degrees) and,
recognizing the challenges with defining program-level completion at
the undergraduate level, the completion rate for undergraduate non-
completing cohorts used for the risk-sharing percentage is measured at
the institution-level and encompasses all undergraduate students
receiver federal student aid. https://www.brookings.edu/articles/
towards-a-framework-for-accountability-for-federal-financial-
assistance-programs-in-postsecondary-education/.
---------------------------------------------------------------------------
Committee Republicans believe the risk-sharing system
established in the CCRA has several advantages over other
accountability policies that have been proposed or that are in
place today. First, it is a market-based approach to
accountability, such that the valuation of a program is
objective, not determined by ED. While risk-sharing provides
IHEs strong incentives to expand high-value programs, improve
low-value programs, and eliminate programs with no value, the
responsibility for identifying a program's value rests with
colleges themselves. Second, it is flexible, offering IHEs
multiple ways to reduce or eliminate potential reimbursements.
Whether by increasing the EPR of their programs (which can
result in programs being exempt from risk-sharing payments
altogether),\45\ improving completion rates, investing in
repayment and default prevention efforts, or preventing
excessive borrowing using their new authority under the CCRA to
set loan limits, schools have ample opportunities to reduce or
eliminate potential liabilities before they occur.
---------------------------------------------------------------------------
\45\Importantly, if the value-added earnings of graduates exceeds
the total price the schools Is charging students for that credential,
like in the case of the University of South Dakota's nursing degree,
the program is exempt from these requirements (see Table 1).
---------------------------------------------------------------------------
Lastly, it does not overburden IHEs. While risk-sharing
provides a financial incentive for IHEs to continuously improve
their programs and increase the value they provide students and
taxpayers, such payments are manageable for IHEs. Figure 8
shows the distribution of estimated risk-sharing payments paid
annually by type of institution. Across types of institutions,
public institutions--particularly community colleges and low-
cost, open access four-year schools--have lower risk-sharing
liabilities than private non-profit and for-profit colleges.
Further, most institutions (80 percent) have a risk-sharing
payment of less $250 per student, while just 2 percent of IHEs
have a risk-sharing payment greater than $1,000 per student.
For perspective, the average per-student spending on
college administrators was $3,771 in 2021, which is 37 times
greater than the average risk-sharing payment among all
colleges and universities.\47\ Committee Republicans believe
the CCRA's risk-sharing will help align the incentives of IHEs
to that of students in taxpayers and, in doing so, result in
lower tuition, reduced borrowing, and higher-quality education
opportunities. That said, accountability means more than just
sanctioning, and institutions that are committed to offering
affordable, high-quality education and promoting economic
mobility should be rewarded for their efforts.
---------------------------------------------------------------------------
\46\https://edworkforce.house.gov/news/
documentsingle.aspx?DocumentID=410507.
\47\https://www.goacta.org/2024/01/critics-say-public-universities-
are-spending-too-much-outside-the-classroom/.
---------------------------------------------------------------------------
PROMISE Grants
Each year, taxpayers provide billions in grants intended to
support access and completion efforts. Yet, those dollars flow
with little to no distinction between the value those
institutions provide or who that value is provided to. A fairer
and more accountable system would leverage grant aid as an
incentive for institutions to invest in market-aligned
credentials offered to consumers at the lowest possible cost,
particularly for those who would otherwise be unable to afford
them. As such, H.R. 6951 uses funds received from IHEs through
risk-sharing to fund PROMISE Grants, a performance-based
program designed to encourage colleges to enroll and graduate
low-income students in high-value programs:
PROMISE Grant = (Avg. EPR Total Pell
Completion Rate) - Campus-Based Aid
The PROMISE grant formula is the product of the average EPR
of an IHE's programs, the total Pell Grant dollars the IHE
receives, the percentage of low-income students who graduate
(and in the case of two-year institutions, those who
successfully transfer) on time, minus the amount of campus-
based aid dollars already being allocated to the IHE. To
illustrate, students at the State Technical College of Missouri
receive $2.7 million in Pell Grant aid annually, the school's
on-time completion rate is 71 percent, and its average EPR is
2. Thus, the institution's gross PROMISE Grant is equal to $2.7
million times 71 percent times two, or $3.8 million. The
$85,000 in campus-based aid that the school already receives
every year is then deducted from this total, though schools
eligible for PROMISE have 100 percent authority to transfer
those existing dollars for PROMISE purposes. Thus, the IHE
(net) PROMISE Grant is $3.7 million. As long as they continue
to meet the eligibility requirements for maximum price
transparency,\48\ institutions like the State Technical College
of Missouri will have broad flexibility when it comes to how
PROMISE funds (as well as their existing campus-based aid
dollars) are used, including employer partnerships, completion
efforts, and additional need-based financial aid, among other
allowable uses.
---------------------------------------------------------------------------
\48\Ibid.
---------------------------------------------------------------------------
Importantly, while critics have historically opposed
outcomes-based accountability on the grounds that they would
result in higher costs and less access for students that IHEs
deem ``risky,''\49\ the accountability system established under
the CCRA is intentionally structured to reward, rather than
penalize, IHEs for enrolling low-income, first-generation, and
other disadvantaged students.\50\ As shown in Figure 9, IHEs
who enroll the lowest share of low-income learners--as measured
by the total amount of Pell Grants received by the IHE--have an
average PROMISE grant of $14 per student, while those who
enroll the largest share of low-income students have an average
PROMISE grant of $416 per student.
---------------------------------------------------------------------------
\49\https://www.civilrightsproject.ucla.edu/research/college-
access/financing/how-accountability-can-increase-racial-inequality-the-
case-of-federal-risk-sharing/Risksharing_Hillman_-final-0119
-w_cover.pdf.
\50\Importantly, the incorporation of a performance bonus also has
the added benefit of controlling for changes in the business cycle;
because money is simply being redistributed to IHEs making the best use
of their resources, the CCRA's accountability is both fair and works
equally well during both good economic times and bad. http://www.doug-
webber.com/risk%20sharing%20proposal.pdf.
Taken together, Committee Republicans believe that the
outcomes-based accountability system established in the CCRA
will drive IHEs to improve access and affordability and to
invest in the long-term success of their graduates. It will
create strong incentives for colleges to consider how every
student performs and reward schools that successfully use
federal student aid to promote opportunity and economic
mobility. The end result will be a postsecondary financing
system that better leverages tax dollars to help students build
productive lives, while also protecting taxpayers from
underwriting low-quality institutions and programs.
---------------------------------------------------------------------------
\51\https://edworkforce.house.gov/news/
documentsingle.aspx?DocumentID=410507.
---------------------------------------------------------------------------
Accreditation
Accreditors serve as key gatekeepers in postsecondary
education because they must give their stamp of approval to
institutions in order for them to be eligible to participate in
the federal student aid programs.\52\ Despite this
responsibility, it is well understood that accreditors have
acted less as stewards of the interest of federal taxpayers and
students and more like a cartel that prevents new institutions
and innovations from emerging.\53\ Indeed, all the available
evidence suggests that accreditors spend more time and
resources mandating ``woke'' policies and practices within
universities than they do ensuring IHEs provide students and
taxpayers a worthwhile return on their investment.\54\ For
example, a 2022 report found that only 11 percent of colleges
incur a quality-related disciplinary action from an accreditor
and that 97 percent of all disciplinary actions were about non-
quality issues at an institution.\55\ H.R. 6951 updates the HEA
to refocus accreditors on assessing academic quality through
reviewing student outcomes, enacting a risk-based review system
for efficient use of time, and creating a marketplace for new
quality assurance entities to enter the market to ensure
education is aligned with industry standards.
---------------------------------------------------------------------------
\52\The three requirements are state authorization, largely
consumer protection; certification by ED to ensure compliance with
administrative and fiscal integrity of an institution's Title IV
programs; and accreditation by an accrediting agency or association
recognized by ED to provide quality assurance of the education offered
by institutions.
\53\https://www.mindingthecampus.org/2022/04/14/further-evidence-
that-higher-education-
accreditation-is-a-cartel/.
\54\https://freopp.org/college-accreditation-does-not-guarantee-
good-student-outcomes-c6c0e390e2bd.
\55\This information, as well as nearly all data elements reported
throughout the bill, will be produced by ED. Thus, every accreditor
will have this benchmark to begin the assessment of where institutions
may be on the quality scale. https://postsecondarycommission.org/wp-
content/uploads/2024/01/Accreditor-College-Quality-Report-FINAL-PSC-
Updated-010624.pdf.
---------------------------------------------------------------------------
While the HEA requires accreditors to focus on
``outcomes,'' the lack of clarity on what is meant by student
achievement outcomes has provided no direction for accreditors
to develop robust measures of student achievement for the
purpose of critically evaluating the institutions and programs
they accredit. To address this, H.R. 6951 specifies that an
accreditor must establish student achievement outcomes
standards to assess the quality of institutions and programs of
study within an institution; standards include learning
outcomes, employer satisfaction and employment rates, and
measures of student success such as loan repayment.\56\ At the
same time, the CCRA prohibits accreditors from piling on
additional standards that too often take away from
institutions' core mission, including closing the ``elastic
loophole'' and strictly prohibiting political litmus tests and
adherence to DEI standards as a condition of accreditation.
Simply put, no institution should be forced to adopt the
critical social justice agenda in order to receive Title IV
funding, as this is opposed to academic freedom. Moreover, in
line with CCRA's goal to better align education and the
workforce, the CCRA requires business representation on every
accrediting board, though the bill includes strict provisions
preventing conflicts of interest (such as baring an employee of
any IHE accredited by the agency to sit on their accrediting
board).\57\
---------------------------------------------------------------------------
\56\Additionally, given the metric's importance for determining the
return on investment for students, institutions, and taxpayers, the
bill also requires accreditors to have standards in place with respect
to the EPR of IHEs' programs. While accreditors are free to develop any
outcomes within the broad parameters established in statute and the
CCRA does not prescribe any stringent list, it does require accreditors
to ensure that programs are meeting the needs of students and the
workforce.
\57\Accreditors will say that it will be difficult to board members
without a direct interest in a member institution, but there are
accreditors with board membership that volunteered for the role without
knowing the institutions that would be accredited https://
postsecondarycommission.org/commissioners/ Perhaps because the model of
regional accreditation is still fresh in the minds of many in the
accreditation industry is there a perceived barrier to finding board
members across the country, from a variety of different backgrounds.
Importantly, nothing in the bill limits who can be on an accrediting
board, outside the conflict of interest provisions.
---------------------------------------------------------------------------
Additionally, H.R. 6951 updates the law to move
accreditation away from a binary model, providing a foundation
for all accreditors to begin using a risk-based review process
for monitoring IHEs they accredit based on performance and
performance relative to peer IHEs the accreditor also oversees.
In doing so, it provides escape hatches from unnecessary
accreditor regulation to IHEs who exceed achievement measures
relative to that of peer IHE's their accreditor oversees.\58\
This type of oversight will better focus accreditor and
institution resources\59\ but still require accreditors to
evaluate the quality of all institutions. To make accurate
comparisons across institutions and to be able to determine
what punitive actions might be fair and appropriate, the CCRA
calls for the development of a common set of terminology and
codifies regulations to prevent an accreditor from considering
a religious institution's religious practices in the
institution's evaluation. The bill also makes other strategic
reforms to minimize unnecessary compliance burdens for
institutions, including outlining the definition of what
constitutes a ``substantive change'' at an institution that
should go before an accreditation board or commission for full
approval.\60\
---------------------------------------------------------------------------
\58\https://www.texaspolicy.com/wp-content/uploads/2020/04/Gillen-
Escape-Hatches-from-
Higher-Ed-Accreditation.pdf However, the bill provides much-need cover
to direct accreditors to engage in different measures of sanction for
programs that fail to meet student achievement outcomes and other
standards in the law.
\59\https://www.aplu.org/news-and-media/news/aplu-risk-based-
accreditation-would-better-
allocate-resources-to-focus-on-schools-with-greatest-need-for-
increased-oversight/.
\60\The Committee believes that too high frequency substantive
changes only set back institutions from being able to develop degree
programs quickly and approve changes in faculty and departments to be
nimble to what students want to learn and employers need to be
delivered.
---------------------------------------------------------------------------
Improving competition in postsecondary education requires
allowing accreditors to compete amongst new and existing
providers. As such, H.R. 6951 codifies the 2019 regulations
issued by ED under the Trump administration repealing the
concept of regional accreditors, allowing accreditors to
operate within a state or nationally and as an institutional or
programmatic accreditor. Additionally, the CCRA allows states
to designate an entity, such as an industry-specific quality
assurance entity, for a five-year period as an accreditor for
purposes of verifying the quality of degrees and credentials
eligible for Title IV funding.\61\ Committee Republicans also
believe a new marketplace of high-quality accreditors must
allow the entry of new quality assurance experts to keep pace
with the changing needs of education, as well as allow
institutions to change accreditors more freely without the
review of ED. A path to recognition should not take years of
paperwork, for example, if a prospective accreditor has already
built a relationship with an institution, is already overseeing
the institution, and has standards in place that meet the law's
requirements, and the bill makes critical changes to ensure
this will no longer be the case.\62\ Lastly, while the CCRA
makes necessary reforms to improve accreditation, Committee
Republicans question whether accreditors should continue to
serve as Title IV gatekeeper or should return to the more
classical role of peer review without the high stakes of Title
IV approval,\63\ particularly in light of the CCRA's other
reforms focusing funding on outcomes and requiring skin-in-the-
game from IHEs. To test this possibility, the bill would
authorize a voluntary experimental site initiative for five
years to evaluate whether institutions and non-institutional
education providers can maintain high student achievement
outcomes in lieu of an ED recognized accreditor.\64\
---------------------------------------------------------------------------
\61\Because state designated accreditors are also subject to all
the requirements of the statute, including the reformed standards of
accreditation, state designated accreditors will be held to a higher
level of accountability, since the state could also require additional
expectations to receive a state's designation. This builds off of
builds off of H.R. 5042, the Higher Education Reform and Opportunity
Act.
\62\The bill provides more of a road map for new, or prospective
accreditors, on how a path to recognition from ED should be, providing
ED with the ability to recommend a prospective accreditors application
to NACIQI before two years, if the prospective accreditor has at least
one year of accrediting experience. The bill also provides NACIQI the
ability to provide longer periods of recognition for accreditors that
oversee institutions with successful outcomes or continually improving
their outcomes.
\63\https://www.heritage.org/education/report/its-time-congress-
dismantle-the-higher-education-accreditation-cartel.
\64\This experimental site is different than the challenged
experiment initiated during the Obama Administration. https://
www.insidehighered.com/news/2018/04/18/federal-experiment-
nontraditional-providers-stumbles-out-gate For example, accreditors
would not be involved in the experiment and instead ED would be
applying already collected outcomes data to evaluate credentials and
degree programs worthiness to receive Title IV funding.
---------------------------------------------------------------------------
Regulatory Relief Just as input-based accreditation
standards allow for the proliferation of low-quality degrees,
stifle innovation, and create unnecessary barriers to entry for
new providers, heavy-handed and politicized regulations issued
by ED provide patchwork accountability and often harm more than
they help.\65\ For example, not only are current 90/10 rule and
Gainful Employment (GE) regulations applicable to just 15
percent of students, but also they unfairly punish many IHEs
who go above and beyond to provide real value to the students
who stand to benefit most from the promise of postsecondary
education the most. While an IHE's 90/10 ratio has zero
relationship to whether programs offered by for-profit IHEs
provide the majority of students a positive return on
investment, the metric is strongly correlated with the
percentage of IHEs' students who receive Pell Grants,
indicating it is a better predicator of students' ability to
pay than a measure of the quality of education being provided
or someone's willingness to pay for it.\66\
---------------------------------------------------------------------------
\65\https://www.heritage.org/education/report/reversing-the-
department-educations-anti-market-orientation-higher-education.
\66\https://www.edvisors.com/ask/student-aid-policy/90-10-rule//
media/d16fabde2fdb4134932cb0fd3e620683.ashx.
Similarly, the binary thresholds (e.g., earnings premium,
debt-to-earnings ratio) used to determine whether programs are
eligible for student loans and Pell Grants under the GE rule
misclassify nearly one quarter (24 percent) of short-term
certificate programs and degrees by for-profit colleges,
leading to thousands of students being cutoff from education
opportunities that provide real value while students in
negative-ROI programs that barely skirt these requirements
remain unprotected, as well as the millions of other students
enrolled in low-value programs that aren't subject to the GE
rule in the first place.\68\ The same is true for other polices
by ED that attempt to micromanage how colleges conduct their
everyday business.\69\ Indeed, what might be well-intentioned
scrutiny by ED with respect to IHEs contracts with third-party
service providers and tuition rates would result in substantial
compliance costs that inevitably get passed on to students
through higher prices.\70\ And while no one disagrees that
protecting students and taxpayers should be the primary focus
when it comes to ED's oversight of college mergers or
acquisitions, recent regulatory changes have injected more
uncertainty and cost into an already difficult process that
lengthen approval timelines and result in the shut down of
struggling colleges and universities.
---------------------------------------------------------------------------
\67\Sources: College Scorecard, https://studentaid.gov/data-center/
school/proprietary, https://freopp.org/whitepapers/does-college-pay-
off-a-comprehensive-return-on-investment-analysis/.
\68\https://freopp.org/whitepapers/accountable-or-not-evaluating-
the-biden-administrations-proposed-gainful-employment-framework/.
\69\For example, On February 15, 2023, the Department issued
updated guidance through a Dear Colleague letter that attempted to
redefine when organizations that contract with institutions are
considered third-party servicers and, thereby, subject to disclosure,
audit, and liability requirements. Additionally, on the same day, ED
announced a public comment period and listening session on existing
2011 guidance that impacts how institutions can contract with online
program managers, or OPMs, which are private companies that help bring
programs online and serve additional students. https://
fsapartners.ed.gov/knowledge-center/library/dear-colleague-letters/
2011-03-17/gen-11-05-subject-implementation-program-integrity-
regulations.
\70\https://www.christenseninstitute.org/blog/congressional-
testimony-on-higher-ed-allow-for-
innovation-incentivize-student-outcomes/.
---------------------------------------------------------------------------
Recognizing this, CCRA repeals a host of expansive
regulations issued in recent years and, in many cases, prevents
ED from issuing new regulations going forward as well--
including the 90/10 rule and GE. The bill also clarifies the
instances in which ED can deem institutions financially
responsible, and it streamlines program reviews as well as ED's
oversight of mergers, acquisitions, and changes in ownership.
Lastly, to avoid another reckless attempt by future
administrations from expanding the definition of third-party
servicers to micromanage private company payment structures,
the CCRA clarifies that third-party servicers are not companies
that provide services outside of administering financial aid.
The HEA prohibits institutions from providing a commission or
bonuses to individuals or entities based on securing enrollment
or financial aid.\71\ However, third parties are exempt from
the ban on incentive compensation if they provide a bundled set
of services as outlined in the 2011 guidance.\72\ A company
could receive financial compensation based on student
enrollment if the company provides other services, such as
technology support, in addition to student recruitment.
However, the CCRA's language makes clear that a company
receiving an incentive payment from an institution could not
provide its own employees or subcontractors with incentive
payments. This is an important protection that shields any
taxpayer funding from abuses. While institutions are aware of
what is known as the ``bundled services guidance,'' codifying
this policy will provide long-term clarity to universities on
how they should wisely manage their private partnerships.
---------------------------------------------------------------------------
\71\2 CFR Sec. 200.430(f).
\72\https://fsapartners.ed.gov/knowledge-center/library/dear-
colleague-letters/2011-03-17/gen-11-05-subject-implementation-program-
integrity-regulations.
---------------------------------------------------------------------------
Committee Republicans believe that with a robust, outcomes-
focused accountability system in place, there is no need for
input-based regulations such as those focused on institutional
control or third-party servicer contracts which only raise
compliance costs for institutions. Additionally, input-based
regulations are poor proxies for program quality that fail to
protect students and taxpayers. Proponents of these regulations
claim such repeals open the door for bad actors to take
advantage of low-income learners, veterans, and other students
receiving generous taxpayer support. However, such criticisms
are unwarranted. The CCRA holds all schools accountable to the
same standard, not just those who do not have Democrats'
preferred tax status, which means all students (including
veterans) are protected for low-value education programs unlike
today. At the same time, the CCRA's carrots and sticks approach
to accountability ensures that no IHE unfairly loses access to
Title IV dollars based on imperfect metrics, and instead it
creates a graduated scale of penalties and rewards to encourage
IHEs to maximize the value they provide while cutting red tape
to allow them the maximum opportunity to do so.
Limitations on Executive Authority
From illegal and expansive waivers of statutory
requirements to untargeted and expensive repayment pauses, to
the outright transfer of tens of millions of loans to those who
didn't borrow them, ED has spent the last three and half years
attempting to transform the student loan program into de facto
``free'' college, delivered in all the worst ways
possible\73\--in the face of the courts repeated reminders that
such actions go far beyond what Congress ever intended. As a
result of ED's false promises, millions of borrowers are now
stuck in limbo, wondering when and how they will be able to
repay their student loans. The CCRA prevents these unfair,
inflationary, and illegal actions by repealing numerous
regulations issued by ED, including the latest iteration of the
Borrower Defense to Repayment (BDR) and closed school discharge
regulations\74\ as well as ED's ``SAVE'' plan. Further, to
prevent any Education Department under any administration from
pursuing such reckless policies in the first future, the CCRA
prohibits ED from issuing any proposed or final regulation that
is considered ``economically significant'' or that would
otherwise increase the cost of the loan program. There is no
such thing as forgiveness, just the shifting of debt burdens
from one party to another, and the CCRA ensures such unfair and
illegal actions never occur again.
---------------------------------------------------------------------------
\73\https://www.crfb.org/blogs/total-cost-student-debt-
cancellation. https://edworkforce.house.gov/uploaded.les/
3.23.23_looney_testimony.pdf.
\74\The Borrower Defense to Repayment (BDR) rule allows student
loan borrowers to seek forgiveness if they can prove that their
educational institution misled them or engaged in other misconduct in
violation of certain state laws. Originating in 1994, BDR was initially
a temporary measure designed to provide relief in specific cases of
institutional malfeasance. For over two decades, the rule saw minimal
use, with only five claims filed from its inception until 2015.
---------------------------------------------------------------------------
Postsecondary Student Success Grants
After decades of subpar and stagnant completion rates,\75\
institutions, research and advocacy organizations, and the
Department have developed and experimented with a variety of
methods to increase the rates at which students complete their
degree or credential program. In doing so, ED has found that
strong first-year orientation programs, the use of technology-
integrated academic advising, and career services are all ways
in which IHEs can boost their retention of students.\76\
Moreover, this research also notes the success of articulation
agreements between institutions to enable students to more
easily transfer and retain the credit for learning they have
already undergone. The Committee also heard directly from Dr.
Tim Renick, Executive Director for the National Institute of
Student Success, who led Georgia State University's pioneering
effort to utilize predictive analytics to give students early
interventions and help them get back on track for completion;
this plan has resulted in a 23 percent increase in graduation
rates since 2003.\77\ Building off these results, the CCRA
authorizes the existing Postsecondary Student Success Grant
program for five years to support the efforts of institutions
and their partners to test potential practices for long-term
success. Studies have shown that taking on student debt without
completing a degree leaves students in a more difficult
position to repay their student loans.\78\ Research to find
proven strategies will pay dividends for challenged students
and taxpayers.
---------------------------------------------------------------------------
\75\https://nces.ed.gov/programs/digest/d21/tables/dt21_326.10.asp.
\76\https://www.salesforce.org/resources/article/student-retention-
strategies/.
\77\https://success.gsu.edu/.
\78\https://www.insidehighered.com/news/2018/08/08/link-between-
college-completion-
and-student-loan-repayment; https://www.federalreserve.gov/econres/
notes/feds-notes/non-completion-
student-debt-and-financial-well-being-20230821.html.
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TRANSPARENCY
A central element of market competition is consumers'
ability to shop among a host of providers, which disciplines
the market and holds prices to a reasonable level. However,
comparison-shopping is all but non-existent in postsecondary
education. The cost of a college education is often shrouded in
complexity and unpredictability. Furthermore, due to a
convoluted system of grants, scholarships, and discounts, the
advertised tuition rates rarely reflect what students end up
paying,\79\ and often the information that is provided is
either misrepresented or outright inaccurate. This lack of
transparency makes it challenging, if not impossible, for
families to accurately compare institutions and plan for the
full cost of education. What is worse, institutions spend
billions annually in order to take advantage of students'
limited choices and raise as much revenue as possible.
---------------------------------------------------------------------------
\79\https://www.aei.org/education/dont-get-scammed-by-college-
scholarships/.
---------------------------------------------------------------------------
Students and families have every right to know how much
they can reasonably expect to pay for college before they
apply. Moreover, they deserve to know what they are actually
paying for, including whether a prospective program of study
will allow them to get a job or repay their loans, as well as
the chances that they will ultimately complete their degree
program before they enroll. To accomplish this, the CCRA makes
several critical reforms to address the lack of transparency in
postsecondary education and make college shopping more consumer
friendly. Those reforms include ensuring students receive
clear, accurate, and timely information about how much college
costs and about what aid is available to help them pay for it
as well as enhancing outcomes data to allow students to assess
whether or not that program will provide them a positive ROI.
Most importantly, the bill proposes rethinking college
financing altogether by encouraging schools to move towards
all-in, up-front pricing.
Financial Aid Offers; Net Price Calculators
Colleges typically send current and prospective students
financial aid offers that include both federal and
institutional aid. Students and families rely on these offers
to understand how much colleges cost and the types and amounts
of financial aid for which they are eligible. Students use the
information in these offers to make key education and financial
decisions, including whether to pursue postsecondary education,
which college to attend, and how to finance their education.
However, according to the Government Accountability Office
(GAO), the vast majority of aid offers are inaccurate and
misleading at best, and outright fraudulent at worst. The GAO
found that just 9 percent of colleges provide an accurate net
price to students; half of colleges understate the net price,
such as treating or even labeling loans as grants, while 41
percent fail to provide students a net price at all.\80\
---------------------------------------------------------------------------
\80\https://www.gao.gov/products/gao-23-104708.
In response to the GAOs damning finding, H.R. 6951 requires
IHEs to adopt standardized financial aid forms with uniform
formatting requirements and key terminology. This includes an
itemized list of expenses as well as an indication of whether
those expenses are required or optional for enrollment; the
amount of grants and scholarships available to cover those
expenses; the net price of attendance, including the minimum
and maximum amount a student could be expected to pay; and the
options that students have to finance their remaining out-of-
pocket costs, including loans and other non-grant aid (e.g.,
Federal Work Study). Just like when an individual goes to a
bank to compare different mortgage options, students and
families will be able to make apples-toapples comparisons about
their options for and costs of pursuing a postsecondary
education.\81\
---------------------------------------------------------------------------
\81\Sources: College Scorecard, https://studentaid.gov/data-center/
school/proprietary, https://freopp.org/whitepapers/does-college-pay-
off-a-comprehensive-return-on-investment-analysis/.
---------------------------------------------------------------------------
Additionally, recognizing the need for accurate information
on costs before students apply for college, the CCRA
establishes a Universal Net Price Calculator website that is
embedded in both the College Scorecard (discussed below) and
the FAFSA. In 2008, Congress required all IHEs receiving
federal dollars under the HEA to post a net price calculator on
their website--an online tool to provide prospective students
with individualized cost and financial aid estimates; however,
many of these calculators are difficult for students to find,
use, and compare and often do not provide useful information.
Under the CCRA, students and families will be able to go to a
single website, enter in a few pieces of key information, and
have personalized price estimates for individual schools and
programs of study. Moreover, upon completing the FAFSA, each
student will receive these personalized estimates
automatically, allowing them to plan financially well in
advance of having to pay their tuition bill.
College Scorecard; Postsecondary Student Data System
Today, data regarding completion, earnings, repayment, and
other post-graduate outcomes are sparse and housed by various
sources, making it difficult for prospective students to assess
the quality of degree and credential offerings. Moreover,
inconsistent reporting requirements from multiple agencies
increases institutional burden, forcing IHEs to focus more on
government compliance than on student success. To improve
transparency and reduce administrative burden, the CCRA
authorizes a secure, privacy-protected student-level data
system to streamline reporting requirements and enhance
outcomes data so students can evaluate their ROI in
postsecondary education. In doing so, the CCRA also requires
the Department to update the College Scorecard to include this
enhanced information, including allowing students to receive
personalized and disaggregated data on earnings, costs, and
other measures of student success based on their individual
financial circumstances and other characteristics. Importantly,
the CCRA specifies extensive privacy protections as well as
makes clear the limits to which data can be collected,
including by restricting data collection to students receiving
federal financial assistance and prohibiting the collection of
data elements outside of those authorized in statute. Taken
together, the Committee Republicans believe these improvements
to postsecondary data align with the goals and interests of
students, policymakers, and postsecondary education
stakeholders alike.
Maximum Price Guarantee
Unlike other major investments such as homes or cars, the
total amount one will ultimately be required to pay for a
college degree is not known up front. Indeed, most students
don't know this final amount until they receive their last
billing statement before graduation. This lack of transparency
creates unnecessary barriers and complexity and exacerbates
problems of institutional fit and college affordability.
Committee Republicans believe there is no reason that IHEs
cannot provide students with an up-front pricing option,
especially if institutions are provided with additional
financial assistance to do so.\82\ As such, the CCRA requires
that IHEs, as a condition of receiving PROMISE Grants, provide
students with a ``maximum price guarantee'' for their program
offerings. This means that, for example, colleges would
disclose the entire price cost of their individual programs up
front and keep that price constant throughout a student's
enrollment, up to a maximum of six years or the institution's
median time to degree (whichever is less).
---------------------------------------------------------------------------
\82\https://files.eric.ed.gov/fulltext/ED604327.pdf.
---------------------------------------------------------------------------
For students, the benefits of the maximum price guarantee
are substantial. When students are blindsided by tuition
increases, it can create financial strain and even force some
students to drop out.\83\ By eliminating the fear of unexpected
tuition hikes, the maximum price guarantee provides students
and families predictability when it comes to financing
postsecondary education. This stability allows students to
focus more on their studies and less on financial concerns,
improving persistence and completion rates. Moreover, it
improves affordability: students receiving private scholarships
their freshman year would see their total price further
reduced, while those who borrow and receive aid in their junior
or senior year, for example, could apply those scholarships to
their loans' principal balance.\84\ Price transparency is
financially advantageous to institutions as well. Research and
case studies from individual institutions suggest that clear,
predictable pricing can make institutions more attractive to
applicants, potentially boosting enrollment.\85\
---------------------------------------------------------------------------
\83\https://hechingerreport.org/august-surprise-that-college-
scholarship-you-earned-might-not-count/.
\84\https://files.eric.ed.gov/fulltext/ED604327.pdf.
\85\
---------------------------------------------------------------------------
Further, while colleges may complain that such pricing
would be difficult to implement, most IHEs already use
sophisticated pricing strategies to charge students the maximum
they are willing to pay to enroll, and they spend billions of
dollars doing so.\86\ The maximum price guarantee would not
change these internal practices; they would simply ensure that
these hidden prices would be revealed to students instead of
concealed by institutions. Moreover, if schools are concerned
about their ability to provide consumers with the same kind of
transparency they get in any other market, plenty of
institutions would likely be willing to share their best
practices for implementation. For example, Purdue University
has kept its tuition flat since 2013, which has cumulatively
saved students and their families more than $1 billion as a
result.\87\
---------------------------------------------------------------------------
\86\https://hep.gse.harvard.edu/9781682538920/lifting-the-veil-on-
enrollment-management/.
\87\https://marcom.purdue.edu/contentpkg/purdues-13th-year-of-
frozen-tuition/#::text=While%20student %20loan%20debt%20has,
freeze%20began %20in%202012%2D13.
---------------------------------------------------------------------------
CONCLUSION
Americans across the political spectrum agree that student
debt is too high, completion rates are too low, and far too
many individuals are left worse off financially for investing
in postsecondary education. For too long, policymakers have
relied on patchwork ``solutions'' that exacerbate these
problems without addressing the root cause: the inflated cost
of obtaining college degrees with questionable value. Committee
Republicans are stepping up to fix the underlying problem
permanently. H.R. 6951, the College Cost Reduction Act,
provides a comprehensive solution that will lower college costs
for students, families, and taxpayers.
H.R. 6951 Summary
There is bipartisan agreement that student loan debt is too
high, completion rates are too low, and far too many students
are left worse off after paying for postsecondary education
than if they had never enrolled in the first place. For too
long, policymakers have relied on patchwork ``solutions'' that
exacerbate these problems without addressing their root cause:
the inflated cost of obtaining a college degree. Fortunately,
Committee Republicans are stepping up to fix the underlying
problem permanently through H.R. 6951, the College Cost
Reduction Act, which provides a comprehensive solution that
will lower college costs for students and families:
Promotes a new quality assurance model.
Ensures colleges have skin in
the game by holding them financially
responsible when they charge too much for
degrees that leave students with debt they
can't afford.
Ends the regional accreditation
monopoly and creates an environment for new
quality assurance entities to provide their
expertise to postsecondary education programs.
Focuses on outcomes rather than
inputs when assessing the quality and relevancy
of postsecondary credentials.
Reins in the executive branch.
Repeals excessive and burdensome
regulations that increase administrative costs
for institutions that are ultimately passed on
to students and families.
Prohibits executive overreach by
barring the Department of Education from
transferring student debt to hardworking
Americans who never stepped foot on a college
campus.
Removes barriers to graduation.
Provides Postsecondary Student
Success Grants to help ensure high-need
students complete their postsecondary education
through evidence-based practices.
Fosters completion by making it
easier for students to transfer credits and
ensuring that students can receive a credential
for the learning they have completed.
Empowers students and families.
Ensures information about
college costs is clear, accessible, and
consumer-friendly through standardized
financial aid offers and enhanced college-
shopping tools that provide personalized prices
to students for postsecondary degrees and
credentials.
Streamlines and enhances data
collection and reporting on college outcomes
which will improve decision making and allow
prospective students to assess their return on
the cost of postsecondary education.
Promotes economic mobility.
Provides performance-based
PROMISE grants with flexible uses of funds to
institutions committed to lowering tuition,
aligning degree programs with labor market
needs, and enrolling and graduating low-income
students.
Prevents colleges from endlessly raising
tuition.
Requires colleges to offer
degree programs at an up-front, guaranteed
price in order to receive performance-based
funding, allowing students to know the cost of
an entire degree program before they enroll.
Sunsets the inflationary PLUS
loan program which effectively allows for
unlimited borrowing, resulting in skyrocketing
costs for graduate students while creating a
debt trap for countless low-income families.
Protects borrowers from unaffordable debt.
Institutes flexible loan limits
that vary by fields of study that allow
students to borrow up to the median cost of
college and provides financial aid
administrators flexibility to further reduce
borrowing at their institution.
Simplifies and improves student
loan repayment, offers targeted relief to those
harmed by the current system, and provides
repayment assistance to struggling borrowers to
ensure they always see progress towards paying
off their loans.
H.R. 6951 Section-by-Section Summary
Section 1--Short title/table of contents
The short title is ``College Cost Reduction Act''
Section 2--References
Clarifies any amendment or repeal is with respect to the
Higher Education Act of 1965 unless otherwise noted.
TITLE I--TRANSPARENCY
PART A--DEFINITIONS
Section 101--Definitions
Establishes the following definitions: ``CIP code,''
``credential level,'' ``program of study,'' ``program length,''
``time to credential,'' and ``value-added earnings.''
PART B--COLLEGE COSTS AND FINANCIAL VALUE
Section 11--Financial aid offers
Requires the Secretary to create a standardized financial
aid offer form that includes standardized definitions and
terminology, formatting requirements, and information for
students and families. Requires all Title IV-participating
institutions to use such offer developed by the Department
following consumer testing. Provides institutions with
flexibility to remove or amend certain elements of the aid
offer if they are not applicable to a given student or
institution.
Section 112--College scorecard website
Requires the Secretary to update and maintain the College
Scorecard website with key information about colleges and
universities. Requires the College Scorecard to include
aggregated, program-level statistics on college costs,
financial aid, and student outcomes, as well as to allow
students to create customizable comparisons of degree and
certificate programs offered at IHEs. Establishes a Universal
Net Price Calculator to provide personalized estimates of
college costs for students before they enroll, including
automatic estimates for students after they fill out their
FAFSA.
Section 113--Postsecondary student data system
Directs the Commissioner of the National Center on
Education Statistics (NCES) to develop and maintain a secure
postsecondary student data system to evaluate student-level
enrollment, progression, and completion patterns, post-college
outcomes, postsecondary costs, and financial aid of students
receiving federal financial assistance under Title IV or
military and veterans education benefits provided under federal
law. Requires the NCES Commissioner to focus on the needs of
users in developing the data system, follow relevant web design
and digital service standards, and ensure student data privacy
and security in accordance with federal standards. Authorizes
the Secretary and NCES Commissioner to consider reporting to
the new postsecondary student data system as sufficient to
satisfy any other reporting required under section 132 of the
HEA in cases where the same reporting or collection of data is
required and directs the NCES Commissioner to periodically
review methods for streamlining data collection and minimizing
duplicative reporting. Prohibits the collection of any data
elements that are not authorized in statute, including health
data, discipline records or data, elementary and secondary
education data, physical addresses, political affiliation, and
religion. Directs the NCES Commissioner to enter into
agreements with other federal agencies to create secure
linkages between the postsecondary data system and other
federal data systems. Requires the NCES Commissioner to
promulgate guidance and regulations related to data access and
security. Establishes a postsecondary student data system
advisory committee composed of students, state higher education
agencies, institutions, and representatives from relevant
federal agencies. Requires the committee to provide a report to
Congress with recommendations for additional data elements to
be included in the postsecondary student data system. Requires
the NCES Commissioner to make summary aggregate information
available to the public in a user-friendly format on
institution-and program-level data, as well as to develop and
implement a secure process for making non-personally
identifiable student-level data available for research and
evaluation purposes and to allow institutions and states to
request and receive non-personally identifiable information and
aggregate summary data on current and former students.
Section 114--Database of student information prohibited
Prohibits the establishment of any student data system
other than that established in section 132 of the HEA, as
amended by section 113 of the bill.
TITLE II--ACCESS AND AFFORDABILITY
PART A--FINANCIAL NEED
Section 201--Amount of need; cost of attendance; median cost of college
Amends sections 471 and 472 of the HEA to calculate
students' financial need for purposes of federal student aid
eligibility using the MCOC of students' program of study
beginning in award year 2025-2026. Defines the MCOC as the
median cost of attendance for all students enrolled in a
specific program of study nationally during the previous award
year. Restores the exemption of certain assets under the FAFSA.
PART B--FINANCIAL AID
SUBPART 1--GRANTS
Section 211--Federal Pell Grant program
Caps the maximum Pell Grant award at the MCOC of students'
program of study.
Section 212--Campus-based aid programs
Amends subpart 4 of the HEA to replace the Leveraging
Education Assistance Program with the Promoting Real
Opportunities to Maximize Investments and Savings in Education
(PROMISE) grant program. Establishes a formula for determining
each IHE's PROMISE grant based on the ratio of the average
value-added earnings of an IHE's graduates and average maximum
total price of an IHE's programs, the total amount of Pell
Grant dollars awarded to students at the institution, the
percentage of low-income students who complete or successfully
transfer from the institution on time, and the amount of
campus-based aid funding the school already receives under the
Supplemental Educational Opportunity Grants (SEOG) and Federal
Work-Study (FWS) programs. Caps the maximum amount an IHE can
receive under the PROMISE program each year at $5,000 per
federal student aid recipient. Allows IHEs eligible for PROMISE
grants to use 100 percent of their SEOG and FWS funds for
PROMISE grant purposes. Establishes flexible uses of funds for
IHEs to improve college affordability, college access, and
student success. Requires IHEs to report and evaluate how funds
are used, as well as to disseminate best practices based on
those evaluations. Requires IHEs to provide prospective
students a guaranteed maximum total price based on their family
income and financial need (as determined by the FAFSA) for each
program of study at their institution; this guaranteed maximum
total price will be locked in for a minimum period of
enrollment (up to six years or the institution's median time to
completion, whichever is less). Requires the Secretary to use
reimbursements made by IHEs under section 311 of the bill and
funds returned under section 484B of the HEA to make PROMISE
grants to eligible institutions and requires the Secretary to
prioritize grants based on the percentage of low-income
students enrolled at the IHE if such funds are insufficient to
award a PROMISE grant to each eligible IHE.
SUBPART 2--LOANS
Section 221--Loan limits
Caps aggregate student loan limits at $50,000 for
undergraduate students (up to $23,000 of which can be
subsidized loans), $100,000 for graduate students, and $150,000
for students in graduate professional programs. Additionally,
the bill allows undergraduates enrolled in certain qualifying
programs subject to federally regulated licensure requirements
to exceed the aggregate undergraduate loan limit. Caps the
total aggregate amount of federal loans a student can borrow at
$200,000. Eliminates the current annual loan limits under the
Stafford program that vary by student characteristics and year
of study and instead sets annual borrowing limits to the MCOC
of a student's program (minus the amount of a student's Pell
Grant, as applicable). Provides financial aid administrators
with additional flexibility to lower loan limits for certain
categories of borrowers and the earnings and repayment outcomes
of graduates. Sunsets the Grad PLUS and Parent PLUS loan
programs beginning July 1, 2025 and allows current students and
parents to access PLUS loans until they complete their program
of study or three years after enactment, whichever is less.
Section 222--Loan repayment
Streamlines the number of federal student loan repayment
plans down to two plans: a standard 10-year plan and an IDR
plan dubbed the ``repayment assistance plan.'' Current
borrowers paying under one of the existing fixed repayment
plans eliminated under the bill will be able to continue paying
under those plans or choose to pay under the standard 10-year
plan or the new repayment assistance plan. Borrowers choosing
the IDR plan must pay 10 percent of their annual income above
150 percent of the federal poverty line. Ensures that borrowers
making on-time monthly payments will see at least half their
payment applied to their loan's principal, even if the payment
does not fully cover accrued interest; any remaining unpaid
interest is waived. Eliminates time-based forgiveness under IDR
and caps the total amount of payments borrowers are required to
pay at the amount of principal and interest owed under the
standard 10-year plan and allows borrowers currently in
repayment to retroactively receive this benefit if they enroll
in the IDR plan. Prohibits the Secretary from creating new
repayment plans and from modifying an existing repayment plan
in a manner that increases costs to the government.
Section 223--Loan rehabilitation
Permits defaulted loans to go through the established
process of loan rehabilitation twice, rather than just once.
Section 224--Interest capitalization
Prohibits the accrued interest on federal student loans
from capitalizing at the end of forbearance and certain types
of deferment subsequent to enactment of this Act. Eliminates
all instances of interest capitalization for current and new
borrowers effective upon enactment.
Section 225--Origination fees
Eliminates the administrative origination fees on all new
student loans issued on or after July 1, 2025.
TITLE III--ACCOUNTABILITY AND STUDENT SUCCESS
PART A--ACCOUNTABILITY
SUBPART 1--DEPARTMENT OF EDUCATION
Section 301--Agreements with institutions
Amends section 454 of the HEA to require IHEs participating
in the direct loan program to reimburse the Secretary for a
percentage of the ``non-repayment balance'' associated with
loans they disburse to students. Requires the Secretary to
calculate a reimbursement percentage for each cohort of
students who graduate from a program of study in an award year
or whom leave the institution before completing a program of
study. The reimbursement percentage for completing cohorts is
equal to a ratio of the value-added earnings of former
graduates of such program of study and the total price charged
to students in the cohort, while the percentage for non-
completing cohorts is determined by the percentage of students
who do not graduate or successfully transfer within 150 percent
of the expected time to completion. Requires the Secretary to
calculate the non-repayment balance each year for each cohort
of students, which is the sum of any missed or partial payments
plus any amount of principal and interest discharged by the
Secretary under IDR or other programs, with the exception of
total and permanent disability discharge and the teacher loan
forgiveness program. Requires IHEs to reimburse ED each year an
amount equal to the product of the non-repayment balance
calculated for each cohort in such year and the reimbursement
percentage that was calculated for the cohort when such cohort
was initially established. Establishes escalating penalties for
late payments, starting with requiring IHEs to pay interest on
late payments and scaling up to loss of Title IV eligibility.
Requires the Secretary to waive 50 percent of payments due for
a given program if an IHE voluntarily agrees to cease
disbursement of federal student loans for the program (or a
substantially similar program) for 10 years.
Section 302--Regulatory relief
Repeals current regulations and eliminates authority for
any future regulations for both the 90/10 rule as well as
Financial Value Transparency and Gainful Employment (with the
exception of certain reporting requirements).
Repeals current regulations and reforms the process for
schools seeking to change institutional ownership or convert
from a for-profit to a non-profit institution. Requires IHEs to
pay an administrative fee when submitting change of control and
conversion applications and directs administrative fees to be
used by ED and the IRS to hire staff and reduce the application
processing time as well as conduct oversight. Repeals current
regulations related to financial responsibility and clarifies
circumstances in which ED determines whether an institution is
financially responsible; requires ED to undergo a new
rulemaking process to update the financial responsibility
ratios no later than 18 months after enactment. Requires the
Secretary provide a detailed written justification for a
program review, when practicable. Requires the Secretary to
conduct, respond to, and conclude program reviews within
specified timeframes.
Clarifies that a third-party providing recruiting or
admissions activities for an institution as part of a larger
bundle of services may receive a commission, bonus, or other
incentive payment; to receive such a payment, the third party
may not provide an incentive-based payment to its employees or
subcontractors or award or disburse federal financial aid
awards. Affirms the definition of third-party servicer to be an
entity that contracts with an institution to administer any
aspect of the institution's Title IV student assistance
programs, but not any entity which conducts activities or
interacts with prospective or enrolled students for the
purposes of marketing or recruiting, assisting with completion
of applications for enrollment, administering ability-to-
benefit tests, conducting activities for student retention, and
providing instructional content or developing curricula or
course materials; prohibits the Secretary from regulating the
definition of third-party servicer.
Repeals other new regulations issued by ED related to
closed school discharges, BDR, pre-dispute arbitration, false
certification, administrative capability, certification
procedures, and ability to benefit, as well as guidance related
to personal liability for owners of proprietary institutions.
Prohibits any substantially similar regulation on these topics
from being issued by ED.
Section 303--Limitation on authority of Secretary to propose or issue
regulations and executive actions
Requires the Secretary to confirm that any new regulations
or executive actions issued related to the student loan program
will not increase costs to the federal government. Prohibits
any regulations from being issued that cannot meet that
threshold.
Section 304--Office of Federal Student Aid
Clarifies the federal preemption of state laws that
conflict with federal requirements for and the operations of
federal student loan servicers and requires the Office of
Federal Student Aid (FSA) to provide student loan servicers
actionable guidance related to new operations and information
about any modifications to contracts at least 30 days before
such changes take effect. This section also prohibits any
actionable guidance to student loan servicers outside of formal
contract modifications and Dear Colleague letters and clarifies
that all other forms of guidance from FSA are non-binding.
SUBPART 2--ACCREDITORS
Sec. 311--Accrediting agency recognition
Repeals the regional accreditation structure by aligning
the HEA with regulations issued in 2019 and permits accreditors
to operate within a state or nationally and as an institutional
or programmatic accreditor. Requires an accreditor to be both
administratively and financially separate from and independent
of any related or affiliated trade association or membership
organization. Requires an accreditor's board or governing body
to have at least one public member representing business for
every six members of the accreditor's board or governing body,
though it clarifies that public members cannot be a member of
any related or affiliated trade association or membership
organization. Requires each accreditor to establish guidelines
for members of the board or governing body to avoid conflicts
of interest, ensuring no member either is an employee of any
institution accredited by the agency or has a financial
interest in any of the accredited institutions.
Specifies that an accreditor must establish student
achievement outcomes standards to assess the quality of
institutions and programs of study, including a program of
study's median total price relative to the median value-added
earnings of graduates; learning outcomes measures, such as
competency attainment; labor market outcomes, such as employer
satisfaction and employment rates; and student success
outcomes, such as completion rates and loan repayment rates.
Allows a state to designate an entity, such as an industry-
specific quality assurance entity, for a five-year period to be
an accreditor for the purposes of verifying the quality of
degrees and credentials eligible for Title IV funding. States
are required to submit a plan to the Secretary describing the
process the state used to select the entity for designation, a
justification of the state's decision, a description of any of
the additional requirements that the state imposed on the
entity as a condition of receiving and maintaining the
designation, a copy of the policies and procedures of the
entity, the state's assessment of how the designated entities'
standards will be effective in holding institutions
accountable, and evidence that at least one other state has
determined the accreditor to be a reliable authority for being
a Title IV accreditor. The Secretary is required to approve and
respond to the state's plan and publish the plan and the
Secretary's response in the Federal Register for a 30-day
public comment period. States are also required to submit a
report at the end of the five-year period that contains
completion data for the designated accreditor's institutions
and programs overseen disaggregated by type of credential,
certification, or degree.
Allows the Secretary to recognize an accreditor for up to
an additional three years if the accreditor has demonstrated
capability and compliance. Allows prospective accreditors to be
recognized by the Secretary before the customary timeframe of
two or more years if the prospective accreditor can demonstrate
it has at least one year of experience making accreditation
decisions, meets the criteria required, and agrees to submit
monitoring reports.
Directs the Secretary to convene a panel to develop common
terminology for accrediting decisions, such as a common
understanding of monitoring, warning, showing cause, and other
relevant statuses, so the public and institutions have a better
understanding of accreditors' actions. Requires accreditors to
only review the following: substantive changes that
significantly impact the institution's educational mission;
change in legal status, control, or ownership; new programs at
a higher credential level then already offered at an
institution; and when an institution enters into a contract
with an organization providing a certain amount of educational
instruction. Requires accreditors to post all actions taken by
the accreditor and a summary of why any adverse actions were
taken. Directs accreditors to confirm an institution does not
deny transfer of credit solely on the accreditation of the
institution where the credit was earned. Requires accreditors
to post on their websites for public inspection a list of all
institutions accredited by the agency, the year the
accreditation was granted, the date of the most recent
comprehensive evaluation, and the anticipated date of the next
evaluation.
Prohibits accreditors from requiring the institutions and
programs they accredit to meet any litmus tests, such as
requiring adherence to DEI standards, as a condition of
accreditation. Prohibits accreditors from assessing the roles
of elected and appointed state and federal officials and
legislative bodies. Prohibits an accreditor from requiring an
institution to develop a degree program, certificate, or
credential that is not in response to the needs of an industry
or occupation. Prohibits the Secretary from establishing any
additional criteria for accreditors. Limits the standards
institutions or programs must meet to be Title IV-eligible to
those standards in the law.
Allows any institution or program of study not under
sanction by their accreditor or a state agency to change
accreditors without the approval of the Secretary, including
when an institution is changing accreditors to follow state
law. Requires the Secretary to recognize if an institution
chooses to be accredited by more than one accreditor and allows
an institution to change the designation of which accreditor
determines its Title IV eligibility at the end of the
institution's recognition period.
Requires an accreditor to consistently apply and enforce
standards that respect an institution's religious mission by
basing decisions only on the standards of accreditation.
Prevents an accreditor from using policies of an institution
that reflect the institution's religious mission as a negative
factor in determining its compliance with certain required
standards. Provides IHEs the option to file a complaint with
the Secretary if the institution believes that an accreditor's
adverse action is based on the institution's religious mission.
Requires an accreditor to develop an annual process to
identify institutions or programs of study not meeting
accreditation standards and help the struggling institutions or
programs of study remedy the performance issues. Directs
accreditors to also establish a risk-based review process to
assess compliance based on how well an institution or program
is performing. Requires an accreditor to categorize each
institution or program using methods such as peer benchmarking
to understand the institution's or program's performance in
comparison with its peers. Allows accreditors to take actions
to avoid or minimize the risk of an institution with declining
performance that has not improved, such as limiting program
enrollment, before the accreditor revokes accreditation. Allows
accreditors to reduce compliance requirements for institutions
or programs of study meeting or exceeding performance
standards. Prohibits any risk-based review process from
discriminating against an institution based on the
institutional sector, including an institution's tax status.
Sec. 312--National Advisory Committee on Institutional Quality and
Integrity (NACIQI)
Disqualifies an individual from being an appointed member
to NACIQI if the person has a significant conflict of interest
that will require that individual to frequently recuse himself
or herself and requires recusals to be published in each NACIQI
agenda. Narrows the function of NACIQI to only the functions
listed in statute. Reauthorizes NACIQI until September 30,
2028.
Sec. 313--Alternative quality assurance experimental site initiative
Establishes a voluntary experimental site initiative for
five years to evaluate whether institutions and non-
institutional education providers can maintain high student
achievement outcomes for the purposes of receiving Title IV
funding without being accredited by a Department-recognized
accreditor.
PART B--STUDENT SUCCESS
Section 321--Postsecondary student success grants
Codifies and reforms the existing Postsecondary Student
Success Grant at the most recently appropriated level of
$45,000,000 for fiscal years 2025 through 2030. The competitive
grant would support institutions, partnerships between
institutions and non-profit educational organizations, or a
consortium of institutions in implementing, replicating, and
further evaluating evidence-based completion and retention
activities designed to ensure the postsecondary success of
high-need students.
Establishes three tiers of evidence-based reforms or
practices distinguishing each tier based on the amount of prior
research that suggests the reform or practice has promise of
successfully improving student achievement or attainment for
high-need students. Reserves 2 percent of the funds to increase
the participation and completion rates of high-need students in
Tribal Colleges and Universities. Requires applicants to submit
a plan to increase achievement and completion, including a
description of which evidence tiers would be met by the reforms
or practices to be carried out, a description of how the
proposed project will serve high-need students, annual
benchmarks for student outcomes to be attained by the reforms
or practices, and a plan to evaluate the reforms or practices.
Reserves not less than 20 percent of the grant awards for
eligible entities that propose to include at least one reform
or practice that meets evidence tier three.
Requires funds to be used for evidence-based reforms or
practices for improving retention and completion rates, such as
real-time data on student progress and improving transfer
student success; direct student support services, including a
combination of tutoring, other academic support, and emergency
financial assistance; and efforts to prepare students for a
career, such as networking opportunities, career counseling,
and work-based learning opportunities. Requires the Secretary
to evaluate the effectiveness of the reforms and practices
carried out by the grantees, disseminate information on the
impact of these activities on increasing completion and
retention of students, and submit a report to Congress.
Section 322--Reverse Transfer Efficiency Act
Allows an institution to release education records to
another institution to facilitate the awarding of a recognized
postsecondary credential to students for the learning they have
completed, as long as the student provides written consent
prior to receiving the credential.
Section 323--Transparency and fairness in transfer credit policies
Requires each Title IV participating institution to
publicly disclose its transfer of credit policies regarding
acceptance or denial of academic credit earned at another
institution and prohibits the institution from establishing a
transfer of credit policy that denies credit earned at another
institution based solely on the source of accreditation of the
sending institution.
Explanation of Amendments
The amendments, including the amendment in the nature of a
substitute, are explained in the body of this report.
Application of Law to the Legislative Branch
Section 102(b)(3) of Public Law 104-1 requires a
description of the application of this bill to the legislative
branch. H.R. 6951 lowers college costs for students and
families by focusing on policies to increase transparency and
accessibility in the college financing system. H.R. 6951 is
applicable to institutions of higher education and therefore
does not apply to the Legislative Branch.
Unfunded Mandate Statement
Pursuant to Section 423 of the Congressional Budget and
Impoundment Control Act of 1974, Pub. L. No. 93-344 (as amended
by Section 101(a)(2) of the Unfunded Mandates Reform Act of
1995, Pub. L. No. 104-4), the Committee adopts as its own the
cost estimate prepared by the Director of the Congressional
Budget Office (CBO) pursuant to section 402 of the
Congressional Budget and Impoundment Control Act of 1974.
Earmark Statement
H.R. 6951 does not contain any congressional earmarks,
limited tax benefits, or limited tariff benefits as defined in
clause 9 of House rule XXI.
Roll Call Votes
Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee Report to include for
each record vote on a motion to report the measure or matter
and on any amendments offered to the measure or matter the
total number of votes for an against and the names of the
Members voting for and against.
Statement of General Performance Goals and Objectives
In accordance with clause (3)(c) of House rule XIII, the
goal of H.R. 6951, is to lower the cost of postsecondary
education for students and families.
Duplication of Federal Programs
No provision of H.R. 6951 establishes or reauthorizes a
program of the Federal Government known to be duplicative of
another Federal program, a program that was included in any
report from the Government Accountability Office to Congress
pursuant to section 21 of Public Law 111-139, or a program
related to a program identified in the most recent Catalog of
Federal Domestic Assistance.
Required Committee Hearing
In compliance with clause 3(c)(6) of rule XIII the
following hearing held during the 118th Congress was used to
develop or consider H.R. 6951: On July 27, 2023, the Committee
on Education and the Workforce, Subcommittee on Higher
Education and Workforce Development, held a hearing on
``Lowering Costs and Increasing Value for Students,
Institutions, and Taxpayers.''
New Budget Authority and CBO Cost Estimate
With respect to the requirements of clause 3(c)(2) of rule
XIII of the Rules of the House of Representatives and section
308(a) of the Congressional Budget Act of 1974 and with respect
to requirements of clause 3(c)(3) of rule XIII of the Rules of
the House of Representatives and section 402 of the
Congressional Budget Act of 1974, the Committee has received
the following estimate for H.R. 6951 from the Director of the
Congressional Budget Office:
The bill would:
Replace existing income-driven repayment
(IDR) plans with a new IDR plan for federal student
loans originated after June 30, 2024
Prohibit the adoption of new regulations
that would increase costs for the student loan program
or markedly affect the economy
Eliminate PLUS loans to parents and graduate
students and amend annual and aggregate limits on
borrowing in other types of loans
Require postsecondary institutions to make
payments to the federal government, based on the
repayment of student loans by students at each
institution
Repeal certain regulations concerning
student loans and postsecondary institutions
Impose intergovernmental mandates by
preempting state and local laws on federal student loan
servicers
Estimated budgetary effects would mainly stem from:
Eliminating existing IDR plans
Eliminating PLUS loans to parents and
graduate students and instituting new limits on student
loan borrowing
Repealing certain regulations and preventing
future administrative actions related to student loans
Reduced borrowing in response to payments
required of postsecondary institutions
Areas of significant uncertainty include:
Students' and institutions' responses to new
incentives and penalties under the bill
Bill summary: H.R. 6951 would amend the Higher Education
Act of 1965, making changes to federal student aid programs.
Specifically, the bill would modify the William D. Ford Federal
Direct Loan Program by changing repayment terms, loan limits,
and requirements for institutional eligibility. The bill also
would limit the administrative authority of the Department of
Education, repeal certain regulations, create a new
institutional grant program funded through payments from
postsecondary institutions, and increase data collection and
reporting requirements for postsecondary institutions that
receive federal aid.
Estimated Federal cost: The estimated budgetary effect of
H.R. 6951 is shown in Table 1. The costs of the legislation
fall within budget functions 500 (education, training,
employment, and social services) and 700 (veterans benefits and
services).
TABLE 1.--ESTIMATED BUDGETARY EFFECTS OF H.R. 6951
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
By fiscal year, billions of dollars--
-----------------------------------------------------------------------------------------------------------------------------------------------------------
2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2024-2028 2024-2033
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
DECREASES IN DIRECT SPENDING
Estimated Budget Authority.......... -34.1 -13.6 -16.2 -19.0 -20.1 -20.4 -20.5 -20.6 -21.5 -21.7 n.e................... -103.0 -207.7
Estimated Outlays................... -32.3 -12.0 -13.7 -16.2 -17.5 -18.4 -18.4 -18.6 -19.0 -19.4 n.e................... -91.7 -185.5
INCREASES OR DECREASES (-) IN SPENDING SUBJECT TO APPROPRIATION
Estimated Authorization............. * * -0.1 -0.2 -0.2 -0.2 -0.3 -0.3 -0.3 -0.4 n.e................... -0.5 -2.0
Estimated Outlays................... * * * -0.1 -0.2 -0.2 -0.3 -0.3 -0.3 -0.4 n.e................... -0.3 -1.8
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Components may not sum to totals because of rounding; n.e. = not estimated; * = between -$50 million and $50 million.
Basis of estimate: For this estimate, CBO assumes that H.R.
6951 will be enacted near the middle of calendar year 2024.
Estimates are based on information from a variety of sources,
including the National Center for Education Statistics,
National Student Loan Data System, and National Postsecondary
Student Aid Study as well as data supplied by the Department of
Education from applications for federal student aid.
CBO estimates that enacting H.R. 6951 would reduce direct
spending by $91.7 billion over the 2024-2028 period and by
$185.5 billion over the 2024-2033 period. Implementing the bill
would reduce spending subject to appropriation by $0.3 billion
over the 2024-2028 period and $1.8 billion over the 2024-2033
period.
The estimates are relative to CBO's May 2023 baseline,
updated for subsequently enacted legislation and most
administrative actions. On April 17, 2024, the Administration
published a notice of proposed rulemaking that describes new
ways in which the Secretary of Education may cancel all or part
of a borrower's outstanding federal loan debt.\1\ CBO has not
completed an estimate of the proposed rule, so the effects of
that policy are not incorporated into this estimate. We expect
that incorporating the proposed rule would, on net, reduce the
overall estimated savings of enacting H.R. 6951.
---------------------------------------------------------------------------
\1\See Office of Postsecondary Education, Department of Education,
``Student Debt Relief for the William D. Ford Federal Direct Loan
Program (Direct Loans), the Federal Family Education Loan (FFEL)
Program, the Federal Perkins Loan (Perkins) Program, and the Health
Education Assistance Loan (HEAL) Program,'' notice of proposed
rulemaking, 89 Fed. Reg. 27564 (April 17, 2024), https://tinyurl.com/
3db2cpxe.
---------------------------------------------------------------------------
Budgetary treatment of Federal Student Loans and Pell
Grants: CBO estimates that enacting H.R. 6951 would affect
spending both for the federal direct student loan program and
for the Federal Pell Grant Program. Those programs are treated
differently in the federal budget than most other federal
programs.
Federal Direct student loan program: As required by the
Federal Credit Reform Act of 1990 (FCRA), the costs of the
federal student loan program are estimated on a net-present-
value basis. A present value is a single number that expresses
a flow of current and future payments or receipts in terms of
an equivalent lump sum paid or received at a specific time. The
value depends on the rates of interest, known as the discount
rates, used to translate future cash flows into current
dollars. FCRA specifies those discount rates as the rates on
Treasury securities with similar terms to maturity. As required
by FCRA, changes to the estimated costs of outstanding student
loans are shown in the year of enactment. The administrative
costs of the student loan program are estimated on a cash
basis.
Federal Pell grant program: Pell grants provide need-based
aid to undergraduate students; they are funded by discretionary
and direct spending. For the 2024-2025 academic year, which
begins on July 1, 2024, the maximum award a student can receive
is $6,335. The maximum award amount, and the amount of
discretionary funding, are set in the annual appropriation act.
CBO's estimate of the program's costs is based on an assumption
that the maximum award will stay the same through 2033.
The program also has direct spending authority to support a
``mandatory add-on,'' which increases the award amount by
$1,060 above the discretionary maximum: For the 2024-2025
academic year, the total maximum award is $7,395. The costs of
the mandatory and discretionary components of Pell grants under
the bill are discussed separately in the sections on ``Direct
Spending'' and ``Spending Subject to Appropriation.''
Direct spending: CBO estimates that enacting the bill would
decrease direct spending, on net, by $185.5 billion over the
2024-2033 period (see Table 2). Those reductions include
changes to the cost of federal student loans and the mandatory
add-on portion of Pell grants.
Loan repayment: Under H.R. 6951 the Department of Education
would offer borrowers two repayment plans for loans originated
after June 30, 2024: the currently available 10-year repayment
plan and a new income-driven repayment (IDR) plan. The bill
would eliminate all other plans, including the Saving on a
Valuable Education (SAVE) Plan, which is the IDR plan that was
created administratively in 2023.
The new IDR plan would:
Set payments at 10 percent of discretionary
income (defined as the amount of a borrower's income
that is above 150 percent of the federal poverty
guidelines). Under the SAVE Plan, borrowers pay between
5 percent and 10 percent of their income above 225
percent of the federal poverty guidelines.
Waive 100 percent of unpaid accrued interest
when a borrower's calculated payment does not cover
accrued interest; the same is true for the current SAVE
Plan.
Match 50 percent of the monthly amount paid
by borrowers who meet income criteria and apply that
match to the outstanding principal balance; the SAVE
Plan has no such match.
Forgive any outstanding loan balance after
the borrower repays the amount that would have been
owed under a current 10-year repayment plan (regardless
of the amount of time required to repay such loans).
Under the SAVE Plan, outstanding balances generally are
forgiven after 20 or 25 years of repayment; for smaller
balances, forgiveness can occur after 10 years, no
matter how much of the balance has been repaid.
CBO estimates that about half of the loan volume originated
after June 30, 2024, would be repaid through the bill's IDR
plan. In contrast, CBO estimates, roughly 70 percent of loan
volume would be repaid under the SAVE Plan and other current-
law IDR plans. Borrowers repaying their loans would pay more,
on average, under the bill than under current law. CBO
estimates that implementing the changes to repayment plans
would reduce direct spending for student loans by $127.3
billion over the 2024-2033 period.\2\
---------------------------------------------------------------------------
\2\For information on CBO's modeling, see Nadia Karamcheva, Jeffrey
Perry, and Constantine Yannelis, Income-Driven Repayment Plans for
Student Loans, Working Paper 2020-02 (Congressional Budget Office,
April 2020), www.cbo.gov/publication/56337. For earlier SAVE Plan
estimates, see below, ``Previous CBO Estimates.''
TABLE 2.--ESTIMATED DIRECT SPENDING EFFECTS UNDER H.R. 6951
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
By fiscal year, millions of dollars--
--------------------------------------------------------------------------------------------------------------------------------------------------
2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2024-2028 2024-2033
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Increases or Decreases (-) in Direct Spending
Loan Repayment:
Budget Authority........................... -11,576 -12,683 -13,843 -15,285 -15,148 -15,282 -15,178 -15,022 -15,526 -15,611 -68,535 -145,154
Outlays.................................... -10,185 -11,157 -12,080 -13,256 -13,390 -13,408 -13,329 -13,261 -13,505 -13,728 -60,068 -127,299
Limit Regulatory Authority:
Budget Authority........................... -19,853 -1,219 -1,248 -1,286 -1,315 -1,344 -1,373 -1,403 -1,432 -1,454 -24,921 -31,927
Outlays.................................... -19,364 -1,071 -1,098 -1,129 -1,158 -1,184 -1,210 -1,237 -1,263 -1,285 -23,820 -29,999
Loan Limits:
Budget Authority........................... 0 -322 279 -1,746 -2,754 -3,028 -2,979 -3,304 -3,881 -4,284 -4,543 -22,019
Outlays.................................... 0 -222 60 -1,010 -2,189 -2,618 -2,749 -3,008 -3,328 -3,667 -3,361 -18,731
Risk-Sharing Payments and PROMISE Grants:a
Budget Authority........................... 0 -528 -1,494 -2,146 -2,385 -2,418 -2,481 -2,490 -2,610 -2,563 -6,553 -19,115
Outlays.................................... 0 -325 -1,035 -1,707 -2,143 -2,603 -2,575 -2,615 -2,612 -2,548 -5,210 -18,163
Eliminate Origination Fees and
Capitalization:
Budget Authority........................... 2,248 2,259 2,353 2,443 2,511 2,571 2,634 2,699 2,633 2,698 11,814 25,049
Outlays.................................... 1,729 2,005 2,090 2,172 2,233 2,286 2,341 2,400 2,382 2,399 10,229 22,037
Regulatory Changes:
Budget Authority........................... -4,665 -24 142 211 274 263 252 240 233 216 -4,062 -2,858
Outlays.................................... -4,370 -269 67 141 169 162 152 142 132 119 -4,262 -3,555
Other Provisions:
Budget Authority........................... 3 51 89 132 171 171 172 172 175 174 446 1,310
Outlays.................................... 3 34 68 105 143 157 157 157 160 160 353 1,144
Interactions:
Budget Authority........................... -282 -1,179 -2,463 -1,360 -1,408 -1,329 -1,590 -1,521 -1,045 -847 -6,692 -13,024
Outlays.................................... -86 -993 -1,799 -1,471 -1,168 -1,175 -1,227 -1,183 -998 -812 -5,517 -10,912
Total, Direct Spending:
Budget Authority........................... -34,125 -13,645 -16,185 -19,037 -20,054 -20,396 -20,543 -20,629 -21,453 -21,671 -103,046 -207,738
Outlays.................................... -32,273 -11,998 -13,727 -16,155 -17,503 -18,383 -18,440 -18,605 -19,032 -19,362 -91,656 -185,478
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Budget authority and outlays are estimated relative to CBO's May 2023 baseline, adjusted for subsequent legislation and administrative actions other than the April 17, 2024, proposed rule on
debt cancellation. CBO's May 2023 baseline uses a 5-year budget window of 2024 to 2028 and a 10-year budget window of 2024 to 2033.
PROMISE = Promoting Real Opportunities to Maximize Investments and Savings in Education.
The estimates shown for risk-sharing payments and PROMISE grants incorporate interactions with the bill's other student loan policies and include the effects of institutional responses. See
Table 4 for more details.
Limit regulatory authority: H.R. 6951 would limit the
authority of the Department of Education to issue regulations
that would increase the cost of federal student loans or that
would have economically significant effects (that is, that
would have an annual effect on the economy of $100 million or
more or that would adversely affect the economy in a material
way). CBO's baseline includes costs that reflect the
possibility of future administrative actions that would
increase the cost to the government of federal student loans.
Therefore, CBO estimates that enacting this provision would
decrease direct spending for student loans by $30.0 billion
over the 2024-2033 period.
Loan limits: H.R. 6951 would eliminate parent PLUS loans,
which are offered to parents of dependent undergraduate
students, and grad PLUS loans, which are offered to graduate
students and students enrolled in professional programs. The
bill would generally eliminate such loans to new borrowers
beginning on July 1, 2025, and would eliminate the program
altogether by 2028. Beginning on July 1, 2025, the bill also
would amend loan limits for unsubsidized graduate and
undergraduate loans. CBO estimates that, in total, those
provisions would reduce direct spending by $18.7 billion (see
Table 3).
TABLE 3.--ESTIMATED DIRECT SPENDING EFFECTS OF LOAN LIMITS UNDER H.R. 6951
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
By fiscal year, millions of dollars--
-----------------------------------------------------------------------------------------------------------------------------------
2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2024-2028 2024-2033
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
INCREASES OR DECREASES (-) IN DIRECT SPENDING
Eliminate Parent PLUS Loans:
Budget Authority.......................................... 0 494 1,227 1,865 2,088 2,110 2,142 2,172 2,178 2,221 5,674 16,497
Outlays................................................... 0 274 865 1,473 1,810 1,895 1,920 1,948 1,962 1,988 4,422 14,135
Eliminate Grad PLUS Loans and Amend Limits for Unsubsidized
Graduate Loans:
Budget Authority.......................................... 0 -1,008 -1,848 -4,763 -6,098 -6,278 -6,422 -6,607 -7,007 -7,309 -13,717 -47,340
Outlays................................................... 0 -606 -1,405 -3,351 -5,078 -5,617 -5,757 -5,909 -6,196 -6,501 -10,440 -40,420
Amend Limits for Unsubsidized Undergraduate Loans:
Budget Authority.......................................... 0 192 900 1,152 1,256 1,140 1,301 1,131 948 804 3,500 8,824
Outlays................................................... 0 110 600 868 1,079 1,104 1,088 953 906 846 2,657 7,554
Total, Loan Limits:
Budget Authority.......................................... 0 -322 279 -1,746 -2,754 -3,028 -2,979 -3,304 -3,881 -4,284 -4,543 -22,019
Outlays................................................... 0 -222 60 -1,010 -2,189 -2,618 -2,749 -3,008 -3,328 -3,667 -3,361 -18,731
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Budget authority and outlays are estimated relative to CBO's May 2023 baseline, adjusted for subsequent legislation and administrative actions other than the April 17, 2024, proposed rule on
debt cancellation. CBO's May 2023 baseline uses a 5-year spending window of 2024 to 2028 and a 10-year budget window of 2024 to 2033.
Eliminate parent PLUS loans: In CBO's May 2023 baseline
projections, in 2025, parents will borrow approximately $11
billion in PLUS loans, and, on average, the federal government
will earn, on a net-present-value basis, about 16 cents for
every dollar it lends. On that basis, CBO estimates that
eliminating parent PLUS loans would increase direct spending by
$14.1 billion over the 2024-2033 period.
Eliminate grad PLUS loans and amend limits for unsubsidized
graduate loans: In addition to eliminating grad PLUS loans,
H.R. 6951 would increase annual limits on borrowing for
graduate students, on average, while decreasing aggregate
limits. Specifically, the bill would allow graduate students to
take out unsubsidized loans up to the median annual cost of
their program, with an aggregate maximum of $100,000, or
$150,000 if the borrower is enrolled in a graduate professional
program. Under the bill, the total amount of financial
assistance, including grants and loans, could not exceed the
borrower's annual cost of attendance. Under current law,
graduate students may borrow up to $20,500 each year in
unsubsidized loans, with a total aggregate cap for most
borrowers of $138,500. They can borrow up to the cost of
attendance under the grad PLUS loan program, which does not
have an aggregate cap.
CBO analyzed current borrowing patterns using data from the
National Postsecondary Student Aid Study and National Student
Loan Data System and expects that borrowing would increase in
the unsubsidized program as a result of the higher limits in
the bill. CBO expects that borrowers who borrowed the most
under current law, including the use of PLUS loans, were more
likely to increase borrowing.
Under current law, CBO estimates that borrowers will take
out approximately $15 billion in grad PLUS loans in 2025,
increasing to about $17 billion in 2028. Without access to
those loans, CBO expects that by 2029, students who would have
taken out grad PLUS loans under current law would increase
their graduate unsubsidized borrowing, resulting in a nearly 20
percent increase in graduate unsubsidized loan volume under
H.R. 6951.
CBO estimates that eliminating grad PLUS loans and amending
unsubsidized loan limits for graduate borrowers would reduce
direct spending by $40.4 billion over the 2024-2033 period.
Amend limits for unsubsidized undergraduate loans: CBO
estimates that enacting H.R. 6951 would increase the total
amount of unsubsidized loans to undergraduate students.
Under current law, annual and aggregate limits on
unsubsidized loans are set based on the borrower's class level
and dependency type. H.R. 6951 would set the annual limit at
the median cost of college for the program the borrower is
enrolled in, which is higher than the current limits, on
average. The bill also would require that total financial
assistance not exceed the student's cost of attendance and
would set an aggregate cap at $50,000 on the amount a student
may borrow--an increase for dependent students but a decrease
for independent students.\3\ Using methods that are similar to
those used to analyze the bill's effects on graduate loan
loans, CBO expects that borrowers who borrow the most under
current law, including in parent PLUS loans, would be likely to
increase borrowing under the bill's higher limits.
---------------------------------------------------------------------------
\3\Under current law, $31,000 is the aggregate limit for
undergraduate dependent students; $57,500 is the limit for
undergraduate independent students. No student can have more than
$23,000 in subsidized loans. H.R. 6951 would not change annual or
aggregate limits on subsidized loans.
---------------------------------------------------------------------------
H.R. 6951 also would allow institutions to cap loan amounts
for some or all students. Using information from financial aid
associations and other sources with knowledge of student aid
programs, along with data from the National Postsecondary
Student Aid Study, CBO expects that, under the bill's new loan
limits, this provision would limit some of the otherwise
expected increase in lending.
CBO estimates that amending loan limits and allowing
institutions the flexibility to cap limits for undergraduate
students would, on net, increase lending by about 10 percent
and direct spending by $7.6 billion over the 2024-2033 period.
Risk-sharing payments and PROMISE grants: Under H.R. 6951,
postsecondary institutions could be required to make annual
payments, called risk-sharing payments, in order to participate
in the federal student loan program. Those payments would be
the main source of funding for the Promoting Real Opportunities
to Maximize Investments and Savings in Education (PROMISE)
grants, which would be made to eligible postsecondary education
institutions to help improve affordability and promote success
for students. (Other funding for PROMISE grants would come from
funds that postsecondary institutions return to the federal
government, under title IV of the Higher Education Act, when
students withdraw from their programs.)
CBO estimated the amounts in risk-sharing payments on a
cash basis rather than using FCRA procedures because those
annual payments are based on cohorts of loans and are not tied
directly to, or made on behalf of, any individual loan. Loan
cohorts consist of groups of loans from borrowers who exit a
program in the same year. CBO also estimated the effects of
those provisions as if all other provisions in the bill were
enacted simultaneously. For example, the estimate for the
amount of risk-sharing payments incorporates an assumption that
borrowers would no longer be eligible for the current SAVE
Plan, that PLUS loans would no longer be available, and that
new loan limits would be in place. CBO estimates that, in
total, the risk-sharing payments and their effects on
institutional participation, and the PROMISE grant program,
including other sources of funding, would reduce direct
spending by $18.2 billion over the 2024-2033 period (see Table
4).
TABLE 4.--ESTIMATED DIRECT SPENDING EFFECTS OF RISK-SHARING PAYMENTS AND PROMISE GRANTS UNDER H.R. 6951
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
By fiscal year, millions of dollars--
-----------------------------------------------------------------------------------------------------------------------------------
2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2024-2028 2024-2033
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
INCREASES OR DECREASES (-) IN DIRECT SPENDING
Risk-Sharing Payments:
Budget Authority.......................................... 0 0 0 -8 -151 -798 -1,336 -1,893 -2,348 -2,709 -159 -9,243
Outlays................................................... 0 0 0 -8 -151 -798 -1,336 -1,893 -2,348 -2,709 -159 -9,243
Reduction in Institutional Participation in Federal Student
Aid Programs:
Student Loans:
Budget Authority.......................................... 0 -521 -1,467 -2,107 -2,342 -2,371 -2,430 -2,434 -2,550 -2,502 -6,437 -18,724
Outlays................................................... 0 -323 -1,031 -1,675 -1,992 -2,080 -2,124 -2,145 -2,214 -2,217 -5,021 -15,801
Pell Grants Mandatory Add-On:
Budget Authority.......................................... 0 -7 -38 -57 -61 -65 -69 -74 -78 -79 -163 -528
Outlays................................................... 0 -2 -15 -42 -58 -62 -66 -70 -75 -78 -117 -468
PROMISE Grants:
Budget Authority.......................................... 0 0 0 8 151 798 1,336 1,893 2,348 2,709 159 9,243
Outlays................................................... 0 0 0 0 40 319 933 1,475 2,007 2,438 40 7,212
Return of Title IV Funds for Student Loans and the Pell
Grant Mandatory Add-On:
Budget Authority.......................................... 0 0 11 18 18 18 18 18 18 18 47 137
Outlays................................................... 0 0 11 18 18 18 18 18 18 18 47 137
Total, Risk-Sharing Payments and PROMISE Grants:
Budget Authority........................................ 0 -528 -1,494 -2,146 -2,385 -2,418 -2,481 -2,490 -2,610 -2,563 -6,553 -19,115
Outlays................................................. 0 -325 -1,035 -1,707 -2,143 -2,603 -2,575 -2,615 -2,612 -2,548 -5,210 -18,163
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Budget authority and outlays are estimated relative to CBO's May 2023 baseline, adjusted for subsequent legislation and administrative actions other than the April 17, 2024, proposed rule on
debt cancellation. CBO's May 2023 baseline uses a 5-year spending window of 2024 to 2028 and a 10-year budget window of 2024 to 2033.
Risk-sharing payments: Under H.R. 6951, some institutions
would be required to make annual payments to the Department of
Education to participate in the federal student loan program.
Those payments would be recorded as offsetting receipts, that
is, as a reduction in direct spending. An institution's risk-
sharing payment would be based on a formula that considers the
amount of loan payments in a cohort that are waived, matched,
or forgiven in the new IDR plan or that borrowers fail to make
in a timely manner, as well as the total cost of a program for
borrowers who complete that program, and borrowers' future
earnings.
CBO calculated risk-sharing payments based on our estimates
of repayment in IDR plans and information from the College
Scorecard database (which gathers data on institutional costs,
graduation and employment rates, and student loan borrowing),
and the Integrated Postsecondary Education Data System. CBO
also analyzed delinquency and default rates using data in the
National Student Loan Data System.
CBO anticipates that the first risk-sharing payments would
be made by institutions late in fiscal year 2027, after the
Department of Education issues new rules, and that the
department would apply the requirements prospectively on loans
made beginning in the 2026-2027 award year. We expect that
initially, risk-sharing payments would be small but would
increase as more borrowers entered repayment on loans
originated after June 30, 2026. CBO estimates that by 2033,
risk-sharing payments would be $2.7 billion and would continue
to increase after that year. In total, CBO estimates that the
risk-sharing payments would reduce direct spending by $9.2
billion over the 2024-2033 period.
Reduction in institutional participation in Federal Student
Aid Programs: Given the high cost of risk-sharing payments to
institutions and the considerable uncertainty about that cost
over the lifetime of any given loan, CBO expects that some
institutions would take action to avoid making those payments:
Some would choose not to participate in the federal student
loan program, others would close certain institutional
programs, and still others would close altogether. Based on
information from associations of schools and from people with
knowledge of postsecondary financial aid programs, CBO
estimates that enacting this provision would reduce projected
loan volume by about one-third.
CBO estimates that, after incorporating all of the bill's
provisions, one dollar of student loan volume would cost the
federal government, on average, about 11 cents. On that basis,
CBO estimates that the reduction in loan volume would reduce
direct spending by $15.8 billion over the 2024-2033 period.
CBO expects that decisions by institutions to avoid risk-
sharing payments also would affect federal spending for the
Pell grant mandatory add-on. In general, institutions that
leave the federal student loan program would be expected to
continue to participate in the Pell grant program. However,
based on the literature included as part of the Department of
Education's rulemaking on gainful employment and financial
transparency (see ``Regulatory Changes'' below for more
information), CBO expects that some students enrolled in
programs or schools that close as a result of the bill's risk-
sharing requirements would not reenroll in other programs.
Thus, CBO estimates that enacting the risk-sharing provision
would reduce spending for the Pell grant mandatory add-on by
$468 million over the 2024-2033 period.
PROMISE grants: H.R. 6951 would institute PROMISE grants,
funded by institutional risk-sharing payments and federal
student aid funds that must be returned to the federal
government when students withdraw. To be eligible for a grant,
an institution would need to guarantee the total amount of
tuition and fees (net of institutional aid, but excluding
federal aid), that a student can be charged for completion of a
program, for a maximum of six years while the student is
enrolled.
Under the bill's grant formula, an eligible institution
could receive up to $5,000 for each student receiving federal
financial aid each year, depending on the availability of
funds. Along with additional criteria, the formula compares
students' earnings after completion of a program to the cost of
tuition, and it makes an adjustment for the amount an
institution receives in federal work-study funds and funds for
Federal Supplemental Educational Opportunity Grants.
CBO expects that PROMISE grants would be awarded as funds
become available. Using information from the College Scorecard
database and the Integrated Postsecondary Education Data System
and considering estimated risk-sharing payments, CBO estimates
that PROMISE grants would increase direct spending by $7.2
billion over the 2024-2033 period.
Return of Title IV funds for student loans and the Pell
grant mandatory add-on: H.R. 6951 would allow the Department of
Education to reallocate federal student aid that is returned to
the government under title IV to PROMISE grants. CBO estimates
that enacting this provision would increase direct spending for
student loans because the provision would change the underlying
subsidy rate of those loans. Funding PROMISE grants with
returned funds from the mandatory add-on for Pell grants also
would increase direct spending because the underlying Pell
grant is not subject to appropriation. In total, CBO estimates
that using those returned funds for PROMISE grants would
increase direct spending by $137 million over the 2024-2033
period.\4\
---------------------------------------------------------------------------
\4\The costs of this provision for student loans are estimated on a
net-present-value basis using FCRA procedures. However, CBO expects
that the amounts available to fund PROMISE grants would be available to
the Department of Education to disburse on a cash basis as they are
received.
---------------------------------------------------------------------------
Eliminate origination fees and the capitalization of
interest: H.R. 6951 would eliminate origination fees and
capitalization of interest for all federal student loans. CBO
estimates that enacting those provisions would increase direct
spending by $22.0 billion in total over the 2024-2033 period
(see Table 2). The two components of that cost are detailed
below.
Under current law, the origination fee for
unsubsidized federal student loans is 1 percent; the
fee for PLUS loans is 4 percent.\5\ CBO estimates that
eliminating those fees would increase direct spending
by $18.2 billion over the 2024-2033 period.
---------------------------------------------------------------------------
\5\The Budget Control Act of 2011 requires automatic reductions in
the cost of certain mandatory programs. For student loans, the savings
are achieved by increasing origination fees above the percentages
specified in the Higher Education Act. CBO's estimates of this
provision are based on those higher origination fees, but the fees
described in the text do not include that additional amount.
---------------------------------------------------------------------------
The bill also would prohibit the
capitalization of outstanding interest (that is, adding
interest to a loan's principal balance). Under current
law, interest is capitalized when a borrower exits
deferment, which increases the total amount of interest
the loan accrues. CBO estimates that eliminating
capitalization would increase direct spending by $3.8
billion over the 2024-2033 period.
Regulatory changes: H.R. 6951 would repeal or modify
regulations related to federal student aid. In total, enacting
those provisions would reduce direct spending by $3.6 billion
over the 2024-2033 period, CBO estimates (see Table 5).
Modify the Borrower Defense Rule: H.R. 6951 would partially
repeal a rule that made it easier for a borrower to discharge
loans as a result of a school's misconduct, including, for
example, misrepresentation of student outcomes. Based on an
analysis of loan volume at schools that were or are under
investigation for issues that could fall under that rule, and
using data from the Department of Education, CBO estimates that
enacting the change would reduce direct spending by $9.8
billion over the 2024-2033 period.
Repeal the Closed-Schools Rule: H.R. 6951 would repeal a
rule that established a standard process for discharging loans
made to borrowers who attended schools that closed, thus
increasing the likelihood of loan discharge for those
borrowers. Using information from the Department of Education,
CBO estimates that repealing the rule would reduce direct
spending by $4.9 billion over the 2024-2033 period.
Repeal the Gainful Employment and Financial Transparency
Rules: The bill would repeal rules that established a maximum
debt-to-earnings ratio that students enrolled at for-profit
institutions and in certain non-degree-granting programs at
two-year institutions would need to meet for the programs to
remain eligible for federal student aid (referred to as the
gainful employment rule). Based on a literature review, CBO
estimates that repealing the rules would increase both student
borrowing and the number of Pell grant recipients by about 2
percent. On that basis, CBO estimates that enacting the
provision would increase direct spending by $9.1 billion over
the 2024-2033 period: $8.3 billion for student loans and $0.8
billion for the Pell grant mandatory add-on.
Repeal the 90/10 Rule: H.R. 6951 would repeal the
requirement that for-profit institutions receive no more than
90 percent of their revenue from federal financial aid,
including veterans' education benefits. CBO anticipates that
repealing the rule would allow schools whose revenue comes
primarily from federal sources to expand enrollment and that
the schools closest to the 90 percent threshold would be the
most likely to do so. CBO estimates that enacting this
provision would increase direct spending by about $2.0 billion
over the 2024-2033 period: $1.7 billion for increased student
loan volume, $270 million for the Pell grant mandatory add-on,
and $25 million for veterans' education benefits.
TABLE 5--ESTIMATED DIRECT SPENDING EFFECTS OF REGULATORY CHANGES UNDER H.R. 6951
--------------------------------------------------------------------------------------------------------------------------------------------------------
By fiscal year, millions of dollars--
--------------------------------------------------------------------------------------------------------------------------
2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2024-2028 2024-2033
--------------------------------------------------------------------------------------------------------------------------------------------------------
INCREASES OR DECREASES (-) IN DIRECT SPENDING
Modify the Borrower Defense
Rule:
Budget Authority........... -3,505 -736 -767 -800 -816 -833 -850 -868 -883 -901 -6,624 -10,959
Outlays.................... -3,217 -642 -669 -698 -718 -733 -748 -764 -778 -793 -5,944 -9,760
Repeal the Closed-Schools
Rule:
Budget Authority........... -1,478 -400 -420 -439 -449 -455 -461 -465 -474 -481 -3,186 -5,522
Outlays.................... -1,328 -347 -364 -382 -393 -399 -405 -409 -416 -423 -2,814 -4,866
Repeal the Gainful Employment
and Financial Transparency
Rules:
Student Loans:
Budget Authority........... 251 913 1,028 1,035 1,042 1,049 1,057 1,064 1,074 1,081 4,269 9,594
Outlays.................... 147 613 889 929 936 942 949 956 963 971 3,514 8,295
Pell Grants Mandatory Add-On:
Budget Authority........... 23 85 98 99 99 100 101 101 102 103 404 911
Outlays.................... 6 39 88 98 99 99 100 101 102 102 330 834
Repeal the 90/10 Rule:
Student Loans:
Budget Authority........... 38 98 180 285 359 362 365 368 374 377 960 2,806
Outlays.................... 22 58 106 168 212 214 216 218 221 223 566 1,658
Pell Grant Mandatory Add-On:
Budget Authority........... 7 15 22 29 37 38 38 38 38 35 110 297
Outlays.................... 2 9 16 24 31 37 38 38 38 37 82 270
Veterans' Education Benefits:
Budget Authority........... * 2 2 3 3 3 3 3 3 3 10 25
Outlays.................... * 2 2 3 3 3 3 3 3 3 10 25
Change in Ownership:
Budget Authority........... -1 -1 -1 -1 -1 -1 -1 -1 -1 -1 -5 -10
Outlays.................... -2 -1 -1 -1 -1 -1 -1 -1 -1 -1 -6 -11
Total Regulatory Changes:
Budget Authority......... -4,665 -24 142 211 274 263 252 240 233 216 -4,062 -2,858
Outlays.................. -4,370 -269 67 141 169 162 152 142 132 119 -4,262 -3,555
--------------------------------------------------------------------------------------------------------------------------------------------------------
Budget authority and outlays are estimated relative to CBO's May 2023 baseline, adjusted for subsequent legislation and administrative actions other
than the April 17, 2024, proposed rule on debt cancellation. CBO's May 2023 baseline uses a 5-year spending window of 2024 to 2028 and a 10-year
budget window of 2024 to 2033.
* = between zero and $500,000.
Change in ownership: The bill would require institutions
undergoing a change in ownership or conversion from for-profit
to nonprofit status to pay an administrative fee equal to a
specified portion of their revenue. CBO estimates that enacting
the provision would decrease direct spending by $11 million
over the 2024-2033 period.
Other provisions: H.R. 6951 also would make other, smaller
changes to the federal student aid system that would affect
direct spending. CBO estimates that enacting those provisions
would increase direct spending by $1.1 billion over the 2024-
2033 period (see Table 6).
TABLE 6.--ESTIMATED DIRECT SPENDING EFFECTS OF OTHER PROVISIONS UNDER H.R. 6951
--------------------------------------------------------------------------------------------------------------------------------------------------------
By fiscal year, millions of dollars--
---------------------------------------------------------------------------------------------------------------
2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2024-2028 2024-2033
--------------------------------------------------------------------------------------------------------------------------------------------------------
INCREASES IN DIRECT SPENDING
Accrediting Agencies:
Student Loans:
Budget Authority...................... 0 28 59 94 126 126 127 126 129 130 307 945
Outlays............................... 0 17 43 73 103 112 112 112 114 115 236 801
Pell Grants Mandatory Add-on:
Budget Authority...................... 0 7 14 22 29 29 29 30 30 28 72 218
Outlays............................... 0 2 9 16 24 29 29 29 30 29 51 197
Loan Rehabilitation:a
Budget Authority...................... 3 15 15 15 15 15 15 15 15 15 63 138
Outlays............................... 3 15 15 15 15 15 15 15 15 15 63 138
Farm and Small Business Exemptions:
Budget Authority...................... 0 1 1 1 1 1 1 1 1 1 4 9
Outlays............................... 0 * 1 1 1 1 1 1 1 1 3 8
Total, Other Provisions:
Budget Authority.................... 3 51 89 132 171 171 172 172 175 174 446 1,310
Outlays............................. 3 34 68 105 143 157 157 157 160 160 353 1,144
--------------------------------------------------------------------------------------------------------------------------------------------------------
Budget authority and outlays are estimated relative to CBO's May 2023 baseline, adjusted for subsequent legislation and administrative actions other
than the April 17, 2024, proposed rule on debt cancellation. CBO's May 2023 baseline uses a 5-year spending window of 2024 to 2028 and a 10-year
budget window of 2024 to 2033.
* = between -$500,000 and $500,000.
aBecause the costs of loan rehabilitation are administrative, they are estimated on a cash basis.
Accrediting agencies: The bill would amend the requirements
for accrediting agencies, private educational associations that
develop evaluation criteria and conduct peer evaluations for
accrediting postsecondary institutions and conferring
eligibility to participate in federal student aid programs. CBO
expects that enacting this provision would allow more
postsecondary institutions to become eligible for federal aid
programs. We estimate that the change would increase direct
spending by about $1 billion over the 2024-2033 period: $801
million for student loans and $197 million for the Pell grant
mandatory add-on.
Loan rehabilitation. The bill would allow borrowers who
default on their loans to be eligible for a second
rehabilitation loan, which allows borrowers to exit default by
making nine on-time payments. Under current law, borrowers can
rehabilitate their loans just once.\6\ CBO estimates that
enacting this provision would increase the cost of
administering student loans by $138 million over the 2024-2033
period; administrative costs are estimated on a cash rather
than an accrual basis.
---------------------------------------------------------------------------
\6\The Fresh Start Program temporarily eliminated the need for
borrowers in default to rehabilitate their loans and does not qualify
as a rehabilitation loan. That program ends September 30, 2024.
---------------------------------------------------------------------------
Farm and small business exemptions: The bill would exclude
certain farm and small business assets from calculations for a
student's eligibility for the Pell grant program. CBO estimates
that enacting this provision would increase spending for the
Pell grant mandatory add-on by $8 million over the 2024-2033
period.
Interactions among provisions: The direct spending effects
of simultaneously enacting all provisions in H.R. 6951 would
differ from the sum of each provision's effects relative to
CBO's baseline. CBO estimates that those interactions, if
combined, would decrease direct spending by an additional $10.9
billion over the 2024-2033 period (see Table 2).
For example, the cost of eliminating origination fees in
PLUS loans is captured both in CBO's estimate of the provision
to eliminate origination fees and in the estimate to eliminate
the PLUS loan program. That difference, and other similar
differences, are included in CBO's estimate of the bill's
interactions. (Most provisions presented here were estimated
relative to current law. However, the risk-sharing payments and
PROMISE grant provisions were estimated relative to CBO's
baseline adjusted to include the effects of all other policies
in H.R. 6951. The estimate of these provisions contains some
interactions not shown in the ``Interactions''' row in Table
2.)
Spending subject to appropriation: Using information about
current or similar programs and activities, CBO estimates that
implementing H.R. 6951 would decrease spending subject to
appropriation by $330 million over the 2024-2028 period (see
Table 1). That estimate includes a reduction in costs for the
discretionary portion of the Pell grant program, partially
offset by the costs of other provisions in the bill. Any
spending would be subject to the availability of appropriated
funds.
Pell grants: CBO estimates that implementing H.R. 6951
would, on net, decrease the cost of the discretionary portion
of the Pell grant program (the affected provisions are
described above in ``Direct Spending'') by $518 million over
the 2024-2028 period (see Table 7).
TABLE 7.--ESTIMATED CHANGES IN SPENDING SUBJECT TO APPROPRIATION FOR PELL GRANTS UNDER H.R. 6951
----------------------------------------------------------------------------------------------------------------
By fiscal year, millions of dollars--
----------------------------------------------------------
2024 2025 2026 2027 2028 2024-2028
----------------------------------------------------------------------------------------------------------------
INCREASES AND DECREASES (-) IN SPENDING SUBJECT TO APPROPRIATION
Repeal the Gainful Employment and Financial
Transparency Rules:a
Estimated Authorization............................ 0 441 496 501 505 1,943
Estimated Outlays.................................. 0 115 451 497 502 1,565
Risk-Sharing Payments:
Estimated Authorization............................ 0 -37 -190 -287 -309 -823
Estimated Outlays.................................. 0 -10 -77 -214 -292 -593
Repeal 90/10 Rule:a
Estimated Authorization............................ 0 70 105 140 176 491
Estimated Outlays.................................. 0 18 78 114 149 359
Accrediting Agencies:
Estimated Authorization............................ 0 34 68 103 138 343
Estimated Outlays.................................. 0 9 43 77 112 241
Return of Title IV Funds:
Estimated Authorization............................ 0 0 14 24 24 62
Estimated Outlays.................................. 0 0 14 24 24 62
Farm and Small Business Exemptions:
Estimated Authorization............................ 0 4 4 4 4 16
Estimated Outlays.................................. 0 1 4 4 4 13
Interactions:a
Estimated Authorization............................ 0 -545 -669 -744 -819 -2,777
Estimated Outlays.................................. 0 -142 -572 -688 -763 2,165
Total Changes:
Estimated Authorization............................ 0 -33 -172 -259 -281 -745
Estimated Outlays.................................. 0 -9 -59 -186 -264 -518
----------------------------------------------------------------------------------------------------------------
aBecause the Congress has already enacted appropriations for fiscal year 2024, any additional costs for the
discretionary portion of the Pell grant program in that year would come from existing appropriations funds and
be treated as additional direct spending. However, CBO estimates that, on net, enacting H.R. 6951 would not
increase the cost of the discretionary portion of the program in fiscal year 2024.
That decrease in costs would result from the following
changes:
Repealing the gainful employment and
financial transparency rules would increase spending by
$1.6 billion over the 2024-2028 period and by $4.1
billion over the 2024-2033 period.
Implementing risk-sharing payments would
reduce institutional participation in the federal
student aid program, which would reduce spending by
$593 million over the 2024-2028 period and by $2.4
billion over the 2024-2033 period.
Repealing the 90/10 rule would increase
spending by $359 million over the 2024-2028 period and
by $1.3 billion over the 2024-2033 period.
Changing requirements for institutional
accreditation agencies would increase spending by $241
million over the 2024-2028 period and by $941 million
over the 2024-2033 period.
Funding PROMISE grants with title IV funds
returned to the government would increase spending by
$62 million over the 2024-2028 period and by $184
million over the 2024-2033 period.
Excluding certain farm and small business
assets from the calculation for Pell grants would
increase spending by $13 million over the 2024-2028
period and by $33 million over the 2024-2033 period.
The interactions between the effects of the
new risk-sharing payments and several other provisions
in the bill would reduce spending by $2.2 billion over
the 2024-2028 period and by $6.3 billion over the 2024-
2033 period. Those other provisions include the repeal
of the gainful employment and financial transparency
rules, the 90/10 rule and new requirements for
accreditation agencies.
Other changes in discretionary spending: Using information
about the costs of similar programs and based on feedback from
the Department of Education, CBO estimates that implementing
the other provisions in H.R. 6951 would cost $188 million over
the 2024-2028 period and $421 million over the 2024-2033 period
(see Table 8).
CBO estimates that implementing the bill would result in
the following additional costs:
The bill would authorize the appropriation
of $45 million annually over the 2026-2031 period for
the Postsecondary Student Success Grants program. That
authorization would automatically be extended for one
year by the General Education Provisions Act. Those
grants would support activities to increase the
participation, retention, and completion rates among
high-need students, including low-income and special
education students. CBO estimates that implementing the
provision would cost $126 million over the 2024-2028
period and $315 million over the 2024-2033 period.
TABLE 8.--ESTIMATED CHANGES IN OTHER SPENDING SUBJECT TO APPROPRIATION UNDER H.R. 6951
----------------------------------------------------------------------------------------------------------------
By fiscal year, millions of dollars--
-------------------------------------------------------
2024-
2024 2025 2026 2027 2028 2028
----------------------------------------------------------------------------------------------------------------
INCREASES IN SPENDING SUBJECT TO APPROPRIATION
Postsecondary Student Success Grants:
Authorization......................................... 0 0 45 45 45 135
Estimated Outlays..................................... 0 0 36 45 45 126
Postsecondary Student Data System:
Estimated Authorization............................... 5 11 11 7 7 41
Estimated Outlays..................................... 5 8 10 9 7 39
College Scorecard Database:
Estimated Authorization............................... 4 4 4 2 2 16
Estimated Outlays..................................... 3 4 4 3 2 16
Financial Aid Offers:
Estimated Authorization............................... 2 2 2 1 1 8
Estimated Outlays..................................... 1 2 2 1 1 7
Total Changes:
Estimated Authorization............................... 11 17 62 55 55 200
Estimated Outlays..................................... 9 14 52 58 55 188
----------------------------------------------------------------------------------------------------------------
The bill would require the Department of
Education to create the Postsecondary Student Data
System to provide information on college costs,
enrollment patterns, and federal aid programs. CBO
estimates that implementing the provision would cost
$39 million over the 2024-2028 period and $71 million
over the 2024-2033 period.
The bill would require the Department of
Education to update the College Scorecard database.
Based on feedback from the department, CBO estimates
that implementing the provision would cost $16 million
over the 2024-2028 period and $26 million over the
2024-2033 period.
The bill would direct the Department of
Education to develop a standard financial aid offer
form to be used by postsecondary institutions. CBO
estimates that implementing the provision would cost $7
million over the 2024-2028 period and $9 million over
the 2024-2033 period.
Uncertainty: CBO's estimates for H.R. 6951 are uncertain in
a variety of areas. In particular, the ways in which students,
postsecondary institutions, and the Department of Education
would respond to the bill's provisions, especially the new
institutional risk-sharing payments, are difficult to predict.
That difficulty is attributable in part to information that is
redacted or missing from the College Scorecard database. To the
extent possible, CBO imputed data to fill in missing values and
checked for consistency across different approaches to
imputation. CBO generally aims to estimate effects that are in
the middle of the distribution of potential outcomes.
CBO's projections for current-law spending also are
uncertain. For example, final rulemaking for the new SAVE Plan
was completed only in 2023. Participation data are limited and
incomplete because more recent borrowers may still be weighing
their repayment options. Actual participation in the SAVE Plan
or in the bill's IDR proposed plan may be higher or lower than
CBO estimates.
Changes to the underlying economy also could significantly
affect the bill's costs. Fluctuations in interest rates, for
example, would change the cost of the student loan program. A
sudden change in unemployment rates could affect postsecondary
enrollment or the income of borrowers in IDR plans, which would
change the cost of federal student aid.
Despite that uncertainty, in CBO's assessment, the
direction of the budgetary effects of most of the bill's
provisions is clear. In particular, the changes to the federal
student loan program would, on net, almost certainly decrease
federal costs significantly.
Pay-As-You-Go considerations: The Statutory Pay-As-You-Go
Act of 2010 establishes budget-reporting and enforcement
procedures for legislation affecting direct spending or
revenues. The net changes in outlays that are subject to those
pay-as-you-go procedures are shown in Table 9.
TABLE 9.--CBO'S ESTIMATE OF THE STATUTORY PAY-AS-YOU-GO EFFECTS OF H.R. 6951, THE COLLEGE COST REDUCTION ACT, AS ORDERED REPORTED BY THE HOUSE COMMITTEE ON EDUCATION AND THE WORKFORCE ON
JANUARY 31, 2024
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
By fiscal year, billions of dollars--
-------------------------------------------------------------------------------------------------------------------------------------------------
2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2024-2028 2024-2033
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
NET DECREASE IN THE DEFICIT
Pay-As-You-Go Effect.......................... -32.3 -12.0 -13.7 -16.2 -17.5 -18.4 -18.4 -18.6 -19.0 -19.4 n.e............................. -91.7 -185.5
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
n.e. = not estimated.
Increase in long-term net direct spending and deficits: CBO
estimates that enacting H.R. 6951 would not increase net direct
spending or deficits in any of the four consecutive 10-year
periods beginning in 2034.
Mandates: H.R. 6951 would preempt state and local laws
relating to certain requirements and other restrictions on
originating, servicing, or collecting amounts due on federal
student loans issued under title IV of the Higher Education Act
as defined in the Unfunded Mandates Reform Act (UMRA). Those
laws include, but are not limited to, state requirements that a
servicer of student loans obtain a license to operate in a
state; several states charge annual fees for those licenses.
Using information from the Nationwide Multistate Licensing
System and data from the Department of Education on the number
of student loans, CBO estimates that the intergovernmental cost
of this mandate is about $2 million a year, well below the
threshold established in UMRA ($100 million in 2024, adjusted
annually for inflation).
The bill would impose a new fee on postsecondary education
institutions that participate in the federal student loan
program. Those costs would be conditions of participation in a
voluntary federal program and thus would not be a mandate as
defined by UMRA.
The bill contains no private-sector mandates.
Previous CBO estimates: CBO has provided other information
concerning the costs of the SAVE Plan. On September 18, 2023,
CBO transmitted a cost estimate for H.J. Res. 88, a joint
resolution providing for Congressional disapproval under
chapter 8 of title 5, United States Code, of the rule submitted
by the Department of Education relating to ``Improving Income
Driven Repayment for the William D. Ford Federal Direct Loan
Program and the Federal Family Education Loan (FFEL) Program.''
On March 13, 2023, CBO sent letter to the Honorable Virginia
Foxx and the Honorable William Cassidy, M.D., concerning the
costs of the proposed income-driven repayment plan for student
loans.
Estimate prepared by: Federal costs: Margot Berman (for
federal student loans; other postsecondary education), Leah
Koestner (for federal student loans; other postsecondary
education), Garrett Quenneville (for the Federal Pell Grant
Program; other postsecondary education); Mandates: Erich
Dvorak.
Estimate reviewed by: Justin Humphrey, Chief, Finance,
Housing, and Education Cost Estimates Unit; Kathleen
FitzGerald, Chief, Public and Private Mandates Unit; Emily
Stern, Senior Adviser for Budget Analysis; H. Samuel Papenfuss
Deputy Director of Budget Analysis.
Estimate approved by: Phillip L. Swagel, Director,
Congressional Budget Office.
Committee Cost Estimate
Clause 3(d)(1) of rule XIII of the Rules of the House of
Representatives requires an estimate and a comparison of the
costs that would be incurred in carrying out H.R. 6951.
However, clause 3(d)(2)(B) of that rule provides that this
requirement does not apply when, as with the present report,
the Committee adopts as its own the cost estimate of the bill
prepared by the Director of the Congressional Budget Office
under section 402 of the Congressional Budget Act.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italics, and existing law in which no
change is proposed is shown in roman):
HIGHER EDUCATION ACT OF 1965
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled, That this
Act may be cited as the ``Higher Education Act of 1965''.
* * * * * * *
TITLE I--GENERAL PROVISIONS
PART A--DEFINITIONS
* * * * * * *
SEC. 103. ADDITIONAL DEFINITIONS.
In this Act:
(1) Authorizing committees.--The term ``authorizing
committees'' means the Committee on Health, Education,
Labor, and Pensions of the Senate and the Committee on
Education and Labor of the House of Representatives.
(2) Combination of institutions of higher
education.--The term ``combination of institutions of
higher education'' means a group of institutions of
higher education that have entered into a cooperative
arrangement for the purpose of carrying out a common
objective, or a public or private nonprofit agency,
organization, or institution designated or created by a
group of institutions of higher education for the
purpose of carrying out a common objective on the
group's behalf.
(3) Critical foreign language.--Except as otherwise
provided, the term ``critical foreign language'' means
each of the languages contained in the list of critical
languages designated by the Secretary in the Federal
Register on August 2, 1985 (50 Fed. Reg. 31412;
promulgated under the authority of section 212(d) of
the Education for Economic Security Act (repealed by
section 2303 of the Augustus F. Hawkins-Robert T.
Stafford Elementary and Secondary School Improvement
Amendments of 1988)), as updated by the Secretary from
time to time and published in the Federal Register,
except that in the implementation of this definition
with respect to a specific title, the Secretary may set
priorities according to the purposes of such title and
the national security, economic competitiveness, and
educational needs of the United States.
(4) Department.--The term ``Department'' means the
Department of Education.
(5) Diploma mill.--The term ``diploma mill'' means an
entity that--
(A)(i) offers, for a fee, degrees, diplomas,
or certificates, that may be used to represent
to the general public that the individual
possessing such a degree, diploma, or
certificate has completed a program of
postsecondary education or training; and
(ii) requires such individual to complete
little or no education or coursework to obtain
such degree, diploma, or certificate; and
(B) lacks accreditation by an accrediting
agency or association that is recognized as an
accrediting agency or association of
institutions of higher education (as such term
is defined in section 102) by--
(i) the Secretary pursuant to subpart
2 of part H of title IV; or
(ii) a Federal agency, State
government, or other organization or
association that recognizes accrediting
agencies or associations.
(6) Disability.--The term ``disability'' has the same
meaning given that term under section 3(2) of the
Americans With Disabilities Act of 1990.
(7) Distance education.--
(A) In general.--Except as otherwise
provided, the term``distance education''means
education that uses one or more of the
technologies described in subparagraph (B)--
(i) to deliver instruction to
students who are separated from the
instructor; and
(ii) to support regular and
substantive interaction between the
students and the instructor,
synchronously or asynchronously.
(B) Inclusions.--For the purposes of
subparagraph (A), the technologies used may
include--
(i) the Internet;
(ii) one-way and two-way
transmissions through open broadcast,
closed circuit, cable, microwave,
broadband lines, fiber optics,
satellite, or wireless communications
devices;
(iii) audio conferencing; or
(iv) video cassettes, DVDs, and CD-
ROMs, if the cassettes, DVDs, or CD-
ROMs are used in a course in
conjunction with any of the
technologies listed in clauses (i)
through (iii).
(8) Early childhood education program.--The term
``early childhood education program'' means--
(A) a Head Start program or an Early Head
Start program carried out under the Head Start
Act (42 U.S.C. 9831 et seq.), including a
migrant or seasonal Head Start program, an
Indian Head Start program, or a Head Start
program or an Early Head Start program that
also receives State funding;
(B) a State licensed or regulated child care
program; or
(C) a program that--
(i) serves children from birth
through age six that addresses the
children's cognitive (including
language, early literacy, and early
mathematics), social, emotional, and
physical development; and
(ii) is--
(I) a State prekindergarten
program;
(II) a program authorized
under section 619 or part C of
the Individuals with
Disabilities Education Act; or
(III) a program operated by a
local educational agency.
(9) Elementary school.--The term ``elementary
school'' has the same meaning given that term under
section 8101 of the Elementary and Secondary Education
Act of 1965.
(10) Gifted and talented.--The term ``gifted and
talented'' has the same meaning given that term under
section 8101 of the Elementary and Secondary Education
Act of 1965.
(11) Local educational agency.--The term ``local
educational agency'' has the same meaning given that
term under section 8101 of the Elementary and Secondary
Education Act of 1965.
(12) New borrower.--The term ``new borrower'' when
used with respect to any date means an individual who
on that date has no outstanding balance of principal or
interest owing on any loan made, insured, or guaranteed
under title IV.
(13) Nonprofit.--The term ``nonprofit'' as applied to
a school, agency, organization, or institution means a
school, agency, organization, or institution owned and
operated by one or more nonprofit corporations or
associations, no part of the net earnings of which
inures, or may lawfully inure, to the benefit of any
private shareholder or individual.
(14) Poverty line.--The term ``poverty line'' means
the poverty line (as defined in section 673(2) of the
Community Services Block Grant Act (42 U.S.C. 9902(2))
applicable to a family of the size involved.
(15) School or department of divinity.--The term
``school or department of divinity'' means an
institution, or a department or a branch of an
institution, the program of instruction of which is
designed for the education of students--
(A) to prepare the students to become
ministers of religion or to enter upon some
other religious vocation (or to provide
continuing training for any such vocation); or
(B) to prepare the students to teach
theological subjects.
(16) Secondary school.--The term ``secondary school''
has the same meaning given that term under section 8101
of the Elementary and Secondary Education Act of 1965.
(17) Secretary.--The term ``Secretary'' means the
Secretary of Education.
(18) Service-learning.--The term ``service-learning''
has the same meaning given that term under section
101(23) of the National and Community Service Act of
1990.
(19) Special education teacher.--The term ``special
education teacher'' means teachers who teach children
with disabilities as defined in section 602 of the
Individuals with Disabilities Education Act.
(20) State; freely associated states.--
(A) State.--The term ``State'' includes, in
addition to the several States of the United
States, the Commonwealth of Puerto Rico, the
District of Columbia, Guam, American Samoa, the
United States Virgin Islands, the Commonwealth
of the Northern Mariana Islands, and the Freely
Associated States.
(B) Freely associated states.--The term
``Freely Associated States'' means the Republic
of the Marshall Islands, the Federated States
of Micronesia, and the Republic of Palau.
(21) State educational agency.--The term ``State
educational agency'' has the same meaning given that
term under section 8101 of the Elementary and Secondary
Education Act of 1965.
(22) State higher education agency.--The term ``State
higher education agency'' means the officer or agency
primarily responsible for the State supervision of
higher education.
(23) Universal design.--The term``universal
design''has the meaning given the term in section 3 of
the Assistive Technology Act of 1998 (29 U.S.C. 3002).
(24) Universal design for learning.--The term
``universal design for learning'' means a
scientifically valid framework for guiding educational
practice that--
(A) provides flexibility in the ways
information is presented, in the ways students
respond or demonstrate knowledge and skills,
and in the ways students are engaged; and
(B) reduces barriers in instruction, provides
appropriate accommodations, supports, and
challenges, and maintains high achievement
expectations for all students, including
students with disabilities and students who are
limited English proficient.
(25) Cip code.--The term ``CIP code'' means the six-
digit taxonomic identification code assigned by an
institution of higher education to a specific program
of study at the institution, determined by the
institution in accordance with the Classification of
Instructional Programs published by the National Center
for Education Statistics.
(26) Credential level.--
(A) In general.--The term ``credential
level'' means the level of the degree or other
credential awarded by an institution of higher
education to students who complete a program of
study of the institution. Each degree or other
credential awarded by an institution shall be
categorized by the institution as either
undergraduate credential level or graduate
credential level.
(B) Undergraduate credential.--When used with
respect to a credential or credential level,
the term ``undergraduate credential'' includes
credentials such as an undergraduate
certificate, an associate degree, a bachelor's
degree, and a post-baccalaureate certificate.
(C) Graduate credential.--When used with
respect to a credential or credential level,
the term ``graduate credential'' includes
credentials such as a master's degree, a
doctoral degree, a professional degree, and a
postgraduate certificate.
(27) Program of study.--The term ``program of study''
means an academic program of study offered to students
by an institution of higher education that--
(A) upon completion of the program, results
in the award of a credential to a student,
including a degree, diploma, or certificate,
for one credential level;
(B) is certified as a program of study in the
institution's program participation agreement
under section 487; and
(C) is classified by a combination of--
(i) a CIP code; and
(ii) one credential level, determined
by the credential awarded upon
completion of the program.
(28) Program length.--The term ``program length''
means the minimum amount of time in weeks, months, or
years that is specified in the catalog, marketing
materials, or other official publications of an
institution of higher education for a full-time student
to complete the requirements for a specific program of
study and to obtain the degree or credential awarded by
such program.
(29) Time to credential.--The term ``time to
credential'' means, with respect to a student, the
actual amount of time in weeks, months, or years it
takes the student to complete the requirements for a
specific program of study and to obtain the degree or
credential awarded by such program.
(30) Value-added earnings.--
(A) Calculation.--With respect to a student
who received Federal financial aid under title
IV and who completed a program of study offered
by an institution of higher education, the term
``value-added earnings'' means--
(i) the annual earnings of such
student measured during the applicable
earnings measurement period for such
program (as determined under
subparagraph (C)); minus
(ii) in the case of a student who
completed a program of study that
awards--
(I) an undergraduate
credential (other than such a
credential awarded by a
qualifying undergraduate
program as defined in section
455(a)(4)(B)(ii)), 150 percent
of the poverty line applicable
to a single individual as
determined under section 673(2)
of the Community Services Block
Grant Act (42 U.S.C. 9902(2))
for such year; or
(II) a graduate credential or
an undergraduate credential
awarded by a qualifying
undergraduate program as
defined in section
455(a)(4)(B)(ii), 300 percent
of the poverty line applicable
to a single individual as
determined under section 673(2)
of the Community Services Block
Grant Act (42 U.S.C. 9902(2))
for such year.
(B) Geographic adjustment.--
(i) In general.--Except as provided
in clause (ii), the Secretary shall use
the geographic location of the
institution at which a student
completed a program of study to adjust
the value-added earnings of the student
calculated under subparagraph (A) by
dividing--
(I) the difference between
subclauses (I) and (II) of such
subparagraph; by
(II) the most recent regional
price parity index of the
Bureau of Economics Analysis
for the State or, as
applicable, metropolitan area
in which such institution is
located.
(ii) Exception.--The value-added
earnings of a student calculated under
subparagraph (A) shall not be adjusted
based on geographic location in
accordance with clause (i) if such
student attended principally through
distance education.
(C) Earnings measurement period.--
(i) In general.--For the purpose of
calculating the value-added earnings of
a student, except as provided in clause
(ii), the annual earnings of a student
shall be measured--
(I) in the case of a program
of study that awards an
undergraduate certificate, post
baccalaureate certificate, or
graduate certificate, one year
after the student completes
such program;
(II) in the case of a program
of study that awards an
associate's degree or master's
degree, 2 years after the
student completes such program;
and
(III) in the case of a
program of study that awards a
bachelor's degree, doctoral
degree, or professional degree,
4 years after the student
completes such program.
(ii) Exception.--The Secretary may,
as the Secretary determines appropriate
based on the characteristics of a
program of study, extend an earnings
measurement period described in clause
(i) for a program of study that--
(I) requires completion of an
additional educational program
after completion of the program
of study in order to obtain a
licensure associated with the
credential awarded for such
program of study; and
(II) when combined with the
program length of such
additional educational program
for licensure, has a total
program length that exceeds the
relevant earnings measurement
period prescribed for such
program of study under clause
(i),
except that in no case shall the annual
earnings of a student be measured more
than 5 years after the student
completes a program of study.
PART B--ADDITIONAL GENERAL PROVISIONS
* * * * * * *
SEC. 114. NATIONAL ADVISORY COMMITTEE ON INSTITUTIONAL QUALITY AND
INTEGRITY.
(a) Establishment.--There is established in the Department a
National Advisory Committee on Institutional Quality and
Integrity (in this section referred to as the ``Committee'') to
assess the process of accreditation and the institutional
eligibility and certification of institutions of higher
education (as defined in section 102) under title IV.
(b) Membership.--
(1) In general.--The Committee shall have 18 members,
of which--
(A) six members shall be appointed by the
Secretary;
(B) six members shall be appointed by the
Speaker of the House of Representatives, three
of whom shall be appointed on the
recommendation of the majority leader of the
House of Representatives, and three of whom
shall be appointed on the recommendation of the
minority leader of the House of
Representatives; and
(C) six members shall be appointed by the
President pro tempore of the Senate, three of
whom shall be appointed on the recommendation
of the majority leader of the Senate, and three
of whom shall be appointed on the
recommendation of the minority leader of the
Senate.
(2) Qualifications.--[Individuals]
(A) In general._Individuals shall be
appointed as members of the Committee--
[(A)] (i) on the basis of the
individuals' experience, integrity,
impartiality, and good judgment;
[(B)] (ii) from among individuals who
are representatives of, or
knowledgeable concerning, education
[and training] skills development
beyond secondary education,
representing all sectors and types of
institutions of higher education (as
defined in section 102); and
[(C)] (iii) on the basis of the
individuals' technical qualifications,
professional standing, and demonstrated
knowledge in the fields of
accreditation and administration in
higher education.
(B) Disqualification.--No individual may be
appointed as a member of the Committee if such
individual has a significant conflict of
interest, such as being a current regulator
(such as a State authorizer), that would
require the individual to frequently be recused
from serving as a member of the Committee.
(3) Terms of members.--[Except as provided in
paragraph (5), the term] The term of office of each
member of the Committee shall be for six years, except
that any member appointed to fill a vacancy occurring
prior to the expiration of the term for which the
member's predecessor was appointed shall be appointed
for the remainder of such term.
(4) Vacancy.--A vacancy on the Committee shall be
filled in the same manner as the original appointment
was made not later than 90 days after the vacancy
occurs. If a vacancy occurs in a position to be filled
by the Secretary, the Secretary shall publish a Federal
Register notice soliciting nominations for the position
not later than 30 days after being notified of the
vacancy.
(5) Initial terms.--The terms of office for the
initial members of the Committee shall be--
(A) three years for members appointed under
paragraph (1)(A);
(B) four years for members appointed under
paragraph (1)(B); and
(C) six years for members appointed under
paragraph (1)(C).
(6) Chairperson.--The members of the Committee shall
select a chairperson from among the members.
(c) Functions.--The Committee shall--
(1) advise the Secretary with respect to
establishment and enforcement of the standards of
accrediting agencies or associations under subpart 2 of
part H of title IV;
(2) advise the Secretary with respect to the
recognition of a specific accrediting agency or
association;
(3) advise the Secretary with respect to the
preparation and publication of the list of nationally
recognized accrediting agencies and associations;
(4) advise the Secretary with respect to the
eligibility and certification process for institutions
of higher education under title IV, together with
recommendations for improvements in such process; and
(5) advise the Secretary with respect to the
relationship between--
(A) accreditation of institutions of higher
education and the certification and eligibility
of such institutions; and
(B) State licensing responsibilities with
respect to such institutions[; and].
[(6) carry out such other advisory functions relating
to accreditation and institutional eligibility as the
Secretary may prescribe by regulation.]
(d) Meeting Procedures.--
(1) Schedule.--
(A) Biannual meetings.--The Committee shall
meet not less often than twice each year, at
the call of the Chairperson.
(B) Publication of date.--The Committee shall
submit the date and location of each meeting in
advance to the Secretary, and the Secretary
shall publish such information in the Federal
Register not later than 30 days before the
meeting.
(2) Agenda.--
(A) Establishment.--The agenda for a meeting
of the Committee shall be established by the
Chairperson and shall be submitted to the
members of the Committee upon notification of
the meeting.
(B) Opportunity for public comment.--The
agenda shall include, at a minimum, opportunity
for public comment during the Committee's
deliberations. The name of any member of the
Committee who has been recused with respect to
an agenda item of the meeting shall be included
in such agenda.
(3) Secretary's designee.--The Secretary shall
designate an employee of the Department to serve as the
Secretary's designee to the Committee, and the
Chairperson shall invite the Secretary's designee to
attend all meetings of the Committee.
(4) Chapter 10 of title 5, united states code.--
Chapter 10 of title 5, United States Code, shall apply
to the Committee, except that section 1013 of title 5,
United States Code, shall not apply.
(e) Report and Notice.--
(1) Notice.--The Secretary shall annually publish in
the Federal Register--
(A) a list containing, for each member of the
Committee--
(i) the member's name;
(ii) the date of the expiration of
the member's term of office; and
(iii) the name of the individual
described in subsection (b)(1) who
appointed the member; and
(B) a solicitation of nominations for each
expiring term of office on the Committee of a
member appointed by the Secretary.
(2) Report.--Not later than the last day of each
fiscal year, the Committee shall make available an
annual report to the Secretary, the authorizing
committees, and the public. The annual report shall
contain--
(A) a detailed summary of the agenda and
activities of, and the findings and
recommendations made by, the Committee during
the fiscal year preceding the fiscal year in
which the report is made;
(B) a list of the date and location of each
meeting during the fiscal year preceding the
fiscal year in which the report is made;
(C) a list of the members of the Committee;
and
(D) a list of the functions of the
Committee[, including any additional functions
established by the Secretary through
regulation].
(f) Termination.--The Committee shall terminate on [September
30, 2021] September 30, 2028.
* * * * * * *
SEC. 124. INSTITUTION FINANCIAL AID OFFER FORM.
(a) Standard Form and Terminology.--The Secretary, in
consultation with the heads of relevant Federal agencies, shall
develop standard terminology and a standard form for financial
aid offers based on recommendations from representatives of
students, veterans, servicemembers, families of students,
institutions of higher education (including community colleges,
for-profit institutions, four-year public institutions, and
four-year private nonprofit institutions), financial aid
experts, secondary school and postsecondary counselors, college
access professionals, nonprofit organizations, and consumer
groups.
(b) Key Required Contents for Aid Offer.--The standard form
developed pursuant to subsection (a) shall be titled
``Financial Aid Offer'' and shall include the following items
in a consumer-friendly manner that is simple and
understandable, with costs listed first, followed by grants and
scholarships, clearly separated from each other with separate
headings:
(1) Cost information.--
(A) In general.--Information on the student's
estimated cost of attendance, including the
following:
(i) Direct costs.--The total cost of
all items described in section 472 that
are billed to the student by the
institution or otherwise required by
the institution for enrollment,
including such total cost disaggregated
by the cost of each such item,
including, as determined under such
section--
(I) tuition and fees (and
other required expenses); and
(II) housing and food for a
student electing
institutionally owned or
operated food services or
institutionally owned or
operated housing.
(ii) Indirect costs.--The total cost
(including such total cost
disaggregated by the cost of each item)
as determined under section 472, of--
(I) housing and food for a
student not electing
institutionally owned or
operated food services and not
living in institutionally owned
or operated housing;
(II) books, school supplies,
equipment, course materials,
and rental or purchase of a
personal computer;
(III) transportation; and
(IV) any other item described
in such section and not
described in clause (i)
determined to be necessary by
the institution.
(B) The academic period covered by the
financial aid offer, and an explanation that
the amount of financial aid offered may
differ--
(i) for academic periods not covered
by the aid offer, such as a summer term
or future academic year; or
(ii) by program.
(C) An indication of whether cost and aid
estimates are based on full-time or part-time
enrollment.
(D) An indication, as applicable, about
whether any costs described in subparagraph
(A)(i) which are subject to change are--
(i) estimated based on the previous
year; or
(ii) set for the academic period
indicated in accordance with
subparagraph (B).
(2) Grants and scholarships.--The aggregate amount of
grants and scholarships, differentiated by source, that
the student does not have to repay, such as grant aid
offered under title IV, grant aid offered through other
Federal programs, grant aid offered by the institution,
grant aid offered by the State, and, if known, grant
aid or scholarship from an outside source to the
student for such academic period, including a
disclosure that the grants and scholarships do not have
to be repaid, except that institutions shall be
authorized to list individual grants and scholarships
by name at the discretion of the institution.
(3) Net price.--
(A) In general.--The net price that the
student, is estimated to have to pay for the
student to attend the institution for such
academic period, including the following:
(i) Minimum amount covered by student
for enrollment.--The net price of
tuition and fees (and other required
expenses), which is equal to--
(I) the sum of the costs
described in paragraph (1)(A)
that are required for students
(as determined under paragraph
(5)(B)) for the period
indicated in paragraph (1)(B);
minus
(II) the total amount of
grant and scholarship aid
described in paragraph (2) that
is included in the financial
aid offer and available to the
student for the costs described
in subclause (I).
(ii) Estimated annual net price of
attendance.--The estimated net price of
attendance, which is equal to--
(I) the cost of attendance
for the student for the period
indicated in paragraph (1)(B);
minus
(II) the total amount of
grant and scholarship aid
described in paragraph (2).
(B) Disclosure.--A disclosure that the
estimated annual net price of attendance as
calculated under subparagraph (A)(ii) is based
on an estimate of the total cost of attendance
for the year and not necessarily equivalent to
the amount the student will owe directly to the
institution.
(4) Loans.--
(A) Information on any education loan offered
through any Federal or State program (including
any loan under part D or part E of title IV
other than a Federal Direct PLUS Loan) that the
institution offers for the student for the
academic period covered by the offer, which
shall be made--
(i) with clear use of the word
``loan'' to describe the recommended
loan amounts; and
(ii) with clear labeling of
subsidized and unsubsidized loans.
(B) If applicable, a disclosure that such
loans have to be repaid with interest.
(C) Information on any other loan that the
student or parent has applied for and been
approved for, regardless of the source.
(5) Student employment.--Information on work-study
employment opportunities (including work-study programs
under part C of title IV, institutional work-study
programs, or State work-study programs), including--
(A) the maximum annual amount the student may
earn through the program; and
(B) a disclosure that any amounts received
pursuant to such a program may be--
(i) subject to the availability of
qualified employment opportunities upon
students enrollment; and
(ii) disbursed over time as earned by
the student.
(6) Process for accepting, adjusting, or declining
aid and next steps.--
(A) The deadlines and a summary of the
process (including the next steps) for--
(i) accepting the financial aid
offered;
(ii) adjusting the amount of aid
offered; and
(iii) declining the aid offered.
(B) Information on when and how costs
described in paragraph (1)(A)(i) must be paid,
including a clear indication of whether each
such cost is required or optional for the
student.
(C) A disclosure that verification of
information provided on the Free Application
for Federal Student Aid may require the student
to submit further documentation.
(D) Information about where a student or the
student's family can seek additional
information regarding the financial aid
offered, including contact information for the
institution's financial aid office and the
Department of Education's website on financial
aid.
(E) Information about where a student or a
student's family can seek additional
information on college costs and student
outcomes, including a link to the Department of
Education's College Scorecard website (or
successor website).
(7) Net price calculator.--A link to the universal
net price calculator website described in section
132(c)(4).
(8) Quick reference box.--A standardized quick
reference box to enable students to compare information
on the costs and financial aid described in paragraphs
(1) and (2). The quick reference box shall include the
following two data elements:
(A) The minimum amount covered by the student
for enrollment described in paragraph
(3)(A)(i).
(B) The estimated annual net price of
attendance described in paragraph (3)(A)(ii).
(9) Additional information.--Any other information
the Secretary, in consultation with the heads of
relevant Federal agencies, including the Secretary of
the Treasury and the Director of the Bureau of Consumer
Financial Protection, determines necessary, based on
the results and input of the consumer testing under
subsection (h)(2), and limited only to effectively
communicating college costs and financial aid
eligibility to students and parents.
(c) Other Required Contents for Aid Offer.--The standard form
developed under subsection (a) shall include, in addition to
the information described in subsection (b), the following
information in a concise format determined by the Secretary, in
consultation with the heads of relevant Federal agencies and
the individuals and entities described in subsection (a):
(1) Additional options and potential resources for
paying for the amount listed in subsection (b)(3), such
as tuition payment plans.
(2) The following information relating to private
student loans and Federal Direct PLUS Loans:
(A) A disclosure that Federal Direct PLUS
Loans, private education loans, or income share
agreements may be available to cover remaining
need, except that the institution may not
include Federal Direct PLUS Loans or private
education loans other than under the conditions
described in subsection (b)(4)(C) and must
include a disclosure that such loans--
(i) are subject to an additional
application process; and
(ii) must be repaid by the borrower
or their co-signer, and may not be
eligible for the benefits available for
Federal Direct Loans or Federal Direct
Unsubsidized Loans.
(B) A statement that students considering
borrowing to cover the cost of attendance
should consider available Federal student loans
prior to applying for private education loans,
including an explanation that Federal student
loans offer generally more favorable terms and
beneficial repayment options than private
loans.
(d) Additional Formatting Requirements for Financial Aid
Offer.--The financial aid offer shall meet the following
requirements:
(1) Clearly distinguish between the aid offered under
paragraphs (2) and (4) of subsection (b), by including
a subtotal for the aid offered in each of such
paragraphs and by refraining from commingling the
different types of aid described in such paragraphs.
(2) Use standard terminology and definitions, as
described in subsection (f)(1), and use plain language
where possible.
(3) Use the standard aid offer described in
subsection (f)(2).
(e) Additional Requirements for Electronic Financial Aid
Offers.--In the case of an electronic financial aid offer that
includes a requirement that a student confirm receipt of such
offer, such confirmation may not be considered an acceptance or
rejection of such offer.
(f) Supplemental Content and Disclosures to Be Provided.--In
addition to the standard form described under subsection (a),
institutions shall provide, in supplemental documents or
through easily accessible weblinks to the institution's portal
or a website, the following:
(1) The renewability requirements and conditions
under which the student can expect to receive similar
amounts of such financial aid for each academic period
the student is enrolled at the institution.
(2) Whether the aid offer may change if aid from
outside sources is applied after the student receives
the initial aid offer, and, if applicable, how that aid
will change.
(3) If loans under part D or part E of title IV or
other education loans offered through Federal programs
are included--
(A) a disclosure that the interest rates and
fees on such loans are set annually and affect
total cost over time, and a link to any website
that includes current information on interest
rates and fees; and
(B) if an institution's recommended Federal
student loan aid offered in subsection (b)(4)
is less than the Federal maximum available to
the student, the institution shall provide
additional information on Federal student loans
including the types and amounts for which the
student is eligible and the process for
requesting higher loan amounts if offered loan
amounts were included.
(4) If the institution opts not to disclose other
items described in subsection (b)(1)(A)(ii)(V) as part
of the aid offer, a list of such other items and the
allowance amount for each such item.
(g) Standard Information Established by Secretary.--
(1) Standard terminology.--Not later than 3 months
after the date of enactment of the College Cost
Reduction Act, the Secretary, in consultation with the
heads of relevant Federal agencies, and the individuals
and entities described in subsection (a) shall
establish standard terminology and definitions for the
terms described in subsection (b).
(2) Standard form.--
(A) In general.--The Secretary of Education
shall develop multiple draft financial aid
offers for consumer testing, carry out consumer
testing for such forms, and establish a
finalized standard financial aid offer in
accordance with--
(i) the process established under
subsection (h); and
(ii) the requirements of this
section.
(B) Separate financial aid offers.--The
Secretary shall develop separate financial aid
offers for--
(i) undergraduate students; and
(ii) graduate students.
(h) Additional Information; Removal of Information.--Nothing
in this section shall preclude an institution from--
(1) supplementing the financial aid offer with
additional information, provided that such information
utilizes the same standard terminology identified in
subsection (f)(1) and does not misrepresent costs,
financial aid offered, or net price; or
(2) deleting a required item or disclosure if--
(A) the student is ineligible for such aid;
(B) the institution does not participate in
the aid program or type;
(C) the aid offer does not include the aid
program or type; or
(D) a cost of attendance item is not
applicable to the student.
(i) Development of Financial Aid Offer.--
(1) Draft form.--Not later than 9 months after the
date of enactment of the College Cost Reduction Act,
the Secretary of Education, in consultation with the
heads of relevant Federal agencies and the individuals
and entities described in subsection (a) shall design
and produce multiple draft financial aid offers for
consumer testing with postsecondary students or
prospective students. In developing that form, the
Secretary shall ensure that--
(A) the headings described in paragraphs (1)
through (4) of subsection (b) are in the same
font, appears in the same order, and are
displayed prominently on the financial aid
offer, such that none of that information is
inappropriately omitted or deemphasized;
(B) the other information required under
subsection (b) appears in a standard format and
design on the financial aid offer; and
(C) the institution may include a logo or
brand alongside the title of the financial aid
offer.
(2) Consumer testing.--
(A) In general.--Not later than 9 months
after the date of enactment of the College Cost
Reduction Act, the Secretary, in consultation
with the heads of relevant Federal agencies,
shall establish a process to submit the
financial aid offer drafts developed under
paragraph (1) for consumer testing among
representatives of students (including low-
income students, first generation college
students, adult students, veterans,
servicemembers, and prospective students),
students' families (including low-income
families, families with first generation
college students, and families with prospective
students), institutions of higher education,
secondary school and postsecondary counselors,
and nonprofit consumer groups.
(B) Length of consumer testing.--The
Secretary shall ensure that the consumer
testing under this paragraph lasts not longer
than 8 months after the process for consumer
testing is developed under subparagraph (A).
(C) Nonapplication of paperwork reduction
act.--Subchapter I of chapter 35 of title 44,
United States Code, shall not apply to the
consumer testing process under this paragraph.
(3) Final form.--
(A) In general.--The results of consumer
testing under paragraph (2) shall be used in
the development of the finalized standard
financial aid offer required under subsection
(f)(2).
(B) Reporting requirement.--Not later than 3
months after the date on which the consumer
testing under paragraph (2) concludes, the
Secretary shall submit to Congress, and publish
on its website--
(i) the final standard financial aid
offer; and
(ii) a report detailing the results
of such testing, including whether the
Secretary added, modified, or moved any
additional items to the standard
financial aid offer pursuant to
subsection (b)(6).
(4) Authority to modify.--The Secretary may modify or
remove the definitions, terms, formatting, and design
of the financial aid offer based on the results of
consumer testing required under this subsection and
before finalizing the form, or in subsequent consumer
testing. The Secretary may also recommend additional
changes to Congress.
(j) Cost of Attendance Defined.--In this section, the term
``cost of attendance'' has the meaning given such term in
section 472.
(k) Use of Mandatory Financial Aid Offer and Terms.--
(1) In general.--Notwithstanding any other provision
of law, each institution of higher education that
receives Federal financial assistance under this Act
shall--
(A) use the financial aid offer developed
under this section in providing paper, mobile-
optimized offers, or other electronic offers to
all students who apply for aid and are accepted
at the institution; and
(B) use the standard terminology and
definitions developed by the Secretary under
subsection (f)(1) for all communications from
the institution related to financial aid
offers.
(2) Effective date.--The requirements under this
section shall take effect on the first date on which
the Secretary releases the Free Application for Federal
Student Aid for the applicable award year associated
with that application, if such date occurs not less
than 1 year after the Secretary of Education finalizes
the standard terminology and form developed in
accordance with this section.
(3) Administrative procedures.--Notwithstanding any
other provision of law, the Secretary shall not have
the authority to prescribe regulations to carry out
this section, including with respect to the definition
of ``income share agreement'' or ``private education
loan'' (as such term is defined in section 140(a) of
the Truth in Lending Act (15 U.S.C. 1650(a))).
PART C--COST OF HIGHER EDUCATION
SEC. 131. IMPROVEMENTS IN MARKET INFORMATION AND PUBLIC ACCOUNTABILITY
IN HIGHER EDUCATION.
(a) Improved Data Collection.--
(1) Development of uniform methodology.--The
Secretary shall direct the Commissioner of Education
Statistics to convene a series of forums to develop
nationally consistent methodologies for reporting costs
incurred by postsecondary institutions in providing
postsecondary education.
(2) Redesign of data systems.--On the basis of the
methodologies developed pursuant to paragraph (1), the
Secretary shall redesign relevant parts of the
postsecondary education data systems to improve the
usefulness and timeliness of the data collected by such
systems.
(3) Information to institutions.--The Commissioner of
Education Statistics shall--
(A) develop a standard definition for the
following data elements:
(i) tuition and fees for a full-time
undergraduate student;
(ii) cost of attendance for a full-
time undergraduate student, consistent
with the provisions of section 472;
(iii) average amount of financial
assistance received by an undergraduate
student who attends an institution of
higher education, including--
(I) each type of assistance
or benefit described in section
428(a)(2)(C)(ii);
(II) fellowships; and
(III) institutional and other
assistance; and
(iv) number of students receiving
financial assistance described in each
of subclauses (I), (II), and (III) of
clause (iii);
(B) not later than 90 days after the date of
enactment of the Higher Education Amendments of
1998, report the definitions to each
institution of higher education and within a
reasonable period of time thereafter inform the
authorizing committees of those definitions;
and
(C) collect information regarding the data
elements described in subparagraph (A) with
respect to at least all institutions of higher
education participating in programs under title
IV, beginning with the information from
academic year 2000-2001 and annually
thereafter.
(b) Data Dissemination.--The Secretary shall make available
the data collected pursuant to subsection (a). Such data shall
be available in a form that permits the review and comparison
of the data submissions of individual institutions of higher
education. Such data shall be presented in a form that is
easily understandable and allows parents and students to make
informed decisions based on the costs for typical full-time
undergraduate students.
(c) Study.--
(1) In general.--The Commissioner of Education
Statistics shall conduct a national study of
expenditures at institutions of higher education. Such
study shall include information with respect to--
(A) the change in tuition and fees compared
with the consumer price index and other
appropriate measures of inflation;
(B) faculty salaries and benefits;
(C) administrative salaries, benefits and
expenses;
(D) academic support services;
(E) research;
(F) operations and maintenance; and
(G) institutional expenditures for
construction and technology and the potential
cost of replacing instructional buildings and
equipment.
(2) Evaluation.--The study shall include an
evaluation of--
(A) changes over time in the expenditures
identified in paragraph (1);
(B) the relationship of the expenditures
identified in paragraph (1) to college costs;
and
(C) the extent to which increases in
institutional financial aid and tuition
discounting practices affect tuition increases,
including the demographics of students
receiving such discounts, the extent to which
financial aid is provided to students with
limited need in order to attract a student to a
particular institution, and the extent to which
Federal financial aid, including loan aid, has
been used to offset the costs of such
practices.
(3) Final report.--The Commissioner of Education
Statistics shall submit a report regarding the findings
of the study required by paragraph (1) to the
appropriate committees of Congress not later than
September 30, 2002.
(4) Higher education market basket.--The Bureau of
Labor Statistics, in consultation with the Commissioner
of Education Statistics, shall develop a higher
education market basket that identifies the items that
comprise the costs of higher education. The Bureau of
Labor Statistics shall provide a report on the market
basket to the Committee on Labor and Human Resources of
the Senate and the Committee on Education and the
Workforce of the House of Representatives not later
than September 30, 2002.
(5) Fines.--In addition to actions authorized in
section 487(c), the Secretary may impose a fine in an
amount not to exceed $25,000 on an institution of
higher education for failing to provide the information
described in paragraph (1) in a timely and accurate
manner, or for failing to otherwise cooperate with the
National Center for Education Statistics regarding
efforts to obtain data on the cost of higher education
under this section and pursuant to the program
participation agreement entered into under section 487.
(d) Promotion of the Department of Education Federal Student
Financial Aid Website.--The Secretary shall display a link to
the Federal student financial aid website of the Department in
a prominent place on the homepage of the Department's website.
(e) Enhanced Student Financial Aid Information.--
(1) Implementation.--The Secretary shall continue to
improve the usefulness and accessibility of the
information provided by the Department on college
planning and student financial aid.
(2) Dissemination.--The Secretary shall continue to
make the availability of the information on the Federal
student financial aid website of the Department widely
known, through a major media campaign and other forms
of communication.
(3) Coordination.--As a part of the efforts required
under this subsection, the Secretary shall create one
website accessible from the Department's website that
fulfills the requirements under subsections (b), (f),
and (g).
(f) Improved Availability and Coordination of Information
Concerning Student Financial Aid Programs for Military Members
and Veterans.--
(1) Coordination.--The Secretary, in coordination
with the Secretary of Defense and the Secretary of
Veterans Affairs, shall create a searchable website
that--
(A) contains information, in simple and
understandable terms, about all Federal and
State student financial assistance, readmission
requirements under section 484C, and other
student services, for which members of the
Armed Forces (including members of the National
Guard and Reserves), veterans, and the
dependents of such members or veterans may be
eligible; and
(B) is easily accessible through the website
described in subsection (e)(3).
(2) Implementation.--Not later than one year after
the date of enactment of the Higher Education
Opportunity Act, the Secretary shall make publicly
available the Armed Forces information website
described in paragraph (1).
(3) Dissemination.--The Secretary, in coordination
with the Secretary of Defense and the Secretary of
Veterans Affairs, shall make the availability of the
Armed Forces information website described in paragraph
(1) widely known to members of the Armed Forces
(including members of the National Guard and Reserves),
veterans, the dependents of such members or veterans,
States, institutions of higher education, and the
general public.
(4) Definition.--In this subsection, the term
``Federal and State student financial assistance''
means any grant, loan, work assistance, tuition
assistance, scholarship, fellowship, or other form of
financial aid for pursuing a postsecondary education
that is--
(A) administered, sponsored, or supported by
the Department of Education, the Department of
Defense, the Department of Veterans Affairs, or
a State; and
(B) available to members of the Armed Forces
(including members of the National Guard and
Reserves), veterans, or the dependents of such
members or veterans.
(g) Promotion of Availability of Information Concerning Other
Student Financial Aid Programs.--
(1) Definition.--For purposes of this subsection, the
term ``nondepartmental student financial assistance
program'' means any grant, loan, scholarship,
fellowship, or other form of financial aid for students
pursuing a postsecondary education that is--
(A) distributed directly to the student or to
the student's account at an institution of
higher education; and
(B) operated, sponsored, or supported by a
Federal department or agency other than the
Department of Education.
(2) Availability of other student financial aid
information.--The Secretary shall ensure that--
(A) not later than 90 days after the
Secretary receives the information required
under paragraph (3), the eligibility
requirements, application procedures, financial
terms and conditions, and other relevant
information for each nondepartmental student
financial assistance program are searchable and
accessible through the Federal student
financial aid website in a manner that is
simple and understandable for students and the
students' families; and
(B) the website displaying the information
described in subparagraph (A) includes a link
to the National Database on Financial
Assistance for the Study of Science,
Technology, Engineering, and Mathematics
pursuant to paragraph (4), and the information
on military benefits under subsection (f), once
such Database and information are available.
(3) Nondepartmental student financial assistance
programs.--The Secretary shall request all Federal
departments and agencies to provide the information
described in paragraph (2)(A), and each Federal
department or agency shall--
(A) promptly respond to surveys or other
requests from the Secretary for the information
described in such paragraph; and
(B) identify for the Secretary any
nondepartmental student financial assistance
program operated, sponsored, or supported by
such Federal department or agency.
(4) National stem database.--
(A) In general.--The Secretary shall
establish and maintain, on the website
described in subsection (e)(3), a National
Database on Financial Assistance for the Study
of Science, Technology, Engineering, and
Mathematics (in this paragraph referred to as
the ``STEM Database''). The STEM Database shall
consist of information on scholarships,
fellowships, and other programs of Federal,
State, local, and, to the maximum extent
practicable, private financial assistance
available for the study of science, technology,
engineering, or mathematics at the
postsecondary and postbaccalaureate levels.
(B) Database contents.--The information
maintained on the STEM Database shall be
displayed on the website in the following
manner:
(i) Separate information.--The STEM
Database shall provide separate
information for each of the fields of
science, technology, engineering, and
mathematics, and for postsecondary and
postbaccalaureate programs of financial
assistance.
(ii) Information on targeted
assistance.--The STEM Database shall
provide specific information on any
program of financial assistance that is
targeted to individuals based on
financial need, merit, or student
characteristics.
(iii) Contact and website
information.--The STEM Database shall
provide--
(I) standard contact
information that an interested
person may use to contact a
sponsor of any program of
financial assistance included
in the STEM Database; and
(II) if such sponsor
maintains a public website, a
link to the website.
(iv) Search and match capabilities.--
The STEM Database shall--
(I) have a search capability
that permits an individual to
search for information on the
basis of each category of the
information provided through
the STEM Database and on the
basis of combinations of
categories of the information
provided, including--
(aa) whether the
financial assistance is
need- or merit-based;
and
(bb) by relevant
academic majors; and
(II) have a match capability
that--
(aa) searches the
STEM Database for all
financial assistance
opportunities for which
an individual may be
qualified to apply,
based on the student
characteristics
provided by such
individual; and
(bb) provides
information to an
individual for only
those opportunities for
which such individual
is qualified, based on
the student
characteristics
provided by such
individual.
(v) Recommendation and disclaimer.--
The STEM Database shall provide, to the
users of the STEM Database--
(I) a recommendation that
students and families should
carefully review all of the
application requirements prior
to applying for any aid or
program of student financial
assistance; and
(II) a disclaimer that the
non-Federal programs of student
financial assistance presented
in the STEM Database are not
provided or endorsed by the
Department or the Federal
Government.
(C) Compilation of financial assistance
information.--In carrying out this paragraph,
the Secretary shall--
(i) consult with public and private
sources of scholarships, fellowships,
and other programs of student financial
assistance; and
(ii) make easily available a process
for such entities to provide regular
and updated information about the
scholarships, fellowships, or other
programs of student financial
assistance.
(D) Contract authorized.--In carrying out the
requirements of this paragraph, the Secretary
is authorized to enter into a contract with a
private entity with demonstrated expertise in
creating and maintaining databases such as the
one required under this paragraph, under which
contract the entity shall furnish, and
regularly update, all of the information
required to be maintained on the STEM Database.
(5) Dissemination of information.--The Secretary
shall take such actions, on an ongoing basis, as may be
necessary to disseminate information under this
subsection and to encourage the use of the information
by interested parties, including sending notices to
secondary schools and institutions of higher education.
(h) No User Fees for Department Financial Aid Websites.--No
fee shall be charged to any individual to access--
(1) a database or website of the Department that
provides information about higher education programs or
student financial assistance, including the [College
Navigator] College Scorecard website (or successor
website) and the websites and databases described in
this section and section 132; or
(2) information about higher education programs or
student financial assistance available through a
database or website of the Department.
SEC. 132. TRANSPARENCY IN COLLEGE TUITION FOR CONSUMERS.
[(a) Definitions.--In this section:
[(1) College navigator website.--The term ``College
Navigator website'' means the College Navigator website
operated by the Department and includes any successor
website.
[(2) Cost of attendance.--The term ``cost of
attendance'' means the average annual cost of tuition
and fees, room and board, books, supplies, and
transportation for an institution of higher education
for a first-time, full-time undergraduate student
enrolled in the institution.
[(3) Net price.--The term ``net price'' means the
average yearly price actually charged to first-time,
full-time undergraduate students receiving student aid
at an institution of higher education after deducting
such aid, which shall be determined by calculating the
difference between--
[(A) the institution's cost of attendance for
the year for which the determination is made;
and
[(B) the quotient of--
[(i) the total amount of need-based
grant aid and merit-based grant aid,
from Federal, State, and institutional
sources, provided to such students
enrolled in the institution for such
year; and
[(ii) the total number of such
students receiving such need-based
grant aid or merit-based grant aid for
such year.
[(4) Tuition and fees.--The term ``tuition and fees''
means the average annual cost of tuition and fees for
an institution of higher education for first-time,
full-time undergraduate students enrolled in the
institution.
[(b) Calculations for Public Institutions.--In making the
calculations regarding cost of attendance, net price, and
tuition and fees under this section with respect to a public
institution of higher education, the Secretary shall calculate
the cost of attendance, net price, and tuition and fees at such
institution in the manner described in subsection (a), except
that--
[(1) the cost of attendance, net price, and tuition
and fees shall be calculated for first-time, full-time
undergraduate students enrolled in the institution who
are residents of the State in which such institution is
located; and
[(2) in determining the net price, the average need-
based grant aid and merit-based grant aid described in
subsection (a)(3)(B) shall be calculated based on the
average total amount of such aid received by first-
time, full-time undergraduate students who are
residents of the State in which such institution is
located, divided by the total number of such resident
students receiving such need-based grant aid or merit-
based grant aid at such institution.
[(c) College Affordability and Transparency Lists.--
[(1) Availability of lists.--Beginning July 1, 2011,
the Secretary shall make publicly available on the
College Navigator website, in a manner that is sortable
and searchable by State, the following:
[(A) A list of the five percent of
institutions in each category described in
subsection (d) that have the highest tuition
and fees for the most recent academic year for
which data are available.
[(B) A list of the five percent of
institutions in each such category that have
the highest net price for the most recent
academic year for which data are available.
[(C) A list of the five percent of
institutions in each such category that have
the largest increase, expressed as a percentage
change, in tuition and fees over the most
recent three academic years for which data are
available, using the first academic year of the
three-year period as the base year to compute
such percentage change.
[(D) A list of the five percent of
institutions in each such category that have
the largest increase, expressed as a percentage
change, in net price over the most recent three
academic years for which data are available,
using the first academic year of the three-year
period as the base year to compute such
percentage change.
[(E) A list of the ten percent of
institutions in each such category that have
the lowest tuition and fees for the most recent
academic year for which data are available.
[(F) A list of the ten percent of
institutions in each such category that have
the lowest net price for the most recent
academic year for which data are available.
[(2) Annual updates.--The Secretary shall annually
update the lists described in paragraph (1) on the
College Navigator website.
[(d) Categories of Institutions.--The lists described in
subsection (c)(1) shall be compiled according to the following
categories of institutions that participate in programs under
title IV:
[(1) Four-year public institutions of higher
education.
[(2) Four-year private, nonprofit institutions of
higher education.
[(3) Four-year private, for-profit institutions of
higher education.
[(4) Two-year public institutions of higher
education.
[(5) Two-year private, nonprofit institutions of
higher education.
[(6) Two-year private, for-profit institutions of
higher education.
[(7) Less than two-year public institutions of higher
education.
[(8) Less than two-year private, nonprofit
institutions of higher education.
[(9) Less than two-year private, for-profit
institutions of higher education.
[(e) Reports by Institutions.--
[(1) Report to secretary.--If an institution of
higher education is included on a list described in
subparagraph (C) or (D) of subsection (c)(1), the
institution shall submit to the Secretary a report
containing the following information:
[(A) A description of the major areas in the
institution's budget with the greatest cost
increases.
[(B) An explanation of the cost increases
described in subparagraph (A).
[(C) A description of the steps the
institution will take toward the goal of
reducing costs in the areas described in
subparagraph (A).
[(D) In the case of an institution that is
included on the same list under subparagraph
(C) or (D) of subsection (c)(1) for two or more
consecutive years, a description of the
progress made on the steps described in
subparagraph (C) of this paragraph that were
included in the institution's report for the
previous year.
[(E) If the determination of any cost
increase described in subparagraph (A) is not
within the exclusive control of the
institution--
[(i) an explanation of the extent to
which the institution participates in
determining such cost increase;
[(ii) the identification of the
agency or instrumentality of State
government responsible for determining
such cost increase; and
[(iii) any other information the
institution considers relevant to the
report.
[(2) Information to the public.--The Secretary
shall--
[(A) issue an annual report that summarizes
all of the reports by institutions required
under paragraph (1) to the authorizing
committees; and
[(B) publish such report on the College
Navigator website.
[(f) Exemptions.--
[(1) In general.--An institution shall not be placed
on a list described in subparagraph (C) or (D) of
subsection (c)(1), and shall not be subject to the
reporting required under subsection (e), if the dollar
amount of the institution's increase in tuition and
fees, or net price, as applicable, is less than $600
for the three-year period described in such
subparagraph.
[(2) Update.--Beginning in 2014, and every three
years thereafter, the Secretary shall update the dollar
amount described in paragraph (1) based on annual
increases in inflation, using the Consumer Price Index
for each of the three most recent preceding years.
[(g) State Higher Education Spending Chart.--The Secretary
shall annually report on the College Navigator website, in
charts for each State, comparisons of--
[(1) the percentage change in spending by such State
per full-time equivalent student at all public
institutions of higher education in such State, for
each of the five most recent preceding academic years;
[(2) the percentage change in tuition and fees for
such students for all public institutions of higher
education in such State for each of the five most
recent preceding academic years; and
[(3) the percentage change in the total amount of
need-based aid and merit-based aid provided by such
State to full-time students enrolled in the public
institutions of higher education in the State for each
of the five most recent preceding academic years.]
(a) Definitions.--In this section:
(1) College scorecard website.--The term ``College
Scorecard website'' means the College Scorecard website
required under subsection (c) and includes any
successor website.
(2) Cost of attendance.--The term ``cost of
attendance'' has the meaning given such term in section
472.
(3) Total net price required for completion.--The
term ``total net price required for completion'' means,
with respect to the period of completion of a program
of study--
(A) the sum of the required costs described
in section 124(b)(3)(A)(i)(I) charged to a
student for such period of completion; minus
(B) the total amount of grant and scholarship
aid described in paragraph (2) of section
124(b) that is available to the student for the
costs described in subparagraph (A) for
completion of a program of study.
[(h)] (b) Net Price Calculator.--
(1) Development of net price calculator.--Not later
than one year after the date of enactment of theHigher
Education Opportunity Act, the Secretary shall, in
consultation with institutions of higher education and
other appropriate experts, develop a net price
calculator to help current and prospective students,
families, and other consumers estimate the individual
net price of an institution of higher education for a
student. The calculator shall be developed in a manner
that enables current and prospective students,
families, and consumers to determine an estimate of a
current or prospective student's individual net price
at a particular institution.
(2) Calculation of individual net price.--For
purposes of this subsection, an individual net price of
an institution of higher education shall be calculated
in the same manner as the net price of such institution
is calculated under subsection (a)(3), except that the
cost of attendance and the amount of need-based and
merit-based aid available shall be calculated for the
individual student as much as practicable.
(3) Use of net price calculator by institutions.--Not
later than two years after the date on which the
Secretary makes the calculator developed under
paragraph (1) available to institutions of higher
education, each institution of higher education that
receives Federal funds under title IV shall make
publicly available on the institution's website a net
price calculator to help current and prospective
students, families, and other consumers estimate a
student's individual net price at such institution of
higher education. Such calculator may be a net price
calculator developed--
(A) by the Department pursuant to paragraph
(1); or
(B) by the institution of higher education,
if the institution's calculator includes, at a
minimum, the same data elements included in the
calculator developed under paragraph (1).
(4) Disclaimer.--Estimates of an individual net price
determined using a net price calculator required under
paragraph (3) shall be accompanied by a clear and
conspicuous notice--
(A) stating that the estimate--
(i) does not represent a final
determination, or actual award, of
financial assistance;
(ii) shall not be binding on the
Secretary, the institution of higher
education, or the State; and
(iii) may change;
(B) stating that the student must complete
the Free Application for Federal Student Aid
described in section 483 in order to be
eligible for, and receive, an actual financial
aid award that includes Federal grant, loan, or
work-study assistance under title IV; and
(C) including a link to the website of the
Department that allows students to access the
Free Application for Federal Student Aid
described in section 483.
[(i) Consumer Information.--
[(1) Availability of title iv institution
information.--Not later than one year after the date of
enactment of the Higher Education Opportunity Act, the
Secretary shall make publicly available on the College
Navigator website, in simple and understandable terms,
the following information about each institution of
higher education that participates in programs under
title IV, for the most recent academic year for which
satisfactory data are available:
[(A) A statement of the institution's
mission.
[(B) The total number of undergraduate
students who applied to, were admitted by, and
enrolled in the institution.
[(C) For institutions that require SAT or ACT
scores to be submitted, the reading, writing,
mathematics, and combined scores on the SAT or
ACT, as applicable, for the middle 50 percent
range of the institution's freshman class.
[(D) The number of first-time, full-time, and
part-time students enrolled at the institution,
at the undergraduate and (if applicable)
graduate levels.
[(E) The number of degree- or certificate-
seeking undergraduate students enrolled at the
institution who have transferred from another
institution.
[(F) The percentages of male and female
undergraduate students enrolled at the
institution.
[(G) Of the first-time, full-time, degree- or
certificate-seeking undergraduate students
enrolled at the institution--
[(i) the percentage of such students
who are from the State in which the
institution is located;
[(ii) the percentage of such students
who are from other States; and
[(iii) the percentage of such
students who are international
students.
[(H) The percentages of first-time, full-
time, degree- or certificate-seeking students
enrolled at the institution, disaggregated by
race and ethnic background.
[(I) The percentage of undergraduate students
enrolled at the institution who are formally
registered with the office of disability
services of the institution (or the equivalent
office) as students with disabilities, except
that if such percentage is three percent or
less, the institution shall report ``three
percent or less''.
[(J) The percentages of first-time, full-
time, degree- or certificate-seeking
undergraduate students enrolled at the
institution who obtain a degree or certificate
within--
[(i) the normal time for completion
of, or graduation from, the student's
program;
[(ii) 150 percent of the normal time
for completion of, or graduation from,
the student's program; and
[(iii) 200 percent of the normal time
for completion of, or graduation from,
the student's program;
[(K) The number of certificates, associate
degrees, baccalaureate degrees, master's
degrees, professional degrees, and doctoral
degrees awarded by the institution.
[(L) The undergraduate major areas of study
at the institution with the highest number of
degrees awarded.
[(M) The student-faculty ratio, the number of
full-time and part-time faculty, and the number
of graduate assistants with primarily
instructional responsibilities, at the
institution.
[(N)(i) The cost of attendance for first-
time, full-time undergraduate students enrolled
in the institution who live on campus;
[(ii) the cost of attendance for first-time,
full-time undergraduate students enrolled in
the institution who live off campus; and
[(iii) in the case of a public institution of
higher education and notwithstanding subsection
(b)(1), the costs described in clauses (i) and
(ii), for--
[(I) first-time, full-time students
enrolled in the institution who are
residents of the State in which the
institution is located; and
[(II) first-time, full-time students
enrolled in the institution who are not
residents of such State.
[(O) The average annual grant amount
(including Federal, State, and institutional
aid) awarded to a first-time, full-time
undergraduate student enrolled at the
institution who receives financial aid.
[(P) The average annual amount of Federal
student loans provided through the institution
to undergraduate students enrolled at the
institution.
[(Q) The total annual grant aid awarded to
undergraduate students enrolled at the
institution, from the Federal Government, a
State, the institution, and other sources known
by the institution.
[(R) The percentage of first-time, full-time
undergraduate students enrolled at the
institution receiving Federal, State, and
institutional grants, student loans, and any
other type of student financial assistance
known by the institution, provided publicly or
through the institution, such as Federal work-
study funds.
[(S) The number of students enrolled at the
institution receiving Federal Pell Grants.
[(T) The institution's cohort default rate,
as defined under section 435(m).
[(U) The information on campus safety
required to be collected under section 485(i).
[(V) A link to the institution's website that
provides, in an easily accessible manner, the
following information:
[(i) Student activities offered by
the institution.
[(ii) Services offered by the
institution for individuals with
disabilities.
[(iii) Career and placement services
offered by the institution to students
during and after enrollment.
[(iv) Policies of the institution
related to transfer of credit from
other institutions.
[(W) A link to the appropriate section of the
Bureau of Labor Statistics website that
provides information on regional data on
starting salaries in all major occupations.
[(X) Information required to be submitted
under paragraph (4) and a link to the
institution pricing summary page described in
paragraph (5).
[(Y) In the case of an institution that was
required to submit a report under subsection
(e)(1), a link to such report.
[(Z) The availability of alternative tuition
plans, which may include guaranteed tuition
plans.
[(2) Annual updates.--The Secretary shall annually
update the information described in paragraph (1) on
the College Navigator website.
[(3) Consultation.--The Secretary shall regularly
consult with current and prospective college students,
family members of such students, institutions of higher
education, and other experts to improve the usefulness
and relevance of the College Navigator website, with
respect to the presentation of the consumer information
collected in paragraph (1).
[(4) Data collection.--The Commissioner for Education
Statistics shall continue to update and improve the
Integrated Postsecondary Education Data System
(referred to in this section as ``IPEDS''), including
the reporting of information by institutions and the
timeliness of the data collected.
[(5) Institution pricing summary page.--
[(A) Availability of list of participating
institutions.--The Secretary shall make
publicly available on the College Navigator
website in a sortable and searchable format a
list of all institutions of higher education
that participate in programs under title IV,
which list shall, for each institution, include
the following:
[(i) The tuition and fees for each of
the three most recent academic years
for which data are available.
[(ii) The net price for each of the
three most recent available academic
years for which data are available.
[(iii)(I) During the period beginning
July 1, 2010, and ending June 30, 2013,
the net price for students receiving
Federal student financial aid under
title IV, disaggregated by the income
categories described in paragraph (6),
for the most recent academic year for
which data are available.
[(II) Beginning July 1, 2013, the net
price for students receiving Federal
student financial aid under title IV,
disaggregated by the income categories
described in paragraph (6), for each of
the three most recent academic years
for which data are available.
[(iv) The average annual percentage
change and average annual dollar change
in such institution's tuition and fees
for each of the three most recent
academic years for which data are
available.
[(v) The average annual percentage
change and average annual dollar change
in such institution's net price for
each of the three most recent preceding
academic years for which data are
available.
[(vi) A link to the webpage on the
College Navigator website that provides
the information described in paragraph
(1) for the institution.
[(B) Annual updates.--The Secretary shall
annually update the lists described in
subparagraph (A) on the College Navigator
website.
[(6) Income categories.--
[(A) In general.--For purposes of reporting
the information required under this subsection,
the following income categories shall apply for
students who receive Federal student financial
aid under title IV:
[(i) $0-30,000.
[(ii) $30,001-48,000.
[(iii) $48,001-75,000.
[(iv) $75,001-110,000.
[(v) $110,001 and more.
[(B) Adjustment.--The Secretary may adjust
the income categories listed in subparagraph
(A) using the Consumer Price Index if the
Secretary determines such adjustment is
necessary.]
(c) Consumer Information.--
(1) Availability of information for title iv
institutions and programs.--Not later than 18 months
after the date of the enactment of the College Cost
Reduction Act, the Secretary shall make publicly
available on the College Scorecard website the
following aggregated information with respect to each
institution of higher education and each program of
study at such institution, as applicable, that
participates in a program under title IV:
(A) A link to the website of the institution.
(B) A link to the net price calculator for
such institution.
(C) A link to the website of the institution
containing campus safety data with respect to
such institution.
(D) The geographic location of the
institution.
(E) Information on the type of institution,
including sector, size, predominant and highest
credential awarded, research intensity,
programs of study offered, and other
characteristics of the institution.
(F) Information on student enrollment,
including the number and percentage of students
enrolled full-time, less than full-time, and
enrolled in distance education.
(G) Information on student progression and
completion, including time to credential and
rates of withdrawal, retention, transfer, or
completion.
(H) Information on college costs and
financial aid, including average, median,
minimum, and maximum values of--
(i) the cost of attendance, including
such cost disaggregated by the costs
described in paragraphs (1) through
(14) of section 472(a);
(ii) the grants and scholarships
received by students at the institution
and the number and percentage of such
students receiving such grants and
scholarships, disaggregated by source
and whether such aid is need-based,
merit-based, an athletic scholarship,
or other type of grant or scholarship;
and
(iii) the total net price required
for completion for students who
received Federal financial assistance
described in paragraph (2)(I).
(I) Information on student debt and
repayment, including--
(i) the average, median, minimum, and
maximum amounts borrowed by students
under title IV; and
(ii) information with respect to
repayment of loans made under title IV,
including borrower-based repayment
rates, dollar-based repayment rates,
and time spent in repayment.
(J) Information on the earnings of students
who received Federal financial assistance
described in paragraph (2)(I), including the
average, median, minimum, and maximum values
of--
(i) with respect to students who
complete a program of study in an award
year--
(I) the annual earnings of
such students; and
(II) the value-added earnings
of such students; and
(ii) with respect to students who do
not complete a program of study in an
award year, the annual earnings of such
students.
(2) Disaggregated information.--The Secretary shall
ensure the information described in paragraph (1) is
disaggregated, as applicable, by the following student
characteristics:
(A) Financial circumstances including--
(i) household income categories, as
determined by students' adjusted gross
income, family size, and poverty line
(as defined in section 401(a)); and
(ii) student aid index categories, as
determined by the Secretary.
(B) Sex.
(C) Race and ethnicity.
(E) Classification as a student with a
disability.
(F) Enrollment status, including part-time or
full-time enrollment, and status as a distance
education student.
(G) Status as an in-district, in-State, or
out-of-State student.
(H) Status as an international student.
(I) Status as a recipient of Federal
financial assistance, including--
(i) a Pell Grant;
(ii) a loan made under title IV; and
(iii) assistance described in section
131(f)(4) administered, sponsored, or
supported by the Department of Defense
or the Department of Veterans Affairs.
(J) Status as a participant in a program
described in section 116(b)(3)(A)(ii) of the
Workforce Innovation and Opportunity Act (29
U.S.C. 3131(b)(3)(A)(ii)).
(3) Institutional and program comparison.--The
Secretary shall include on the College Scorecard
website a method for users to easily compare
institutions and programs, including in a manner that
allows for such comparison based on--
(A) the institutional and program information
described in paragraph (1); and
(B) the student characteristics described in
paragraph (2).
(4) Universal net price calculator.--
(A) Establishment.--Not later than 18 months
after the date of the enactment of this
paragraph, the Secretary shall establish, on a
dedicated website of the Department, a
Universal Net Price Calculator that provides to
an individual, with respect to each institution
of higher education and program of study
offered by such institution--
(i) the information described in
section 124, including the amounts
described in clauses (i) and (ii) of
subsection (b)(3) of such section; and
(ii) the total net price required for
completion as defined under section
132(a).
(B) Universal net price calculator inputs.--
(i) In general.--Except as provided
in clause (ii), the information
required under subparagraph (A) shall
be generated based on a single set of
questions developed by the Secretary
for purposes of capturing the
information specified in paragraph (2)
and using the data elements described
in section 132(f)(2)(C)(ii).
(ii) Fafsa-based estimate.--When an
individual submits a Free Application
for Federal Student Aid described in
section 483, the information required
under subparagraph (A) shall be
automatically generated based solely on
the contents of such application and
the data elements described in section
132(f)(2)(C)(ii).
(C) Integration with other federal financial
aid resources.--The Secretary shall ensure that
a website link or other means of accessing the
Universal Net Price Calculator is included on--
(i) the College Scorecard website;
and
(ii) the FAFSA website.
(D) Relationship to early estimator tool.--
Beginning on the date on which the Universal
Net Price Calculator becomes operational, the
Secretary shall remove from the FAFSA website
the electronic estimator maintained pursuant to
section 485E(b)(4).
(5) Updates.--
(A) Data.--The Secretary shall update the
Universal Net Price Calculator Website and
College Scorecard website not less than
annually.
(B) Technology and format.--The Secretary
shall regularly assess the format and
technology of the College Scorecard website and
make any changes or updates that the Secretary
considers appropriate.
(6) Consumer testing.--In developing and maintaining
the College Scorecard website, the Secretary, in
consultation with appropriate departments and agencies
of the Federal Government--
(A) not later than 6 months after the date of
the enactment of the College Cost Reduction
Act, and not less than once every 3 years
thereafter, shall conduct consumer testing with
appropriate persons, including current and
prospective college students, family members of
such students, institutions of higher
education, and experts, to ensure that the
College Scorecard website is usable and easily
understandable and provides useful and relevant
information to students and families; and
(B) prominently shall display on such website
in simple, understandable, and unbiased terms
for the most recent academic year for which
satisfactory data is available, the information
described in paragraphs (1) and (2) that was
determined to be useful and relevant to
students and families based on the consumer
testing described in subparagraph (A) for each
institution and program of study (as
applicable).
(7) Interagency coordination.--The Secretary, in
consultation with each appropriate head of a department
or agency of the Federal Government, shall ensure, to
the greatest extent practicable, that any information
related to higher education that is published by such
department or agency is consistent with the information
published on the College Scorecard website.
(8) Data collection and duplicated reporting.--
Notwithstanding any other provision of this section, to
the extent that another provision of this section
requires the same reporting or collection of data that
is required under this Act, an institution of higher
education, or the Secretary or Commissioner, shall use
the reporting or data required under this subsection to
satisfy both requirements.
(9) Data privacy.--
(A) In general.--The Secretary shall ensure
any information made available under this
section is made available in accordance with
the privacy laws described in section
132(f)(1)(C)(iv).
(B) Small institutions and program of
study.--For purposes of publishing the
information described in paragraphs (1) and
(2), for any year for which the number of
students is determined by the Secretary to be
of insufficient size to maintain the privacy of
student data, the Secretary shall--
(i) aggregate up to 4 years of
additional data for such program of
study to obtain data for a sufficient
number of students to maintain student
privacy;
(ii) in the case of a program of
study, if the method described in
clause (i) is insufficient to maintain
student privacy, aggregate data for
students who completed or who were
enrolled in, as applicable, similar
program of study of the institution to
obtain data for a sufficient number of
students to maintain student privacy;
and
(iii) in the case of a program of
study, if the methods described in
clauses (i) and (ii) are insufficient
to maintain student privacy, or
additional data described in such
clauses is not available or can not be
aggregated, aggregate data with respect
to all students who completed or were
enrolled in, as applicable, any program
of study of the institution of the same
credential level, in lieu of data
specific to students in such program of
study.
[(j)] (d) Multi-Year Tuition Calculator.--
(1) Development of multi-year tuition calculator.--
Not later than one year after the date of enactment of
theHigher Education Opportunity Act, the Secretary
shall, in consultation with institutions of higher
education, financial planners, and other appropriate
experts, develop a multi-year tuition calculator to
help current and prospective students, families of such
students, and other consumers estimate the amount of
tuition an individual may pay to attend an institution
of higher education in future years.
(2) Calculation of multi-year tuition.--The multi-
year tuition calculator described in paragraph (1)
shall--
(A) allow an individual to select an
institution of higher education for which the
calculation shall be made;
(B) calculate an estimate of tuition and fees
for each year of the normal duration of the
program of study at such institution by--
(i) using the tuition and fees for
such institution, as reported under
subsection (i)(5)(A)(i), for the most
recent academic year for which such
data are reported; and
(ii) determining an estimated annual
percentage change for each year for
which the calculation is made, based on
the annual percentage change in such
institution's tuition and fees, as
reported under subsection
(i)(5)(A)(iv), for the most recent
three-year period for which such data
are reported;
(C) calculate an estimate of the total amount
of tuition and fees to complete a program of
study at such institution, based on the normal
duration of such program, using the estimate
calculated under subparagraph (B) for each year
of the program of study;
(D) provide the individual with the option to
replace the estimated annual percentage change
described in subparagraph (B)(ii) with an
alternative annual percentage change specified
by the individual, and calculate an estimate of
tuition and fees for each year and an estimate
of the total amount of tuition and fees using
the alternative percentage change;
(E) in the case of an institution that offers
a multi-year tuition guarantee program, allow
the individual to have the estimates of tuition
and fees described in subparagraphs (B) and (C)
calculated based on the provisions of such
guarantee program for the tuition and fees
charged to a student, or cohort of students,
enrolled for the duration of the program of
study; and
(F) include any other features or information
determined to be appropriate by the Secretary.
(3) Availability and comparison.--The multi-year
tuition calculator described in paragraph (1) shall be
available on the [College Navigator] College Scorecard
website and shall allow current and prospective
students, families of such students, and consumers to
compare information and estimates under this subsection
for multiple institutions of higher education.
(4) Disclaimer.--Each calculation of estimated
tuition and fees made using the multi-year tuition
calculator described in paragraph (1) shall be
accompanied by a clear and conspicuous notice--
(A) stating that the calculation--
(i) is only an estimate and not a
guarantee of the actual amount the
student may be charged;
(ii) is not binding on the Secretary,
the institution of higher education, or
the State; and
(iii) may change, subject to the
availability of financial assistance,
State appropriations, and other
factors;
(B) stating that the student must complete
the Free Application for Federal Student Aid
described in section 483 in order to be
eligible for, and receive, an actual financial
aid award that includes Federal grant, loan, or
work-study assistance under title IV; and
(C) including a link to the website of the
Department that allows students to access the
Free Application for Federal Student Aid
described in section 483.
[(k)] (e) Student Aid Recipient Survey.--
(1) Survey required.--The Secretary, acting through
the Commissioner for Education Statistics, shall
conduct, on a State-by-State basis, a survey of
recipients of Federal student financial aid under title
IV--
(A) to identify the population of students
receiving such Federal student financial aid;
(B) to describe the income distribution and
other socioeconomic characteristics of
recipients of such Federal student financial
aid;
(C) to describe the combinations of aid from
Federal, State, and private sources received by
such recipients from all income categories;
(D) to describe the--
(i) debt burden of such loan
recipients, and their capacity to repay
their education debts; and
(ii) the impact of such debt burden
on the recipients' course of study and
post-graduation plans;
(E) to describe the impact of the cost of
attendance of postsecondary education in the
determination by students of what institution
of higher education to attend; and
(F) to describe how the costs of textbooks
and other instructional materials affect the
costs of postsecondary education for students.
(2) Frequency.--The survey shall be conducted on a
regular cycle and not less often than once every four
years.
(3) Survey design.--The survey shall be
representative of students from all types of
institutions, including full-time and part-time
students, undergraduate, graduate, and professional
students, and current and former students.
(4) Dissemination.--The Commissioner for Education
Statistics shall disseminate to the public, in printed
and electronic form, the information resulting from the
survey.
(f) Postsecondary Student Data System.--
(1) In general.--
(A) Establishment of system.--Not later than
3 years after the date of enactment of the
College Cost Reduction Act, the Commissioner of
the National Center for Education Statistics
(referred to in this subsection as the
``Commissioner'') in consultation with the
Director of the Institute of Education Sciences
(referred to as ``the Director'') shall develop
and maintain a secure and privacy-protected
postsecondary student-level data system in
order to--
(i) accurately evaluate student
enrollment patterns, progression,
completion, and postcollegiate
outcomes, and higher education costs
and financial aid;
(ii) assist with transparency,
institutional improvement, and analysis
of Federal aid programs;
(iii) provide accurate, complete, and
customizable information for students
and families making decisions about
postsecondary education; and
(iv) to the extent practicable,
reduce the reporting burden on
institutions of higher education in
accordance with section 111 of the
College Cost Reduction Act.
(B) Avoiding duplicate reporting.--
Notwithstanding any other provision of this
section, to the extent that another provision
of this section requires the same reporting or
collection of data that is required under this
subsection, an institution of higher education,
or the Secretary or Commissioner, shall use the
reporting or data required for the
postsecondary student data system under this
subsection to satisfy both requirements.
(C) Development process.--In developing the
postsecondary student data system described in
this subsection, the Commissioner, in
consultation with the Director, shall--
(i) focus on the needs of--
(I) users of the data system;
and
(II) entities, including
institutions of higher
education, reporting to the
data system;
(ii) take into consideration, to the
extent practicable--
(I) the guidelines outlined
in--
(aa) the ``United
States Web Design
Standards'' maintained
by the General Services
Administration; and
(bb) the ``Digital
Services Playbook'' and
``TechFAR Handbook for
Procuring Digital
Services Using Agile
Processes'' of the
United States Digital
Service; and
(II) the relevant successor
documents or recommendations of
such guidelines;
(iii) use modern, relevant privacy-
and security-enhancing technology, and
enhance and update the data system as
necessary to carry out the purpose of
this subsection;
(iv) ensure data privacy and security
is consistent with any relevant Federal
law relating to privacy or data
security, including--
(I) the requirements of
subchapter II of chapter 35 of
title 44, United States Code,
specifying security
categorization under the
Federal Information Processing
Standards or any relevant
successor of such standards;
(II) security requirements
that are consistent with the
Federal agency responsibilities
in section 3554 of title 44,
United States Code, or any
relevant successor of such
responsibilities; and
(III) security requirements,
guidelines, and controls
consistent with cybersecurity
standards and best practices
developed by the National
Institute of Standards and
Technology, including
frameworks, consistent with
section 2(c) of the National
Institute of Standards and
Technology Act (15 U.S.C.
272(c)), or any relevant
successor of such frameworks;
(v) follow Federal data minimization
practices to ensure only the minimum
amount of data is collected to meet the
system's goals, in accordance with
Federal data minimization standards and
guidelines developed by the National
Institute of Standards and Technology;
and
(vi) provide notice to students
outlining the data included in the
system and how the data are used.
(D) Limitation.--The data system developed
under this subsection may only include data
with respect to--
(i) students receiving--
(I) Federal financial
assistance under title IV of
this Act; or
(II) assistance described in
section 131(f)(4) administered,
sponsored, or supported by the
Department of Defense or the
Department of Veterans Affairs;
and
(ii) participants in a program
described in section 116(b)(3)(A)(ii)
of the Workforce Innovation and
Opportunity Act (29 U.S.C.
3131(b)(3)(A)(ii)).
(2) Data elements.--
(A) In general.--Not later than 3 years after
the date of enactment of the College Cost
Reduction Act, the Commissioner, in
consultation with the Postsecondary Student
Data System Advisory Committee and the
Director, established under subparagraph (B),
shall determine--
(i) the data elements to be included
in the postsecondary student data
system, in accordance with
subparagraphs (C) and (D); and
(ii) how to include the data elements
required under subparagraph (C), and
any additional data elements selected
under subparagraph (D), in the
postsecondary student data system.
(B) Postsecondary student data system
advisory committee.--
(i) Establishment.--Not later than 1
year after the date of enactment of the
College Cost Reduction Act, the
Commissioner, in consultation with the
Director, shall establish a
Postsecondary Student Data System
Advisory Committee (referred to in this
subsection as the ``Advisory
Committee''), whose members shall
include--
(I) the Chief Privacy Officer
of the Department or an
official of the Department
delegated the duties of
overseeing data privacy at the
Department;
(II) the Chief Security
Officer of the Department or an
official of the Department
delegated the duties of
overseeing data security at the
Department;
(III) representatives of
diverse institutions of higher
education, which shall include
equal representation between 2-
year and 4-year institutions of
higher education, and from
public, nonprofit, and
proprietary institutions of
higher education, including
minority-serving institutions;
(IV) representatives from
State higher education
agencies, entities, bodies, or
boards;
(V) representatives of
postsecondary students;
(VI) representatives from
relevant Federal agencies;
(VII) individuals with
expertise in data privacy and
security;
(VIII) the individual within
a State responsible for
administering the statewide,
longitudinal data system
described in section 208 of the
Education Sciences Reform Act
of 2002 (20 U.S.C. 9607(a));
and
(IX) other stakeholders
(including individuals with
consumer protection and
postsecondary education
research).
(ii) Requirements.--The Commissioner,
working with the Director, shall ensure
that the Advisory Committee--
(I) adheres to all
requirements under chapter 10
of title 5, United States Code
(commonly known as the
``Federal Advisory Committee
Act'');
(II) establishes operating
and meeting procedures and
guidelines necessary to execute
its advisory duties; and
(III) is provided with
appropriate staffing and
resources to execute its
advisory duties.
(C) Required data elements.--The data
elements in the postsecondary student data
system shall include the following:
(i) Student-level data elements
necessary to calculate the information
within the surveys designated by the
Commissioner as ``student-related
surveys'' in the Integrated
Postsecondary Education Data System
(IPEDS), as such surveys are in effect
on the day before the date of enactment
of the College Cost Reduction Act,
except that in the case that collection
of such elements would conflict with
the prohibition under subparagraph (F),
such elements in conflict with such
prohibition shall be included in the
aggregate instead of at the student
level.
(ii) Student-level data elements
reported by institutions in accordance
with section 668.408 of title 34, Code
of Federal Regulations, as in effect on
July 1, 2024.
(iii) Student-level data elements
necessary to allow for reporting
student enrollment, persistence,
progression (including credit
accumulation) retention, transfer,
completion, and time and credits to
credential measures for all credential
levels separately (including
certificate, associate, baccalaureate,
and advanced degree levels), within and
across institutions of higher education
(including across all categories of
institution level, control, and
predominant degree awarded). The data
elements shall allow for reporting
about all such data disaggregated by
the following categories:
(I) Enrollment status as a
first-time student, recent
transfer student, or other
nonfirst-time student.
(II) Attendance intensity,
whether full-time or part-time.
(III) Credential-seeking
status, by credential level
(including noncredit-seeking
and noncredit credentials).
(IV) Race or ethnicity, in a
manner that captures all the
racial groups specified in the
most recent American Community
Survey of the Bureau of the
Census.
(V) Age intervals.
(VI) Sex.
(VII) Status as a first
generation college student (as
defined in section 402A(h)).
(VIII) Economic status.
(IX) Measures related to
college readiness, including
participation in postsecondary
remedial coursework or gateway
course completion.
(X) Program of study.
(XI) Status as an online
education student, whether
exclusively or partially
enrolled in online education.
(XII) Military or veteran
benefit status (as determined
based on receipt of veteran's
education benefits, as defined
in section 480(c)).
(XIII) Federal Pell Grant
recipient status under section
401 and Federal loan recipient
status under title IV.
(XIV) Status as a participant
in a program described in
section 116(b)(3)(A)(ii) of the
Workforce Innovation and
Opportunity Act (29 U.S.C.
3131(b)(3)(A)(ii)).
(D) Reevaluation.--Not less than once every 3
years after the implementation of the
postsecondary student data system described in
this subsection, the Commissioner, in
consultation with the Advisory Committee
described in subparagraph (B) and working with
the Director, shall report to Congress the data
elements included in the postsecondary student
data system and recommend any additional data
elements to be included in such system.
(E) Prohibitions.--The postsecondary student
data system shall not include individual health
data (including data relating to physical
health or mental health), student discipline
records or data, elementary and secondary
education data, an exact address, course
grades, postsecondary entrance examination
results, political affiliation, religion, or
any other data in the postsecondary student
data system not described in this subsection.
(3) Periodic matching with other federal data
systems.--
(A) Data sharing agreements.--
(i) In general.--The Commissioner, in
consultation with the Director, shall
ensure secure and privacy-protected
periodic data matches by entering into
data sharing agreements with each of
the following Federal agencies and
offices:
(I) The Secretary of the
Treasury and the Commissioner
of the Internal Revenue
Service, in order to calculate
aggregate program- and
institution-level earnings of
postsecondary students
described in subparagraph
(B)(ii).
(II) The Secretary of
Defense, in order to assess the
use of postsecondary
educational benefits and the
outcomes of servicemembers who
are receiving veteran's
education benefits (as defined
in section 480(c)).
(III) The Secretary of
Veterans Affairs, in order to
assess the use of postsecondary
educational benefits and
outcomes of veterans who are
receiving veteran's education
benefits (as defined in section
480(c)).
(IV) The Director of the
Bureau of the Census, in order
to assess the employment
outcomes of former
postsecondary education
students described in paragraph
(1)(D).
(V) The Chief Operating
Officer of the Office of
Federal Student Aid, in order
to analyze the use of
postsecondary educational
benefits provided under this
Act.
(VI) The Commissioner of the
Social Security Administration,
in order to evaluate labor
market outcomes of former
postsecondary education
students described in paragraph
(1)(D).
(VII) The Secretary of Health
and Human Services, in order to
evaluate the wages of former
postsecondary education
students described in paragraph
(1)(D).
(ii) Data sharing agreements.--The
heads of Federal agencies and offices
described under clause (i) shall enter
into data sharing agreements with the
Commissioner to ensure secure and
privacy-protected periodic data matches
as described in this paragraph.
(B) Categories of data.--The Commissioner, in
consultation with the Director, shall, at a
minimum, seek to ensure that the secure and
privacy-protected periodic data matches
described in subparagraph (A) permit consistent
reporting of the following categories of data
for students described in paragraph (1)(D) who
completed a program of study and who did not
complete a program of study:
(i) Enrollment, retention, transfer,
and completion outcomes.
(ii) Financial indicators for
postsecondary students receiving
Federal grants and loans, including
grant and loan aid by source,
cumulative student debt, loan repayment
status, and repayment plan.
(iii) Post-completion outcomes,
including earnings and employment
(including industry, occupation, and
location of employment, and further
education, by program of study and
credential level) and as measured at
time intervals appropriate to the
credential sought and earned.
(C) Periodic data match streamlining and
confidentiality.--
(i) Streamlining.--In carrying out
the secure and privacy-protected
periodic data matches under this
paragraph, the Commissioner shall--
(I) ensure that such matches
are not continuous, but occur
only periodically at
appropriate intervals, as
determined by the Commissioner
to meet the goals of
subparagraph (A); and
(II) seek to--
(aa) streamline the
data collection and
reporting requirements
for institutions of
higher education;
(bb) minimize
duplicative reporting
across or within
Federal agencies or
departments, including
reporting requirements
applicable to
institutions of higher
education under the
Workforce Innovation
and Opportunity Act (29
U.S.C. 3101 et seq.)
and the Carl D. Perkins
Career and Technical
Education Act of 2006;
(cc) protect student
privacy; and
(dd) streamline the
application process for
student loan benefit
programs available to
borrowers based on data
available from
different Federal data
systems.
(ii) Review.--Not less often than
once every 3 years after the
establishment of the postsecondary
student data system under this
subsection, the Commissioner, in
consultation with the Advisory
Committee and the Director, shall
review methods for streamlining data
collection from institutions of higher
education and minimizing duplicative
reporting within the Department and
across Federal agencies that provide
data for the postsecondary student data
system.
(iii) Confidentiality.--The
Commissioner shall ensure that any
periodic matching or sharing of data
through periodic data system matches
established in accordance with this
paragraph--
(I) complies with the
security and privacy
protections described in
paragraph (1)(C)(iv) and other
Federal data protection
protocols;
(II) follows industry best
practices commensurate with the
sensitivity of specific data
elements or metrics;
(III) does not result in the
creation of a single standing,
linked Federal database at the
Department that maintains the
information reported across
other Federal agencies; and
(IV) discloses to
postsecondary students what
data are included in the data
system and periodically matched
and how the data are used.
(iv) Correction.--The Commissioner,
in consultation with the Advisory
Committee and Director, shall establish
a process for students to request
access to only their personal
information for inspection and request
corrections to inaccuracies in a manner
that protects the student's personally
identifiable information. The
Commissioner shall respond in writing
to every request for a correction from
a student.
(4) Publicly available information.--
(A) In general.--The Commissioner shall make
the summary aggregate information described in
subparagraph (C), at a minimum, publicly
available through a user-friendly consumer
information website and analytic tool for
institutional and research use that--
(i) provides appropriate mechanisms
for users to customize and filter
information by institutional and
student characteristics;
(ii) allows users to build summary
aggregate reports of information,
including reports that allow
comparisons across multiple
institutions and programs, subject to
subparagraph (B);
(iii) uses appropriate statistical
disclosure limitation techniques
necessary to ensure that the data
released to the public cannot be used
to identify specific individuals; and
(iv) provides users with appropriate
contextual factors to make comparisons,
which may include national median
figures of the summary aggregate
information described in subparagraph
(C).
(B) No personally identifiable information
available.--The summary aggregate information
described in this paragraph shall not include
personally identifiable information.
(C) Summary aggregate information
available.--The summary aggregate information
described in this paragraph shall, at a
minimum, include each of the following for each
institution of higher education:
(i) Measures of student access,
including--
(I) admissions selectivity
and yield; and
(II) enrollment,
disaggregated by each category
described in paragraph
(2)(C)(iii).
(ii) Measures of student progression,
including retention rates and
persistence rates, disaggregated by
each category described in paragraph
(2)(C)(iii).
(iii) Measures of student completion,
including--
(I) transfer rates and
outcomes, completion rates, and
time and credits to credential,
disaggregated by each category
described in paragraph
(2)(C)(iii); and
(II) number of completions,
disaggregated by each category
described in paragraph
(2)(C)(iii).
(iv) Measures of student costs,
including--
(I) tuition, required fees,
cost of attendance, grants and
scholarships, net price, and
unmet need disaggregated by in-
State tuition or in-district
tuition status (if applicable),
direct and indirect costs,
program of study (if
applicable), and credential
level; and
(II) typical grant amounts
and loan amounts received by
students reported separately
from Federal, State, local,
institutional, employers, and
other sources, and cumulative
debt, disaggregated by--
(aa) each category
described in paragraph
(2)(C)(iii); and
(bb) completion
status.
(v) Measures of postcollegiate
student outcomes, including return on
investment, employment rates, earnings,
loan repayment and default rates, and
further education rates. These measures
shall--
(I) be disaggregated by--
(aa) each category
described in paragraph
(2)(C)(iii); and
(bb) completion
status; and
(II) be measured immediately
after leaving postsecondary
education and at time intervals
appropriate to the credential
sought or earned.
(D) Development criteria.--In developing the
method and format of making the information
described in this paragraph publicly available,
the Commissioner shall--
(i) focus on the needs of the users
of the information, which will include
students, families of students,
potential students, researchers, and
other consumers of education data;
(ii) take into consideration, to the
extent practicable, the guidelines
described in paragraph (1)(C)(ii)(I),
and relevant successor documents or
recommendations of such guidelines;
(iii) use modern, relevant technology
and enhance and update the
postsecondary student data system with
information, as necessary to carry out
the purpose of this paragraph;
(iv) ensure data privacy and security
in accordance with standards and
guidelines developed by the National
Institute of Standards and Technology,
and in accordance with any other
Federal law relating to privacy or
security, including complying with the
requirements of subchapter II of
chapter 35 of title 44, United States
Code, specifying security
categorization under the Federal
Information Processing Standards, and
security requirements, and setting of
National Institute of Standards and
Technology security baseline controls
at the appropriate level; and
(v) conduct consumer testing to
determine how to make the information
as meaningful to users as possible.
(5) Permissible disclosures of data.--
(A) Data reports and queries.--
(i) In general.--Not later than 3
years after the date of enactment of
the College Cost Reduction Act, the
Commissioner in consultation with the
Director, shall develop and implement a
secure and privacy-protected process
for making student-level, nonpersonally
identifiable information, with direct
identifiers removed, from the
postsecondary student data system
available for vetted research and
evaluation purposes approved by the
Commissioner in a manner compatible
with practices for disclosing National
Center for Education Statistics
restricted-use survey data as in effect
on the day before the date of enactment
of the College Cost Reduction Act, or
by applying other research and
disclosure restrictions to ensure data
privacy and security. Such process
shall be approved by the National
Center for Education Statistics'
Disclosure Review Board (or successor
body).
(ii) Providing data reports and
queries to institutions and states.--
(I) In general.--The
Commissioner shall provide
feedback reports, at least
annually, to each institution
of higher education, each
postsecondary education system
that fully participates in the
postsecondary student data
system, and each State higher
education body as designated by
the governor.
(II) Feedback reports.--The
feedback reports provided under
this clause shall include
program-level and institution-
level information from the
postsecondary student data
system regarding students who
are associated with the
institution or, for State
representatives, the
institutions within that State,
on or before the date of the
report, on measures including
student mobility (including
transfer and completion rates)
and workforce outcomes,
provided that the feedback
aggregate summary reports
protect the privacy of
individuals.
(III) Determination of
content.--The content of the
feedback reports shall be
determined by the Commissioner
in consultation with the
Advisory Committee and the
Director.
(iii) Permitting state data
queries.--The Commissioner shall, in
consultation with the Advisory
Committee and as soon as practicable,
create a process through which States
may submit lists of secondary school
graduates within the State to receive
summary aggregate outcomes for those
students who enrolled at an institution
of higher education, including
postsecondary enrollment, retention and
transfer, and college completion,
provided that those data protect the
privacy of individuals and that the
State data submitted to the
Commissioner are not stored in the
postsecondary education system.
(iv) Regulations.--The Commissioner
shall promulgate regulations to ensure
fair, secure and privacy-protected, and
equitable access to data reports and
queries under this paragraph.
(B) Disclosure limitations.--In carrying out
the public reporting and disclosure
requirements of this subsection, the
Commissioner shall use appropriate statistical
disclosure limitation techniques necessary to
ensure that the data released to the public
cannot include personally identifiable
information or be used to identify specific
individuals.
(C) Sale of data prohibited.--Data collected
under this subsection, including the public-use
data set and data comprising the summary
aggregate information available under paragraph
(4), shall not be sold to any third party by
the Commissioner, including any institution of
higher education or any other entity.
(D) Limitation on use by other federal
agencies.--
(i) In general.--The Commissioner
shall not allow any other Federal
agency to use data collected under this
subsection for any purpose except--
(I) for vetted research and
evaluation conducted by the
other Federal agency, as
described in subparagraph
(A)(i); or
(II) for a purpose explicitly
authorized by an Act of
Congress.
(ii) Prohibition on limitation of
services.--The Secretary, or the head
of any other Federal agency, shall not
use data collected under this
subsection to limit services to
students.
(E) Law enforcement.--Personally identifiable
information collected under this subsection
shall not be used for any Federal, State, or
local law enforcement activity or any other
activity that would result in adverse action
against any student or a student's family.
(F) Limitation of use for federal rankings or
summative rating system.--The comprehensive
data collection and analysis necessary for the
postsecondary student data system under this
subsection shall not be used by the Secretary
or any Federal entity to establish any Federal
ranking system of institutions of higher
education or a system that results in a
summative Federal rating of institutions of
higher education.
(G) Rule of construction.--Nothing in this
paragraph shall be construed to prevent the use
of individual categories of aggregate
information to be used for accountability
purposes.
(H) Rule of construction regarding commercial
use of data.--Nothing in this paragraph shall
be construed to prohibit third-party entities
from using publicly available information in
this data system for commercial use.
(6) Submission of data.--
(A) Required submission.--Each institution of
higher education participating in a program
under title IV, or the assigned agent of such
institution, shall, for each instructional
program, and in accordance with section
487(a)(17), collect, and submit to the
Commissioner, the data requested by the
Commissioner to carry out this subsection.
(B) Voluntary submission.--Any institution of
higher education not participating in a program
under title IV may voluntarily participate in
the postsecondary student data system under
this subsection by collecting and submitting
data to the Commissioner, as the Commissioner
may request to carry out this subsection.
(C) Personally identifiable information.--In
accordance with paragraph (2)(C)(i), if the
submission of an element of student-level data
is prohibited under paragraph (2)(F) (or
otherwise prohibited by law), the institution
of higher education shall submit that data to
the Commissioner in the aggregate.
(7) Unlawful willful disclosure.--
(A) In general.--It shall be unlawful for any
person who obtains or has access to personally
identifiable information in connection with the
postsecondary student data system described in
this subsection to willfully disclose to any
person (except as authorized in this Act or by
any Federal law) such personally identifiable
information.
(B) Penalty.--Any person who violates
subparagraph (A) shall be subject to a penalty
described under section 3572(f) of title 44,
United States Code, and section 183(d)(6) of
the Education Sciences Reform Act of 2002 (20
U.S.C. 9573(d)(6)).
(C) Employee of officer of the united
states.--If a violation of subparagraph (A) is
committed by any officer or employee of the
United States, the officer or employee shall be
dismissed from office or discharged from
employment upon conviction for the violation.
(8) Data security.--The Commissioner shall produce
and update as needed guidance and regulations relating
to privacy, security, and access which shall govern the
use and disclosure of data collected in connection with
the activities authorized in this subsection. The
guidance and regulations developed and reviewed shall
protect data from unauthorized access, use, and
disclosure, and shall include--
(A) an audit capability, including mandatory
and regularly conducted audits;
(B) access controls;
(C) requirements to ensure sufficient data
security, quality, validity, and reliability;
(D) confidentiality protection in accordance
with the applicable provisions of subchapter
III of chapter 35 of title 44, United States
Code;
(E) appropriate and applicable privacy and
security protection, including data retention
and destruction protocols and data
minimization, in accordance with the most
recent Federal standards developed by the
National Institute of Standards and Technology;
and
(F) protocols for managing a breach,
including breach notifications, in accordance
with the standards of National Center for
Education Statistics.
(9) Data collection.--The Commissioner shall ensure
that data collection, maintenance, and use under this
subsection complies with section 552a of title 5,
United States Code.
(10) Definitions.--In this subsection:
(A) Institution of higher education.--The
term ``institution of higher education'' has
the meaning given the term in section 102.
(B) Minority-serving institution.--The term
``minority-serving institution'' means an
institution of higher education listed in
section 371(a).
(C) Personally identifiable information.--The
term ``personally identifiable information''
means personally identifiable information
within the meaning of section 444 of the
General Education Provisions Act.
[(l)] (g) Regulations.--The Secretary is authorized to issue
such regulations as may be necessary to carry out this section.
* * * * * * *
SEC. 134. DATABASE OF STUDENT INFORMATION PROHIBITED.
(a) Prohibition.--Except as described in subsection (b),
nothing in this Act shall be construed to authorize the
development, implementation, or maintenance of a Federal
database of personally identifiable information on individuals
receiving assistance under this Act, attending institutions
receiving assistance under this Act, or otherwise involved in
any studies or other collections of data under this Act,
including a student unit record system, an education bar code
system, or any other system that tracks individual students
over time.
[(b) Exception.--The provisions of subsection (a) shall not
apply to a system (or a successor system) that--
[(1) is necessary for the operation of programs
authorized by title II, IV, or VII; and
[(2) was in use by the Secretary, directly or through
a contractor, as of the day before the date of
enactment of theHigher Education Opportunity Act.]
(b) Exception.--The provisions of subsection (a) shall not
apply to a system (or a successor system)--
(1) that--
(A) is necessary for the operation of
programs authorized by title II, IV, or VII;
and
(B) was in use by the Secretary, directly or
through a contractor, as of the day before the
date of enactment of the College Cost Reduction
Act; or
(2) required under section 132.
(c) State Databases.--Nothing in this Act shall prohibit a
State or a consortium of States from developing, implementing,
or maintaining State-developed databases that track individuals
over time, including student unit record systems that contain
information related to enrollment, attendance, graduation and
retention rates, student financial assistance, and graduate
employment outcomes.
* * * * * * *
PART D--ADMINISTRATIVE PROVISIONS FOR DELIVERY OF STUDENT FINANCIAL
ASSISTANCE
* * * * * * *
SEC. 142. PROCUREMENT FLEXIBILITY.
(a) Procurement Authority.--Subject to the authority of the
Secretary, the Chief Operating Officer of a PBO may exercise
the authority of the Secretary to procure property and services
in the performance of functions managed by the PBO. For the
purposes of this section, the term ``PBO'' includes the Chief
Operating Officer of the PBO and any employee of the PBO
exercising procurement authority under the preceding sentence.
(b) In General.--Except as provided in this section, the PBO
shall abide by all applicable Federal procurement laws and
regulations when procuring property and services. The PBO
shall--
(1) enter into contracts to carry out the functions
set forth in section 141(b)(2);
(2) obtain the services of experts and consultants
without regard to section 3109 of title 5, United
States Code and set pay in accordance with such
section; and
(3) through the Chief Operating Officer--
(A) to the maximum extent practicable,
utilize procurement systems that streamline
operations, improve internal controls, and
enhance management; and
(B) assess the efficiency of such systems and
assess such systems' ability to meet PBO
requirements.
(c) Service Contracts.--
(1) Performance-based servicing contracts.--The Chief
Operating Officer shall, to the extent practicable,
maximize the use of performance-based servicing
contracts, consistent with guidelines for such
contracts published by the Office of Federal
Procurement Policy, to achieve cost savings and improve
service.
(2) Fee for service arrangements.--The Chief
Operating Officer shall, when appropriate and
consistent with the purposes of the PBO, acquire
services related to the functions set forth in section
141(b)(2) from any entity that has the capability and
capacity to meet the requirements set by the PBO. The
Chief Operating Officer is authorized to pay fees that
are equivalent to those paid by other entities to an
organization that provides services that meet the
requirements of the PBO, as determined by the Chief
Operating Officer.
(d) Two-Phase Source-Selection Procedures.--
(1) In general.--The PBO may use a two-phase process
for selecting a source for a procurement of property or
services.
(2) First phase.--The procedures for the first phase
of the process for a procurement are as follows:
(A) Publication of notice.--The contracting
officer for the procurement shall publish a
notice of the procurement in accordance with
section 18 of the Office of Federal Procurement
Policy Act (41 U.S.C. 416) and subsections (e),
(f), and (g) of section 8 of the Small Business
Act (15 U.S.C. 637), except that the notice
shall include only the following:
(i) A general description of the
scope or purpose of the procurement
that provides sufficient information on
the scope or purpose for sources to
make informed business decisions
regarding whether to participate in the
procurement.
(ii) A description of the basis on
which potential sources are to be
selected to submit offers in the second
phase.
(iii) A description of the
information that is to be required
under subparagraph (B).
(iv) Any additional information that
the contracting officer determines
appropriate.
(B) Information submitted by offerors.--Each
offeror for the procurement shall submit basic
information, such as information on the
offeror's qualifications, the proposed
conceptual approach, costs likely to be
associated with the proposed conceptual
approach, and past performance of the offeror,
together with any additional information that
is requested by the contracting officer.
(C) Selection for second phase.--The
contracting officer shall select the offerors
that are to be eligible to participate in the
second phase of the process. The contracting
officer shall limit the number of the selected
offerors to the number of sources that the
contracting officer determines is appropriate
and in the best interests of the Federal
Government.
(3) Second phase.--
(A) In general.--The contracting officer
shall conduct the second phase of the source
selection process in accordance with sections
303A and 303B of the Federal Property and
Administrative Services Act of 1949 (41 U.S.C.
253a and 253b).
(B) Eligible participants.--Only the sources
selected in the first phase of the process
shall be eligible to participate in the second
phase.
(C) Single or multiple procurements.--The
second phase may include a single procurement
or multiple procurements within the scope, or
for the purpose, described in the notice
pursuant to paragraph (2)(A).
(4) Procedures considered competitive.--The
procedures used for selecting a source for a
procurement under this subsection shall be considered
competitive procedures for all purposes.
(e) Use of Simplified Procedures for Commercial Products and
Commercial Services.--Whenever the PBO anticipates that
commercial products or commercial services will be offered for
a procurement, the PBO may use (consistent with the special
rules for commercial products and commercial services) the
special simplified procedures for the procurement without
regard to any dollar limitation otherwise applicable to the use
of those procedures.
(f) Flexible Wait Periods and Deadlines for Submission of
Offers of Noncommercial Products and Services.--
(1) Authority.--In carrying out a procurement, the
PBO may--
(A) apply a shorter waiting period for the
issuance of a solicitation after the
publication of a notice under section 18 of the
Office of Federal Procurement Policy Act (41
U.S.C. 416) than is required under subsection
(a)(3)(A) of such section; and
(B) notwithstanding subsection (a)(3) of such
section, establish any deadline for the
submission of bids or proposals that affords
potential offerors a reasonable opportunity to
respond to the solicitation.
(2) Inapplicability to commercial products and
services.--Paragraph (1) does not apply to a
procurement of a commercial product or a commercial
service.
(3) Consistency with applicable international
agreements.--If an international agreement is
applicable to the procurement, any exercise of
authority under paragraph (1) shall be consistent with
the international agreement.
(g) Modular Contracting.--
(1) In general.--The PBO may satisfy the requirements
of the PBO for a system incrementally by carrying out
successive procurements of modules of the system. In
doing so, the PBO may use procedures authorized under
this subsection to procure any such module after the
first module.
(2) Utility requirement.--A module may not be
procured for a system under this subsection unless the
module is useful independently of the other modules or
useful in combination with another module previously
procured for the system.
(3) Conditions for use of authority.--The PBO may use
procedures authorized under paragraph (4) for the
procurement of an additional module for a system if--
(A) competitive procedures were used for
awarding the contract for the procurement of
the first module for the system; and
(B) the solicitation for the first module
included--
(i) a general description of the
entire system that was sufficient to
provide potential offerors with
reasonable notice of the general scope
of future modules;
(ii) other information sufficient for
potential offerors to make informed
business judgments regarding whether to
submit offers for the contract for the
first module; and
(iii) a statement that procedures
authorized under this subsection could
be used for awarding subsequent
contracts for the procurement of
additional modules for the system.
(4) Procedures.--If the procurement of the first
module for a system meets the requirements set forth in
paragraph (3), the PBO may award a contract for the
procurement of an additional module for the system
using any of the following procedures:
(A) Single-source basis.--Award of the
contract on a single-source basis to a
contractor who was awarded a contract for a
module previously procured for the system under
competitive procedures or procedures authorized
under subparagraph (B).
(B) Adequate competition.--Award of the
contract on the basis of offers made by--
(i) a contractor who was awarded a
contract for a module previously
procured for the system after having
been selected for award of the contract
under this subparagraph or other
competitive procedures; and
(ii) at least one other offeror that
submitted an offer for a module
previously procured for the system and
is expected, on the basis of the offer
for the previously procured module, to
submit a competitive offer for the
additional module.
(C) Other.--Award of the contract under any
other procedure authorized by law.
(5) Notice requirement.--
(A) Publication.--Not less than 30 days
before issuing a solicitation for offers for a
contract for a module for a system under
procedures authorized under subparagraph (A) or
(B) of paragraph (4), the PBO shall publish in
the Commerce Business Daily a notice of the
intent to use such procedures to enter into the
contract.
(B) Exception.--Publication of a notice is
not required under this paragraph with respect
to a use of procedures authorized under
paragraph (4) if the contractor referred to in
that subparagraph (who is to be solicited to
submit an offer) has previously provided a
module for the system under a contract that
contained cost, schedule, and performance goals
and the contractor met those goals.
(C) Content of notice.--A notice published
under subparagraph (A) with respect to a use of
procedures described in paragraph (4) shall
contain the information required under section
18(b) of the Office of Federal Procurement
Policy Act (41 U.S.C. 416(b)), other than
paragraph (4) of such section, and shall invite
the submission of any assertion that the use of
the procedures for the procurement involved is
not in the best interest of the Federal
Government together with information supporting
the assertion.
(6) Documentation.--The basis for an award of a
contract under this subsection shall be documented.
However, a justification pursuant to section 303(f) of
the Federal Property and Administrative Services Act of
1949 (41 U.S.C. 253(f)) or section 8(h) of the Small
Business Act (15 U.S.C. 637(h)) is not required.
(7) Simplified source-selection procedures.--The PBO
may award a contract under any other simplified
procedures prescribed by the PBO for the selection of
sources for the procurement of modules for a system,
after the first module, that are not to be procured
under a contract awarded on a single-source basis.
(h) Use of Simplified Procedures for Small Business Set-
Asides for Services Other Than Commercial Services.--
(1) Authority.--The PBO may use special simplified
procedures for a procurement of services that are not
commercial services if--
(A) the procurement is in an amount not
greater than $1,000,000;
(B) the procurement is conducted as a small
business set-aside pursuant to section 15(a) of
the Small Business Act (15 U.S.C. 644(a)); and
(C) the price charged for supplies associated
with the services procured are items of supply
expected to be less than 20 percent of the
total contract price.
(2) Inapplicability to certain procurements.--The
authority set forth in paragraph (1) may not be used
for--
(A) an award of a contract on a single-source
basis; or
(B) a contract for construction.
(i) Guidance for Use of Authority.--
(1) Issuance by pbo.--The Chief Operating Officer of
the PBO, in consultation with the Administrator for
Federal Procurement Policy, shall issue guidance for
the use by PBO personnel of the authority provided in
this section.
(2) Guidance from ofpp.--As part of the consultation
required under paragraph (1), the Administrator for
Federal Procurement Policy shall provide the PBO with
guidance that is designed to ensure, to the maximum
extent practicable, that the authority under this
section is exercised by the PBO in a manner that is
consistent with the exercise of the authority by the
heads of the other performance-based organizations.
(3) Compliance with ofpp guidance.--The head of the
PBO shall ensure that the procurements of the PBO under
this section are carried out in a manner that is
consistent with the guidance provided for the PBO under
paragraph (2).
(j) Limitation on Multiagency Contracting.--No department or
agency of the Federal Government may purchase property or
services under contracts entered into or administered by a PBO
under this section unless the purchase is approved in advance
by the senior procurement official of that department or agency
who is responsible for purchasing by the department or agency.
(k) Laws Not Affected.--Nothing in this section shall be
construed to waive laws for the enforcement of civil rights or
for the establishment and enforcement of labor standards that
are applicable to contracts of the Federal Government.
(l) Guidance to Student Loan Servicers.--
(1) In general.--In notifying a student loan servicer
of a final contract modification (as such term is
defined in section 2.101 of title 48, Code of Federal
Regulations) that instructs such loan servicer to
perform a function that is new or different from a
function such servicer performs pursuant to an existing
contract, the PBO shall, not later than 30 days before
such contract change takes effect, provide such
servicers with written guidance in the form of--
(A) a change order (as such term is defined
in section 2.101 of title 48, Code of Federal
Regulations);
(B) a dear colleague letter; or
(C) an electronic announcement.
(2) Non-binding directives.--A student loan servicer
that is notified of a final contract modification
described in paragraph (1) and receives guidance in a
form other than a form described in paragraph (1)
(including through emails or phone calls) shall not be
subject to such contract modification.
[(l)] (m) Definitions.--In this section:
(1) Commercial product.--The term ``commercial
product'' has the meaning given the term in section 103
of title 41, United States Code.
(2) Commercial service.--The term ``commercial
service'' has the meaning given the term in section
103a of title 41, United States Code.
(3) Competitive procedures.--The term ``competitive
procedures'' has the meaning given the term in section
152 of title 41, United States Code.
(4) Single-source basis.--The term ``single-source
basis'', with respect to an award of a contract, means
that the contract is awarded to a source after
soliciting an offer or offers from, and negotiating
with, only such source (although such source is not the
only source in the marketplace capable of meeting the
need) because such source is the most advantageous
source for purposes of the award.
(5) Special rules for commercial products and
commercial services.--The term ``special rules for
commercial products and commercial services'' means the
regulations set forth in the Federal Acquisition
Regulation pursuant to sections 1901 and 3305(a) of
title 41, United States Code.
(6) Special simplified procedures.--The term
``special simplified procedures'' means the procedures
applicable to purchases of property and services for
amounts not greater than the simplified acquisition
threshold that are set forth in the Federal Acquisition
Regulation pursuant to sections 1901(a)(1) and
3305(a)(1) of title 41, United States Code.
* * * * * * *
TITLE IV--STUDENT ASSISTANCE
Part A--Grants to Students in Attendance at Institutions of Higher
Education
SEC. 400. STATEMENT OF PURPOSE; PROGRAM AUTHORIZATION.
(a) Purpose.--It is the purpose of this part, to assist in
making available the benefits of postsecondary education to
eligible students (defined in accordance with section 484) in
institutions of higher education by--
(1) providing Federal Pell Grants to all eligible
students;
(2) providing supplemental educational opportunity
grants to those students who demonstrate financial
need;
(3) providing for payments to the States to assist
them in making financial aid available to such
students;
(4) providing for special programs and projects
designed (A) to identify and encourage qualified youths
with financial or cultural need with a potential for
postsecondary education, (B) to prepare students from
low-income families for postsecondary education, and
(C) to provide remedial (including remedial language
study) and other services to students; and
(5) providing assistance to institutions of higher
education.
(b) Secretary Required To Carry Out Purposes.--The Secretary
shall, in accordance with subparts 1 through 9, carry out
programs to achieve the purposes of this part.
Subpart 1--Federal Pell Grants
* * * * * * *
[Note: Effective July 1, 2024, section 211 of H.R. 6951 (as
reported) provides for an amendment to section 401, as amended
by FAFSA Simplification Act. For laws relative to a reference
made by this bill to FAFSA Simplification Act, see section 2(b)
of H.R. 6951 (as reported). Upon such date, section 401 (as
amended by FAFSA Simplification Act and by such section 211 of
H.R. 6951 (as reported)) will read as follows:]
SEC. 401. FEDERAL PELL GRANTS: AMOUNT AND DETERMINATIONS; APPLICATIONS.
(a) Purpose; Definitions.--
(1) Purpose.--The purpose of this subpart is to
provide a Federal Pell Grant to low-income students.
(2) Definitions.--In this section--
(A) the term ``adjusted gross income''
means--
(i) in the case of a dependent
student, the adjusted gross income (as
defined in section 62 of the Internal
Revenue Code of 1986) of the student's
parents in the second tax year
preceding the academic year; and
(ii) in the case of an independent
student, the adjusted gross income (as
defined in section 62 of the Internal
Revenue Code of 1986) of the student
(and the student's spouse, if
applicable) in the second tax year
preceding the academic year;
(B) the term ``family size'' has the meaning
given the term in section 480(k);
(C) the term ``poverty line'' means the
poverty line (as determined under the poverty
guidelines updated periodically in the Federal
Register by the Department of Health and Human
Services under the authority of section 673(2)
of the Community Services Block Grant Act (42
U.S.C. 9902(2))) applicable to the student's
family size and applicable to the second tax
year preceding the academic year;
(D) the term ``single parent'' means--
(i) a parent of a dependent student
who was a head of household (as defined
in section 2(b) of the Internal Revenue
Code of 1986) or a surviving spouse (as
defined in section 2(a) of the Internal
Revenue Code of 1986) or was an
eligible individual for purposes of the
credit under section 32 of such Code,
in the second tax year preceding the
academic year; or
(ii) an independent student who is a
parent and was a head of household (as
defined in section 2(b) of the Internal
Revenue Code of 1986) or a surviving
spouse (as defined in section 2(a) of
the Internal Revenue Code of 1986) or
was an eligible individual for purposes
of the credit under section 32 of such
Code, in the second tax year preceding
the academic year;
(E) the term ``total maximum Federal Pell
Grant'' means the total maximum Federal Pell
Grant award per student for any academic year
described under subsection (b)(5); and
(F) the term ``minimum Federal Pell Grant''
means the minimum amount of a Federal Pell
Grant that shall be awarded to a student for
any academic year in which that student is
attending full time, which shall be equal to 10
percent of the total maximum Federal Pell Grant
for such academic year.
(b) Amount and Distribution of Grants.--
(1) Determination of amount of a federal pell
grant.--Subject to paragraphs (2) and (3), the amount
of a Federal Pell Grant for a student shall be
determined in accordance with the following:
(A) A student shall be eligible for a total
maximum Federal Pell Grant for an academic year
in which the student is enrolled in an eligible
program full time--
(i) if the student (and the student's
spouse, if applicable), or, in the case
of a dependent student, the dependent
student's parents (or single parent),
is not required to file a Federal
income tax return in the second year
preceding the academic year;
(ii) if the student or, in the case
of a dependent student, the dependent
student's parent, is a single parent,
and the adjusted gross income is
greater than zero and equal to or less
than 225 percent of the poverty line;
or
(iii) if the student or, in the case
of a dependent student, the dependent
student's parent, is not a single
parent, and the adjusted gross income
is greater than zero and equal to or
less than 175 percent of the poverty
line.
(B) A student who is not eligible for a total
maximum Federal Pell Grant under subparagraph
(A) for an academic year, shall be eligible for
a Federal Pell Grant for an academic year in
which the student is enrolled in an eligible
program full time if such student's student aid
index in such award year is less than the total
maximum Federal Pell Grant for that award year.
The amount of the Federal Pell Grant for a
student eligible under this subparagraph shall
be--
(i) the total maximum Federal Pell
Grant as calculated under paragraph
(5)(A) for that year, less
(ii) an amount equal to the amount
determined to be the student aid index
with respect to that student for that
year, except that a student aid index
of less than zero shall be considered
to be zero for the purposes of this
clause,
rounded to the nearest $5, except that a
student eligible for less than the minimum
Federal Pell Grant as defined in section
(a)(2)(F) shall not be eligible for an award.
(C) A student who is not eligible for a
Federal Pell Grant under subparagraph (A) or
(B) shall be eligible for the minimum Federal
Pell Grant for an academic year in which the
student is enrolled in an eligible program full
time--
(i) in the case of a dependent
student--
(I) if the student's parent
is a single parent, and the
adjusted gross income is equal
to or less than 325 percent of
the poverty line; or
(II) if the student's parent
is not a single parent, and the
adjusted gross income is equal
to or less than 275 percent of
the poverty line; or
(ii) in the case of an independent
student--
(I) if the student is a
single parent, and the adjusted
gross income is equal to or
less than 400 percent of the
poverty line;
(II) if the student is a
parent and is not a single
parent, and the adjusted gross
income is equal to or less than
350 percent of the poverty
line; or
(III) if the student is not a
parent, and the adjusted gross
income is equal to or less than
275 percent of the poverty
line.
(D) A student eligible for the total maximum
Federal Pell Grant under subparagraph (A) who
has (or whose spouse or parent, as applicable
based on whose information is used under such
subparagraph, has) foreign income that would,
if added to adjusted gross income, result in
the student no longer being eligible for such
total maximum Federal Pell Grant, shall not be
provided a Federal Pell Grant until the student
aid administrator evaluates the student's FAFSA
and makes a determination regarding whether it
is appropriate to make an adjustment under
section 479A(b)(1)(B)(v) to account for such
foreign income when determining the student's
eligibility for such total maximum Federal Pell
Grant.
(E) With respect to a student who is not
eligible for the total maximum Federal Pell
Grant under subparagraph (A) or a minimum
Federal Pell Grant under subparagraph (C), the
Secretary shall subtract from the student or
parents' adjusted gross income, as applicable
based on whose income is used for the Federal
Pell Grant calculation, the sum of the
following for the individual whose income is so
used, and consider such difference the adjusted
gross income for purposes of determining the
student's eligibility for such Federal Pell
Grant award under such subparagraph:
(i) If the applicant, or, if
applicable, the parents or spouse of
the applicant, elects to report
receiving college grant and scholarship
aid included in gross income on a
Federal tax return described in section
480(e)(2), the amount of such aid.
(ii) Income earned from work under
part C of this title.
(2) Less than full-time enrollment.--In any case
where a student is enrolled in an eligible program of
an institution of higher education on less than a full-
time basis (including a student who attends an
institution of higher education on less than a half-
time basis) during any academic year, the amount of the
Federal Pell Grant to which that student is entitled
shall be reduced in direct proportion to the degree to
which that student is not so enrolled on a full-time
basis, rounded to the nearest whole percentage point,
as provided in a schedule of reductions published by
the Secretary computed in accordance with this subpart.
Such schedule of reductions shall be published in the
Federal Register in accordance with section 482. Such
reduced Federal Pell Grant for a student enrolled on a
less than full-time basis shall also apply
proportionally to students who are otherwise eligible
to receive the minimum Federal Pell Grant, if enrolled
full-time.
[(3) Award may not exceed cost of attendance.--No
Federal Pell Grant under this subpart shall exceed the
cost of attendance (as defined in section 472) at the
institution at which that student is in attendance. If,
with respect to any student, it is determined that the
amount of a Federal Pell Grant for that student exceeds
the cost of attendance for that year, the amount of the
Federal Pell Grant shall be reduced until the Federal
Pell Grant does not exceed the cost of attendance at
such institution.]
(3) Award may not exceed median cost of college.--
With respect to award year 2025-2026 and each
succeeding award year, no Federal Pell Grant under this
subpart shall exceed the median cost of college (as
defined in section 472A) for the program at which that
student is in attendance. If, with respect to any
student, it is determined that the amount of a Federal
Pell Grant for that student exceeds the median cost of
college for such program for that year, the amount of
the Federal Pell Grant shall be reduced until the
Federal Pell Grant does not exceed the median cost of
college for such program for that year.
(4) Study abroad.--Notwithstanding any other
provision of this subpart, the Secretary shall allow
the amount of the Federal Pell Grant to be exceeded for
students participating in a program of study abroad
approved for credit by the institution at which the
student is enrolled when the reasonable costs of such
program are greater than the cost of attendance at the
student's home institution, except that the amount of
such Federal Pell Grant in any fiscal year shall not
exceed the maximum amount of a Federal Pell Grant for
which a student is eligible under paragraph (1) or (2)
during such award year. If the preceding sentence
applies, the financial aid administrator at the home
institution may use the cost of the study abroad
program, rather than the home institution's cost, to
determine the cost of attendance of the student.
(5) Total maximum federal pell grant.--
(A) In general.--For award year 2024-2025,
and each subsequent award year, the total
maximum Federal Pell Grant award per student
shall be equal to the sum of--
(i) $1,060; and
(ii) the amount specified as the
maximum Federal Pell Grant in the last
enacted appropriation Act applicable to
that award year.
(B) Rounding.--The total maximum Federal Pell
Grant for any award year shall be rounded to
the nearest $5.
(6) Funds by fiscal year.--
(A) In general.--To carry out this section--
(i) there are authorized to be
appropriated and are appropriated (in
addition to any other amounts
appropriated to carry out this section
and out of any money in the Treasury
not otherwise appropriated) such sums
as are necessary to carry out paragraph
(5)(A)(i) for fiscal year 2024 and each
subsequent fiscal year; and
(ii) such sums as may be necessary
are authorized to be appropriated to
carry out paragraph (5)(A)(ii) for each
of the fiscal years 2024 through 2034.
(B) Availability of funds.--The amounts made
available by subparagraph (A) for any fiscal
year shall be available beginning on October 1
of that fiscal year, and shall remain available
through September 30 of the succeeding fiscal
year.
(7) Appropriation.--
(A) In general.--In addition to any funds
appropriated under paragraph (6) and any funds
made available for this section under any
appropriations Act, there are authorized to be
appropriated, and there are appropriated (out
of any money in the Treasury not otherwise
appropriated) to carry out this section,
$1,170,000,000 for fiscal year 2023 and each
subsequent award year.
(B) No effect on previous appropriations.--
The amendments made to this section by the
FAFSA Simplification Act shall not--
(i) increase or decrease the amounts
that have been appropriated or are
available to carry out this section for
fiscal year 2017, 2018, 2019, 2020,
2021, 2022, or 2023 as of the day
before the effective date of such Act;
or
(ii) extend the period of
availability for obligation that
applied to any such amount, as of the
day before such effective date.
(C) Availability of funds.--The amounts made
available by this paragraph for any fiscal year
shall be available beginning on October 1 of
that fiscal year, and shall remain available
through September 30 of the succeeding fiscal
year.
(8) Method of distribution.--
(A) In general.--For each fiscal year through
fiscal year 2034, the Secretary shall pay to
each eligible institution such sums as may be
necessary to pay each eligible student for each
academic year during which that student is in
attendance at an institution of higher
education as an undergraduate, a Federal Pell
Grant in the amount for which that student is
eligible.
(B) Alternative disbursement.--Nothing in
this section shall be interpreted to prohibit
the Secretary from paying directly to students,
in advance of the beginning of the academic
term, an amount for which they are eligible, in
the cases where an eligible institution does
not participate in the disbursement system
under subparagraph (A).
(9) Additional payment periods in same award year.--
(A) Effective in the 2017-2018 award year and
thereafter, the Secretary shall award an
eligible student not more than one and one-half
Federal Pell Grants during a single award year
to permit such student to work toward
completion of an eligible program if, during
that single award year, the student has
received a Federal Pell Grant for an award year
and is enrolled in an eligible program for one
or more additional payment periods during the
same award year that are not otherwise fully
covered by the student's Federal Pell Grant.
(B) In the case of a student receiving more
than one Federal Pell Grant in a single award
year under subparagraph (A), the total amount
of Federal Pell Grants awarded to such student
for the award year may exceed the total maximum
Federal Pell Grant available for an award year.
(C) Any period of study covered by a Federal
Pell Grant awarded under subparagraph (A) shall
be included in determining a student's duration
limit under subsection (d)(5).
(D) In any case where an eligible student is
receiving a Federal Pell Grant for a payment
period that spans 2 award years, the Secretary
shall allow the eligible institution in which
the student is enrolled to determine the award
year to which the additional period shall be
assigned, as it determines is most beneficial
to students.
(c) Special Rule.--
(1) In general.--A student described in paragraph (2)
shall be eligible for the total maximum Federal Pell
Grant.
(2) Applicability.--Paragraph (1) shall apply to any
dependent or independent student--
(A) whose parent or guardian was--
(i) an individual who, on or after
September 11, 2001, died in the line of
duty while serving on active duty as a
member of the Armed Forces; or
(ii) actively serving as a public
safety officer and died in the line of
duty while performing as a public
safety officer; and
(B) who is less than 33 years of age.
(3) Information.--Notwithstanding any other provision
of law--
(A) the Secretary shall establish the
necessary data-sharing agreements with the
Secretary of Veterans Affairs and the Secretary
of Defense, as applicable, to provide the
information necessary to determine which
students meet the requirements of paragraph
(2)(A)(i); and
(B) the financial aid administrator shall
verify with the student that the student is
eligible for the adjustment and notify the
Secretary of the adjustment of the student's
eligibility.
(4) Treatment of pell amount.--Notwithstanding
section 1212 of the Omnibus Crime Control and Safe
Streets Act of 1968 (34 U.S.C. 10302), in the case of a
student who receives an increased Federal Pell Grant
amount under this section, the total amount of such
Federal Pell Grant, including the increase under this
subsection, shall not be considered in calculating that
student's educational assistance benefits under the
Public Safety Officers' Benefits program under subpart
2 of part L of title I of such Act.
(5) Prevention of double benefits.--No eligible
student described in paragraph (2) may concurrently
receive a grant under both this subsection and
subsection (b).
(6) Terms and conditions.--The Secretary shall award
grants under this subsection in the same manner and
with the same terms and conditions, including the
length of the period of eligibility, as the Secretary
awards Federal Pell Grants under subsection (b), except
that--
(A) the award rules and determination of need
applicable to the calculation of Federal Pell
Grants under subsection (b)(1) shall not apply
to grants made under this subsection; and
(B) the maximum period determined under
subsection (d)(5) shall be determined by
including all grants made under this section
received by the eligible student and all grants
so received under subpart 10 before the
effective date of this subsection.
(7) Definition of public safety officer.--For
purposes of this subsection, the term ``public safety
officer'' means--
(A) a public safety officer, as defined in
section 1204 of title I of the Omnibus Crime
Control and Safe Streets Act of 1968 (34 U.S.C.
10284); or
(B) a fire police officer, defined as an
individual who--
(i) is serving in accordance with
State or local law as an officially
recognized or designated member of a
legally organized public safety agency;
(ii) is not a law enforcement
officer, a firefighter, a chaplain, or
a member of a rescue squad or ambulance
crew; and
(iii) provides scene security or
directs traffic--
(I) in response to any fire
drill, fire call, or other
fire, rescue, or police
emergency; or
(II) at a planned special
event.
(d) Period of Eligibility for Grants.--
(1) In general.--The period during which a student
may receive Federal Pell Grants shall be the period
required for the completion of the first undergraduate
baccalaureate course of study being pursued by that
student at the institution at which the student is in
attendance, except that any period during which the
student is enrolled in a noncredit or remedial course
of study, as described in paragraph (2), shall not be
counted for the purpose of this paragraph.
(2) Noncredit or remedial courses; study abroad.--
Nothing in this section shall exclude from eligibility
courses of study which are noncredit or remedial in
nature (including courses in English language
instruction) which are determined by the institution to
be necessary to help the student be prepared for the
pursuit of a first undergraduate baccalaureate degree
or certificate or, in the case of courses in English
language instruction, to be necessary to enable the
student to use already existing knowledge, training, or
skills. Nothing in this section shall exclude from
eligibility programs of study abroad that are approved
for credit by the home institution at which the student
is enrolled.
(3) No concurrent payments.--No student is entitled
to receive Pell Grant payments concurrently from more
than one institution or from both the Secretary and an
institution.
(4) Postbaccalaureate program.--Notwithstanding
paragraph (1), the Secretary may allow, on a case-by-
case basis, a student to receive a Federal Pell Grant
if the student--
(A) is carrying at least one-half the normal
full-time work load for the course of study the
student is pursuing, as determined by the
institution of higher education; and
(B) is enrolled or accepted for enrollment in
a postbaccalaureate program that does not lead
to a graduate degree, and in courses required
by a State in order for the student to receive
a professional certification or licensing
credential that is required for employment as a
teacher in an elementary school or secondary
school in that State,
except that this paragraph shall not apply to a student
who is enrolled in an institution of higher education
that offers a baccalaureate degree in education.
(5) Maximum period.--
(A) In general.--Except as provided in
subparagraph (B), the period during which a
student may receive Federal Pell Grants shall
not exceed 12 semesters, or the equivalent of
12 semesters, as determined by the Secretary by
regulation. Such regulations shall provide,
with respect to a student who received a
Federal Pell Grant for a term but was enrolled
at a fraction of full time, that only that same
fraction of such semester or equivalent shall
count towards such duration limits.
(B) Exception.--
(i) In general.--Any Federal Pell
Grant that a student received during a
period described in subclause (I) or
(II) of clause (ii) shall not count
towards the student's duration limits
under this paragraph.
(ii) Applicable periods.--Clause (i)
shall apply with respect to any Federal
Pell Grant awarded to a student to
enroll in an eligible program at an
institution--
(I) during a period of a
student's attendance at an
institution--
(aa) at which the
student was unable to
complete a course of
study due to the
closing of the
institution; or
(bb) for which the
student was falsely
certified as eligible
for Federal aid under
this title; or
(II) during a period--
(aa) for which the
student received a loan
under this title; and
(bb) for which the
loan described in item
(aa) is discharged
under--
(AA) section
437(c)(1) or
section
464(g)(1);
(BB) section
432(a)(6); or
(CC) section
455(h) due to
the student's
successful
assertion of a
defense to
repayment of
the loan,
including
defenses
provided to any
applicable
groups of
students.
(e) Applications for Grants.--
(1) Deadlines.--The Secretary shall from time to time
set dates by which students shall file the Free
Application for Federal Student Aid under section 483.
(2) Application.--Each student desiring a Federal
Pell Grant for any year shall file the Free Application
for Federal Student Aid containing the information
necessary to enable the Secretary to carry out the
functions and responsibilities of this subpart.
(f) Distribution of Grants to Students.--Payments under this
section shall be made in accordance with regulations
promulgated by the Secretary for such purpose, in such manner
as will best accomplish the purpose of this section. Any
disbursement allowed to be made by crediting the student's
account shall be limited to tuition and fees, and food and
housing if that food and housing is institutionally owned or
operated. The student may elect to have the institution provide
other such goods and services by crediting the student's
account.
(g) Insufficient Appropriations.--If, for any fiscal year,
the funds appropriated for payments under this subpart are
insufficient to satisfy fully all entitlements, as calculated
under subsections (b) and (c) (but at the maximum grant level
specified in such appropriation), the Secretary shall promptly
transmit a notice of such insufficiency to each House of the
Congress, and identify in such notice the additional amount
that would be required to be appropriated to satisfy fully all
entitlements (as so calculated at such maximum grant level).
(h) Use of Excess Funds.--
(1) 15 percent or less.--If, at the end of a fiscal
year, the funds available for making payments under
this subpart exceed the amount necessary to make the
payments required under this subpart to eligible
students by 15 percent or less, then all of the excess
funds shall remain available for making payments under
this subpart during the next succeeding fiscal year.
(2) More than 15 percent.--If, at the end of a fiscal
year, the funds available for making payments under
this subpart exceed the amount necessary to make the
payments required under this subpart to eligible
students by more than 15 percent, then all of such
funds shall remain available for making such payments
but payments may be made under this paragraph only with
respect to entitlements for that fiscal year.
(i) Treatment of Institutions and Students Under Other
Laws.--Any institution of higher education which enters into an
agreement with the Secretary to disburse to students attending
that institution the amounts those students are eligible to
receive under this subpart shall not be deemed, by virtue of
such agreement, a contractor maintaining a system of records to
accomplish a function of the Secretary. Recipients of Pell
Grants shall not be considered to be individual grantees for
purposes of chapter 81 of title 41, United States Code.
(j) Institutional Ineligibility Based on Default Rates.--
(1) In general.--No institution of higher education
shall be an eligible institution for purposes of this
subpart if such institution of higher education is
ineligible to participate in a loan program under part
B or D as a result of a final default rate
determination made by the Secretary under part B or D
after the final publication of cohort default rates for
fiscal year 1996 or a succeeding fiscal year.
(2) Sanctions subject to appeal opportunity.--No
institution may be subject to the terms of this
subsection unless the institution has had the
opportunity to appeal the institution's default rate
determination under regulations issued by the Secretary
for the loan program authorized under part B or D, as
applicable. This subsection shall not apply to an
institution that was not participating in the loan
program authorized under part B or D on October 7,
1998, unless the institution subsequently participates
in the loan programs.
* * * * * * *
[Subpart 4--Leveraging Educational Assistance Partnership Program
[SEC. 415A. PURPOSE; APPROPRIATIONS AUTHORIZED.
[(a) Purpose of Subpart.--It is the purpose of this subpart
to make incentive grants available to States to assist States
in--
[(1) providing grants to--
[(A) eligible students attending institutions
of higher education or participating in
programs of study abroad that are approved for
credit by institutions of higher education at
which such students are enrolled; and
[(B) eligible students for campus-based
community service work-study; and
[(2) carrying out the activities described in section
415E.
[(b) Authorization of Appropriations; Availability.--
[(1) In general.--There are authorized to be
appropriated to carry out this subpart $200,000,000 for
fiscal year 2009 and such sums as may be necessary for
each of the five succeeding fiscal years.
[(2) Reservation.--For any fiscal year for which the
amount appropriated under paragraph (1) exceeds
$30,000,000, the excess amount shall be available to
carry out section 415E.
[(3) Availability.--Sums appropriated pursuant to the
authority of paragraph (1) for any fiscal year shall
remain available for payments to States under this
subpart until the end of the fiscal year succeeding the
fiscal year for which such sums were appropriated.
[SEC. 415B. ALLOTMENT AMONG STATES.
[(a) Allotment Based on Number of Eligible Students in
Attendance.--(1) From the sums appropriated pursuant to section
415A(b)(1) and not reserved under section 415A(b)(2) for any
fiscal year, the Secretary shall allot to each State an amount
which bears the same ratio to such sums as the number of
students who are deemed eligible in such State for
participation in the grant program authorized by this subpart
bears to the total number of such students in all the States,
except that no State shall receive less than the State received
for fiscal year 1979.
[(2) For the purpose of this subsection, the number of
students who are deemed eligible in a State for participation
in the grant program authorized by this subpart, and the number
of such students in all the States, shall be determined for the
most recent year for which satisfactory data are available.
[(b) Reallotment.--The amount of any State's allotment under
subsection (a) for any fiscal year which the Secretary
determines will not be required for such fiscal year for the
leveraging educational assistance partnership program of that
State shall be available for reallotment from time to time, on
such dates during such year as the Secretary may fix, to other
States in proportion to the original allotments to such States
under such part for such year, but with such proportionate
amount for any of such States being reduced to the extent it
exceeds the sum the Secretary estimates such State needs and
will be able to use for such year for carrying out the State
plan. The total of such reductions shall be similarly
reallotted among the States whose proportionate amounts were
not so reduced. Any amount reallotted to a State under this
part during a year from funds appropriated pursuant to section
415A(b)(1) shall be deemed part of its allotment under
subsection (a) for such year.
[(c) Allotments Subject to Continuing Compliance.--The
Secretary shall make payments for continuing incentive grants
only to States which continue to meet the requirements of
section 415C(b).
[SEC. 415C. APPLICATIONS FOR LEVERAGING EDUCATIONAL ASSISTANCE
PARTNERSHIP PROGRAMS.
[(a) Submission and Contents of Applications.--A State which
desires to obtain a payment under this subpart for any fiscal
year shall submit annually an application therefor through the
State agency administering its program under this subpart as of
July 1, 1985, unless the Governor of that State so designates,
in writing, a different agency to administer the program. The
application shall contain such information as may be required
by, or pursuant to, regulation for the purpose of enabling the
Secretary to make the determinations required under this
subpart.
[(b) Payment of Federal Share of Grants Made by Qualified
Program.--From a State's allotment under this subpart for any
fiscal year the Secretary is authorized to make payments to
such State for paying up to 50 percent of the amount of student
grants pursuant to a State program which--
[(1) is administered by a single State agency;
[(2) provides that such grants will be in amounts not
to exceed the lesser of $12,500 or the student's cost
of attendance per academic year (A) for attendance on a
full-time basis at an institution of higher education,
and (B) for campus-based community service work
learning study jobs;
[(3) provides that--
[(A) not more than 20 percent of the
allotment to the State for each fiscal year may
be used for the purpose described in paragraph
(2)(B);
[(B) grants for the campus-based community
work learning study jobs may be made only to
students who are otherwise eligible for
assistance under this subpart; and
[(C) grants for such jobs be made in
accordance with the provisions of section
443(b)(1);
[(4) provides for the selection of recipients of such
grants or of such State work-study jobs on the basis of
substantial financial need determined annually on the
basis of criteria established by the State and approved
by the Secretary, except that for the purpose of
collecting data to make such determination of financial
need, no student or parent shall be charged a fee that
is payable to an entity other than such State;
[(5) provides that, effective with respect to any
academic year beginning on or after October 1, 1978,
all nonprofit institutions of higher education in the
State are eligible to participate in the State program,
except in any State in which participation of nonprofit
institutions of higher education is in violation of the
constitution of the State or in any State in which
participation of nonprofit institutions of higher
education is in violation of a statute of the State
which was enacted prior to October 1, 1978;
[(6) provides for the payment of the non-Federal
portion of such grants or of such work-study jobs from
funds supplied by such State which represent an
additional expenditure for such year by such State for
grants or work-study jobs for students attending
institutions of higher education over the amount
expended by such State for such grants or work-study
jobs, if any, during the second fiscal year preceding
the fiscal year in which such State initially received
funds under this subpart;
[(7) provides that if the State's allocation under
this subpart is based in part on the financial need
demonstrated by students who are independent students
or attending the institution less than full time, a
reasonable proportion of the State's allocation shall
be made available to such students;
[(8) provides for State expenditures under such
program of an amount not less than the average annual
aggregate expenditures for the preceding three fiscal
years or the average annual expenditure per full-time
equivalent student for such years;
[(9) provides (A) for such fiscal control and fund
accounting procedures as may be necessary to assure
proper disbursement of and accounting for Federal funds
paid to the State agency under this subpart, and (B)
for the making of such reports, in such form and
containing such information, as may be reasonably
necessary to enable the Secretary to perform his
functions under this subpart;
[(10) for any academic year beginning after June 30,
1987, provides the non-Federal share of the amount of
student grants or work-study jobs under this subpart
through State funds for the program under this subpart;
and
[(11) provides notification to eligible students that
such grants are--
[(A) Leveraging Educational Assistance
Partnership Grants; and
[(B) funded by the Federal Government, the
State, and, where applicable, other
contributing partners.
[(c) Reservation and Disbursement of Allotments and
Reallotments.--Upon his approval of any application for a
payment under this subpart, the Secretary shall reserve from
the applicable allotment (including any applicable reallotment)
available therefor, the amount of such payment, which (subject
to the limits of such allotment or reallotment) shall be equal
to the Federal share of the cost of the students' incentive
grants or work-study jobs covered by such application. The
Secretary shall pay such reserved amount, in advance or by way
of reimbursement, and in such installments as the Secretary may
determine. The Secretary may amend the reservation of any
amount under this section, either upon approval of an amendment
of the application or upon revision of the estimated cost of
the student grants or work-study jobs with respect to which
such reservation was made. If the Secretary approves an upward
revision of such estimated cost, the Secretary may reserve the
Federal share of the added cost only from the applicable
allotment (or reallotment) available at the time of such
approval.
[SEC. 415D. ADMINISTRATION OF STATE PROGRAMS; JUDICIAL REVIEW.
[(a) Disapproval of Applications; Suspension of
Eligibility.--(1) The Secretary shall not finally disapprove
any application for a State program submitted under section
415C, or any modification thereof, without first affording the
State agency submitting the program reasonable notice and
opportunity for a hearing.
[(2) Whenever the Secretary, after reasonable notice and
opportunity for hearing to the State agency administering a
State program approved under this subpart, finds--
[(A) that the State program has been so changed that
it no longer complies with the provisions of this
subpart, or
[(B) that in the administration of the program there
is a failure to comply substantially with any such
provisions,
the Secretary shall notify such State agency that the State
will not be regarded as eligible to participate in the program
under this subpart until he is satisfied that there is no
longer any such failure to comply.
[(b) Review of Decisions.--(1) If any State is dissatisfied
with the Secretary's final action with respect to the approval
of its State program submitted under this subpart or with his
final action under subsection (a), such State may appeal to the
United States court of appeals for the circuit in which such
State is located. The summons and notice of appeal may be
served at any place in the United States. The Commissioner
shall forthwith certify and file in the court the transcript of
the proceedings and the record on which he based his action.
[(2) The findings of fact by the Secretary, if supported by
substantial evidence, shall be conclusive; but the court, for
good cause shown, may remand the case to the Secretary to take
further evidence, and the Secretary may thereupon make new or
modified findings of fact and may modify his previous action,
and shall certify to the court the transcript and record of
further proceedings. Such new or modified findings of fact
shall likewise be conclusive if supported by substantial
evidence.
[(3) The court shall have jurisdiction to affirm the action
of the Secretary or to set it aside, in whole or in part. The
judgment of the court shall be subject to review by the Supreme
Court of the United States upon certiorari or certification as
provided in title 28, United States Code, section 1254.
[SEC. 415E. GRANTS FOR ACCESS AND PERSISTENCE.
[(a) Purpose.--It is the purpose of this section to expand
college access and increase college persistence by making
allotments to States to enable the States to--
[(1) expand and enhance partnerships with
institutions of higher education, early information and
intervention, mentoring, or outreach programs, private
corporations, philanthropic organizations, and other
interested parties, including community-based
organizations, in order to--
[(A) carry out activities under this section;
and
[(B) provide coordination and cohesion among
Federal, State, and local governmental and
private efforts that provide financial
assistance to help low-income students attend
an institution of higher education;
[(2) provide need-based grants for access and
persistence to eligible low-income students;
[(3) provide early notification to low-income
students of the students' eligibility for financial
aid; and
[(4) encourage increased participation in early
information and intervention, mentoring, or outreach
programs.
[(b) Allotments to States.--
[(1) In general.--
[(A) Authorization.--From sums reserved under
section 415A(b)(2) for each fiscal year, the
Secretary shall make an allotment to each State
that submits an application for an allotment in
accordance with subsection (c) to enable the
State to pay the Federal share, as described in
paragraph (2), of the cost of carrying out the
activities under subsection (d).
[(B) Determination of allotment.--In making
allotments under subparagraph (A), the
Secretary shall consider the following:
[(i) Continuation of award.--Except
as provided in clause (ii), if a State
continues to meet the specifications
established in such State's application
under subsection (c), the Secretary
shall make an allotment to such State
that is not less than the allotment
made to such State for the previous
fiscal year.
[(ii) Special continuation and
transition rule.--If a State that
applied for and received an allotment
under this section for fiscal year 2010
pursuant to subsection (j) meets the
specifications established in the
State's application under subsection
(c) for fiscal year 2011, then the
Secretary shall make an allotment to
such State for fiscal year 2011 that is
not less than the allotment made
pursuant to subsection (j) to such
State for fiscal year 2010 under this
section (as this section was in effect
on the day before the date of enactment
of the Higher Education Opportunity Act
(Public Law 110-315)).
[(iii) Priority.--The Secretary shall
give priority in making allotments to
States that meet the requirements
described in paragraph (2)(B)(ii).
[(2) Federal share.--
[(A) In general.--The Federal share of the
cost of carrying out the activities under
subsection (d) for any fiscal year shall not
exceed 66.66 percent.
[(B) Different percentages.--The Federal
share under this section shall be determined in
accordance with the following:
[(i) The Federal share of the cost of
carrying out the activities under
subsection (d) shall be 57 percent if a
State applies for an allotment under
this section in partnership with any
number of degree-granting institutions
of higher education in the State whose
combined full-time enrollment
represents less than a majority of all
students attending institutions of
higher education in the State, and--
[(I) philanthropic
organizations that are located
in, or that provide funding in,
the State; or
[(II) private corporations
that are located in, or that do
business in, the State.
[(ii) The Federal share of the cost
of carrying out the activities under
subsection (d) shall be 66.66 percent
if a State applies for an allotment
under this section in partnership with
any number of degree-granting
institutions of higher education in the
State whose combined full-time
enrollment represents a majority of all
students attending institutions of
higher education in the State, and--
[(I) philanthropic
organizations that are located
in, or that provide funding in,
the State; or
[(II) private corporations
that are located in, or that do
business in, the State.
[(C) Non-federal share.--
[(i) In general.--The non-Federal
share under this section may be
provided in cash or in kind, fairly
evaluated.
[(ii) In-kind contribution.--For the
purpose of calculating the non-Federal
share under this subparagraph, an in-
kind contribution is a non-cash
contribution that--
[(I) has monetary value, such
as the provision of--
[(aa) room and board;
or
[(bb) transportation
passes; and
[(II) helps a student meet
the cost of attendance at an
institution of higher
education.
[(iii) Effect on need analysis.--For
the purpose of calculating a student's
need in accordance with part F, an in-
kind contribution described in clause
(ii) shall not be considered an asset
or income of the student or the
student's parent.
[(c) Application for Allotment.--
[(1) In general.--
[(A) Submission.--A State that desires to
receive an allotment under this section on
behalf of a partnership described in paragraph
(3) shall submit an application to the
Secretary at such time, in such manner, and
containing such information as the Secretary
may require.
[(B) Content.--An application submitted under
subparagraph (A) shall include the following:
[(i) A description of the State's
plan for using the allotted funds.
[(ii) An assurance that the State
will provide matching funds, in cash or
in kind, from State, institutional,
philanthropic, or private funds, of not
less than 33.33 percent of the cost of
carrying out the activities under
subsection (d). The State shall specify
the methods by which matching funds
will be paid. A State that uses non-
Federal funds to create or expand
partnerships with entities described in
subsection (a)(1), in which such
entities match State funds for student
scholarships, may apply such matching
funds from such entities toward
fulfilling the State's matching
obligation under this clause.
[(iii) An assurance that the State
will use funds provided under this
section to supplement, and not
supplant, Federal and State funds
available for carrying out the
activities under this title.
[(iv) An assurance that early
information and intervention,
mentoring, or outreach programs exist
within the State or that there is a
plan to make such programs widely
available.
[(v) A description of the
organizational structure that the State
has in place to administer the
activities under subsection (d),
including a description of how the
State will compile information on
degree completion of students receiving
grants under this section.
[(vi) A description of the steps the
State will take to ensure that students
who receive grants under this section
persist to degree completion.
[(vii) An assurance that the State
has a method in place, such as
acceptance of the automatic zero
expected family contribution
determination described in section
479(c), to identify eligible low-income
students and award State grant aid to
such students.
[(viii) An assurance that the State
will provide notification to eligible
low-income students that grants under
this section are--
[(I) Leveraging Educational
Assistance Partnership Grants;
and
[(II) funded by the Federal
Government and the State, and,
where applicable, other
contributing partners.
[(2) State agency.--The State agency that submits an
application for a State under section 415C(a) shall be
the same State agency that submits an application under
paragraph (1) for such State.
[(3) Partnership.--In applying for an allotment under
this section, the State agency shall apply for the
allotment in partnership with--
[(A) not less than one public and one private
degree-granting institution of higher education
that are located in the State, if applicable;
[(B) new or existing early information and
intervention, mentoring, or outreach programs
located in the State; and
[(C) not less than one--
[(i) philanthropic organization
located in, or that provides funding
in, the State; or
[(ii) private corporation located in,
or that does business in, the State.
[(4) Roles of partners.--
[(A) State agency.--A State agency that is in
a partnership receiving an allotment under this
section--
[(i) shall--
[(I) serve as the primary
administrative unit for the
partnership;
[(II) provide or coordinate
non-Federal share funds, and
coordinate activities among
partners;
[(III) encourage each
institution of higher education
in the State to participate in
the partnership;
[(IV) make determinations and
early notifications of
assistance as described under
subsection (d)(2); and
[(V) annually report to the
Secretary on the partnership's
progress in meeting the purpose
of this section; and
[(ii) may provide early information
and intervention, mentoring, or
outreach programs.
[(B) Degree-granting institutions of higher
education.--A degree-granting institution of
higher education that is in a partnership
receiving an allotment under this section--
[(i) shall--
[(I) recruit and admit
participating qualified
students and provide such
additional institutional grant
aid to participating students
as agreed to with the State
agency;
[(II) provide support
services to students who
receive grants for access and
persistence under this section
and are enrolled at such
institution; and
[(III) assist the State in
the identification of eligible
students and the dissemination
of early notifications of
assistance as agreed to with
the State agency; and
[(ii) may provide funding for early
information and intervention,
mentoring, or outreach programs or
provide such services directly.
[(C) Programs.--An early information and
intervention, mentoring, or outreach program
that is in a partnership receiving an allotment
under this section shall provide direct
services, support, and information to
participating students.
[(D) Philanthropic organization or private
corporation.--A philanthropic organization or
private corporation that is in a partnership
receiving an allotment under this section shall
provide funds for grants for access and
persistence for participating students, or
provide funds or support for early information
and intervention, mentoring, or outreach
programs.
[(d) Authorized Activities.--
[(1) In general.--
[(A) Establishment of partnership.--Each
State receiving an allotment under this section
shall use the funds to establish a partnership
to award grants for access and persistence to
eligible low-income students in order to
increase the amount of financial assistance
such students receive under this subpart for
undergraduate education expenses.
[(B) Amount of grants.--The amount of a grant
for access and persistence awarded by a State
to a student under this section shall be not
less than--
[(i) the average undergraduate
tuition and mandatory fees at the
public institutions of higher education
in the State where the student resides
that are of the same type of
institution as the institution of
higher education the student attends;
minus
[(ii) other Federal and State aid the
student receives.
[(C) Special rules.--
[(i) Partnership institutions.--A
State receiving an allotment under this
section may restrict the use of grants
for access and persistence under this
section by awarding the grants only to
students attending institutions of
higher education that are participating
in the partnership.
[(ii) Out-of-state institutions.--If
a State provides grants through another
program under this subpart to students
attending institutions of higher
education located in another State,
grants awarded under this section may
be used at institutions of higher
education located in another State.
[(2) Early notification.--
[(A) In general.--Each State receiving an
allotment under this section shall annually
notify low-income students in grades seven
through 12 in the State, and their families, of
their potential eligibility for student
financial assistance, including an access and
persistence grant, to attend an institution of
higher education.
[(B) Content of notice.--The notice under
subparagraph (A)--
[(i) shall include--
[(I) information about early
information and intervention,
mentoring, or outreach programs
available to the student;
[(II) information that a
student's eligibility for a
grant for access and
persistence is enhanced through
participation in an early
information and intervention,
mentoring, or outreach program;
[(III) an explanation that
student and family eligibility
for, and participation in,
other Federal means-tested
programs may indicate
eligibility for a grant for
access and persistence and
other student aid programs;
[(IV) a nonbinding estimate
of the total amount of
financial aid that a low-income
student with a similar income
level may expect to receive,
including an estimate of the
amount of a grant for access
and persistence and an estimate
of the amount of grants, loans,
and all other available types
of aid from the major Federal
and State financial aid
programs;
[(V) an explanation that in
order to be eligible for a
grant for access and
persistence, at a minimum, a
student shall--
[(aa) meet the
requirement under
paragraph (3);
[(bb) graduate from
secondary school; and
[(cc) enroll at an
institution of higher
education--
[(AA) that is
a partner in
the
partnership; or
[(BB) with
respect to
which
attendance is
permitted under
subsection
(d)(1)(C)(ii);
[(VI) information on any
additional requirements (such
as a student pledge detailing
student responsibilities) that
the State may impose for
receipt of a grant for access
and persistence under this
section; and
[(VII) instructions on how to
apply for a grant for access
and persistence and an
explanation that a student is
required to file a Free
Application for Federal Student
Aid authorized under section
483(a) to be eligible for such
grant and assistance from other
Federal and State financial aid
programs; and
[(ii) may include a disclaimer that
grant awards for access and persistence
are contingent on--
[(I) a determination of the
student's financial eligibility
at the time of the student's
enrollment at an institution of
higher education that is a
partner in the partnership or
qualifies under subsection
(d)(1)(C)(ii);
[(II) annual Federal and
State spending for higher
education; and
[(III) other aid received by
the student at the time of the
student's enrollment at such
institution of higher
education.
[(3) Eligibility.--In determining which students are
eligible to receive grants for access and persistence,
the State shall ensure that each such student complies
with the following subparagraph (A) or (B):
[(A) Meets not less than two of the following
criteria, with priority given to students
meeting all of the following criteria:
[(i) Has an expected family
contribution\1\ equal to zero, as
determined under part F, or a
comparable alternative based upon the
State's approved criteria in section
415C(b)(4).
[(ii) Qualifies for the State's
maximum undergraduate award, as
authorized under section 415C(b).
[(iii) Is participating in, or has
participated in, a Federal, State,
institutional, or community early
information and intervention,
mentoring, or outreach program, as
recognized by the State agency
administering activities under this
section.
[(B) Is receiving, or has received, a grant
for access and persistence under this section,
in accordance with paragraph (5).
[(4) Grant award.--Once a student, including those
students who have received early notification under
paragraph (2) from the State, applies for admission to
an institution that is a partner in the partnership,
files a Free Application for Federal Student Aid and
any related State form, and is determined eligible by
the State under paragraph (3), the State shall--
[(A) issue the student a preliminary award
certificate for a grant for access and
persistence with estimated award amounts; and
[(B) inform the student that payment of the
grant for access and persistence award amounts
is subject to certification of enrollment and
award eligibility by the institution of higher
education.
[(5) Duration of award.--An eligible student who
receives a grant for access and persistence under this
section shall receive such grant award for each year of
such student's undergraduate education in which the
student remains eligible for assistance under this
title, including pursuant to section 484(c), and
remains financially eligible as determined by the
State, except that the State may impose reasonable time
limits to degree completion.
[(e) Administrative Cost Allowance.--A State that receives an
allotment under this section may reserve not more than two
percent of the funds made available annually through the
allotment for State administrative functions required to carry
out this section.
[(f) Statutory and Regulatory Relief for Institutions of
Higher Education.--The Secretary may grant, upon the request of
an institution of higher education that is in a partnership
described in subsection (b)(2)(B)(ii) and that receives an
allotment under this section, a waiver for such institution
from statutory or regulatory requirements that inhibit the
ability of the institution to successfully and efficiently
participate in the activities of the partnership.
[(g) Applicability Rule.--The provisions of this subpart that
are not inconsistent with this section shall apply to the
program authorized by this section.
[(h) Maintenance of Effort Requirement.--Each State receiving
an allotment under this section for a fiscal year shall provide
the Secretary with an assurance that the aggregate amount
expended per student or the aggregate expenditures by the
State, from funds derived from non-Federal sources, for the
authorized activities described in subsection (d) for the
preceding fiscal year were not less than the amount expended
per student or the aggregate expenditure by the State for the
activities for the second preceding fiscal year.
[(i) Special Rule.--Notwithstanding subsection (h), for
purposes of determining a State's share of the cost of the
authorized activities described in subsection (d), the State
shall consider only those expenditures from non-Federal sources
that exceed the State's total expenditures for need-based
grants, scholarships, and work-study assistance for fiscal year
1999 (including any such assistance provided under this
subpart).
[(j) Continuation and Transition.--For the two-year period
that begins on the date of enactment of the Higher Education
Opportunity Act, the Secretary shall continue to award grants
under section 415E of the Higher Education Act of 1965 as such
section existed on the day before the date of enactment of the
Higher Education Opportunity Act to States that choose to apply
for grants under such predecessor section.
[(k) Reports.--Not later than three years after the date of
enactment of the Higher Education Opportunity Act and annually
thereafter, the Secretary shall submit a report describing the
activities and the impact of the partnerships under this
section to the authorizing committees.
[SEC. 415F. DEFINITION.
[For the purpose of this subpart, the term ``community
service'' means services, including direct service, planning,
and applied research which are identified by an institution of
higher education, through formal or informal consultation with
local nonprofit, governmental, and community-based
organizations, and which--
[(1) are designed to improve the quality of life for
community residents, particularly low-income
individuals, or to solve particular problems related to
the needs of such residents, including but not limited
to, such fields as health care, child care, education,
literacy training, welfare, social services, public
safety, crime prevention and control, transportation,
recreation, housing and neighborhood improvement, rural
development, and community improvement; and
[(2) provide participating students with work-
learning opportunities related to their educational or
vocational programs or goals.
Subpart 4--Promoting Real Opportunities to Maximize Investments and
Savings in Education
SEC. 415A. PURPOSE.
It is the purpose of this subpart to provide performance-
based grants to--
(1) assist institutions in providing certainty to
students and families about postsecondary
affordability;
(2) increase postsecondary access and economic
mobility; and
(3) ensure that students, institutions, and taxpayers
receive a financial return for investments in
postsecondary education.
SEC. 415B. PROMISE GRANTS.
For award year 2026-2027 and each succeeding award year, from
reserved funds remitted to the Secretary in accordance with
section 454(d) and additional funds authorized under section
415E, as necessary, the Secretary shall award PROMISE grants to
eligible institutions to carry out the purpose of this subpart.
PROMISE grants awarded under this subpart shall be performance-
based and shall be awarded to each eligible institution for a
6-year period in an amount that is determined in accordance
with section 415D.
SEC. 415C. ELIGIBLE INSTITUTIONS; APPLICATION.
(a) Eligible Institution.--To be eligible for a PROMISE grant
under this subpart, an institution shall--
(1) be an institution of higher education under
section 102, except that an institution described in
section 102(a)(1)(C) shall not be an eligible
institution under this subpart; and
(2) meet the maximum total price guarantee
requirements under subsection (c).
(b) Application.--An eligible institution seeking a PROMISE
grant under this subpart (including a renewal of such a grant)
shall submit to the Secretary an application, at such time as
the Secretary may require, that contains the information
required in this subsection. Such application shall--
(1) demonstrate that the institution--
(A) meets the maximum total price guarantee
requirements under subsection (c); and
(B) will continue to meet the maximum total
price guarantee requirements for each award
year during the grant period with respect to
students first enrolling at the institution for
each such award year;
(2) describe how grant funds awarded under this
subpart will be used by the institution to carry out
the purposes of this Act, including activities related
to--
(A) postsecondary affordability, including--
(i) the expansion and continuation of
the maximum total price guarantee
requirements under subsection (c); and
(ii) any other activities to be
carried out by the institution to
increase postsecondary affordability
and minimize the total net price
required for completion (as defined in
section 132(a)) paid by students
receiving need-based student aid;
(B) postsecondary access, which may include--
(i) the activities described in
section 485E of this Act; and
(ii) any other activities to be
carried out by the institution to
increase postsecondary access and
expand opportunities for low- and
middle-income students; and
(C) postsecondary student success, which may
include--
(i) activities to improve completion
rates and reduce time to credential,
including the activities described in
section 741 of this Act, as amended by
the College Cost Reduction Act;
(ii) activities to align programs of
study with the needs of employers,
including with respect to in-demand
industry sectors or occupations (as
defined in section 3 of the Workforce
Innovation and Opportunity Act (29
U.S.C. 3102)); and
(iii) any other activities to be
carried out by the institution to
increase value-added earnings and
postsecondary student success;
(3) describe--
(A) how the institution will evaluate the
effectiveness of the institution's use of grant
funds awarded under this subpart; and
(B) how the institution will collect and
disseminate information on promising practices
developed with the use of such grant funds; and
(4) in the case of an institution that has previously
received a grant under this subpart, contain the
evaluation required under paragraph (3) for each
previous grant.
(c) Maximum Total Price Guarantee Requirements.--As a
condition of eligibility for a PROMISE grant under this
subpart, an institution shall--
(1) for each award year beginning after the date of
enactment of the College Cost Reduction Act, not later
than one year before the start of each such award year
(except that, for the first award year beginning after
such date of enactment, the institution shall meet
these requirements as soon as practicable such date of
enactment)--
(A) determine the maximum total price for
completion, in accordance with subsection (e),
for each program of study at the institution--
(i) applicable to students in each
income category described in section
132(c)(2)(A)(i); and
(ii) applicable to students in each
student aid index category determined
by the Secretary in accordance with
section 132(c)(2)(A)(ii); and
(B) publish such information on the
institution's website and in the institution's
catalog, marketing materials, or other official
publications;
(2) for the award year for which the institution is
applying for a PROMISE grant, and at least one award
year preceding such award year, provide to each student
who first enrolls, or plans to enroll, in the
institution during the award year and who receives
Federal financial aid under this title a maximum total
price guarantee, in accordance with this section, for
the minimum guarantee period applicable to the student;
and
(3) provide to the Secretary an assurance that the
institution will continue to meet each of the maximum
total price guarantee requirements under this
subsection for students who first enroll, or plan to
enroll, in the institution during each award year
included in the grant period.
(d) Duration of Minimum Guarantee Period.--
(1) In general.--The minimum period during which a
student shall be provided a guarantee under subsection
(c) with respect to the maximum total price for
completion of a program of study at an institution
shall be the median time to credential of students who
completed any undergraduate program of study at the
institution during the most recent award year for which
data are available, except that such minimum guarantee
period shall not be less than the program length of the
program of study in which the student is enrolled.
(2) Limitation.--An institution shall not be required
to provide a maximum total price guarantee under
subsection (c) to a student after the conclusion of the
6-year period beginning on the first day on which the
student enrolled at such institution.
(e) Determination of Maximum Total Price for Completion.--
(1) In general.--For the purposes of subsection (c),
an institution shall determine, prior to the first
award year in which a student enrolls at the
institution, the maximum total price that may be
charged to the student for completion of a program of
study at the institution for the minimum guarantee
period applicable to a student, before application of
any Federal Pell Grants or other Federal financial aid
under this title. Such a maximum total price for
completion shall be determined for students in each
income category and student aid index category (as
determined in accordance with section 132(c)(2)(A)). In
determining the maximum total price for completion to
be charged to each such category of students, the
institution may consider the ability of a category of
students to pay tuition and fees (including the
required costs described in section
124(b)(3)(A)(i)(I)), but may not include in such
consideration any Federal Pell Grants or other Federal
financial aid awards that may be available to such
category of students under this title.
(2) Multiple maximum total price guarantees.--In the
event that a student receives more than one maximum
total price guarantee because the student is included
in more than one category of students for which the
institution determines a maximum total price guarantee
amount for the purposes of subsection (c), the maximum
total price guarantee applicable to such student for
the purposes of this section shall be equal to the
lowest such guarantee amount.
SEC. 415D. GRANT AMOUNTS; FLEXIBLE USE OF FUNDS.
(a) Grant Amount Formula.--
(1) Formula.--Subject to subsection (b), the amount
of a PROMISE grant for an eligible institution for each
year of the grant period shall be determined by the
Secretary annually and shall be equal to--
(A) the amount determined by multiplying--
(i) the lesser of--
(I) the difference determined
by subtracting one from the
quotient of--
(aa) the average, for
the 3 most recent award
years for which data
are available, of the
median value-added
earnings (as defined in
section 103) for each
such award year of
students who completed
any program of study of
the institution;
divided by
(bb) the average for
the 3 most recent award
years, of the maximum
total price applicable
for each such award
year to students
enrolled in the
institution in any
program of study who
received financial aid
under this title; or
(II) the number two;
(ii) the average, for the 3 most
recent award years, of the total dollar
amount of Federal Pell Grants awarded
to students enrolled in the institution
in each such award year; and
(iii) the average, for the 3 most
recent award years, of the percentage
of low-income students who received
Federal financial assistance under this
title who were enrolled in the
institution in each such award year
who--
(I) completed a program of
study at the institution within
100 percent of the program
length of such program; or
(II) only in the case of a
two-year institution or a less
than two-year institution--
(aa) transfer to a
four-year institution;
and
(bb) within 4 years
after first enrolling
at the two-year or less
than two-year
institution, complete a
program of study at the
four-year institution
for which a bachelor's
degree (or
substantially similar
credential) is awarded;
minus
(B) the sum of--
(i) the amount allocated to the
institution under part C of title IV
for the most recent fiscal year; and
(ii) the amount allocated to the
institution under subpart 3 of part A
of title IV for the most recent fiscal
year.
(2) Definition of low-income.--In this section, the
term ``low-income'', when used with respect to a
student, means that the student's family income does
not exceed the maximum income in the lowest income
category described in section 132(c)(2)(A)(i).
(b) Maximum Grant Amount.--Notwithstanding subsection (a),
the maximum amount an eligible institution may receive annually
for a grant under this subpart shall be the amount equal to--
(1) the average, for the 3 most recent award years,
of the number of students enrolled in the institution
in an award year who receive Federal financial aid
under this title; multiplied by
(2) $5,000.
(c) Flexible Use of Funds.--A PROMISE grant awarded under
this subpart shall be used by an eligible institution to carry
out the purposes of this subpart, including--
(1) carrying out activities included in the
institution's application for such grant related to
postsecondary affordability, access, and student
success; and
(2) evaluating the effectiveness of the activities
carried out with such grant in accordance with section
415C(b)(3)(A); and
(3) collecting and disseminating promising practices
related to the activities carried out with such grant,
in accordance with section 415C(b)(3)(B).
(d) Transfer Authority.--In order to offer an arrangement of
types of aid which best fit the needs of each individual
student, an institution may transfer up to 100 percent of the
institution's allotment under subpart 3 of this part or part C
of this title (or both) to the institution's allotment under
this section. Funds transferred to an institution's allotment
under this section may be used as a part of and for the same
purposes as funds allotted under this subpart. The Secretary
shall have no control over such transfer, except as
specifically authorized, except for the collection and
dissemination of information.
SEC. 415E. AUTHORIZATION OF APPROPRIATIONS.
(a) Used of Reserved Funds.--
(1) Primary funds.--To carry out this subpart, there
shall be available to the Secretary any funds remitted
to the Secretary as reimbursements in accordance with
section 454(d) for any award year; and
(2) Secondary funds.--Beginning award year 2026-2027,
if the amounts made available to the Secretary under
paragraph (1) to carry out this subpart in any award
year are insufficient to fully fund the PROMISE grants
awarded under this subpart in such award year, there
shall be available to the Secretary, in addition to
such amounts, any funds returned to the Secretary under
section 484B in the previous award year.
(b) Insufficient Funds.--If the amounts made available to the
Secretary under subsection (a) to carry out this subpart for
are not sufficient to provide grants to all eligible
institutions in the amount determined under this subpart for an
award year, the Secretary shall first provide grants to the
eligible institutions that have the highest percentage of
students who are low-income students (as defined in section
415D).
Part B--Federal Family Education Loan Program
* * * * * * *
SEC. 428B. FEDERAL PLUS LOANS.
(a) Authority To Borrow.--
(1) Authority and eligibility.--Prior to July 1,
2010, a graduate or professional student or the parents
of a dependent student shall be eligible to borrow
funds under this section in amounts specified in
subsection (b), if--
(A) the graduate or professional student or
the parents do not have an adverse credit
history as determined pursuant to regulations
promulgated by the Secretary;
(B) in the case of a graduate or professional
student or parent who has been convicted of, or
has pled nolo contendere or guilty to, a crime
involving fraud in obtaining funds under this
title, such graduate or professional student or
parent has completed the repayment of such
funds to the Secretary, or to the holder in the
case of a loan under this title obtained by
fraud; and
(C) the graduate or professional student or
the parents meet such other eligibility
criteria as the Secretary may establish by
regulation, after consultation with guaranty
agencies, eligible lenders, and other
organizations involved in student financial
assistance.
(2) Terms, conditions, and benefits.--Except as
provided in subsections (c), (d), and (e), loans made
under this section shall have the same terms,
conditions, and benefits as all other loans made under
this part.
(3) Special rules.--
(A) Parent borrowers.--Whenever necessary to
carry out the provisions of this section, the
terms ``student'' and ``borrower'' as used in
this part shall include a parent borrower under
this section.
(B)(i) Extenuating circumstances.--An
eligible lender may determine that extenuating
circumstances exist under the regulations
promulgated pursuant to paragraph (1)(A) if,
during the period beginning January 1, 2007,
and ending December 31, 2009, an applicant for
a loan under this section--
(I) is or has been delinquent for 180
days or fewer on mortgage loan payments
or on medical bill payments during such
period; and
(II) does not otherwise have an
adverse credit history, as determined
by the lender in accordance with the
regulations promulgated pursuant to
paragraph (1)(A), as such regulations
were in effect on the day before the
date of enactment of the Ensuring
Continued Access to Student Loans Act
of 2008.
(ii) Definition of mortgage loan.--In this
subparagraph, the term ``mortgage loan'' means
an extension of credit to a borrower that is
secured by the primary residence of the
borrower.
(iii) Rule of construction.--Nothing in this
subparagraph shall be construed to limit an
eligible lender's authority under the
regulations promulgated pursuant to paragraph
(1)(A) to determine that extenuating
circumstances exist.
(b) Limitation based on need.--Any loan under this section
may be counted as part of the expected family contribution in
the determination of need under this title, but no loan may be
made to any graduate or professional student or any parent
under this section for any academic year in excess of (A) the
student's estimated cost of attendance, minus (B) other
financial aid as certified by the eligible institution under
section 428(a)(2)(A). The annual insurable limit on account of
any student shall not be deemed to be exceeded by a line of
credit under which actual payments to the borrower will not be
made in any year in excess of the annual limit.
(c) PLUS Loan Disbursement.--All loans made under this
section shall be disbursed in accordance with the requirements
of section 428G and shall be disbursed by--
(1) an electronic transfer of funds from the lender
to the eligible institution; or
(2) a check copayable to the eligible institution and
the graduate or professional student or parent
borrower.
(d) Payment of Principal and Interest.--
(1) Commencement of repayment.--Repayment of
principal on loans made under this section shall
commence not later than 60 days after the date such
loan is disbursed by the lender, subject to deferral--
(A)(i) during any period during which the
parent borrower or the graduate or professional
student borrower meets the conditions required
for a deferral under section 427(a)(2)(C) or
428(b)(1)(M); and
(ii) upon the request of the parent borrower,
during any period during which the student on
whose behalf the loan was borrowed by the
parent borrower meets the conditions required
for a deferral under section 427(a)(2)(C)(i)(I)
or 428(b)(1)(M)(i)(I); and
(B)(i) in the case of a parent borrower, upon
the request of the parent borrower, during the
6-month period beginning on the later of--
(I) the day after the date the
student on whose behalf the loan was
borrowed ceases to carry at least one-
half the normal full-time academic
workload (as determined by the
institution); or
(II) if the parent borrower is also a
student, the day after the date such
parent borrower ceases to carry at
least one-half such a workload; and
(ii) in the case of a graduate or
professional student borrower, during the 6-
month period beginning on the day after the
date such student ceases to carry at least one-
half the normal full-time academic workload (as
determined by the institution).
[(2) Capitalization of interest.--
[(A) In general.--Interest on loans made
under this section for which payments of
principal are deferred pursuant to paragraph
(1) shall, if agreed upon by the borrower and
the lender--
[(i) be paid monthly or quarterly; or
[(ii) be added to the principal
amount of the loan not more frequently
than quarterly by the lender.
[(B) Insurable limits.--Capitalization of
interest under this paragraph shall not be
deemed to exceed the annual insurable limit on
account of the borrower.]
(2) No capitalization of interest.--Interest on loans
made under this section for which payments of principal
are deferred pursuant to paragraph (1) shall be paid
monthly or quarterly, if agreed upon by the borrower
and the lender.
(3) Subsidies prohibited.--No payments to reduce
interest costs shall be paid pursuant to section 428(a)
of this part on loans made pursuant to this section.
(4) Applicable rates of interest.--Interest on loans
made pursuant to this section shall be at the
applicable rate of interest provided in section 427A
for loans made under this section.
(5) Amortization.--The amount of the periodic payment
and the repayment schedule for any loan made pursuant
to this section shall be established by assuming an
interest rate equal to the applicable rate of interest
at the time the repayment of the principal amount of
the loan commences. At the option of the lender, the
note or other written evidence of the loan may require
that--
(A) the amount of the periodic payment will
be adjusted annually, or
(B) the period of repayment of principal will
be lengthened or shortened,
in order to reflect adjustments in interest rates
occurring as a consequence of section 427A(c)(4).
(e) Refinancing.--
(1) Refinancing to secure combined payment.--An
eligible lender may at any time consolidate loans held
by it which are made under this section to a borrower,
including loans which were made under section 428B as
in effect prior to the enactment of the Higher
Education Amendments of 1986, under a single repayment
schedule which provides for a single principal payment
and a single payment of interest, and shall calculate
the repayment period for each included loan from the
date of the commencement of repayment of the most
recent included loan. Unless the consolidated loan is
obtained by a borrower who is electing to obtain
variable interest under paragraph (2) or (3), such
consolidated loan shall bear interest at the weighted
average of the rates of all included loans. The
extension of any repayment period of an included loan
pursuant to this paragraph shall be reported (if
required by them) to the Secretary or guaranty agency
insuring the loan, as the case may be, but no
additional insurance premiums shall be payable with
respect to any such extension. The extension of the
repayment period of any included loan shall not require
the formal extension of the promissory note evidencing
the included loan or the execution of a new promissory
note, but shall be treated as an administrative
forbearance of the repayment terms of the included
loan.
(2) Refinancing to secure variable interest rate.--An
eligible lender may reissue a loan which was made under
this section before July 1, 1987, or under section 428B
as in effect prior to the enactment of the Higher
Education Amendments of 1986 in order to permit the
borrower to obtain the interest rate provided under
section 427A(c)(4). A lender offering to reissue a loan
or loans for such purpose may charge a borrower an
amount not to exceed $100 to cover the administrative
costs of reissuing such loan or loans, not more than
one-half of which shall be paid to the guarantor of the
loan being reissued to cover costs of reissuance.
Reissuance of a loan under this paragraph shall not
affect any insurance applicable with respect to the
loan, and no additional insurance fee may be charged to
the borrower with respect to the loan.
(3) Refinancing by discharge of previous loan.--A
borrower who has applied to an original lender for
reissuance of a loan under paragraph (2) and who is
denied such reissuance may obtain a loan from another
lender for the purpose of discharging the loan from
such original lender. A loan made for such purpose--
(A) shall bear interest at the applicable
rate of interest provided under section
427A(c)(4);
(B) shall not result in the extension of the
duration of the note (other than as permitted
under subsection (d)(5)(B));
(C) may be subject to an additional insurance
fee but shall not be subject to the
administrative cost charge permitted by
paragraph (2) of this subsection; and
(D) shall be applied to discharge the
borrower from any remaining obligation to the
original lender with respect to the original
loan.
(4) Certification in lieu of promissory note
presentation.--Each new lender may accept certification
from the original lender of the borrower's original
loan in lieu of presentation of the original promissory
note.
(f) Verification of Immigration Status and Social
Security Number.--A parent who wishes to borrow funds under
this section shall be subject to verification of the parent's--
(1) immigration status in the same manner as
immigration status is verified for students under
section 484(g); and
(2) social security number in the same manner as
social security numbers are verified for students under
section 484(p).
SEC. 428C. FEDERAL CONSOLIDATION LOANS.
(a) Agreements With Eligible Lenders.--
(1) Agreement required for insurance coverage.--For
the purpose of providing loans to eligible borrowers
for consolidation of their obligations with respect to
eligible student loans, the Secretary or a guaranty
agency shall enter into agreements in accordance with
subsection (b) with the following eligible lenders:
(A) the Student Loan Marketing Association or
the Holding Company of the Student Loan
Marketing Association, including any subsidiary
of the Holding Company, created pursuant to
section 440;
(B) State agencies described in subparagraphs
(D) and (F) of section 435(d)(1); and
(C) other eligible lenders described in
subparagraphs (A), (B), (C), (E), and (J) of
such section.
(2) Insurance coverage of consolidation loans.--
Except as provided in section 429(e), no contract of
insurance under this part shall apply to a
consolidation loan unless such loan is made under an
agreement pursuant to this section and is covered by a
certificate issued in accordance with subsection
(b)(2). Loans covered by such a certificate that is
issued by a guaranty agency shall be considered to be
insured loans for the purposes of reimbursements under
section 428(c), but no payment shall be made with
respect to such loans under section 428(f) to any such
agency.
(3) Definition of eligible borrower.--(A) For the
purpose of this section, the term ``eligible borrower''
means a borrower who--
(i) is not subject to a judgment secured
through litigation with respect to a loan under
this title or to an order for wage garnishment
under section 488A; and
(ii) at the time of application for a
consolidation loan--
(I) is in repayment status as
determined under section 428(b)(7)(A);
(II) is in a grace period preceding
repay-
ment; or
(III) is a defaulted borrower who has
made arrangements to repay the
obligation on the defaulted loans
satisfactory to the holders of the
defaulted loans.
(B)(i) An individual's status as an eligible borrower
under this section or under section 455(g) terminates
under both sections upon receipt of a consolidation
loan under this section or under section 455(g), except
that--
(I) an individual who receives eligible
student loans after the date of receipt of the
consolidation loan may receive a subsequent
consolidation loan;
(II) loans received prior to the date of the
consolidation loan may be added during the 180-
day period following the making of the
consolidation loan;
(III) loans received following the making of
the consolidation loan may be added during the
180-day period following the making of the
consolidation loan;
(IV) loans received prior to the date of the
first consolidation loan may be added to a
subsequent consolidation loan; and
(V) an individual may obtain a
subsequent consolidation loan under
section 455(g) only--
(aa) for the purposes of
obtaining income contingent
repayment or income-based
repayment, and only if the loan
has been submitted to the
guaranty agency for default
aversion or if the loan is
already in default;
(bb) for the purposes of
using the public service loan
forgiveness program under
section 455(m);
(cc) for the purpose of using the no
accrual of interest for active duty
service members benefit offered under
section 455(o).
(dd) for the purpose of
separating a joint
consolidation loan into 2
separate Federal Direct
Consolidation Loans under
section 455(g)(2).
(4) Definition of eligible student loans.--For the
purpose of paragraph (1), the term ``eligible student
loans'' means loans--
(A) made, insured, or guaranteed under this
part, and first disbursed before July 1, 2010,
including loans on which the borrower has
defaulted (but has made arrangements to repay
the obligation on the defaulted loans
satisfactory to the Secretary or guaranty
agency, whichever insured the loans);
(B) made under part E of this title;
(C) made under part D of this title;
(D) made under subpart II of part A of title
VII of the Public Health Service Act; or
(E) made under part E of title VIII of the
Public Health Service Act.
(b) Contents of Agreements, Certificates of Insurance, and
Loan Notes.--
(1) Agreements with lenders.--Any lender described in
subparagraph (A), (B), or (C) of subsection (a)(1) who
wishes to make consolidation loans under this section
shall enter into an agreement with the Secretary or a
guaranty agency which provides--
(A) that, in the case of all lenders
described in subsection (a)(1), the lender will
make a consolidation loan to an eligible
borrower (on request of that borrower) only if
the borrower certifies that the borrower has no
other application pending for a loan under this
section;
(B) that each consolidation loan made by the
lender will bear interest, and be subject to
repayment, in accordance with subsection (c);
(C) that each consolidation loan will be
made, notwithstanding any other provision of
this part limiting the annual or aggregate
principal amount for all insured loans made to
a borrower, in an amount (i) which is not less
than the minimum amount required for
eligibility of the borrower under subsection
(a)(3), and (ii) which is equal to the sum of
the unpaid principal and accrued unpaid
interest and late charges of all eligible
student loans received by the eligible borrower
which are selected by the borrower for
consolidation;
(D) that the proceeds of each consolidation
loan will be paid by the lender to the holder
or holders of the loans so selected to
discharge the liability on such loans;
(E) that the lender shall offer an income-
sensitive repayment schedule, established by
the lender in accordance with the regulations
promulgated by the Secretary, to the borrower
of any consolidation loan made by the lender on
or after July 1, 1994, and before July 1, 2010;
(F) that the lender shall disclose to a
prospective borrower, in simple and
understandable terms, at the time the lender
provides an application for a consolidation
loan--
(i) whether consolidation would
result in a loss of loan benefits under
this part or part D, including loan
forgiveness, cancellation, and
deferment;
(ii) with respect to Federal Perkins
Loans under part E--
(I) that if a borrower
includes a Federal Perkins Loan
under part E in the
consolidation loan, the
borrower will lose all
interest-free periods that
would have been available for
the Federal Perkins Loan, such
as--
(aa) the periods
during which no
interest accrues on
such loan while the
borrower is enrolled in
school at least half-
time;
(bb) the grace period
under section
464(c)(1)(A); and
(cc) the periods
during which the
borrower's student loan
repayments are deferred
under section
464(c)(2);
(II) that if a borrower
includes a Federal Perkins Loan
in the consolidation loan, the
borrower will no longer be
eligible for cancellation of
part or all of the Federal
Perkins Loan under section
465(a); and
(III) the occupations listed
in section 465 that qualify for
Federal Perkins Loan
cancellation under section
465(a);
(iii) the repayment plans that are
available to the borrower;
(iv) the options of the borrower to
prepay the consolidation loan, to pay
such loan on a shorter schedule, and to
change repayment plans;
(v) that borrower benefit programs
for a consolidation loan may vary among
different lenders;
(vi) the consequences of default on
the consolidation loan; and
(vii) that by applying for a
consolidation loan, the borrower is not
obligated to agree to take the
consolidation loan; and
(G) such other terms and conditions as the
Secretary or the guaranty agency may
specifically require of the lender to carry out
this section.
(2) Issuance of certificate of comprehensive
insurance coverage.--The Secretary shall issue a
certificate of comprehensive insurance coverage under
section 429(b) to a lender which has entered into an
agreement with the Secretary under paragraph (1) of
this subsection. The guaranty agency may issue a
certificate of comprehensive insurance coverage to a
lender with which it has an agreement under such
paragraph. The Secretary shall not issue a certificate
to a lender described in subparagraph (B) or (C) of
subsection (a)(1) unless the Secretary determines that
such lender has first applied to, and has been denied a
certificate of insurance by, the guaranty agency which
insures the preponderance of its loans (by value).
(3) Contents of certificate.--A certificate issued
under paragraph (2) shall, at a minimum, provide--
(A) that all consolidation loans made by such
lender in conformity with the requirements of
this section will be insured by the Secretary
or the guaranty agency (whichever is
applicable) against loss of principal and
interest;
(B) that a consolidation loan will not be
insured unless the lender has determined to its
satisfaction, in accordance with reasonable and
prudent business practices, for each loan being
consolidated--
(i) that the loan is a legal, valid,
and binding obligation of the borrower;
(ii) that each such loan was made and
serviced in compliance with applicable
laws and regulations; and
(iii) in the case of loans under this
part, that the insurance on such loan
is in full force and effect;
(C) the effective date and expiration date of
the certificate;
(D) the aggregate amount to which the
certificate applies;
(E) the reporting requirements of the
Secretary on the lender and an identification
of the office of the Department of Education or
of the guaranty agency which will process
claims and perform other related administrative
functions;
(F) the alternative repayment terms which
will be offered to borrowers by the lender;
(G) that, if the lender prior to the
expiration of the certificate no longer
proposes to make consolidation loans, the
lender will so notify the issuer of the
certificate in order that the certificate may
be terminated (without affecting the insurance
on any consolidation loan made prior to such
termination); and
(H) the terms upon which the issuer of the
certificate may limit, suspend, or terminate
the lender's authority to make consolidation
loans under the certificate (without affecting
the insurance on any consolidation loan made
prior to such limitation, suspension, or
termination).
(4) Terms and conditions of loans.--A consolidation
loan made pursuant to this section shall be insurable
by the Secretary or a guaranty agency pursuant to
paragraph (2) only if the loan is made to an eligible
borrower who has agreed to notify the holder of the
loan promptly concerning any change of address and the
loan is evidenced by a note or other written agreement
which--
(A) is made without security and without
endorsement, except that if the borrower is a
minor and such note or other written agreement
executed by him or her would not, under
applicable law, create a binding obligation,
endorsement may be required;
(B) provides for the payment of interest and
the repayment of principal in accordance with
subsection (c) of this section;
(C)(i) provides that periodic installments of
principal need not be paid, but interest shall
accrue and be paid in accordance with clause
(ii), during any period for which the borrower
would be eligible for a deferral under section
428(b)(1)(M), and that any such period shall
not be included in determining the repayment
schedule pursuant to subsection (c)(2) of this
section; and
(ii) provides that interest shall accrue and
be paid during any such period--
(I) by the Secretary, in the case of
a consolidation loan for which the
application is received by an eligible
lender before the date of enactment of
the Emergency Student Loan
Consolidation Act of 1997 that
consolidated only Federal Stafford
Loans for which the student borrower
received an interest subsidy under
section 428;
(II) by the Secretary, in the case of
a consolidation loan for which the
application is received by an eligible
lender on or after the date of
enactment of the Emergency Student Loan
Consolidation Act of 1997 except that
the Secretary shall pay such interest
only on that portion of the loan that
repays Federal Stafford Loans for which
the student borrower received an
interest subsidy under section 428 or
Federal Direct Stafford Loans for which
the borrower received an interest
subsidy under section 455; or
(III) by the borrower, [or
capitalized,] in the case of a
consolidation loan other than a loan
described in subclause (I) or (II);
(D) entitles the borrower to accelerate
without penalty repayment of the whole or any
part of the loan; and
(E)(i) contains a notice of the system of
disclosure concerning such loan to consumer
reporting agencies under section 430A, and (ii)
provides that the lender on request of the
borrower will provide information on the
repayment status of the note to such consumer
reporting agencies.
(5) Direct loans.--If, before July 1, 2010, a
borrower is unable to obtain a consolidation loan from
a lender with an agreement under subsection (a)(1), or
is unable to obtain a consolidation loan with income-
sensitive repayment terms or income-based repayment
terms acceptable to the borrower from such a lender, or
chooses to obtain a consolidation loan for the purposes
of using the public service loan forgiveness program
offered under section 455(m), the Secretary shall offer
any such borrower who applies for it, a Federal Direct
Consolidation loan. In addition, in the event that a
borrower chooses to obtain a consolidation loan for the
purposes of using the no accrual of interest for active
duty service members program offered under section
455(o), the Secretary shall offer a Federal Direct
Consolidation loan to any such borrower who applies for
participation in such program. A direct consolidation
loan offered under this paragraph shall, as requested
by the borrower, be repaid either pursuant to income
contingent repayment under part D of this title,
pursuant to income-based repayment under section 493C,
or pursuant to any other repayment provision under this
section, except that if a borrower intends to be
eligible to use the public service loan forgiveness
program under section 455(m), such loan shall be repaid
using one of the repayment options described in section
455(m)(1)(A). The Secretary shall not offer such loans
if, in the Secretary's judgment, the Department of
Education does not have the necessary origination and
servicing arrangements in place for such loans.
(6) Nondiscrimination in Loan Consolidation.--An
eligible lender that makes consolidation loans under
this section shall not discriminate against any
borrower seeking such a loan--
(A) based on the number or type of eligible
student loans the borrower seeks to
consolidate, except that a lender is not
required to consolidate loans described in
subparagraph (D) or (E) of subsection (a)(4) or
subsection (d)(1)(C)(ii);
(B) based on the type or category of
institution of higher education that the
borrower attended;
(C) based on the interest rate to be charged
to the borrower with respect to the
consolidation loan; or
(D) with respect to the types of repayment
schedules offered to such borrower.
(c) Payment of Principal and Interest.--
(1) Interest rate.--(A) Notwithstanding subparagraphs
(B) and (C), with respect to any loan made under this
section for which the application is received by an
eligible lender--
(i) on or after October 1, 1998, and before
July 1, 2006, the applicable interest rate
shall be determined under section 427A(k)(4);
or
(ii) on or after July 1, 2006, and that is
disbursed before July 1, 2010, the applicable
interest rate shall be determined under section
427A(l)(3).
(B) A consolidation loan made before July 1, 1994,
shall bear interest at an annual rate on the unpaid
principal balance of the loan that is equal to the
greater of--
(i) the weighted average of the interest
rates on the loans consolidated, rounded to the
nearest whole percent; or
(ii) 9 percent.
(C) A consolidation loan made on or after July 1,
1994, and disbursed before July 1, 2010, shall bear
interest at an annual rate on the unpaid principal
balance of the loan that is equal to the weighted
average of the interest rates on the loans
consolidated, rounded upward to the nearest whole
percent.
(D) A consolidation loan for which the application is
received by an eligible lender on or after the date of
enactment of the Emergency Student Loan Consolidation
Act of 1997 and before October 1, 1998, shall bear
interest at an annual rate on the unpaid principal
balance of the loan that is equal to the rate specified
in section 427A(f), except that the eligible lender may
continue to calculate interest on such a loan at the
rate previously in effect and defer, until not later
than April 1, 1998, the recalculation of the interest
on such a loan at the rate required by this
subparagraph if the recalculation is applied
retroactively to the date on which the loan is made.
(2) Repayment schedules.--(A) Notwithstanding any
other provision of this part, to the extent authorized
by its certificate of insurance under subsection (b)(2)
and approved by the issuer of such certificate, the
lender of a consolidation loan shall establish
repayment terms as will promote the objectives of this
section, which shall include the establishment of
graduated, income-sensitive, or income-based repayment
schedules, established by the lender in accordance with
the regulations of the Secretary. Except as required by
such income-sensitive or income-based repayment
schedules, or by the terms of repayment pursuant to
income contingent repayment offered by the Secretary
under subsection (b)(5), such repayment terms shall
require that if the sum of the consolidation loan and
the amount outstanding on other student loans to the
individual--
(i) is less than $7,500, then such
consolidation loan shall be repaid in not more
than 10 years;
(ii) is equal to or greater than $7,500 but
less than $10,000, then such consolidation loan
shall be repaid in not more than 12 years;
(iii) is equal to or greater than $10,000 but
less than $20,000, then such consolidation loan
shall be repaid in not more than 15 years;
(iv) is equal to or greater than $20,000 but
less than $40,000, then such consolidation loan
shall be repaid in not more than 20 years;
(v) is equal to or greater than $40,000 but
less than $60,000, then such consolidation loan
shall be repaid in not more than 25 years; or
(vi) is equal to or greater than $60,000,
then such consolidation loan shall be repaid in
not more than 30 years.
(B) The amount outstanding on other student loans
which may be counted for the purpose of subparagraph
(A) may not exceed the amount of the consolidation
loan.
(3) Additional repayment requirements.--
Notwithstanding paragraph (2)--
(A) except in the case of an income-based
repayment schedule under section 493C, a
repayment schedule established with respect to
a consolidation loan shall require that the
minimum installment payment be an amount equal
to not less than the accrued unpaid interest;
(B) except as required by the terms of
repayment pursuant to income contingent
repayment offered by the Secretary under
subsection (b)(5), the lender of a
consolidation loan may, with respect to
repayment on the loan, when the amount of a
monthly or other similar payment on the loan is
not a multiple of $5, round the payment to the
next highest whole dollar amount that is a
multiple of $5; and
(C) an income-based repayment schedule under
section 493C shall not be available to a
consolidation loan borrower who used the
proceeds of the loan to discharge the liability
on a loan under section 428B, or a Federal
Direct PLUS loan, made on behalf of a dependent
student.
(4) Commencement of repayment.--Repayment of a
consolidation loan shall commence within 60 days after
all holders have, pursuant to subsection (b)(1)(D),
discharged the liability of the borrower on the loans
selected for consolidation.
(5) Insurance premiums prohibited.--No insurance
premium shall be charged to the borrower on any
consolidation loan, and no insurance premium shall be
payable by the lender to the Secretary with respect to
any such loan, but a fee may be payable by the lender
to the guaranty agency to cover the costs of increased
or extended liability with respect to such loan.
(d) Special Program Authorized.--
(1) General rule and definition of eligible student
loan.--
(A) In general.--Subject to the provisions of
this subsection, the Secretary or a guaranty
agency shall enter into agreements with
eligible lenders described in subparagraphs
(A), (B), and (C) of subsection (a)(1) for the
consolidation of eligible student loans.
(B) Applicability rule.--Unless otherwise
provided in this subsection, the agreements
entered into under subparagraph (A) and the
loans made under such agreements for the
consolidation of eligible student loans under
this subsection shall have the same terms,
conditions, and benefits as all other
agreements and loans made under this section.
(C) Definition.--For the purpose of this
subsection, the term ``eligible student loans''
means loans--
(i) of the type described in
subparagraphs (A), (B), and (C) of
subsection (a)(4); and
(ii) made under subpart I of part A
of title VII of the Public Health
Service Act.
(2) Interest rate rule.--
(A) In general.--The portion of each
consolidated loan that is attributable to an
eligible student loan described in paragraph
(1)(C)(ii) shall bear interest at a rate not to
exceed the rate determined under subparagraph
(B).
(B) Determination of the maximum interest
rate.--For the 12-month period beginning after
July 1, 1992, and for each 12-month period
thereafter, beginning on July 1 and ending on
June 30, the interest rate applicable under
subparagraph (A) shall be equal to the average
of the bond equivalent rates of the 91-day
Treasury bills auctioned for the quarter prior
to July 1, for each 12-month period for which
the determination is made, plus 3 percent.
(C) Publication of maximum interest rate.--
The Secretary shall determine the applicable
rate of interest under subparagraph (B) after
consultation with the Secretary of the Treasury
and shall publish such rate in the Federal
Register as soon as practicable after the date
of such determination.
(3) Special rules.--
(A) No special allowance rule.--No special
allowance under section 438 shall be paid with
respect to the portion of any consolidated loan
under this subsection that is attributable to
any loan described in paragraph (1)(C)(ii).
(B) No interest subsidy rule.--No interest
subsidy under section 428(a) shall be paid on
behalf of any eligible borrower for any portion
of a consolidated loan under this subsection
that is attributable to any loan described in
paragraph (1)(C)(ii).
(C) Additional reserve rule.--Notwithstanding
any other provision of this Act, additional
reserves shall not be required for any guaranty
agency with respect to a loan made under this
subsection.
(D) Insurance rule.--Any insurance premium
paid by the borrower under subpart I of part A
of title VII of the Public Health Service Act
with respect to a loan made under that subpart
and consolidated under this subsection shall be
retained by the student loan insurance account
established under section 710 of the Public
Health Service Act.
(4) Regulations.--The Secretary is authorized to
promulgate such regulations as may be necessary to
facilitate carrying out the provisions of this
subsection.
(e) Termination of Authority.--The authority to make loans
under this section expires at the close of June 30, 2010. No
loan may be made under this section for which the disbursement
is on or after July 1, 2010. Nothing in this section shall be
construed to authorize the Secretary to promulgate rules or
regulations governing the terms or conditions of the agreements
and certificates under subsection (b). Loans made under this
section which are insured by the Secretary shall be considered
to be new loans made to students for the purpose of section
424(a).
(f) Interest Payment Rebate Fee.--
(1) In general.--For any month beginning on or after
October 1, 1993, each holder of a consolidation loan
under this section for which the first disbursement was
made on or after October 1, 1993, shall pay to the
Secretary, on a monthly basis and in such manner as the
Secretary shall prescribe, a rebate fee calculated on
an annual basis equal to 1.05 percent of the principal
plus accrued unpaid interest on such loan.
(2) Special rule.--For consolidation loans based on
applications received during the period from October 1,
1998 through January 31, 1999, inclusive, the rebate
described in paragraph (1) shall be equal to 0.62
percent of the principal plus accrued unpaid interest
on such loan.
(3) Deposit.--The Secretary shall deposit all fees
collected pursuant to this subsection into the
insurance fund established in section 431.
* * * * * * *
SEC. 428F. DEFAULT REDUCTION PROGRAM.
(a) Other Repayment Incentives.--
(1) Sale or assignment of loan.--
(A) In general.--Each guaranty agency, upon
securing 9 payments made within 20 days of the
due date during 10 consecutive months of
amounts owed on a loan for which the Secretary
has made a payment under paragraph (1) of
section 428(c), shall--
(i) if practicable, sell the loan to
an eligible lender; or
(ii) beginning July 1, 2014, assign
the loan to the Secretary if the
guaranty agency has been unable to sell
the loan under clause (i).
(B) Monthly payments.--Neither the guaranty
agency nor the Secretary shall demand from a
borrower as monthly payment amounts described
in subparagraph (A) more than is reasonable and
affordable based on the borrower's total
financial circumstances.
(C) Consumer reporting agencies.--Upon the
sale or assignment of the loan, the Secretary,
guaranty agency or other holder of the loan
shall request any consumer reporting agency to
which the Secretary, guaranty agency or holder,
as applicable, reported the default of the
loan, to remove the record of the default from
the borrower's credit history.
(D) Duties upon sale.--With respect to a sold
under subparagraph (A)(i)--
(i) the guaranty agency--
(I) shall, in the case of a
sale made on or after July 1,
2014, repay the Secretary 100
percent of the amount of the
principal balance outstanding
at the time of such sale,
multiplied by the reinsurance
percentage in effect when
payment under the guaranty
agreement was made with respect
to the loan; and
(II) may, in the case of a
sale made on or after July 1,
2014, in order to defray
collection costs--
(aa) charge to the
borrower an amount not
to exceed 16 percent of
the outstanding
principal and interest
at the time of the loan
sale; and
(bb) retain such
amount from the
proceeds of the loan
sale; and
(ii) the Secretary shall reinstate
the Secretary's obligation to--
(I) reimburse the guaranty
agency for the amount that the
agency may, in the future,
expend to discharge the
guaranty agency's insurance
obligation; and
(II) pay to the holder of
such loan a special allowance
pursuant to section 438.
(E) Duties upon assignment.--With respect to
a loan assigned under subparagraph (A)(ii)--
(i) the guaranty agency shall add to
the principal and interest outstanding
at the time of the assignment of such
loan an amount equal to the amount
described in subparagraph
(D)(i)(II)(aa); and
(ii) the Secretary shall pay the
guaranty agency, for deposit in the
agency's Operating Fund established
pursuant to section 422B, an amount
equal to the amount added to the
principal and interest outstanding at
the time of the assignment in
accordance with clause (i).
(F) Eligible lender limitation.--A loan shall
not be sold to an eligible lender under
subparagraph (A)(i) if such lender has been
found by the guaranty agency or the Secretary
to have substantially failed to exercise the
due diligence required of lenders under this
part.
(G) Default due to error.--A loan that does
not meet the requirements of subparagraph (A)
may also be eligible for sale or assignment
under this paragraph upon a determination that
the loan was in default due to clerical or data
processing error and would not, in the absence
of such error, be in a delinquent status.
(2) Use of proceeds of sales.--Amounts received by
the Secretary pursuant to the sale of such loans by a
guaranty agency under paragraph (1)(A)(i) shall be
deducted from the calculations of the amount of
reimbursement for which the agency is eligible under
paragraph (1)(D)(ii)(I) for the fiscal year in which
the amount was received, notwithstanding the fact that
the default occurred in a prior fiscal year.
(3) Borrower eligibility.--Any borrower whose loan is
sold or assigned under paragraph (1)(A) shall not be
precluded by section 484 from receiving additional
loans or grants under this title (for which he or she
is otherwise eligible) on the basis of defaulting on
the loan prior to such loan sale or assignment.
(4) Applicability of general loan conditions.--A loan
that is sold or assigned under paragraph (1) shall, so
long as the borrower continues to make scheduled
repayments thereon, be subject to the same terms and
conditions and qualify for the same benefits and
privileges as other loans made under this part.
(5) Limitation.--A borrower may obtain the benefits
available under this subsection with respect to
rehabilitating a loan (whether by loan sale or
assignment) only [one time] two times per loan.
(b) Satisfactory Repayment Arrangements To Renew
Eligibility.--Each guaranty agency shall establish a program
which allows a borrower with a defaulted loan or loans to renew
eligibility for all title IV student financial assistance
(regardless of whether the defaulted loan has been sold to an
eligible lender or assigned to the Secretary) upon the
borrower's payment of 6 consecutive monthly payments. The
guaranty agency shall not demand from a borrower as a monthly
payment amount under this subsection more than is reasonable
and affordable based upon the borrower's total financial
circumstances. A borrower may only obtain the benefit of this
subsection with respect to renewed eligibility once.
(c) Financial and Economic Literacy.--Each program described
in subsection (b) shall include making available financial and
economic education materials for a borrower who has
rehabilitated a loan.
* * * * * * *
SEC. 428H. UNSUBSIDIZED STAFFORD LOANS FOR MIDDLE-INCOME BORROWERS.
(a) In General.--It is the purpose of this section to
authorize insured loans under this part that are first
disbursed before July 1, 2010, for borrowers who do not qualify
for Federal interest subsidy payments under section 428 of this
Act. Except as provided in this section, all terms and
conditions for Federal Stafford loans established under section
428 shall apply to loans made pursuant to this section.
(b) Eligible Borrowers.--Prior to July 1, 2010, any student
meeting the requirements for student eligibility under section
484 (including graduate and professional students as defined in
regulations promulgated by the Secretary) shall be entitled to
borrow an unsubsidized Federal Stafford Loan for which the
first disbursement is made before such date if the eligible
institution at which the student has been accepted for
enrollment, or at which the student is in attendance, has--
(1) determined and documented the student's need for
the loan based on the student's estimated cost of
attendance (as determined under section 472) and the
student's estimated financial assistance, including a
loan which qualifies for interest subsidy payments
under section 428; and
(2) provided the lender a statement--
(A) certifying the eligibility of the student
to receive a loan under this section and the
amount of the loan for which such student is
eligible, in accordance with subsection (c);
and
(B) setting forth a schedule for disbursement
of the proceeds of the loan in installments,
consistent with the requirements of section
428G.
(c) Determination of Amount of Loan.--The determination of
the amount of a loan by an eligible institution under
subsection (b) shall be calculated by subtracting from the
estimated cost of attendance at the eligible institution any
estimated financial assistance reasonably available to such
student. An eligible institution may not, in carrying out the
provisions of subsection (b) of this section, provide a
statement which certifies the eligibility of any student to
receive any loan under this section in excess of the amount
calculated under the preceding sentence.
(d) Loan Limits.--
(1) In general.--Except as provided in paragraphs
(2), (3), and (4), the annual and aggregate limits for
loans under this section shall be the same as those
established under section 428(b)(1), less any amount
received by such student pursuant to the subsidized
loan program established under section 428.
(2) Limits for graduate, professional, and
independent postbaccalaureate students.--
(A) Annual limits.--The maximum annual amount
of loans under this section a graduate or
professional student, or a student described in
clause (ii), may borrow in any academic year
(as defined in section 481(a)(2)) or its
equivalent shall be the amount determined under
paragraph (1), plus--
(i) in the case of such a student who
is a graduate or professional student
attending an eligible institution,
$12,000; and
(ii) notwithstanding paragraph (4),
in the case of an independent student,
or a dependent student whose parents
are unable to borrow under section 428B
or the Federal Direct PLUS Loan
Program, who has obtained a
baccalaureate degree and who is
enrolled in coursework specified in
paragraph (3)(B) or (4)(B) of section
484(b)--
(I) $7,000 for coursework
necessary for enrollment in a
graduate or professional
program; and
(II) $7,000 for coursework
necessary for a professional
credential or certification
from a State required for
employment as a teacher in an
elementary or secondary school,
except in cases where the Secretary determines
that a higher amount is warranted in order to
carry out the purpose of this part with respect
to students engaged in specialized training
requiring exceptionally high costs of
education, but the annual insurable limit per
student shall not be deemed to be exceeded by a
line of credit under which actual payments by
the lender to the borrower will not be made in
any years in excess of the annual limit.
(B) Aggregate limit.--The maximum aggregate
amount of loans under this section a student
described in subparagraph (A) may borrow shall
be the amount described in paragraph (1),
adjusted to reflect the increased annual limits
described in subparagraph (A), as prescribed by
the Secretary by regulation.
(3) Limits for undergraduate dependent students.--
(A) Annual limits.--The maximum annual amount
of loans under this section an undergraduate
dependent student (except an undergraduate
dependent student whose parents are unable to
borrow under section 428B or the Federal Direct
PLUS Loan Program) may borrow in any academic
year (as defined in section 481(a)(2)) or its
equivalent shall be the sum of the amount
determined under paragraph (1), plus $2,000.
(B) Aggregate limits.--The maximum aggregate
amount of loans under this section a student
described in subparagraph (A) may borrow shall
be $31,000.
(4) Limits for undergraduate independent students.--
(A) Annual limits.--The maximum annual amount
of loans under this section an undergraduate
independent student, or an undergraduate
dependent student whose parents are unable to
borrow under section 428B or the Federal Direct
PLUS Loan Program, may borrow in any academic
year (as defined in section 481(a)(2)) or its
equivalent shall be the sum of the amount
determined under paragraph (1), plus--
(i) in the case of such a student
attending an eligible institution who
has not completed such student's first
2 years of undergraduate study--
(I) $6,000, if such student
is enrolled in a program whose
length is at least one academic
year in length; or
(II) if such student is
enrolled in a program of
undergraduate education which
is less than one academic year,
the maximum annual loan amount
that such student may receive
may not exceed the amount that
bears the same ratio to the
amount specified in subclause
(I) as the length of such
program measured in semester,
trimester, quarter, or clock
hours bears to one academic
year;
(ii) in the case of such a student at
an eligible institution who has
successfully completed such first and
second years but has not successfully
completed the remainder of a program of
undergraduate education--
(I) $7,000; or
(II) if such student is
enrolled in a program of
undergraduate education, the
remainder of which is less than
one academic year, the maximum
annual loan amount that such
student may receive may not
exceed the amount that bears
the same ratio to the amount
specified in subclause (I) as
such remainder measured in
semester, trimester, quarter,
or clock hours bears to one
academic year; and
(iii) in the case of such a student
enrolled in coursework specified in--
(I) section 484(b)(3)(B),
$6,000; or
(II) section 484(b)(4)(B),
$7,000.
(B) Aggregate limits.--The maximum aggregate
amount of loans under this section a student
described in subparagraph (A) may borrow shall
be $57,500.
(5) Capitalized interest.--Interest capitalized
before the date of enactment of the College Cost
Reduction Act shall not be deemed to exceed a maximum
aggregate amount determined under subparagraph (B) of
paragraph (2), (3), or (4).
(e) Payment of Principal and Interest.--
(1) Commencement of repayment.--Repayment of
principal on loans made under this section shall begin
at the beginning of the repayment period described in
section 428(b)(7). Not less than 30 days prior to the
anticipated commencement of such repayment period, the
holder of such loan shall provide notice to the
borrower that interest will accrue before repayment
begins and of the borrower's option to begin loan
repayment at an earlier date.
(2) Capitalization of interest.--(A) Except as
provided in subparagraph (C), interest on loans made
under this section for which payments of principal are
not required during the in-school and grace periods or
for which payments are deferred under sections
427(a)(2)(C) and 428(b)(1)(M) shall[, if agreed upon by
the borrower and the lender--
[(i) be paid monthly or quarterly; or
[(ii) be added to the principal amount of the
loan by the lender only--
[(I) when the loan enters repayment;
[(II) at the expiration of a grace
period, in the case of a loan that
qualifies for a grace period;
[(III) at the expiration of a period
of deferment or forbearance; or
[(IV) when the borrower defaults.] be
paid monthly or quarterly, if agreed
upon by the borrower and the lender.
[(B) The capitalization of interest described in
subparagraph (A) shall not be deemed to exceed the
annual insurable limit on account of the student.]
[(C)] (B) Interest shall not accrue on a loan
deferred under section 428(b)(1)(M)(v) or
427(a)(2)(C)(iv).
(3) Subsidies prohibited.--No payments to reduce
interest costs shall be paid pursuant to section 428(a)
of this part on loans made pursuant to this section.
(4) Applicable rates of interest.--Interest on loans
made pursuant to this section shall be at the
applicable rate of interest provided in section 427A.
(5) Amortization.--The amount of the periodic payment
and the repayment schedule for any loan made pursuant
to this section shall be established by assuming an
interest rate equal to the applicable rate of interest
at the time the repayment of the principal amount of
the loan commences. At the option of the lender, the
note or other written evidence of the loan may require
that--
(A) the amount of the periodic payment will
be adjusted annually; or
(B) the period of repayment of principal will
be lengthened or shortened,
in order to reflect adjustments in interest rates
occurring as a consequence of section 427A(c)(4).
(6) Repayment period.--For purposes of calculating
the repayment period under section 428(b)(9), such
period shall commence at the time the first payment of
principal is due from the borrower.
(7) Qualification for forbearance.--A lender may
grant the borrower of a loan under this section a
forbearance for a period not to exceed 60 days if the
lender reasonably determines that such a forbearance
from collection activity is warranted following a
borrower's request for forbearance, deferment, or a
change in repayment plan, or a request to consolidate
loans in order to collect or process appropriate
supporting documentation related to the request. During
any such period, interest on the loan shall accrue but
not be capitalized.
(g) Single Application Form and Loan Repayment Schedule.--A
guaranty agency shall use a single application form and a
single repayment schedule for subsidized Federal Stafford loans
made pursuant to section 428 and for unsubsidized Federal
Stafford loans made pursuant to this section.
(h) Insurance Premium.--Each State or nonprofit private
institution or organization having an agreement with the
Secretary under section 428(b)(1) may charge a borrower under
this section an insurance premium equal to not more than 1.0
percent of the principal amount of the loan, if such premium
will not be used for incentive payments to lenders. Effective
for loans for which the date of guarantee of principal is on or
after July 1, 2006, and that are first disbursed before July 1,
2010, in lieu of the insurance premium authorized under the
preceding sentence, each State or nonprofit private institution
or organization having an agreement with the Secretary under
section 428(b)(1) shall collect and deposit into the Federal
Student Loan Reserve Fund under section 422A, a Federal default
fee of an amount equal to 1.0 percent of the principal amount
of the loan, which fee shall be collected either by deduction
from the proceeds of the loan or by payment from other non-
Federal sources. The Federal default fee shall not be used for
incentive payments to lenders.
* * * * * * *
PART D--WILLIAM D. FORD FEDERAL DIRECT LOAN PROGRAM
* * * * * * *
SEC. 454. AGREEMENTS WITH INSTITUTIONS.
(a) Participation Agreements.--An agreement with any
institution of higher education for participation in the direct
student loan program under this part shall--
(1) provide for the establishment and maintenance of
a direct student loan program at the institution under
which the institution will--
(A) identify eligible students who seek
student financial assistance at such
institution in accordance with section 484;
(B) estimate the need of each such student as
required by part F of this title for an
academic year, except that, any loan obtained
by a student under this part with the same
terms as loans made under section 428H (except
as otherwise provided in this part), or a loan
obtained by a parent under this part with the
same terms as loans made under section 428B
(except as otherwise provided in this part), or
obtained under any State-sponsored or private
loan program, may be used to offset the
expected family contribution of the student for
that year;
(C) provide a statement that certifies the
eligibility of any student to receive a loan
under this part that is not in excess of the
annual or aggregate limit applicable to such
loan, except that the institution may, in
exceptional circumstances identified by the
Secretary, refuse to certify a statement that
permits a student to receive a loan under this
part, or certify a loan amount that is less
than the student's determination of need (as
determined under part F of this title), if the
reason for such action is documented and
provided in written form to such student;
(D) set forth a schedule for disbursement of
the proceeds of the loan in installments,
consistent with the requirements of section
428G; and
(E) provide timely and accurate information--
(i) concerning the status of student
borrowers (and students on whose behalf
parents borrow under this part) while
such students are in attendance at the
institution and concerning any new
information of which the institution
becomes aware for such students (or
their parents) after such borrowers
leave the institution, to the Secretary
for the servicing and collecting of
loans made under this part; and
(ii) if the institution does not have
an agreement with the Secretary under
subsection (b), concerning student
eligibility and need, as determined
under subparagraphs (A) and (B), to the
Secretary as needed for the alternative
origination of loans to eligible
students and parents in accordance with
this part;
(2) provide assurances that the institution will
comply with requirements established by the Secretary
relating to student loan information with respect to
loans made under this part;
(3) provide that the institution accepts
responsibility and financial liability stemming from
its failure to perform its functions pursuant to the
agreement;
(4) provide for the implementation of a quality
assurance system, as established by the Secretary and
developed in consultation with institutions of higher
education, to ensure that the institution is complying
with program requirements and meeting program
objectives;
(5) provide that the institution will not charge any
fees of any kind, however described, to student or
parent borrowers for origination activities or the
provision of any information necessary for a student or
parent to receive a loan under this part, or any
benefits associated with such loan; [and]
(6) provide annual reimbursements to the Secretary in
accordance with the requirements under subsection (d);
and
[(6)] (7) include such other provisions as the
Secretary determines are necessary to protect the
interests of the United States and to promote the
purposes of this part.
(b) Origination.--An agreement with any institution of higher
education, or consortia thereof, for the origination of loans
under this part shall--
(1) supplement the agreement entered into in
accordance with subsection (a);
(2) include provisions established by the Secretary
that are similar to the participation agreement
provisions described in paragraphs (1)(E)(ii), (2),
(3), (4), (5), and (6) of subsection (a), as modified
to relate to the origination of loans by the
institution or consortium;
(3) provide that the institution or consortium will
originate loans to eligible students and parents in
accordance with this part; and
(4) provide that the note or evidence of obligation
on the loan shall be the property of the Secretary.
(c) Withdrawal and Termination Procedures.--The Secretary
shall establish procedures by which institutions or consortia
may withdraw or be terminated from the program under this part.
(d) Reimbursement Requirements.--
(1) Annual reimbursements required.--Beginning in
award year 2024-2025, each institution of higher
education participating in the direct student loan
program under this part shall, for qualifying student
loans, remit to the Secretary, at such time as the
Secretary may specify, an annual reimbursement for each
student cohort of the institution, based on the non-
repayment balance of such cohort and calculated in
accordance with paragraph (3).
(2) Student cohorts.--
(A) Cohorts established.--For each
institution of higher education, the Secretary
shall establish student cohorts, beginning with
award year 2023-2024, as follows:
(i) Completing student cohort.--For
each program of study at such
institution, a student cohort comprised
of all students who received Federal
financial assistance under this title
and who completed such program during
such award year.
(ii) Undergraduate non-completing
student cohort.--For such institution,
a student cohort comprised of all
students who received Federal financial
assistance under this title, who were
enrolled in the institution during the
previous award year in a program of
study leading to an undergraduate
credential, and who at the time the
cohort is established--
(I) have not completed such
program of study; and
(II) are not enrolled at the
institution in any program of
study leading to an
undergraduate credential.
(iii) Graduate non-completing student
cohort.--For each program of study
leading to a graduate credential at
such institution, a student cohort
comprised of all students who received
Federal financial assistance under this
title, who were enrolled in such
program during the previous award year,
and who at the time the cohort is
established--
(I) have not completed such
program of study; and
(II) are not enrolled in such
program.
(B) Qualifying student loan.--For the
purposes of this subsection, the term
``qualifying student loan'' means a Federal
Direct loan, including a Federal Direct
Consolidation loan, made under this part that--
(i) was made to a student included in
a student cohort of an institution;
(ii) except in the case of a loan
described in clause (i) or (ii) of
subparagraph (C), is not included in
any other student cohort of any
institution of higher education;
(iii) is not in--
(I) a medical or dental
internship or residency
forbearance described in
section 428(c)(3)(A)(i)(I),
section 428B(a)(2), section
428H(a), or section
685.205(a)(3) of title 34, Code
of Federal Regulations;
(II) a graduate fellowship
deferment described in section
455(f)(2)(A)(ii)
(III) rehabilitation training
program deferment described
under section 455(f)(2)(A)(ii);
(IV) an in-school deferment
described under section
455(f)(2)(A)(i);
(V) a cancer deferment
described under section
455(f)(3);
(VI) a military service
deferment described under
section 455(f)(2)(C); or
(VII) a post-active duty
student deferment described
under section 493D; and
(iv) is not in default.
(C) Special circumstances.--
(i) Multiple credentials.--In the
case of a student who completes two or
more programs of study during the same
award year, each qualifying student
loan of the student shall be included
in the student cohort for each of such
program of study for such award year.
(ii) Treatment of certain
consolidation loans.--A Federal Direct
Consolidation loan made under this
title shall not be considered a
qualifying student loan for a student
cohort for an award year if all of the
loans included in such consolidation
loan are attributable to another
student cohort.
(iii) Consolidation after inclusion
in a student cohort.--If a qualifying
student loan is consolidated into a
consolidation loan under this title
after such qualifying student loan has
been included in a student cohort, the
percentage of the consolidation loan
that was attributable to such student
cohort at the time of consolidation
shall remain attributable to the
student cohort for the life of the
consolidation loan.
(3) Calculation of reimbursement.--
(A) Reimbursement payment formula.--For each
student cohort of an institution of higher
education established under this subsection,
the annual reimbursement for such cohort shall
be equal to--
(i) the reimbursement percentage
determined for the cohort in accordance
with subparagraph (B); multiplied by
(ii) the non-repayment balance for
the cohort for the award year,
determined in accordance with
subparagraph (C).
(B) Reimbursement percentage.--The
reimbursement percentage of a student cohort of
an institution shall be determined by the
Secretary when the cohort is established, shall
remain constant for the life of the student
cohort, and shall be determined as follows:
(i) Completing student cohorts.--The
reimbursement percentage of a
completing student cohort shall be
equal to the percentage determined by--
(I) subtracting from one the
quotient of--
(aa) the median
value-added earnings of
students who completed
such program of study
in the most recent
award year for which
such earnings data is
available; divided by
(bb) the median total
price charged to
students included in
such cohort; and
(II) multiplying the
difference determined under
subclause (I) by 100.
(ii) Special circumstances for
completing student cohorts.--
(I) High-risk cohorts.--
Notwithstanding clause (i), if
the median value-added earnings
of a completing student cohort
under clause (i)(I)(aa) is
negative, the reimbursement
percentage of the student
cohort shall be 100 percent.
(II) Low-risk cohorts.--
Notwithstanding clause (i), if
the median value-added earnings
of a completing student cohort
under clause (i)(I)(aa) exceeds
the median total price of such
cohort under clause (i)(I)(bb),
the reimbursement percentage of
the student cohort shall be 0
percent.
(iii) Non-completing student
cohorts.--The reimbursement percentage
of a non-completing student cohort
shall be determined based on the most
recent data available in the award year
in which the cohort is established,
and--
(I) for an undergraduate non-
completing student cohort,
shall be equal to the
percentage of undergraduate
students who received Federal
financial assistance under this
title at such institution who--
(aa) did not complete
an undergraduate
program of study at the
institution within 150
percent of the program
length of such program;
or
(bb) only in the case
of a two-year
institution, did not,
within 6 years after
first enrolling at the
two-year institution,
complete a program of
study at a four-year
institution for which a
bachelor's degree (or
substantially similar
credential) is awarded;
and
(II) for a graduate non-
completing student cohort,
shall be equal to the
percentage of students who
received Federal financial
assistance under this title at
the institution for the
applicable graduate program of
study and who did not complete
such program of study within
150 percent of the program
length.
(C) Non-repayment loan balance.--
(i) In general.--For each award year,
the Secretary shall determine the non-
repayment loan balance for such award
year for each student cohort of an
institution of higher education by
calculating the sum of--
(I) for loans in such cohort,
the difference between the
total amount of payments due
from all borrowers on such
loans during such year and the
total amount of payments made
by all such borrowers on such
loans during such year; plus
(II) the total amount of
interest waived, paid, or
otherwise not charged by the
Secretary during such year
under an income-based repayment
plan described in section 493C
or an income-contingent
repayment plan described in
section 455(e); plus
(III) the total amount of
principal and interest
forgiven, cancelled, waived,
discharged, repaid, or
otherwise reduced by the
Secretary under any act during
such year that is not included
in subclause (II) and was not
discharged or forgiven under
section 437(a) or 428J.
(ii) Special circumstances.--For the
purpose of calculating the non-
repayment loan balance of student
cohorts under this paragraph, the
Secretary shall--
(I) for each qualifying
student loan in a student
cohort that is included in
another student cohort because
the student who borrowed such
loan completed two or more
programs of study during the
same award year, the sum of the
amounts described in subclauses
(I) through (III) of clause (i)
for such qualifying student
loan shall be divided equally
among each of the student
cohorts in which such loan is
included; and
(II) for each consolidation
loan in a student cohort--
(aa) determine the
percentage of the
outstanding principal
balance of the
consolidation loan
attributable to such
student cohort--
(AA) at the
time of that
loan was
included in
such cohort, in
the case of a
loan
consolidated
before
inclusion in
such cohort; or
(BB) at the
time of
consolidation,
in the case of
a loan
consolidated
after inclusion
in such cohort;
and
(bb) include in the
calculations under
clause (i) for such
student cohort only the
percentage of the sum
of the amounts
described in subclauses
(I) through (III) of
clause (i) for the
consolidation loan for
such year that is equal
to the percentage of
the consolidation loan
determined under item
(aa).
(D) Total price.--With respect to a student
who received Federal financial assistance under
this title and who completes a program of
study, the term ``total price'' means the total
amount, before Federal financial assistance
under this title was applied, a student was
required to pay to complete the program of
study. A student's total price shall be
calculated by the Secretary as the difference
between--
(i) the total amount of tuition and
fees (including the required costs
described in section
124(b)(3)(A)(i)(I)) that were charged
to such student before the application
of any Federal financial assistance
provided under this title; minus
(ii) the total amount of grants and
scholarships described in section
480(i) awarded to such student from
non-Federal sources for such program of
study.
(4) Notification and remittance.--Beginning with the
first award year for which reimbursements are required
under this subsection, and for each succeeding award
year, the Secretary shall--
(A) notify each institution of higher
education of the amounts and due dates of each
annual reimbursement calculated under paragraph
(3) for each student cohort of the institution
within 30 days of calculating such amounts; and
(B) require the institution to remit such
payments within 90 days of such notification.
(5) Penalty for late payments.--
(A) Three-month delinquency.--If an
institution fails to remit to the Secretary a
reimbursement for a student cohort as required
under this subsection within 90 days of
receiving notification from the Secretary in
accordance with paragraph (4), the institution
shall pay to the Secretary, in addition to such
reimbursement, interest on such reimbursement
payment, at a rate that is the average rate
applicable to the loans in such student cohort.
(B) Twelve-month delinquency.--If an
institution fails to remit to the Secretary a
reimbursement for a student cohort as required
under this subsection, plus interest owed in
under subparagraph (A), within 12 months of
receiving notification from the Secretary in
accordance with paragraph (4), the institution
shall be ineligible to make direct loans to any
student enrolled in the program of study for
which the institution has failed to make the
reimbursement payments until such payment is
made.
(C) Eighteen-month delinquency.--If an
institution fails to remit to the Secretary a
reimbursement for a student cohort as required
under this subsection, plus interest owed under
subparagraph (A), within 18 months of receiving
notification from the Secretary in accordance
with paragraph (4), the institution shall be
ineligible to make direct loans or award
Federal Pell Grants under section 401 to any
student enrolled in the institution until such
payment is made.
(D) Two-year delinquency.--If an institution
fails to remit to the Secretary a reimbursement
for a student cohort as required under this
subsection, plus interest owed under
subparagraph (A), within 2 years of receiving
notification from the Secretary in accordance
with paragraph (4), the institution shall be
ineligible to participate in any program under
this title for a period of not less than 10
years.
(6) Relief for voluntary cessation of federal direct
loans for a program of study.--The Secretary shall,
upon the request of an institution that voluntarily
ceases to make Federal direct loans to students
enrolled in a specific program of study, reduce the
amount of the annual reimbursement owed by the
institution for each student cohort associated with
such program by 50 percent if the institution assures
the Secretary that the institution will not make
Federal direct loans to any student enrolled in such
program of study (or any substantially similar program
of study) for a period of not less than 10 award years,
beginning with the first award year that begins after
the date on which the Secretary reduces such
reimbursement.
(7) Reservation of funds for promise grants.--
Notwithstanding any other provision of law, the
Secretary shall reserve the funds remitted to the
Secretary as reimbursements in accordance with this
subsection, and such funds shall be made available to
the Secretary only for the purpose of awarding PROMISE
grants in accordance with subpart 4 of part A of this
title.
SEC. 455. TERMS AND CONDITIONS OF LOANS.
(a) In General.--
(1) Parallel terms, conditions, benefits, and
amounts.--Unless otherwise specified in this part,
loans made to borrowers under this part shall have the
same terms, conditions, and benefits, and be available
in the same amounts, as loans made to borrowers, and
first disbursed on June 30, 2010, under sections 428,
428B, 428C, and 428H of this title.
(2) Designation of loans.--Loans made to borrowers
under this part that, except as otherwise specified in
this part, have the same terms, conditions, and
benefits as loans made to borrowers under--
(A) section 428 shall be known as ``Federal
Direct Stafford Loans'';
(B) section 428B shall be known as ``Federal
Direct PLUS Loans'';
(C) section 428C shall be known as ``Federal
Direct Consolidation Loans''; and
(D) section 428H shall be known as ``Federal
Direct Unsubsidized Stafford Loans''.
(3) Termination of authority to make interest
subsidized loans to graduate and professional
students.--
(A) In general.--Subject to subparagraph (B)
and notwithstanding any provision of this part
or part B, for any period of instruction
beginning on or after July 1, 2012--
(i) a graduate or professional
student shall not be eligible to
receive a Federal Direct Stafford loan
under this part; and
(ii) the maximum annual amount of
Federal Direct Unsubsidized Stafford
loans such a student may borrow in any
academic year (as defined in section
481(a)(2)) or its equivalent shall be
the maximum annual amount for such
student determined under section 428H,
plus an amount equal to the amount of
Federal Direct Stafford loans the
student would have received in the
absence of this subparagraph, except
that for any period of instruction
beginning on or after July 1, 2025,
such maximum annual amount shall be
determined in accordance with
subparagraph (C).
(B) Exception.--Subparagraph (A) shall not
apply to an individual enrolled in course work
specified in paragraph (3)(B) or (4)(B) of
section 484(b) for any period of instruction
through June 30, 2025.
(C) Annual limits.--Notwithstanding any
provision of this part or part B, for any
period of instruction beginning on or after
July 1, 2025, the maximum annual amount of
Federal Direct Unsubsidized Stafford loans that
a graduate or professional student may borrow
in any academic year (as defined in section
481(a)(2)) or its equivalent shall be median
cost of college (as defined in section 472A) of
the program of study in which the student is
enrolled, except that the sum of such annual
loan amount and other financial assistance (as
defined in section 480(i)) that the student
receives for such academic year may not exceed
the cost of attendance of such student.
(D) Aggregate limits.--Notwithstanding any
provision of this part or part B, for any
period of instruction beginning on or after
July 1, 2025, the maximum aggregate amount of
Federal Direct Unsubsidized Stafford loans
that--
(i) a graduate student may borrow
shall be $100,000; and
(ii) a professional student may
borrow shall be $150,000.
(E) Exception for certain students.--
(i) In general.--The provisions
listed in clause (ii) shall not apply
with respect to any individual who, as
of June 30, 2025, is enrolled in a
program of study at an institution of
higher education, and has received a
loan (or on whose behalf a loan was
made) under this part for such program,
during the individual's expected time
to completion of such program, as
determined by calculating by the
difference between--
(I) the program length for
the program of study in which
such individual is enrolled;
and
(II) the period of such
program that such individual
has completed,
except that such expected time to
completion may not exceed 3 years.
(ii) Provisions.--An individual
described in clause (i) shall not be
subject to subparagraphs (C) and (D) of
this paragraph, or paragraph (4) or
(6).
(4) Annual and aggregate loan limits for
undergraduate and all borrowers.--
(A) Undergraduate students.--
(i) Annual loan limits.--
(I) Subsidized loans.--
Notwithstanding any provision
of this part or part B, for any
period of instruction beginning
on or after July 1, 2025, the
maximum annual amount of
Federal Direct Stafford loans
that an undergraduate student
may borrow in any academic year
(as defined in section
481(a)(2)) or its equivalent
shall be the difference
between--
(aa) the median cost
of college (as defined
in section 472A) of the
program of study in
which the student is
enrolled; and
(bb) the Federal Pell
Grant under section 401
awarded to the student
for such academic year,
except that (1) the amount of
such Federal Direct Stafford
loans awarded to the student
for such academic year may not
exceed the maximum annual limit
described in section 428(b)(1)
that is applicable to such
student; and (2) the sum of
such Federal Direct Stafford
Loans and the amount of such
Federal Pell Grant and other
financial assistance (as
defined in section 480(i)) that
the student receives for such
academic year may not exceed
the cost of attendance of such
student.
(II) Unsubsidized loans.--
Notwithstanding any provision
of this part or part B, for any
period of instruction beginning
on or after July 1, 2025, the
maximum annual amount of
Federal Direct Unsubsidized
Stafford loans that an
undergraduate student may
borrow in any academic year (as
defined in section 481(a)(2))
or its equivalent shall be the
difference between--
(aa) the median cost
of college (as defined
in section 472A) of the
program of study in
which the student is
enrolled; and
(bb) the sum of--
(AA) the
amount of
Federal Direct
Stafford loans
awarded to such
student for
such academic
year; and
(BB) the
amount of the
Federal Pell
Grant under
section 401
awarded to the
student for
such academic
year,
except that the sum of
all Federal financial
aid under this title
and other financial
assistance (as defined
in section 480(i)) that
such student receives
for such academic year
may not exceed the cost
of attendance for such
student.
(ii) Aggregate limits.--
Notwithstanding any provision of this
part or part B, for any period of
instruction beginning on or after July
1, 2025, with respect to an
undergraduate student--
(I) the maximum aggregate
amount of Federal Direct
Stafford loans and Federal
Direct Unsubsidized Stafford
loans that may be borrowed
shall be $50,000;
(II) the maximum aggregate
amount of Federal Direct
Stafford loans that may be
borrowed shall be $23,000; and
(III) the maximum aggregate
amount of Federal Direct
Unsubsidized Stafford loans
that may be borrowed shall be
$50,000.
(B) Students in a qualifying undergraduate
program.--
(i) Aggregate limits.--
Notwithstanding the aggregate limits
described in subparagraph (A)(ii), a
student enrolled in a qualifying
undergraduate program shall be subject
to the aggregate limits for
professional students described in
paragraph (3)(D)(ii).
(ii) Qualifying undergraduate program
defined.--For purposes of this
subparagraph, the term ``qualifying
undergraduate program'' means a program
of study--
(I) for which the total
tuition and fees (including the
required costs described in
section 124(b)(3)(A)(i)(I))
exceeds the aggregate limits
for undergraduate students
described in subparagraph
(A)(ii);
(II) that meets certification
requirements of the Federal
agency that directly regulates
the program and provides final
licensing and credentials to
students upon completion; and
(III) the institution of
higher education offering such
program of study notifies the
Secretary that the program
desires to be a qualifying
undergraduate program.
(C) All students.--The maximum aggregate
amount of loans made, insured, or guaranteed
under this title to a student shall be
$200,000.
(5) Institutionally determined limits.--
(A) In general.--Notwithstanding any other
provision of this subsection, an eligible
institution (at the discretion of a financial
aid administrator at the institution) may
prorate or limit the amount of a loan any
student who is enrolled in a program of study
for a period of instruction beginning on or
after July 1, 2024, at that institution, may
borrow under this part for an academic year--
(i) if the institution can reasonably
demonstrate that outstanding amounts
owed of loans made under this title are
or would be excessive for students who
complete such program, based on the
most recently available data from the
College Scorecard (or successor website
of the Department) on--
(I) the median of the value-
added earnings of students who
complete such program; and
(II) the median debt owed,
and the repayment rate, on
loans made under this part, of
such students;
(ii) in a case in which the student
is enrolled on a less than full-time
basis or the student is enrolled for
less than the period of enrollment to
which the annual loan limit applies
under this subsection, based on the
student's enrollment status; or
(iii) based on the year of the
program for which the student is
seeking such loan.
(B) Application to all students.--Any
proration or limiting of loan amounts under
subparagraph (A) shall be applied in the same
manner to all students enrolled in a program of
study.
(C) Increases for individual students.--Upon
the request of a student whose loan amount for
an academic year has been prorated or limited
under subparagraph (A), an eligible institution
(at the discretion of the financial aid
administrator at the institution) may increase
such loan amount to an amount not exceeding the
annual loan amount applicable to such student
under this paragraph for such academic year.
(6) Termination of authority to make federal direct
plus loans.--Notwithstanding any provision of this part
or part B, except as provided in paragraph (3)(E), for
any period of instruction beginning on or after July 1,
2025, no Federal Direct PLUS loans may be made to any
parent borrower or graduate or professional student
borrower.
(b) Interest Rate.--
(1) Rates for fdsl and fdusl.--For Federal Direct
Stafford Loans and Federal Direct Unsubsidized Stafford
Loans for which the first disbursement is made on or
after July 1, 1994, the applicable rate of interest
shall, 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) the bond equivalent rate of 91-day
Treasury bills auctioned at the final auction
held prior to such June 1; plus
(B) 3.1 percent,
except that such rate shall not exceed 8.25 percent.
(2) In school and grace period rules.--(A)
Notwithstanding the provisions of paragraph (1), but
subject to paragraph (3), with respect to any Federal
Direct Stafford Loan or Federal Direct Unsubsidized
Stafford Loan for which the first disbursement is made
on or after July 1, 1995, the applicable rate of
interest for interest which accrues--
(i) prior to the beginning of the repayment
period of the loan; or
(ii) during the period in which principal
need not be paid (whether or not such principal
is in fact paid) by reason of a provision
described in section 428(b)(1)(M) or
427(a)(2)(C),
shall not exceed the rate determined under subparagraph
(B).
(B) For the purpose of subparagraph (A), the rate
determined under this subparagraph shall, 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--
(i) the bond equivalent rate of 91-day
Treasury bills auctioned at the final auction
prior to such June 1; plus
(ii) 2.5 percent,
except that such rate shall not exceed 8.25 percent.
(3) Out-year rule.--Notwithstanding paragraphs (1)
and (2), for Federal Direct Stafford Loans and Federal
Direct Unsubsidized Stafford Loans made on or after
July 1, 1998, the applicable rate of interest shall,
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) the bond equivalent rate of the security
with a comparable maturity as established by
the Secretary; plus
(B) 1.0 percent,
except that such rate shall not exceed 8.25 percent.
(4) Rates for fdplus.--
(A)(i) For Federal Direct PLUS Loans for
which the first disbursement is made on or
after July 1, 1994, the applicable rate of
interest shall, during any 12-month period
beginning on July 1 and ending on or before
June 30, 2001, be determined on the preceding
June 1 and be equal to--
(I) the bond equivalent rate of 52-
week Treasury bills auctioned at final
auction held prior to such June 1; plus
(II) 3.1 percent,
except that such rate shall not exceed 9
percent.
(ii) For any 12-month period beginning on
July 1 of 2001 or any succeeding year, the
applicable rate of interest determined under
this subparagraph shall be determined on the
preceding June 26 and be equal to--
(I) the weekly average 1-year
constant maturity Treasury yield, as
published by the Board of Governors of
the Federal Reserve System, for the
last calendar week ending on or before
such June 26; plus
(II) 3.1 percent,
except that such rate shall not exceed 9
percent.
(B) For Federal Direct PLUS loans made on or after
July 1, 1998, the applicable rate of interest shall,
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--
(i) the bond equivalent rate of the security
with a comparable maturity as established by
the Secretary; plus
(ii) 2.1 percent,
except that such rate shall not exceed 9 percent.
(5) Temporary interest rate provision.--
(A) Rates for fdsl and fdusl.--
Notwithstanding the preceding paragraphs of
this subsection, for Federal Direct Stafford
Loans and Federal Direct Unsubsidized Stafford
Loans for which the first disbursement is made
on or after July 1, 1998, and before October 1,
1998, the applicable rate of interest shall,
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--
(i) the bond equivalent rate of 91-
day Treasury bills auctioned at the
final auction held prior to such June
1; plus
(ii) 2.3 percent,
except that such rate shall not exceed 8.25
percent.
(B) In school and grace period rules.--
Notwithstanding the preceding paragraphs of
this subsection, with respect to any Federal
Direct Stafford Loan or Federal Direct
Unsubsidized Stafford Loan for which the first
disbursement is made on or after July 1, 1998,
and before October 1, 1998, the applicable rate
of interest for interest which accrues--
(i) prior to the beginning of the
repayment period of the loan; or
(ii) during the period in which
principal need not be paid (whether or
not such principal is in fact paid) by
reason of a provision described in
section 428(b)(1)(M) or 427(a)(2)(C),
shall be determined under subparagraph (A) by
substituting ``1.7 percent'' for ``2.3
percent''.
(C) PLUS loans.--Notwithstanding the
preceding paragraphs of this subsection, with
respect to Federal Direct PLUS Loan for which
the first disbursement is made on or after July
1, 1998, and before October 1, 1998, the
applicable rate of interest shall be determined
under subparagraph (A)--
(i) by substituting ``3.1 percent''
for ``2.3 percent''; and
(ii) by substituting ``9.0 percent''
for ``8.25 percent''.
(6) Interest rate provision for new loans on or after
october 1, 1998, and before july 1, 2006.--
(A) Rates for fdsl and fdusl.--
Notwithstanding the preceding paragraphs of
this subsection, for Federal Direct Stafford
Loans and Federal Direct Unsubsidized Stafford
Loans for which the first disbursement is made
on or after October 1, 1998, and before July 1,
2006, the applicable rate of interest shall,
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--
(i) the bond equivalent rate of 91-
day Treasury bills auctioned at the
final auction held prior to such June
1; plus
(ii) 2.3 percent,
except that such rate shall not exceed 8.25
percent.
(B) In school and grace period rules.--
Notwithstanding the preceding paragraphs of
this subsection, with respect to any Federal
Direct Stafford Loan or Federal Direct
Unsubsidized Stafford Loan for which the first
disbursement is made on or after October 1,
1998, and before July 1, 2006, the applicable
rate of interest for interest which accrues--
(i) prior to the beginning of the
repayment period of the loan; or
(ii) during the period in which
principal need not be paid (whether or
not such principal is in fact paid) by
reason of a provision described in
section 428(b)(1)(M) or 427(a)(2)(C),
shall be determined under subparagraph (A) by
substituting ``1.7 percent'' for ``2.3
percent''.
(C) PLUS loans.--Notwithstanding the
preceding paragraphs of this subsection, with
respect to Federal Direct PLUS Loan for which
the first disbursement is made on or after
October 1, 1998, and before July 1, 2006, the
applicable rate of interest shall be determined
under subparagraph (A)--
(i) by substituting ``3.1 percent''
for ``2.3 percent''; and
(ii) by substituting ``9.0 percent''
for ``8.25 percent''.
(D) Consolidation loans.--Notwithstanding the
preceding paragraphs of this subsection, any
Federal Direct Consolidation loan for which the
application is received on or after February 1,
1999, and before July 1, 2006, shall bear
interest at an annual rate on the unpaid
principal balance of the loan that is equal to
the lesser of--
(i) the weighted average of the
interest rates on the loans
consolidated, rounded to the nearest
higher one-eighth of one percent; or
(ii) 8.25 percent.
(E) Temporary rules for consolidation
loans.--Notwithstanding the preceding
paragraphs of this subsection, any Federal
Direct Consolidation loan for which the
application is received on or after October 1,
1998, and before February 1, 1999, shall bear
interest at an annual rate on the unpaid
principal balance of the loan that is equal
to--
(i) the bond equivalent rate of 91-
day Treasury bills auctioned at the
final auction held prior to such June
1; plus
(ii) 2.3 percent,
except that such rate shall not exceed 8.25
percent.
(7) Interest rate provision for new loans on or after
july 1, 2006 and before july 1, 2013.--
(A) Rates for fdsl and fdusl.--
Notwithstanding the preceding paragraphs of
this subsection, for Federal Direct Stafford
Loans and Federal Direct Unsubsidized Stafford
Loans for which the first disbursement is made
on or after July 1, 2006, and before July 1,
2013, the applicable rate of interest shall be
6.8 percent on the unpaid principal balance of
the loan.
(B) PLUS loans.--Notwithstanding the
preceding paragraphs of this subsection, with
respect to any Federal Direct PLUS loan for
which the first disbursement is made on or
after July 1, 2006, and before July 1, 2013,
the applicable rate of interest shall be 7.9
percent on the unpaid principal balance of the
loan.
(C) Consolidation loans.--Notwithstanding the
preceding paragraphs of this subsection, any
Federal Direct Consolidation loan for which the
application is received on or after July 1,
2006, and before July 1, 2013, shall bear
interest at an annual rate on the unpaid
principal balance of the loan that is equal to
the lesser of--
(i) the weighted average of the
interest rates on the loans
consolidated, rounded to the nearest
higher one-eighth of one percent; or
(ii) 8.25 percent.
(D) Reduced rates for undergraduate fdsl.--
Notwithstanding the preceding paragraphs of
this subsection and subparagraph (A) of this
paragraph, for Federal Direct Stafford Loans
made to undergraduate students for which the
first disbursement is made on or after July 1,
2006, and before July 1, 2013, the applicable
rate of interest shall be as follows:
(i) For a loan for which the first
disbursement is made on or after July
1, 2006, and before July 1, 2008, 6.8
percent on the unpaid principal balance
of the loan.
(ii) For a loan for which the first
disbursement is made on or after July
1, 2008, and before July 1, 2009, 6.0
percent on the unpaid principal balance
of the loan.
(iii) For a loan for which the first
disbursement is made on or after July
1, 2009, and before July 1, 2010, 5.6
percent on the unpaid principal balance
of the loan.
(iv) For a loan for which the first
disbursement is made on or after July
1, 2010, and before July 1, 2011, 4.5
percent on the unpaid principal balance
of the loan.
(v) For a loan for which the first
disbursement is made on or after July
1, 2011, and before July 1, 2013, 3.4
percent on the unpaid principal balance
of the loan.
(8) Interest rate provisions for new loans on or
after july 1, 2013.--
(A) Rates for undergraduate fdsl and fdusl.--
Notwithstanding the preceding paragraphs of
this subsection, for Federal Direct Stafford
Loans and Federal Direct Unsubsidized Stafford
Loans issued to undergraduate students, for
which the first disbursement is made on or
after July 1, 2013, the applicable rate of
interest 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 the lesser of--
(i) 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 2.05 percent; or
(ii) 8.25 percent.
(B) Rates for graduate and professional
fdusl.--Notwithstanding the preceding
paragraphs of this subsection, for Federal
Direct Unsubsidized Stafford Loans issued to
graduate or professional students, for which
the first disbursement is made on or after July
1, 2013, the applicable rate of interest 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 the lesser of--
(i) 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 3.6 percent; or
(ii) 9.5 percent.
(C) PLUS loans.--Notwithstanding the
preceding paragraphs of this subsection, for
Federal Direct PLUS Loans, for which the first
disbursement is made on or after July 1, 2013,
the applicable rate of interest 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 the lesser of--
(i) 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 4.6 percent; or
(ii) 10.5 percent.
(D) Consolidation loans.--Notwithstanding the
preceding paragraphs of this subsection, any
Federal Direct Consolidation Loan for which the
application is received on or after July 1,
2013, shall bear interest at an annual rate on
the unpaid principal balance of the loan that
is equal to the weighted average of the
interest rates on the loans consolidated,
rounded to the nearest higher one-eighth of one
percent.
(E) Consultation.--The Secretary shall
determine the applicable rate of interest under
this paragraph after consultation with the
Secretary of the Treasury and shall publish
such rate in the Federal Register as soon as
practicable after the date of determination.
(F) Rate.--The applicable rate of interest
determined under this paragraph for a Federal
Direct Stafford Loan, a Federal Direct
Unsubsidized Stafford Loan, or a Federal Direct
PLUS Loan shall be fixed for the period of the
loan.
(9) Repayment incentives.--
(A)(A) Incentives for loans disbursed before
july 1, 2012.--Notwithstanding any other
provision of this part with respect to loans
for which the first disbursement of principal
is made before July 1, 2012,, the Secretary is
authorized to prescribe by regulation such
reductions in the interest or origination fee
rate paid by a borrower of a loan made under
this part as the Secretary determines
appropriate to encourage on-time repayment of
the loan. Such reductions may be offered only
if the Secretary determines the reductions are
cost neutral and in the best financial interest
of the Federal Government. Any increase in
subsidy costs resulting from such reductions
shall be completely offset by corresponding
savings in funds available for the William D.
Ford Federal Direct Loan Program in that fiscal
year from section 458 and other administrative
accounts.
(B) Accountability.--Prior to publishing
regulations proposing repayment incentives with
respect to loans for which the first
disbursement of principal is made before July
1, 2012, the Secretary shall ensure the cost
neutrality of such reductions. The Secretary
shall not prescribe such regulations in final
form unless an official report from the
Director of the Office of Management and Budget
to the Secretary and a comparable report from
the Director of the Congressional Budget Office
to the Congress each certify that any such
reductions will be completely cost neutral.
Such reports shall be transmitted to the
authorizing committees not less than 60 days
prior to the publication of regulations
proposing such reductions.
(C) No repayment incentives for new loans
disbursed on or after july 1, 2012.--
Notwithstanding any other provision of this
part, the Secretary is prohibited from
authorizing or providing any repayment
incentive not otherwise authorized under this
part to encourage on-time repayment of a loan
under this part for which the first
disbursement of principal is made on or after
July 1, 2012, including any reduction in the
interest or origination fee rate paid by a
borrower of such a loan, except that the
Secretary may provide for an interest rate
reduction for a borrower who agrees to have
payments on such a loan automatically
electronically debited from a bank account.
(10) Publication.--The Secretary shall determine the
applicable rates of interest under this subsection
after consultation with the Secretary of the Treasury
and shall publish such rate in the Federal Register as
soon as practicable after the date of determination.
[(c) Loan Fee.--
[(1) In general.--The Secretary shall charge the
borrower of a loan made under this part an origination
fee of 4.0 percent of the principal amount of loan.
[(2) Subsequent reduction.--Paragraph (1) shall be
applied to loans made under this part, other than
Federal Direct Consolidation loans and Federal Direct
PLUS loans--
[(A) by substituting ``3.0 percent'' for
``4.0 percent'' with respect to loans for which
the first disbursement of principal is made on
or after the date of enactment of the Higher
Education Reconciliation Act of 2005, and
before July 1, 2007;
[(B) by substituting ``2.5 percent'' for
``4.0 percent'' with respect to loans for which
the first disbursement of principal is made on
or after July 1, 2007, and before July 1, 2008;
[(C) by substituting ``2.0 percent'' for
``4.0 percent'' with respect to loans for which
the first disbursement of principal is made on
or after July 1, 2008, and before July 1, 2009;
[(D) by substituting ``1.5 percent'' for
``4.0 percent'' with respect to loans for which
the first disbursement of principal is made on
or after July 1, 2009, and before July 1, 2010;
and
[(E) by substituting ``1.0 percent'' for
``4.0 percent'' with respect to loans for which
the first disbursement of principal is made on
or after July 1, 2010.]
(d) Repayment Plans.--
(1) Design and selection.--Consistent with criteria
established by the Secretary, the Secretary shall offer
a borrower of a loan made under this part a variety of
plans for repayment of such loan, including principal
and interest on the loan. The borrower shall be
entitled to accelerate, without penalty, repayment on
the borrower's loans under this part. The borrower may
choose--
(A) a standard repayment plan, consistent
with subsection (a)(1) of this section and with
section 428(b)(9)(A)(i);
(B) a graduated repayment plan, consistent
with section 428(b)(9)(A)(ii);
(C) an extended repayment plan, consistent
with section 428(b)(9)(A)(iv), except that the
borrower shall annually repay a minimum amount
determined by the Secretary in accordance with
section 428(b)(1)(L);
(D) an income contingent repayment plan
(including a repayment assistance plan under
section 455(e)(9)), with varying annual
repayment amounts based on the income of the
borrower, paid over an extended period of time
prescribed by the Secretary, not to exceed 25
years, except that the plan described in this
subparagraph shall not be available to the
borrower of a Federal Direct PLUS loan made on
behalf of a dependent student; and
(E) beginning on July 1, 2009, an income-
based repayment plan that enables borrowers who
have a partial financial hardship to make a
lower monthly payment in accordance with
section 493C, except that the plan described in
this subparagraph shall not be available to the
borrower of a Federal Direct PLUS Loan made on
behalf of a dependent student or a Federal
Direct Consolidation Loan, if the proceeds of
such loan were used to discharge the liability
on such Federal Direct PLUS Loan or a loan
under section 428B made on behalf of a
dependent student.
(2) Selection by secretary.--If a borrower of a loan
made under this part does not select a repayment plan
described in paragraph (1), the Secretary may provide
the borrower with a repayment plan described in
subparagraph (A), (B), or (C) of paragraph (1).
(3) Changes in selections.--The borrower of a loan
made under this part may change the borrower's
selection of a repayment plan under paragraph (1), or
the Secretary's selection of a plan for the borrower
under paragraph (2), as the case may be, under such
terms and conditions as may be established by the
Secretary.
(4) Alternative repayment plans.--The Secretary may
provide, on a case by case basis, an alternative
repayment plan to a borrower of a loan made under this
part who demonstrates to the satisfaction of the
Secretary that the terms and conditions of the
repayment plans available under paragraph (1) are not
adequate to accommodate the borrower's exceptional
circumstances. In designing such alternative repayment
plans, the Secretary shall ensure that such plans do
not exceed the cost to the Federal Government, as
determined on the basis of the present value of future
payments by such borrowers, of loans made using the
plans available under paragraph (1).
(5) Repayment after default.--The Secretary may
require any borrower who has defaulted on a loan made
under this part to--
(A) pay all reasonable collection costs
associated with such loan; and
(B) repay the loan pursuant to an income
contingent repayment plan.
(6) Repayment plans for loans made on or after july
1, 2024.--
(A) Design and selection.--Notwithstanding
paragraph (1), beginning on July 1, 2024, the
Secretary shall offer a borrower of a loan made
under this part on or after July 1, 2024, two
plans for repayment of such loan, including
principal and interest on the loan. The
borrower shall be entitled to accelerate,
without penalty, repayment on such loans. The
borrower may choose--
(i) a standard repayment plan with a
fixed monthly repayment amount paid
over a fixed period of time, not to
exceed 10 years; or
(ii) a repayment assistance plan
under section 455(e)(9).
(B) Selection by secretary.--If such borrower
does not select a repayment plan described in
subparagraph (A), the Secretary shall provide
the borrower with the repayment plan described
in subparagraph (A)(i).
(C) Changes in selection.--
(i) In general.--Subject to clause
(ii), a borrower may change the
borrower's selection of a repayment
plan under subparagraph (A), or the
Secretary's selection of a plan for the
borrower under subparagraph (B), as the
case may be. Nothing in this subsection
shall prohibit the Secretary from
encouraging distressed borrowers from
enrolling in the repayment assistance
plan under section 455(e)(9).
(ii) Same repayment plan required.--
All loans made under this part on or
after July 1, 2024, to a borrower shall
be repaid under the same repayment plan
under subparagraph (A), except that the
borrower may repay an excepted PLUS
loan or an excepted consolidation loan
(as such terms are defined in section
455(e)(9)) separately from other loans
made under this part to the borrower.
(D) Repayment after default.--The Secretary
may require a borrower who has defaulted on a
loan made under this part to--
(i) pay all reasonable collection
costs associated with such loan; and
(ii) repay the loan pursuant to the
repayment assistance plan under section
455(e)(9).
(E) Prohibitions.--The Secretary may not--
(i) authorize a borrower of a loan
made under this part on or after July
1, 2024, to repay such loan pursuant to
a repayment plan that is not described
in clause (i) or (ii) of subparagraph
(A); or
(ii) carry out or modify a repayment
plan for any loan made under this part
on or after July 1, 2024, that is not
described in such clause (i) or (ii).
(e) Income Contingent Repayment.--
(1) Information and procedures.--The Secretary may
obtain such information as is reasonably necessary
regarding the income of a borrower (and the borrower's
spouse, if applicable) of a loan made under this part
that is, or may be, repaid pursuant to income
contingent repayment, for the purpose of determining
the annual repayment obligation of the borrower.
Returns and return information (as defined in section
6103 of the Internal Revenue Code of 1986) may be
obtained under the preceding sentence only to the
extent authorized by section 6103(l)(13) of such Code.
The Secretary shall establish procedures for
determining the borrower's repayment obligation on that
loan for such year, and such other procedures as are
necessary to implement effectively income contingent
repayment.
(2) Repayment based on adjusted gross income.--A
repayment schedule for a loan made under this part and
repaid pursuant to income contingent repayment shall be
based on the adjusted gross income (as defined in
section 62 of the Internal Revenue Code of 1986) of the
borrower or, if the borrower is married and files a
Federal income tax return jointly with the borrower's
spouse, on the adjusted gross income of the borrower
and the borrower's spouse.
(3) Additional documents.--A borrower who chooses, or
is required, to repay a loan made under this part
pursuant to income contingent repayment, and for whom
adjusted gross income is unavailable or does not
reasonably reflect the borrower's current income, shall
provide to the Secretary other documentation of income
satisfactory to the Secretary, which documentation the
Secretary may use to determine an appropriate repayment
schedule.
(4) Repayment schedules.--Income contingent repayment
schedules shall be established by regulations
promulgated by the Secretary and shall require payments
that vary in relation to the appropriate portion of the
annual income of the borrower (and the borrower's
spouse, if applicable) as determined by the Secretary.
(5) Calculation of balance due.--The balance due on a
loan made under this part that is repaid pursuant to
income contingent repayment shall equal the unpaid
principal amount of the loan, any accrued interest, and
any fees, such as late charges, assessed on such loan.
[The Secretary may promulgate regulations limiting the
amount of interest that may be capitalized on such
loan, and the timing of any such capitalization.] No
interest may be capitalized on such loan on or after
the date of the enactment of the College Cost Reduction
Act, and the Secretary shall promulgate regulations
with respect to the treatment of accrued interest that
is not capitalized
(6) Notification to borrowers.--The Secretary shall
establish procedures under which a borrower of a loan
made under this part who chooses or is required to
repay such loan pursuant to income contingent repayment
is notified of the terms and conditions of such plan,
considers that special circumstances, such as a loss of
employment by the borrower or the borrower's spouse,
warrant an adjustment in the borrower's loan repayment,
the borrower may contact the Secretary, who shall
determine whether such adjustment is appropriate, in
accordance with criteria established by the Secretary.
(7) Maximum repayment period.--In calculating the
extended period of time for which an income contingent
repayment plan under this subsection may be in effect
for a borrower, the Secretary shall include all time
periods during which a borrower of loans under part B,
part D, or part E--
(A) is not in default on any loan that is
included in the income contingent repayment
plan; and
(B)(i) is in deferment due to an economic
hardship described in section 435(o);
(ii) makes monthly payments under paragraph
(1) or (6) of section 493C(b);
(iii) makes monthly payments of not less than
the monthly amount calculated under section
428(b)(9)(A)(i) or subsection (d)(1)(A), based
on a 10-year repayment period, when the
borrower first made the election described in
section 493C(b)(1);
(iv) makes payments of not less than the
payments required under a standard repayment
plan under section 428(b)(9)(A)(i) or
subsection (d)(1)(A) with a repayment period of
10 years; or
(v) makes payments under an income contingent
repayment plan under subsection (d)(1)(D).
(8) Automatic recertification.--
(A) In general.--The Secretary shall
establish and implement, with respect to any
borrower described in subparagraph (B),
procedures to--
(i) use return information disclosed
under section 6103(l)(13) of the
Internal Revenue Code of 1986, pursuant
to approval provided under section 494,
to determine the repayment obligation
of the borrower without further action
by the borrower;
(ii) allow the borrower (or the
spouse of the borrower), at any time,
to opt out of disclosure under such
section 6103(l)(13) and instead provide
such information as the Secretary may
require to determine the repayment
obligation of the borrower (or withdraw
from the repayment plan under this
subsection); and
(iii) provide the borrower with an
opportunity to update the return
information so disclosed before the
determination of the repayment
obligation of the borrower.
(B) Applicability.--Subparagraph (A) shall
apply to each borrower of a loan made under
this part who, on or after the date on which
the Secretary establishes procedures under such
subparagraph--
(i) selects, or is required to repay
such loan pursuant to, an income-
contingent repayment plan; or
(ii) recertifies income or family
size under such plan.
(9) Repayment assistance plan.--
(A) In general.--Notwithstanding any other
provision of this Act, beginning on July 1,
2024, the Secretary shall carry out a repayment
assistance program that shall have the terms
and conditions of an income-contingent
repayment plan described in paragraphs (1)
through (8), except that--
(i) a borrower of any loan made under
this part (other than an excepted PLUS
loan or excepted consolidation loan),
may elect to have the borrower's
aggregate monthly payment for all such
loans not exceed the applicable monthly
payment for the borrower, except that a
borrower may not be precluded from
repaying an amount that exceeds such
applicable monthly payment for any
month;
(ii) the Secretary shall apply the
borrower's monthly payment under this
paragraph first toward interest due on
such a loan, next toward any fees due
on the loan, and then toward the
principal of the loan;
(iii) any principal due and not paid
under clause (ii) shall be deferred;
(iv) the amount of time the borrower
makes monthly payments under clause (i)
may exceed 10 years;
(v) notwithstanding paragraph (7),
the Secretary shall repay or cancel any
outstanding balance of principal and
interest due on all loans made under
this part (other than excepted PLUS
loans or excepted consolidation loans)
to a borrower--
(I) who, at any time, elected
to participate in a repayment
assistance plan under clause
(i);
(II) whose final monthly
payment for such loans prior to
the loan cancellation under
this clause was made under such
repayment assistance plan; and
(III) who has repaid on such
loans (pursuant to a repayment
assistance plan under clause
(i), a standard repayment plan
under subsection (d)(6)(A)(i),
or a combination of any such
plan or any of the repayment
plans listed in clause (ii),
(iii), (iv), or (v) of
paragraph (7)(B), or, in the
case of a consolidation loan,
pursuant to a repayment
schedule described item
(aa)(BB) of this subclause) an
amount that is equal to--
(aa)(AA) the total
amount of principal and
interest that the
borrower would have
repaid under a standard
repayment plan under
paragraph (1)(A) or
(6)(A)(i) of subsection
(d), based on a 10-year
repayment period, when
the borrower entered
repayment on such
loans; or
(BB) in the case of a
Federal Direct
Consolidation Loan, the
total amount of
principal and interest
that the borrower would
have repaid under the
repayment schedule
established for the
loan under section
428C(c)(2) on the date
on which such loan was
made; plus
(bb) an amount equal
to the amount of any
unpaid interest that
has accrued, but was
not included in the
calculation of the
total amount of
principal and interest
that would have been
repaid under the
standard repayment plan
or schedule described
in item (aa)--
(AA) during
any deferment
period
described in
clause (i) or
(ii) of
subsection
(f)(2)(A); or
(BB) during
any forbearance
period while
serving in a
medical or
dental
internship or
residency
program as
described in
section
428(c)(3)(A)(i)(
I); and
(vi) a borrower who is repaying a
loan pursuant to a repayment assistance
plan under clause (i) may elect, at any
time, to terminate repayment pursuant
to such plan and repay such loan under
the standard repayment plan under
subsection (d)(6)(A)(i).
(B) Repayment assistance for distressed
borrowers.--
(i) Interest subsidy.--For each month
for which a borrower's aggregate
monthly payment under this paragraph is
insufficient to pay the total amount of
interest that accrues on a loan for the
month, the amount of interest accrued
and not paid for the month shall be
subtracted from the total amount of
interest due on such loan for the
month.
(ii) Principal subsidy.--For each
month for which a borrower's aggregate
monthly payment under this paragraph
repays an amount due on an individual
loan that is less than twice the total
amount of interest that accrues on such
loan for the month, the amount of the
total principal due on such loan shall
be reduced by an amount equal to half
of the monthly payment under this
paragraph on such loan for the month.
(C) Definitions.--In this paragraph:
(i) Adjusted gross income.--The term
``adjusted gross income'' has the
meaning given the term in section 62 of
the Internal Revenue Code of 1986.
(ii) Applicable monthly payment.--The
term ``applicable monthly payment''
means, when used with respect to a
borrower, the amount obtained by
dividing by 12, 10 percent of the
result obtained by calculating, on at
least an annual basis, the amount by
which--
(I) the adjusted gross income
of the borrower or, if the
borrower is married and files a
Federal income tax return
jointly with or separately from
the borrower's spouse, the
adjusted gross income of the
borrower and the borrower's
spouse; exceeds
(II) 150 percent of the
poverty line applicable to the
borrower's family size as
determined under section 673(2)
of the Community Services Block
Grant Act (42 U.S.C. 9902(2)).
(iii) Excepted consolidation loan.--
The term ``excepted Consolidation
Loan'' means a Federal Direct
Consolidation Loan, if the proceeds of
such loan were used to the discharge
the liability on--
(I) an excepted PLUS loan; or
(II) a Federal Direct
Consolidation loan, if the
proceeds of such loan were used
to discharge the liability on
an excepted PLUS loan.
(iv) Excepted plus loan.--The term
``excepted PLUS Loan'' has the meaning
given the term in section 493C.
(f) Deferment.--
(1) Effect on principal and interest.--A borrower of
a loan made under this part who meets the requirements
described in paragraph (2) shall be eligible for a
deferment, during which periodic installments of
principal need not be paid, and interest--
(A) shall not accrue, in the case of a--
(i) Federal Direct Stafford Loan; or
(ii) a Federal Direct Consolidation
Loan that consolidated only Federal
Direct Stafford Loans, or a combination
of such loans and Federal Stafford
Loans for which the student borrower
received an interest subsidy under
section 428; or
(B) shall accrue and be [capitalized or] paid
by the borrower, in the case of a Federal
Direct PLUS Loan, a Federal Direct Unsubsidized
Stafford Loan, or a Federal Direct
Consolidation Loan not described in
subparagraph (A)(ii).
(2) Eligibility.--A borrower of a loan made under
this part shall be eligible for a deferment during any
period--
(A) during which the borrower--
(i) is carrying at least one-half the
normal full-time work load for the
course of study that the borrower is
pursuing, as determined by the eligible
institution (as such term is defined in
section 435(a)) the borrower is
attending; or
(ii) is pursuing a course of study
pursuant to a graduate fellowship
program approved by the Secretary, or
pursuant to a rehabilitation training
program for individuals with
disabilities approved by the Secretary,
except that no borrower shall be eligible for a
deferment under this subparagraph, or a loan
made under this part (other than a Federal
Direct PLUS Loan or a Federal Direct
Consolidation Loan), while serving in a medical
internship or residency program;
(B) not in excess of 3 years during which the
borrower is seeking and unable to find full-
time employment;
(C) during which the borrower--
(i) is serving on active duty during
a war or other military operation or
national emergency; or
(ii) is performing qualifying
National Guard duty during a war or
other military operation or national
emergency,
and for the 180-day period following the
demobilization date for the service described
in clause (i) or (ii); or
(D) not in excess of 3 years during which the
Secretary determines, in accordance with
regulations prescribed under section 435(o),
that the borrower has experienced or will
experience an economic hardship.
(3) Deferment for borrowers receiving cancer
treatment.--
(A) Effect on principal and interest.--A
borrower of a loan made under this part who
meets the requirements of subparagraph (B)
shall be eligible for a deferment, during which
periodic installments of principal need not be
paid, and interest shall not accrue.
(B) Eligibility.--A borrower of a loan made
under this part shall be eligible for a
deferment during--
(i) any period in which such borrower
is receiving treatment for cancer; and
(ii) the 6 months after such period.
(C) Applicability.--This paragraph shall
apply with respect to loans--
(i) made on or after the date of the
enactment of this paragraph; or
(ii) in repayment on the date of the
enactment of this paragraph.
(4) Deferment for dislocated military spouses.--
(A) Duration and effect on principal and
interest.--A borrower of a loan made under this
part who meets the requirements of subparagraph
(B) shall be eligible for a deferment for an
aggregate period of 180 days, during which
periodic installments of principal need not be
paid, and interest--
(i) shall not accrue, in the case of
a--
(I) Federal Direct Stafford
Loan; or
(II) a Federal Direct
Consolidation Loan that
consolidated only Federal
Direct Stafford Loans, or a
combination of such loans and
Federal Stafford Loans for
which the student borrower
received an interest subsidy
under section 428; or
(ii) shall accrue and be capitalized
or paid by the borrower, in the case of
a Federal Direct PLUS Loan, a Federal
Direct Unsubsidized Stafford Loan, or a
Federal Direct Consolidation Loan not
described in clause (i)(II).
(B) Eligibility.--A borrower of a loan made
under this part shall be eligible for a
deferment under subparagraph (A) if the
borrower--
(i) is the spouse of a member of the
Armed Forces serving on active duty;
and
(ii) has experienced a loss of
employment as a result of relocation to
accommodate a permanent change in duty
station of such member.
(C) Documentation and approval.--
(i) In general.--A borrower may
establish eligibility for a deferment
under subparagraph (A) by providing to
the Secretary--
(I) the documentation
described in clause (ii); or
(II) such other documentation
as the Secretary determines
appropriate.
(ii) Documentation.--The
documentation described in this clause
is--
(I) evidence that the
borrower is the spouse of a
member of the Armed Forces
serving on active duty;
(II) evidence that a military
permanent change of station
order was issued to such
member; and
(III)(aa) evidence that the
borrower is eligible for
unemployment benefits due to a
loss of employment resulting
from relocation to accommodate
such permanent change in duty
station; or
(bb) a written certification,
or an equivalent as approved by
the Secretary, that the
borrower is registered with a
public or private employment
agency due to a loss of
employment resulting from
relocation to accommodate such
permanent change in duty
station.
(5) Definition of borrower.--For the purpose of this
subsection, the term ``borrower'' means an individual
who is a new borrower on the date such individual
applies for a loan under this part for which the first
disbursement is made on or after July 1, 1993.
(6) Deferments for previous part b loan borrowers.--A
borrower of a loan made under this part, who at the
time such individual applies for such loan, has an
outstanding balance of principal or interest owing on
any loan made, insured, or guaranteed under part B of
title IV prior to July 1, 1993, shall be eligible for a
deferment under section 427(a)(2)(C) or section
428(b)(1)(M) as such sections were in effect on July
22, 1992.
(g) Federal Direct Consolidation Loans.--
(1) In general.--A borrower of a loan made under this
part may consolidate such loan with the loans described
in section 428C(a)(4), including any loan made under
part B and first disbursed before July 1, 2010. To be
eligible for a consolidation loan under this part, a
borrower shall meet the eligibility criteria set forth
in section 428C(a)(3).
(2) Separating joint consolidation loans.--
(A) In general.--
(i) Authorization.--A married couple,
or 2 individuals who were previously a
married couple, and who received a
joint consolidation loan as such
married couple under subparagraph (C)
of section 428C(a)(3) (as such
subparagraph was in effect on June 30,
2006), may apply to the Secretary, in
accordance with subparagraph (C) of
this paragraph, for each individual
borrower in the married couple (or
previously married couple) to receive a
separate Federal Direct Consolidation
Loan under this part.
(ii) Eligibility for borrowers in
default.--Notwithstanding any other
provision of this Act, a married
couple, or 2 individuals who were
previously a married couple, who are in
default on a joint consolidation loan
may be eligible to receive a separate
Federal Direct Consolidation Loan under
this part in accordance with this
paragraph.
(B) Secretarial requirements.--
Notwithstanding section 428C(a)(3)(A) or any
other provision of law, for each individual
borrower who applies under subparagraph (A),
the Secretary shall--
(i) make a separate Federal Direct
Consolidation Loan under this part
that--
(I) shall be for an amount
equal to the product of--
(aa) the unpaid
principal and accrued
unpaid interest of the
joint consolidation
loan (as of the date
that is the day before
such separate
consolidation loan is
made) and any
outstanding charges and
fees with respect to
such loan; and
(bb) the percentage
of the joint
consolidation loan
attributable to the
loans of the individual
borrower for whom such
separate consolidation
loan is being made, as
determined--
(AA) on the
basis of the
loan
obligations of
such borrower
with respect to
such joint
consolidation
loan (as of the
date such joint
consolidation
loan was made);
or
(BB) in the
case in which
both borrowers
request, on the
basis of
proportions
outlined in a
divorce decree,
court order, or
settlement
agreement; and
(II) has the same rate of
interest as the joint
consolidation loan (as of the
date that is the day before
such separate consolidation
loan is made); and
(ii) in a timely manner, notify each
individual borrower that the joint
consolidation loan had been repaid and
of the terms and conditions of their
new loans.
(C) Application for separate direct
consolidation loan.--
(i) Joint application.--Except as
provided in clause (ii), to receive
separate consolidation loans under this
part, both individual borrowers in a
married couple (or previously married
couple) shall jointly apply under
subparagraph (A).
(ii) Separate application.--An
individual borrower in a married couple
(or previously married couple) may
apply for a separate consolidation loan
under subparagraph (A) separately and
without regard to whether or when the
other individual borrower in the
married couple (or previously married
couple) applies under subparagraph (A),
in a case in which--
(I) the individual borrower
certifies to the Secretary that
such borrower--
(aa) has experienced
an act of domestic
violence (as defined in
section 40002 of the
Violence Against Women
Act of 1994 (34 U.S.C.
12291) from the other
individual borrower;
(bb) has experienced
economic abuse (as
defined in section
40002 of the Violence
Against Women Act of
1994 (34 U.S.C. 12291)
from the other
individual borrower; or
(cc) is unable to
reasonably reach or
access the loan
information of the
other individual
borrower; or
(II) the Secretary determines
that authorizing each
individual borrower to apply
separately under subparagraph
(A) would be in the best fiscal
interests of the Federal
Government.
(iii) Remaining obligation from
separate application.--In the case of
an individual borrower who receives a
separate consolidation loan due to the
circumstances described in clause (ii),
the other non-applying individual
borrower shall become solely liable for
the remaining balance of the joint
consolidation loan.
(h) Borrower Defenses.--Notwithstanding any other provision
of State or Federal law, the Secretary shall specify in
regulations which acts or omissions of an institution of higher
education a borrower may assert as a defense to repayment of a
loan made under this part, except that in no event may a
borrower recover from the Secretary, in any action arising from
or relating to a loan made under this part, an amount in excess
of the amount such borrower has repaid on such loan.
(i) Loan Application and Promissory Note.--The common
financial reporting form required in section 483(a)(1) shall
constitute the application for loans made under this part
(other than a Federal Direct PLUS loan). The Secretary shall
develop, print, and distribute to participating institutions a
standard promissory note and loan disclosure form.
(j) Loan Disbursement.--
(1) In general.--Proceeds of loans to students under
this part shall be applied to the student's account for
tuition and fees, and, in the case of institutionally
owned housing, to room and board. Loan proceeds that
remain after the application of the previous sentence
shall be delivered to the borrower by check or other
means that is payable to and requires the endorsement
or other certification by such borrower.
(2) Payment periods.--The Secretary shall establish
periods for the payments described in paragraph (1) in
a manner consistent with payment of Federal Pell Grants
under subpart 1 of part A of this title.
(k) Fiscal Control and Fund Accountability.--
(1) In general.--(A) An institution shall maintain
financial records in a manner consistent with records
maintained for other programs under this title.
(B) Except as otherwise required by regulations of
the Secretary an institution may maintain loan funds
under this part in the same account as other Federal
student financial assistance.
(2) Payments and refunds.--Payments and refunds shall
be reconciled in a manner consistent with the manner
set forth for the submission of a payment summary
report required of institutions participating in the
program under subpart 1 of part A, except that nothing
in this paragraph shall prevent such reconciliations on
a monthly basis.
(3) Transaction histories.--All transaction histories
under this part shall be maintained using the same
system designated by the Secretary for the provision of
Federal Pell Grants under subpart 1 of part A of this
title.
(l) Armed Forces and NOAA Commissioned Officer Corps Student
Loan Interest Payment Programs.--
(1) Authority.--Using funds received by transfer to
the Secretary under section 2174 of title 10, United
States Code, or section 268 of the National Oceanic and
Atmospheric Administration Commissioned Officer Corps
Act of 2002 for the payment of interest on a loan made
under this part to a member of the Armed Forces or an
officer in the commissioned officer corps of the
National Oceanic and Atmospheric Administration,
respectively, the Secretary shall pay the interest on
the loan as due for a period not in excess of 36
consecutive months. The Secretary may not pay interest
on such a loan out of any funds other than funds that
have been so transferred.
(2) Forbearance.--During the period in which the
Secretary is making payments on a loan under paragraph
(1), the Secretary shall grant the borrower
forbearance, in the form of a temporary cessation of
all payments on the loan other than the payments of
interest on the loan that are made under that
paragraph.
(m) Repayment Plan for Public Service Employees.--
(1) In general.--The Secretary shall cancel the
balance of interest and principal due, in accordance
with paragraph (2), on any eligible Federal Direct Loan
not in default for a borrower who--
(A) has made 120 monthly payments on the
eligible Federal Direct Loan after October 1,
2007, pursuant to any one or a combination of
the following--
(i) payments under an income-based
repayment plan under section 493C;
(ii) payments under a standard
repayment plan under subsection
(d)(1)(A), based on a 10-year repayment
period;
(iii) monthly payments under a
repayment plan under subsection (d)(1)
or (g) of not less than the monthly
amount calculated under subsection
(d)(1)(A), based on a 10-year repayment
period; or
(iv) payments under an income
contingent repayment plan under
subsection (d)(1)(D); and
(B)(i) is employed in a public service job at
the time of such forgiveness; and
(ii) has been employed in a public service
job during the period in which the borrower
makes each of the 120 payments described in
subparagraph (A).
(2) Loan cancellation amount.--After the conclusion
of the employment period described in paragraph (1),
the Secretary shall cancel the obligation to repay the
balance of principal and interest due as of the time of
such cancellation, on the eligible Federal Direct Loans
made to the borrower under this part.
(3) Definitions.--In this subsection:
(A) Eligible federal direct loan.--The term
``eligible Federal Direct Loan'' means a
Federal Direct Stafford Loan, Federal Direct
PLUS Loan, or Federal Direct Unsubsidized
Stafford Loan, or a Federal Direct
Consolidation Loan.
(B) Public service job.--The term ``public
service job'' means--
(i) a full-time job in emergency
management, government (excluding time
served as a member of Congress),
military service, public safety, law
enforcement, public health (including
nurses, nurse practitioners, nurses in
a clinical setting, and full-time
professionals engaged in health care
practitioner occupations and health
care support occupations, as such terms
are defined by the Bureau of Labor
Statistics), public education, social
work in a public child or family
service agency, public interest law
services (including prosecution or
public defense or legal advocacy on
behalf of low-income communities at a
nonprofit organization), early
childhood education (including licensed
or regulated childcare, Head Start, and
State funded prekindergarten), public
service for individuals with
disabilities, public service for the
elderly, public library sciences,
school-based library sciences and other
school-based services, or at an
organization that is described in
section 501(c)(3) of the Internal
Revenue Code of 1986 and exempt from
taxation under section 501(a) of such
Code; or
(ii) teaching as a full-time faculty
member at a Tribal College or
University as defined in section 316(b)
and other faculty teaching in high-
needs subject areas or areas of
shortage (including nurse faculty,
foreign language faculty, and part-time
faculty at community colleges), as
determined by the Secretary.
(4) Ineligibility for double benefits.--No borrower
may, for the same service, receive a reduction of loan
obligations under both this subsection and section
428J, 428K, 428L, or 460.
(n) Identity Fraud Protection.--The Secretary shall take such
steps as may be necessary to ensure that monthly Federal Direct
Loan statements and other publications of the Department do not
contain more than four digits of the Social Security number of
any individual.
(o) No Accrual of Interest for Active Duty Service Members.--
(1) In general.--Notwithstanding any other provision
of this part and in accordance with paragraphs (2) and
(4), interest shall not accrue for an eligible military
borrower on a loan made under this part for which the
first disbursement is made on or after October 1, 2008.
(2) Consolidation loans.--In the case of any
consolidation loan made under this part that is
disbursed on or after October 1, 2008, interest shall
not accrue pursuant to this subsection only on such
portion of such loan as was used to repay a loan made
under this part for which the first disbursement is
made on or after October 1, 2008.
(3) Eligible military borrower.--In this subsection,
the term ``eligible military borrower'' means an
individual who--
(A)(i) is serving on active duty during a war
or other military operation or national
emergency; or
(ii) is performing qualifying National Guard
duty during a war or other military operation
or national emergency; and
(B) is serving in an area of hostilities in
which service qualifies for special pay under
section 310, or paragraph (1) or (3) of section
351(a), of title 37, United States Code.
(4) Limitation.--An individual who qualifies as an
eligible military borrower under this subsection may
receive the benefit of this subsection for not more
than 60 months.
(p) Disclosures.--Each institution of higher education with
which the Secretary has an agreement under section 453, and
each contractor with which the Secretary has a contract under
section 456, shall, with respect to loans under this part and
in accordance with such regulations as the Secretary shall
prescribe, comply with each of the requirements under section
433 that apply to a lender with respect to a loan under part B.
SEC. 456. CONTRACTS.
(a) Contracts for Supplies and Services.--
(1) In general.--The Secretary shall, to the extent
practicable, award contracts for origination,
servicing, and collection described in subsection (b).
In awarding such contracts, the Secretary shall ensure
that such services and supplies are provided at
competitive prices.
(2) Entities.--The entities with which the Secretary
may enter into contracts shall include only entities
which the Secretary determines are qualified to provide
such services and supplies and will comply with the
procedures applicable to the award of such contracts.
In the case of awarding contracts for the origination,
servicing, and collection of loans under this part, the
Secretary shall enter into contracts only with entities
that have extensive and relevant experience and
demonstrated effectiveness. The entities with which the
Secretary may enter into such contracts shall include,
where practicable, agencies with agreements with the
Secretary under sections 428(b) and (c), if such
agencies meet the qualifications as determined by the
Secretary under this subsection and if those agencies
have such experience and demonstrated effectiveness. In
awarding contracts to such State agencies, the
Secretary shall, to the extent practicable and
consistent with the purposes of this part, give special
consideration to State agencies with a history of high
quality performance to perform services for
institutions of higher education within their State.
(3) Rule of construction.--Nothing in this section
shall be construed as a limitation of the authority of
any State agency to enter into an agreement for the
purposes of this section as a member of a consortium of
State agencies.
(b) Contracts for Origination, Servicing, and Data Systems.--
The Secretary may enter into contracts for--
(1) the alternative origination of loans to students
attending institutions of higher education with
agreements to participate in the program under this
part (or their parents), if such institutions do not
have agreements with the Secretary under section
454(b);
(2) the servicing and collection of loans made or
purchased under this part;
(3) the establishment and operation of 1 or more data
systems for the maintenance of records on all loans
made or purchased under this part; and
(4) such other aspects of the direct student loan
program as the Secretary determines are necessary to
ensure the successful operation of the program.
(c) Federal Preemption.--
(1) In general.--Covered activities shall not be
subject to any law or other requirement of any State or
political subdivision of a State with respect to--
(A) disclosure requirements;
(B) requirements or restrictions on the
content, time, quantity, or frequency of
communications with borrowers, endorsers, or
references with respect to such loans; or
(C) any other requirement relating to the
servicing or collection of a loan made under
this title.
(2) Covered activities defined.--In this subsection,
the term ``covered activities'' means any of the
following activities, as carried out by a qualified
entity:
(A) Origination of a loan made under this
title.
(B) Servicing of a loan made under this
title.
(C) Collection of a loan made under this
title.
(D) Any other activity related to the
activities described in subparagraphs (A)
through (C).
* * * * * * *
PART F--NEED ANALYSIS
[Note: Effective July 1, 2024, section 201(a) of H.R. 6951 (as
reported) provides for an amendment to section 471, as amended
by FAFSA Simplification Act. For laws relative to a reference
made by this bill to FAFSA Simplification Act, see section 2(b)
of H.R. 6951 (as reported). Upon such date, section 471 (as
amended by FAFSA Simplification Act and by such section 201(a)
of H.R. 6951 (as reported)) will read as follows:]
SEC. 471. AMOUNT OF NEED.
Except as otherwise provided therein, for award year 2024-
2025 and each subsequent award year, the amount of need of any
student for financial assistance under this title (except
subpart 1 or 2 of part A) is equal to--
[(1) the cost of attendance of such student, minus]
(1)(A) for award year 2024-2025, the cost of
attendance of such student; and
(B) for award year 2025-2026 and each subsequent
award year, the median cost of college of the program
of study of such student, minus
(2) the student aid index (as defined in section 473)
for such student, minus
(3) other financial assistance not received under
this title (as defined in section 480(i)).
[Note: Effective July 1, 2024, section 201(b) of H.R. 6951 (as
reported) provides for an amendment to section 472, as amended
by FAFSA Simplification Act. For laws relative to a reference
made by this bill to FAFSA Simplification Act, see section 2(b)
of H.R. 6951 (as reported). Upon such date, section 472 (as
amended by FAFSA Simplification Act and by such section 201(b)
of H.R. 6951 (as reported)) will read as follows:]
SEC. 472. COST OF ATTENDANCE.
(a) In General.--For the purpose of this title, the term
``cost of attendance'' means--
(1) tuition and fees normally assessed a student
carrying the same academic workload as determined by
the institution;
(2) an allowance for books, course materials,
supplies, and equipment, which shall include all such
costs required of all such students in the same course
of study, including a reasonable allowance for the
documented rental or upfront purchase of a personal
computer, as determined by the institution;
(3) an allowance for transportation, which may
include transportation between campus, residences, and
place of work, as determined by the institution;
(4) an allowance for miscellaneous personal expenses,
for a student attending the institution on at least a
half-time basis, as determined by the institution;
(5) an allowance for living expenses, including food
and housing costs, to be incurred by the student
attending the institution on at least a half-time
basis, as determined by the institution, which shall
include--
(A) for a student electing institutionally
owned or operated food services, such as board
or meal plans, a standard allowance for such
services that provides the equivalent of three
meals each day;
(B) for a student not electing
institutionally owned or operated food
services, such as board or meal plans, a
standard allowance for purchasing food off
campus that provides the equivalent of three
meals each day;
(C) for a student without dependents residing
in institutionally owned or operated housing, a
standard allowance determined by the
institution based on the average or median
amount assessed to such residents for housing
charges, whichever is greater;
(D) for a student with dependents residing in
institutionally owned or operated housing, a
standard allowance determined by the
institution based on the average or median
amount assessed to such residents for housing
charges, whichever is greater;
(E) for a student living off campus, and not
in institutionally owned or operated housing, a
standard allowance for rent or other housing
costs;
(F) for a dependent student residing at home
with parents, a standard allowance that shall
not be zero determined by the institution;
(G) for a student living in housing located
on a military base or for which a basic
allowance is provided under section 403(b) of
title 37, United States Code, a standard
allowance for food based upon such student's
choice of purchasing food on-campus or off-
campus (determined respectively in accordance
with subparagraph (A) or (B)), but not for
housing costs; and
(H) for all other students, an allowance
based on the expenses reasonably incurred by
such students for housing and food;
(6) for a student engaged in a program of study by
correspondence, only tuition and fees and, if required,
books and supplies, travel, and housing and food costs
incurred specifically in fulfilling a required period
of residential training;
(7) for a confined or incarcerated student, only
tuition, fees, books, course materials, supplies,
equipment, and the cost of obtaining a license,
certification, or a first professional credential in
accordance with paragraph (14);
(8) for a student enrolled in an academic program in
a program of study abroad approved for credit by the
student's home institution, reasonable costs associated
with such study (as determined by the institution at
which such student is enrolled);
(9) for a student with one or more dependents, an
allowance based on the estimated actual expenses
incurred for such dependent care, based on the number
and age of such dependents, except that--
(A) such allowance shall not exceed the
reasonable cost in the community in which such
student resides for the kind of care provided;
and
(B) the period for which dependent care is
required includes, but is not limited to,
class-time, study-time, field work,
internships, and commuting time;
(10) for a student with a disability, an allowance
(as determined by the institution) for those expenses
related to the student's disability, including special
services, personal assistance, transportation,
equipment, and supplies that are reasonably incurred
and not provided for by other assisting agencies;
(11) for a student receiving all or part of the
student's instruction by means of telecommunications
technology, no distinction shall be made with respect
to the mode of instruction in determining costs;
(12) for a student engaged in a work experience under
a cooperative education program, an allowance for
reasonable costs associated with such employment (as
determined by the institution);
(13) for a student who receives a Federal student
loan made under this title or any other Federal law, to
cover a student's cost of attendance at the
institution, an allowance for the actual cost of any
loan fee, origination fee, or insurance premium charged
to such student or the parent of such student on such
loan, or the average cost of any such fee or premium,
as applicable; and
(14) for a student in a program requiring
professional licensure, certification, or a first
professional credential, the cost of obtaining the
license, certification, or a first professional
credential.
(b) Special Rule for Living Expenses for Less-than-half-time
Students.--For students attending an institution of higher
education less than half-time, an institution of higher
education may include an allowance for living expenses,
including food and housing costs in accordance with subsection
(a)(4) for up to three semesters, or the equivalent, with no
more than two semesters being consecutive.
(c) Disclosure of Cost of Attendance Elements.--Each
institution shall make publicly available on the institution's
website a list of all the elements of cost of attendance
described in paragraphs (1) through (14) of subsection (a), and
shall disclose such elements on any portion of the website
describing tuition and fees [of the institution] of each
program of study at the institution.
SEC. 472A. DETERMINATION OF MEDIAN COST OF COLLEGE.
For the purpose of this title, the term ``median cost of
college'', when used with respect to a program of study offered
by one or more institutions of higher education for an award
year, means the median of the cost of attendance (as defined in
section 472) for the program of study across all institutions
of higher education offering such a program for the preceding
award year.
* * * * * * *
[Note: Effective July 1, 2024, section 201(d)(1) of H.R. 6951
(as reported) provides for an amendment to section 480, as
amended by FAFSA Simplification Act. For laws relative to a
reference made by this bill to FAFSA Simplification Act, see
section 2(b) of H.R. 6951 (as reported). Upon such date,
section 480 (as amended by FAFSA Simplification Act and by such
section 201(d)(1) of H.R. 6951 (as reported)) will read as
follows:]
SEC. 480. DEFINITIONS.
In this part:
(a) Total Income.--The term ``total income'' means the amount
equal to adjusted gross income for the second preceding tax
year plus untaxed income and benefits for the second preceding
tax year minus excludable income for the second preceding tax
year. The factors used to determine total income shall be
derived from the Federal income tax return, if available,
except for the applicant's ability to indicate a qualified
rollover in the second preceding tax year as outlined in
section 483 or foreign income described in subsection (b)(5).
(b) Untaxed Income and Benefits.--The term ``untaxed income
and benefits'' means--
(1) deductions and payments to self-employed SEP,
SIMPLE, Keogh, and other qualified individual
retirement accounts excluded from income for Federal
tax purposes, except such term shall not include
payments made to tax-deferred pension and retirement
plans, paid directly or withheld from earnings, that
are not delineated on the Federal tax return;
(2) tax-exempt interest income;
(3) untaxed portion of individual retirement account
distributions;
(4) untaxed portion of pensions; and
(5) foreign income of permanent residents of the
United States or United States citizens exempt from
Federal taxation, or the foreign income for which such
a permanent resident or citizen receives a foreign tax
credit.
(c) Veterans and Veterans' Education Benefits.--(1) The term
``veteran'' has the meaning given the term in section 101(2) of
title 38, United States Code, and includes individuals who
served in the United States Armed Forces as described in
sections 101(21), 101(22), and 101(23) of title 38, United
States Code.
(2) The term ``veterans'' education benefits' means veterans'
benefits under the following provisions of law:
(A) Chapter 103 of title 10, United States Code
(Senior Reserve Officers' Training Corps).
(B) Chapter 106A of title 10, United States Code
(Educational Assistance for Persons Enlisting for
Active Duty).
(C) Chapter 1606 of title 10, United States Code
(Selected Reserve Educational Assistance Program).
(D) Chapter 1607 of title 10, United States Code
(Educational Assistance Program for Reserve Component
Members Supporting Contingency Operations and Certain
Other Operations).
(E) Chapter 30 of title 38, United States Code (All-
Volunteer Force Educational Assistance Program, also
known as the ``Montgomery GI Bill--active duty'').
(F) Chapter 31 of title 38, United States Code
(Training and Rehabilitation for Veterans with Service-
Connected Disabilities).
(G) Chapter 32 of title 38, United States Code (Post-
Vietnam Era Veterans' Educational Assistance Program).
(H) Chapter 33 of title 38, United States Code (Post-
9/11 Educational Assistance).
(I) Chapter 35 of title 38, United States Code
(Survivors' and Dependents' Educational Assistance
Program).
(J) Section 903 of the Department of Defense
Authorization Act, 1981 (10 U.S.C. 2141 note)
(Educational Assistance Pilot Program).
(K) Section 156(b) of the ``Joint Resolution making
further continuing appropriations and providing for
productive employment for the fiscal year 1983, and for
other purposes'' (42 U.S.C. 402 note) (Restored
Entitlement Program for Survivors, also known as
``Quayle benefits'').
(L) The provisions of chapter 3 of title 37, United
States Code, related to subsistence allowances for
members of the Reserve Officers Training Corps.
(d) Independent Students and Determinations.--The term
``independent'', when used with respect to a student, means any
individual who--
(1) is 24 years of age or older by December 31 of the
award year;
(2) is, or was at any time when the individual was 13
years of age or older--
(A) an orphan;
(B) a ward of the court; or
(C) in foster care;
(3) is, or was immediately prior to attaining the age
of majority, an emancipated minor or in legal
guardianship as determined by a court of competent
jurisdiction in the individual's State of legal
residence;
(4) is a veteran of the Armed Forces of the United
States (as defined in subsection (c)) or is currently
serving on active duty in the Armed Forces for other
than training purposes;
(5) is a graduate or professional student;
(6) is married and not separated;
(7) has legal dependents other than a spouse;
(8) is an unaccompanied homeless youth or is
unaccompanied, at risk of homelessness, and self-
supporting, without regard to such individual's age;
and
(9) is a student for whom a financial aid
administrator makes a documented determination of
independence by reason of other unusual circumstances
pursuant to section 479A(c) in which the student is
unable to contact a parent or where contact with
parents poses a risk to such student, which includes
circumstances of--
(A) human trafficking, as described in the
Trafficking Victims Protection Act of 2000 (22
U.S.C. 7101 et seq.);
(B) legally granted refugee or asylum status;
(C) parental abandonment or estrangement; or
(D) student or parental incarceration.
(e) Excludable Income.--The term ``excludable income''
means--
(1) an amount equal to the education credits
described in paragraphs (1) and (2) of section 25A(a)
of the Internal Revenue Code of 1986;
(2) if an applicant elects to report it, college
grant and scholarship aid included in gross income on a
Federal tax return, including amounts attributable to
grant and scholarship portions of fellowships and
assistantships and any national service educational
award or post-service benefit received by an individual
under title I of the National and Community Service Act
of 1990 (42 U.S.C. 12511 et seq.), including awards,
living allowances, and interest accrual payments; and
(3) income earned from work under part C of this
title.
(f) Assets.--
(1) In general.--The term ``assets'' means the amount
in checking and savings accounts, time deposits, money
market funds, investments, trusts, stocks, bonds,
derivatives, securities, mutual funds, tax shelters,
qualified education benefits (except as provided in
paragraph (3)), the annual amount of child support
received and the net value of real estate, vacation
homes, income producing property, and business and farm
assets, determined in accordance with section 478(c).
(2) Exclusions.--With respect to determinations of
need under this title, the term ``assets'' shall not
include the [net value of the] the net value of--
(A)the family's principal place of
residence[.];
(B) a family farm on which the family
resides; or
(C) a small business with not more than 100
full-time or full-time equivalent employees (or
any part of such a small business) that is
owned and controlled by the family.
(3) Consideration of qualified education benefit.--A
qualified education benefit shall be considered an
asset of--
(A) the student if the student is an
independent student; or
(B) the parent if the student is a dependent
student and the account is designated for the
student, regardless of whether the owner of the
account is the student or the parent.
(4) Definition of qualified education benefit.--In
this subsection, the term ``qualified education
benefit'' means--
(A) a qualified tuition program (as defined
in section 529(b)(1)(A) of the Internal Revenue
Code of 1986) or other prepaid tuition plan
offered by a State; and
(B) a Coverdell education savings account (as
defined in section 530(b)(1) of the Internal
Revenue Code of 1986).
(g) Net Value.--The term ``net value'' means the market value
at the time of application of the assets (as defined in
subsection (f)), minus the outstanding liabilities or
indebtedness against the assets.
(h) Treatment of Income Taxes Paid to Other Jurisdictions.--
(1) The tax on income paid to the Governments of the
Commonwealth of Puerto Rico, Guam, American Samoa, the
Virgin Islands, or the Commonwealth of the Northern
Mariana Islands, the Republic of the Marshall Islands,
the Federated States of Micronesia, or Palau under the
laws applicable to those jurisdictions, or the
comparable tax paid to the central government of a
foreign country, shall be treated as Federal income
taxes.
(2) References in this part to the Internal Revenue
Code of 1986, Federal income tax forms, and the
Internal Revenue Service shall, for purposes of the tax
described in paragraph (1), be treated as references to
the corresponding laws, tax forms, and tax collection
agencies of those jurisdictions, respectively, subject
to such adjustments as the Secretary may provide by
regulation.
(i) Other Financial Assistance.--
(1) For purposes of determining a student's
eligibility for funds under this title, other financial
assistance not received under this title shall include
all scholarships, grants, loans, or other assistance
known to the institution at the time the determination
of the student's need is made, including national
service educational awards or post-service benefits
under title I of the National and Community Service Act
of 1990 (42 U.S.C. 12511 et seq.), but excluding
veterans' education benefits.
(2) Notwithstanding paragraph (1), a tax credit taken
under section 25A of the Internal Revenue Code of 1986,
or a distribution that is not includable in gross
income under section 529 of such Code, under another
prepaid tuition plan offered by a State, or under a
Coverdell education savings account under section 530
of such Code, shall not be treated as other financial
assistance for purposes of section 471(a)(3).
(3) Notwithstanding paragraph (1) and section 472,
assistance not received under this title may be
excluded from both other financial assistance and cost
of attendance, if that assistance is provided by a
State and is designated by such State to offset a
specific component of the cost of attendance. If that
assistance is excluded from either other financial
assistance or cost of attendance, it shall be excluded
from both.
(4) Notwithstanding paragraph (1), payments made and
services provided under part E of title IV of the
Social Security Act to or on behalf of any child or
youth over whom the State agency has responsibility for
placement, care, or supervision, including the value of
vouchers for education and training and amounts
expended for room and board for youth who are not in
foster care but are receiving services under section
477 of such Act, shall not be treated as other
financial assistance for purposes of section 471(a)(3).
(5) Notwithstanding paragraph (1), emergency
financial assistance provided to the student for
unexpected expenses that are a component of the
student's cost of attendance, and not otherwise
considered when the determination of the student's need
is made, shall not be treated as other financial
assistance for purposes of section 471(a)(3).
(j) Dependents.--
(1) Except as otherwise provided, the term
``dependent of the parent'' means the student who is
deemed to be a dependent student when applying for aid
under this title, and any other person who lives with
and receives more than one-half of their support from
the parent (or parents) and will continue to receive
more than half of their support from the parent (or
parents) during the award year.
(2) Except as otherwise provided, the term
``dependent of the student'' means the student's
dependent children and other persons (except the
student's spouse) who live with and receive more than
one-half of their support from the student and will
continue to receive more than half of their support
from the student during the award year.
(k) Family Size.--
(1) Dependent student.--Except as provided in
paragraph (3), in determining family size in the case
of a dependent student--
(A) if the parents are not divorced or
separated, family members include the student's
parents, and any dependent (within the meaning
of section 152 of the Internal Revenue Code of
1986 or an eligible individual for purposes of
the credit under section 24 of the Internal
Revenue Code of 1986) of the student's parents
for the taxable year used in determining the
amount of need of the student for financial
assistance under this title;
(B) if the parents are divorced or separated,
family members include the parent whose income
is included in computing available income and
any dependent (within the meaning of section
152 of the Internal Revenue Code of 1986 or an
eligible individual for purposes of the credit
under section 24 of the Internal Revenue Code
of 1986) of that parent for the taxable year
used in determining the amount of need of the
student for financial assistance under this
title;
(C) if the parents are divorced and the
parents whose income is so included are
remarried, or if the parent was a widow or
widower who has remarried, family members also
include, in addition to those individuals
referred to in subparagraph (B), the new spouse
and any dependent (within the meaning of
section 152 of the Internal Revenue Code of
1986 or an eligible individual for purposes of
the credit under section 24 of the Internal
Revenue Code of 1986) of the new spouse for the
taxable year used in determining the amount of
need of the student for financial assistance
under this title, if that spouse's income is
included in determining the parent's adjusted
available income; and
(D) if the student is not considered as a
dependent (within the meaning of section 152 of
the Internal Revenue Code of 1986 or an
eligible individual for purposes of the credit
under section 24 of the Internal Revenue Code
of 1986) of any parent, the parents' family
size shall include the student and the family
members applicable to the parents' situation
under subparagraph (A), (B), or (C).
(2) Independent student.--Except as provided in
paragraph (3), in determining family size in the case
of an independent student--
(A) family members include the student, the
student's spouse, and any dependent (within the
meaning of section 152 of the Internal Revenue
Code of 1986 or an eligible individual for
purposes of the credit under section 24 of the
Internal Revenue Code of 1986) of that student
for the taxable year used in determining the
amount of need of the student for financial
assistance under this title; and
(B) if the student is divorced or separated,
family members do not include the spouse (or
ex-spouse), but do include the student and any
dependent (within the meaning of section 152 of
the Internal Revenue Code of 1986 or an
eligible individual for purposes of the credit
under section 24 of the Internal Revenue Code
of 1986) of that student for the taxable year
used in determining the amount of need of the
student for financial assistance under this
title.
(3) Procedures and modification.--The Secretary shall
provide procedures for determining family size in cases
in which information for the taxable year used in
determining the amount of need of the student for
financial assistance under this title has changed or
does not accurately reflect the applicant's current
household size, including when a divorce settlement
only allows a parent to file for the Earned Income Tax
Credit available under section 32 of the Internal
Revenue Code of 1986.
(l) Business Assets.--The term ``business assets'' means
property that is used in the operation of a trade or business,
including real estate, inventories, buildings, machinery, and
other equipment, patents, franchise rights, and copyrights.
(m) Homeless Youth.--The term ``homeless youth'' has the
meaning given the term ``homeless children and youths'' in
section 725 of the McKinney-Vento Homeless Assistance Act (42
U.S.C. 11434a).
(n) Unaccompanied.--The terms ``unaccompanied'',
``unaccompanied youth'', or ``unaccompanied homeless youth''
have the meaning given the term ``unaccompanied youth'' in
section 725 of the McKinney-Vento Homeless Assistance Act (42
U.S.C. 11434a).
Part G--General Provisions Relating to Student Assistance Programs
SEC. 481. DEFINITIONS.
(a) Academic and Award Year.--(1) For the purpose of any
program under this title, the term ``award year'' shall be
defined as the period beginning July 1 and ending June 30 of
the following year.
(2)(A) For the purpose of any program under this title, the
term ``academic year'' shall--
(i) require a minimum of 30 weeks of instructional
time for a course of study that measures its program
length in credit hours; or
(ii) require a minimum of 26 weeks of instructional
time for a course of study that measures its program
length in clock hours; and
(iii) require an undergraduate course of study to
contain an amount of instructional time whereby a full-
time student is expected to complete at least--
(I) 24 semester or trimester hours or 36
quarter credit hours in a course of study that
measures its program length in credit hours; or
(II) 900 clock hours in a course of study
that measures its program length in clock
hours.
(B) The Secretary may reduce such minimum of 30 weeks to not
less than 26 weeks for good cause, as determined by the
Secretary on a case-by-case basis, in the case of an
institution of higher education that provides a 2-year or 4-
year program of instruction for which the institution awards an
associate or baccalaureate degree and that measures program
length in credit hours or clock hours.
(b) Eligible Program.--(1) For purposes of this title, the
term ``eligible program'' means a program of at least--
(A) 600 clock hours of instruction, 16 semester
hours, or 24 quarter hours, offered during a minimum of
15 weeks, in the case of a program that--
(i) provides a program of training to prepare
students for gainful employment in a recognized
profession; and
(ii) admits students who have not completed
the equivalent of an associate degree; or
(B) 300 clock hours of instruction, 8 semester hours,
or 12 hours, offered during a minimum of 10 weeks, in
the case of--
(i) an undergraduate program that requires
the equivalent of an associate degree for
admissions; or
(ii) a graduate or professional program.
(2)(A) A program is an eligible program for purposes of part
B of this title if it is a program of at least 300 clock hours
of instruction, but less than 600 clock hours of instruction,
offered during a minimum of 10 weeks, that--
(i) has a verified completion rate of at least 70
percent, as determined in accordance with the
regulations of the Secretary;
(ii) has a verified placement rate of at least 70
percent, as determined in accordance with the
regulations of the Secretary; and
(iii) satisfies such further criteria as the
Secretary may prescribe by regulation.
(B) In the case of a program being determined eligible for
the first time under this paragraph, such determination shall
be made by the Secretary before such program is considered to
have satisfied the requirements of this paragraph.
(3) An otherwise eligible program that is offered in whole or
in part through telecommunications is eligible for the purposes
of this title if the program is offered by an institution,
other than a foreign institution, that has been evaluated and
determined (before or after the date of enactment of the Higher
Education Reconciliation Act of 2005) to have the capability to
effectively deliver distance education programs by an
accrediting agency or association that--
(A) is recognized by the Secretary under subpart 2 of
part H; and
(B) has evaluation of distance education programs
within the scope of its recognition, as described in
section 496(n)(3).
(4) For purposes of this title, the term ``eligible program''
includes an instructional program that, in lieu of credit hours
or clock hours as the measure of student learning, utilizes
direct assessment of student learning, or recognizes the direct
assessment of student learning by others, if such assessment is
consistent with the accreditation of the institution or program
utilizing the results of the assessment. In the case of a
program being determined eligible for the first time under this
paragraph, such determination shall be made by the Secretary
before such program is considered to be an eligible program.
[(c) Third Party Servicer.--For purposes of this title, the
term ``third party servicer'' means any individual, any State,
or any private, for-profit or nonprofit organization, which
enters into a contract with--
[(1) any eligible institution of higher education to
administer, through either manual or automated
processing, any aspect of such institution's student
assistance programs under this title; or
[(2) any guaranty agency, or any eligible lender, to
administer, through either manual or automated
processing, any aspect of such guaranty agency's or
lender's student loan programs under part B of this
title, including originating, guaranteeing, monitoring,
processing, servicing, or collecting loans.]
(c) Third Party Servicer.--
(1) For purposes of this title, the term ``third
party servicer''--
(A) means any individual, any State, or any
private, for-profit or nonprofit organization,
which enters into a contract with--
(i) any eligible institution of
higher education to administer, through
either manual or automated processing,
any aspect of such institution's
student assistance programs under this
title; or
(ii) any guaranty agency, or any
eligible lender, to administer, through
either manual or automated processing,
any aspect of such guaranty agency's or
lender's student loan programs under
part B of this title, including
originating, guaranteeing, monitoring,
processing, servicing, or collecting
loans; and
(B) does not include any individual, any
State, or any private, for-profit or nonprofit
organization, which conducts activities or
interacts with prospective or enrolled students
for the purposes of--
(i) marketing or recruiting, such as
soliciting potential enrollments
through the dissemination of
information and advertising;
(ii) assisting with the completion of
applications for enrollment, such as
screening pre-enrollment information
and offering admission counseling;
(iii) administering ability-to-
benefit tests or establishing any
aspect of an eligible career pathway
program;
(iv) conducting activities for the
retention of students, such as
monitoring academic engagement and
conducting outreach to student
regarding attendance; and
(v) providing instructional content,
such as evaluating course completion,
delivering mandatory tutoring,
assessing student learning, including
through electronic means, or developing
curricula or course materials.
(2) The Secretary shall not regulate on the
definition of a ``third party servicer''.
(d) Definitions for Military Deferments.--For purposes of
parts B, D, and E of this title:
(1) Active duty.--The term ``active duty'' has the
meaning given such term in section 101(d)(1) of title
10, United States Code, except that such term does not
include active duty for training or attendance at a
service school.
(2) Military operation.--The term ``military
operation'' means a contingency operation as such term
is defined in section 101(a)(13) of title 10, United
States Code.
(3) National emergency.--The term ``national
emergency'' means the national emergency by reason of
certain terrorist attacks declared by the President on
September 14, 2001, or subsequent national emergencies
declared by the President by reason of terrorist
attacks.
(4) Serving on active duty.--The term ``serving on
active duty during a war or other military operation or
national emergency'' means service by an individual who
is--
(A) a Reserve of an Armed Force ordered to
active duty under section 12301(a), 12301(g),
12302, 12304, or 12306 of title 10, United
States Code, or any retired member of an Armed
Force ordered to active duty under section 688
of such title, for service in connection with a
war or other military operation or national
emergency, regardless of the location at which
such active duty service is performed; and
(B) any other member of an Armed Force on
active duty in connection with such emergency
or subsequent actions or conditions who has
been assigned to a duty station at a location
other than the location at which such member is
normally assigned.
(5) Qualifying national guard duty.--The term
``qualifying National Guard duty during a war or other
military operation or national emergency'' means
service as a member of the National Guard on full-time
National Guard duty (as defined in section 101(d)(5) of
title 10, United States Code) under a call to active
service authorized by the President or the Secretary of
Defense for a period of more than 30 consecutive days
under section 502(f) of title 32, United States Code,
in connection with a war, other military operation, or
a national emergency declared by the President and
supported by Federal funds.
(e) Consumer Reporting Agency.--For purposes of this title,
the term ``consumer reporting agency'' has the meaning given
the term ``consumer reporting agency that compiles and
maintains files on consumers on a nationwide basis'' in Section
603(p) of the Fair Credit Reporting Act (15 U.S.C. 1681a(p)).
(f) Definition of Educational Service Agency.--For purposes
of parts B, D, and E, the term ``educational service agency''
has the meaning given the term in section 8101 of the
Elementary and Secondary Education Act of 1965.
* * * * * * *
SEC. 484B. INSTITUTIONAL REFUNDS.
(a) Return of Title IV Funds.--
(1) In general.--If a recipient of assistance under
this title withdraws from an institution during a
payment period or period of enrollment in which the
recipient began attendance, the amount of grant or loan
assistance (other than assistance received under part
C) to be returned to the title IV programs is
calculated according to paragraph (3) and returned in
accordance with subsection (b).
(2) Leave of absence.--
(A) Leave not treated as withdrawal.--In the
case of a student who takes 1 or more leaves of
absence from an institution for not more than a
total of 180 days in any 12-month period, the
institution may consider the student as not
having withdrawn from the institution during
the leave of absence, and not calculate the
amount of grant and loan assistance provided
under this title that is to be returned in
accordance with this section if--
(i) the institution has a formal
policy regarding leaves of absence;
(ii) the student followed the
institution's policy in requesting a
leave of absence; and
(iii) the institution approved the
student's request in accordance with
the institution's policy.
(B) Consequences of failure to return.--If a
student does not return to the institution at
the expiration of an approved leave of absence
that meets the requirements of subparagraph
(A), the institution shall calculate the amount
of grant and loan assistance provided under
this title that is to be returned in accordance
with this section based on the day the student
withdrew (as determined under subsection (c)).
(3) Calculation of amount of title iv assistance
earned.--
(A) In general.--The amount of grant or loan
assistance under this title that is earned by
the recipient for purposes of this section is
calculated by--
(i) determining the percentage of
grant and loan assistance under this
title that has been earned by the
student, as described in subparagraph
(B); and
(ii) applying such percentage to the
total amount of such grant and loan
assistance that was disbursed (and that
could have been disbursed) to the
student, or on the student's behalf,
for the payment period or period of
enrollment for which the assistance was
awarded, as of the day the student
withdrew.
(B) Percentage earned.--For purposes of
subparagraph (A)(i), the percentage of grant or
loan assistance under this title that has been
earned by the student is--
(i) equal to the percentage of the
payment period or period of enrollment
for which assistance was awarded that
was completed (as determined in
accordance with subsection (d)) as of
the day the student withdrew, provided
that such date occurs on or before the
completion of 60 percent of the payment
period or period of enrollment; or
(ii) 100 percent, if the day the
student withdrew occurs after the
student has completed (as determined in
accordance with subsection (d)) 60
percent of the payment period or period
of enrollment.
(C) Percentage and amount not earned.--For
purposes of subsection (b), the amount of grant
and loan assistance awarded under this title
that has not been earned by the student shall
be calculated by--
(i) determining the complement of the
percentage of grant assistance under
subparts 1 and 3 of part A, or loan
assistance under parts B, D, and E,
that has been earned by the student
described in subparagraph (B); and
(ii) applying the percentage
determined under clause (i) to the
total amount of such grant and loan
assistance that was disbursed (and that
could have been disbursed) to the
student, or on the student's behalf,
for the payment period or period of
enrollment, as of the day the student
withdrew.
(4) Differences between amounts earned and amounts
received.--
(A) In general.--After determining the
eligibility of the student for a late
disbursement or post-withdrawal disbursement
(as required in regulations prescribed by the
Secretary), the institution of higher education
shall contact the borrower and obtain
confirmation that the loan funds are still
required by the borrower. In making such
contact, the institution shall explain to the
borrower the borrower's obligation to repay the
funds following any such disbursement. The
institution shall document in the borrower's
file the result of such contact and the final
determination made concerning such
disbursement.
(B) Return.--If the student has received more
grant or loan assistance than the amount earned
as calculated under paragraph (3)(A), the
unearned funds shall be returned by the
institution or the student, or both, as may be
required under paragraphs (1) and (2) of
subsection (b), to the programs under this
title in the order specified in subsection
(b)(3).
(b) Return of Title IV Program Funds.--
(1) Responsibility of the institution.--The
institution shall return not later than 45 days from
the determination of withdrawal, in the order specified
in paragraph (3), the lesser of--
(A) the amount of grant and loan assistance
awarded under this title that has not been
earned by the student, as calculated under
subsection (a)(3)(C); or
(B) an amount equal to--
(i) the total institutional charges
incurred by the student for the payment
period or period of enrollment for
which such assistance was awarded;
multiplied by
(ii) the percentage of grant and loan
assistance awarded under this title
that has not been earned by the
student, as described in subsection
(a)(3)(C)(i).
(2) Responsibility of the student.--
(A) In general.--The student shall return
assistance that has not been earned by the
student as described in subsection
(a)(3)(C)(ii) in the order specified in
paragraph (3) minus the amount the institution
is required to return under paragraph (1).
(B) Special rule.--The student (or parent in
the case of funds due to a loan borrowed by a
parent under part B or D) shall return or
repay, as appropriate, the amount determined
under subparagraph (A) to--
(i) a loan program under this title
in accordance with the terms of the
loan; and
(ii) a grant program under this
title, as an overpayment of such grant
and shall be subject to--
(I) repayment arrangements
satisfactory to the
institution; or
(II) overpayment collection
procedures prescribed by the
Secretary.
(C) Grant overpayment requirements.--
(i) In general.--Notwithstanding
subparagraphs (A) and (B), a student
shall only be required to return grant
assistance in the amount (if any) by
which--
(I) the amount to be returned
by the student (as determined
under subparagraphs (A) and
(B)), exceeds
(II) 50 percent of the total
grant assistance received by
the student under this title
for the payment period or
period of enrollment.
(ii) Minimum.--A student shall not be
required to return amounts of $50 or
less.
(D) Waivers of federal pell grant repayment
by students affected by disasters.--The
Secretary may waive the amounts that students
are required to return under this section with
respect to Federal Pell Grants if the
withdrawals on which the returns are based are
withdrawals by students--
(i) who were residing in, employed
in, or attending an institution of
higher education that is located in an
area in which the President has
declared that a major disaster exists,
in accordance with section 401 of the
Robert T. Stafford Disaster Relief and
Emergency Assistance Act (42 U.S.C.
5170);
(ii) whose attendance was interrupted
because of the impact of the disaster
on the student or the institution; and
(iii) whose withdrawal ended within
the academic year during which the
designation occurred or during the next
succeeding academic year.
(E) Waivers of grant assistance repayment by
students affected by disasters.--In addition to
the waivers authorized by subparagraph (D), the
Secretary may waive the amounts that students
are required to return under this section with
respect to any other grant assistance under
this title if the withdrawals on which the
returns are based are withdrawals by students--
(i) who were residing in, employed
in, or attending an institution of
higher education that is located in an
area in which the President has
declared that a major disaster exists,
in accordance with section 401 of the
Robert T. Stafford Disaster Relief and
Emergency Assistance Act (42 U.S.C.
5170);
(ii) whose attendance was interrupted
because of the impact of the disaster
on the student or the institution; and
(iii) whose withdrawal ended within
the academic year during which the
designation occurred or during the next
succeeding academic year.
(3) Order of return of title iv funds.--
(A) In general.--Excess funds returned by the
institution or the student, as appropriate, in
accordance with paragraph (1) or (2),
respectively, shall be credited to outstanding
balances on loans made under this title to the
student or on behalf of the student for the
payment period or period of enrollment for
which a return of funds is required. Such
excess funds shall be credited in the following
order:
(i) To outstanding balances on loans
made under section 428H for the payment
period or period of enrollment for
which a return of funds is required.
(ii) To outstanding balances on loans
made under section 428 for the payment
period or period of enrollment for
which a return of funds is required.
(iii) To outstanding balances on
unsubsidized loans (other than parent
loans) made under part D for the
payment period or period of enrollment
for which a return of funds is
required.
(iv) To outstanding balances on
subsidized loans made under part D for
the payment period or period of
enrollment for which a return of funds
is required.
(v) To outstanding balances on loans
made under part E for the payment
period or period of enrollment for
which a return of funds is required.
(vi) To outstanding balances on loans
made under section 428B for the payment
period or period of enrollment for
which a return of funds is required.
(vii) To outstanding balances on
parent loans made under part D for the
payment period or period of enrollment
for which a return of funds is
required.
(B) Remaining excesses.--If excess funds
remain after repaying all outstanding loan
amounts, the remaining excess shall be credited
in the following order:
(i) To awards under subpart 1 of part
A for the payment period or period of
enrollment for which a return of funds
is required.
(ii) To awards under subpart 3 of
part A for the payment period or period
of enrollment for which a return of
funds is required.
(iii) To other assistance awarded
under this title for which a return of
funds is required.
(c) Withdrawal Date.--
(1) In general.--In this section, the term ``day the
student withdrew''--
(A) is the date that the institution
determines--
(i) the student began the withdrawal
process prescribed by the institution;
(ii) the student otherwise provided
official notification to the
institution of the intent to withdraw;
or
(iii) in the case of a student who
does not begin the withdrawal process
or otherwise notify the institution of
the intent to withdraw, the date that
is the mid-point of the payment period
for which assistance under this title
was disbursed or a later date
documented by the institution; or
(B) for institutions required to take
attendance, is determined by the institution
from such attendance records.
(2) Special rule.--Notwithstanding paragraph (1), if
the institution determines that a student did not begin
the withdrawal process, or otherwise notify the
institution of the intent to withdraw, due to illness,
accident, grievous personal loss, or other such
circumstances beyond the student's control, the
institution may determine the appropriate withdrawal
date.
(d) Percentage of the Payment Period or Period of Enrollment
Completed.--For purposes of subsection (a)(3)(B), the
percentage of the payment period or period of enrollment for
which assistance was awarded that was completed, is
determined--
(1) in the case of a program that is measured in
credit hours, by dividing the total number of calendar
days comprising the payment period or period of
enrollment for which assistance is awarded into the
number of calendar days completed in that period as of
the day the student withdrew; and
(2) in the case of a program that is measured in
clock hours, by dividing the total number of clock
hours comprising the payment period or period of
enrollment for which assistance is awarded into the
number of clock hours scheduled to be completed by the
student in that period as of the day the student
withdrew.
(e) Effective Date.--The provisions of this section shall
take effect 2 years after the date of enactment of the Higher
Education Amendments of 1998. An institution of higher
education may choose to implement such provisions prior to that
date.
(f) Reservation of Funds for PROMISE Grants.--Notwithstanding
any other provision of law, the Secretary shall reserve the
funds returned to the Secretary under this section for 1 year
after the return of such funds for the purpose of awarding
PROMISE grants in accordance with subpart 4 of part A of this
title.
* * * * * * *
SEC. 485. INSTITUTIONAL AND FINANCIAL ASSISTANCE INFORMATION FOR
STUDENTS.
(a) Information Dissemination Activities.--(1) Each eligible
institution participating in any program under this title shall
carry out information dissemination activities for prospective
and enrolled students (including those attending or planning to
attend less than full time) regarding the institution and all
financial assistance under this title. The information required
by this section shall be produced and be made readily available
upon request, through appropriate publications, mailings, and
electronic media, to an enrolled student and to any prospective
student. Each eligible institution shall, on an annual basis,
provide to all enrolled students a list of the information that
is required to be provided by institutions to students by this
section and section 444 of the General Education Provisions Act
(commonly known as the ``Family Educational Rights and Privacy
Act of 1974''), together with a statement of the procedures
required to obtain such information. The information required
by this section shall accurately describe--
(A) the student financial assistance programs
available to students who enroll at such institution;
(B) the methods by which such assistance is
distributed among student recipients who enroll at such
institution;
(C) any means, including forms, by which application
for student financial assistance is made and
requirements for accurately preparing such application;
(D) the rights and responsibilities of students
receiving financial assistance under this title;
(E) the cost of attending the institution, including
(i) tuition and fees, (ii) books and supplies, (iii)
estimates of typical student room and board costs or
typical commuting costs, and (iv) any additional cost
of the program in which the student is enrolled or
expresses a specific interest;
(F) a statement of--
(i) the requirements of any refund policy
with which the institution is required to
comply;
(ii) the requirements under section 484B for
the return of grant or loan assistance provided
under this title; and
(iii) the requirements for officially
withdrawing from the institution;
(G) the academic program of the institution,
including (i) the current degree programs and other
educational and training programs, (ii) the
instructional, laboratory, and other physical plant
facilities which relate to the academic program, (iii)
the faculty and other instructional personnel, and (iv)
any plans by the institution for improving the academic
program of the institution;
(H) each person designated under subsection (c) of
this section, and the methods by which and locations in
which any person so designated may be contacted by
students and prospective students who are seeking
information required by this subsection;
(I) special facilities and services available to
students with disabilities;
(J) the names of associations, agencies, or
governmental bodies which accredit, approve, or license
the institution and its programs, and the procedures
under which any current or prospective student may
obtain or review upon request a copy of the documents
describing the institution's accreditation, approval,
or licensing;
(K) the standards which the student must maintain in
order to be considered to be making satisfactory
progress, pursuant to section 484(a)(2);
(L) the completion or graduation rate of certificate-
or degree-seeking, full-time, undergraduate students
entering such institutions;
(M) the terms and conditions of the loans
that students receive under parts B, D, and E;
(N) that enrollment in a program of study abroad
approved for credit by the home institution may be
considered enrollment in the home institution for
purposes of applying for Federal student financial
assistance;
(O) the campus crime report prepared by the
institution pursuant to subsection (f), including all
required reporting categories;
(P) institutional policies and sanctions
related to copyright infringement, including--
(i) an annual disclosure that
explicitly informs students that
unauthorized distribution of
copyrighted material, including
unauthorized peer-to-peer file sharing,
may subject the students to civil and
criminal liabilities;
(ii) a summary of the penalties for
violation of Federal copyright laws;
and
(iii) a description of the
institution's policies with respect to
unauthorized peer-to-peer file sharing,
including disciplinary actions that are
taken against students who engage in
unauthorized distribution of
copyrighted materials using the
institution's information technology
system;
(Q) student body diversity at the
institution, including information on the
percentage of enrolled, full-time students
who--
(i) are male;
(ii) are female;
(iii) receive a Federal Pell Grant;
and
(iv) are a self-identified member of
a major racial or ethnic group;
(R) the placement in employment of, and types
of employment obtained by, graduates of the
institution's degree or certificate programs,
gathered from such sources as alumni surveys,
student satisfaction surveys, the National
Survey of Student Engagement, the Community
College Survey of Student Engagement, State
data systems, or other relevant sources;
(S) the types of graduate and professional
education in which graduates of the
institution's four-year degree programs
enrolled, gathered from such sources as alumni
surveys, student satisfaction surveys, the
National Survey of Student Engagement, State
data systems, or other relevant sources;
(T) the fire safety report prepared by the
institution pursuant to subsection (i);
(U) the retention rate of certificate- or
degree-seeking, first-time, full-time,
undergraduate students entering such
institution; and
(V) institutional policies regarding
vaccinations.
(2) For the purpose of this section, the term ``prospective
student'' means any individual who has contacted an eligible
institution requesting information concerning admission to that
institution.
(3) In calculating the completion or graduation rate under
subparagraph (L) of paragraph (1) of this subsection or under
subsection (e), a student shall be counted as a completion or
graduation if, within 150 percent of the normal time for
completion of or graduation from the program, the student has
completed or graduated from the program, or enrolled in any
program of an eligible institution for which the prior program
provides substantial preparation. The information required to
be disclosed under such subparagraph--
(A) shall be made available by July 1 each year to
enrolled students and prospective students prior to the
students enrolling or entering into any financial
obligation; and
(B) shall cover the one-year period ending on August
31 of the preceding year.
(4) For purposes of this section, institutions may--
(A) exclude from the information disclosed in
accordance with subparagraph (L) of paragraph
(1) the completion or graduation rates of
students who leave school to serve in the Armed
Forces, on official church missions, or with a
recognized foreign aid service of the Federal
Government; or
(B) in cases where the students described in
subparagraph (A) represent 20 percent or more
of the certificate- or degree-seeking, full-
time, undergraduate students at the
institution, recalculate the completion or
graduation rates of such students by excluding
from the calculation described in paragraph (3)
the time period during which such students were
not enrolled due to their service in the Armed
Forces, on official church missions, or with a
recognized foreign aid service of the Federal
Government.
(5) The Secretary shall permit any institution of higher
education that is a member of an athletic association or
athletic conference that has voluntarily published completion
or graduation rate data or has agreed to publish data that, in
the opinion of the Secretary, is substantially comparable to
the information required under this subsection, to use such
data to satisfy the requirements of this subsection; and
(6) Each institution may provide supplemental information to
enrolled and prospective students showing the completion or
graduation rate for students described in paragraph (4) or for
students transferring into the institution or information
showing the rate at which students transfer out of the
institution.
(7)(A)(i) Subject to clause (ii), the information
disseminated under paragraph (1)(L), or reported under
subsection (e), shall be disaggregated by gender, by
each major racial and ethnic subgroup, by recipients of
a Federal Pell Grant, by recipients of a loan made
under part B or D (other than a loan made under section
428H or a Federal Direct Unsubsidized Stafford Loan)
who did not receive a Federal Pell Grant, and by
recipients of neither a Federal Pell Grant nor a loan
made under part B or D (other than a loan made under
section 428H or a Federal Direct Unsubsidized Stafford
Loan), if the number of students in such subgroup or
with such status is sufficient to yield statistically
reliable information and reporting will not reveal
personally identifiable information about an individual
student. If such number is not sufficient for such
purposes, then the institution shall note that the
institution enrolled too few of such students to so
disclose or report with confidence and confidentiality.
(ii) The requirements of clause (i) shall not apply
to two-year, degree-granting institutions of higher
education until academic year 2011-2012.
(B)(i) In order to assist two-year degree-granting
institutions of higher education in meeting the
requirements of paragraph (1)(L) and subsection (e),
the Secretary, in consultation with the Commissioner
for Education Statistics, shall, not later than 90 days
after the date of enactment of the Higher Education
Opportunity Act, convene a group of representatives
from diverse institutions of higher education, experts
in the field of higher education policy, state higher
education officials, students, and other stakeholders
in the higher education community, to develop
recommendations regarding the accurate calculation and
reporting of the information required to be
disseminated or reported under paragraph (1)(L) and
subsection (e) by two-year, degree-granting
institutions of higher education. In developing such
recommendations, the group of representatives shall
consider the mission and role of two-year degree-
granting institutions of higher education, and may
recommend additional or alternative measures of student
success for such institutions in light of the mission
and role of such institutions.
(ii) The Secretary shall widely disseminate the
recommendations required under this subparagraph to
two-year, degree-granting institutions of higher
education, the public, and the authorizing committees
not later than 18 months after the first meeting of the
group of representatives convened under clause (i).
(iii) The Secretary shall use the recommendations
from the group of representatives convened under clause
(i) to provide technical assistance to two-year,
degree-granting institutions of higher education in
meeting the requirements of paragraph (1)(L) and
subsection (e).
(iv) The Secretary may modify the information
required to be disseminated or reported under paragraph
(1)(L) or subsection (e) by a two-year, degree-granting
institution of higher education--
(I) based on the recommendations received
under this subparagraph from the group of
representatives convened under clause (i);
(II) to include additional or alternative
measures of student success if the goals of the
provisions of paragraph (1)(L) and subsection
(e) can be met through additional means or
comparable alternatives; and
(III) during the period beginning on the date
of enactment of the Higher Education
Opportunity Act, and ending on June 30, 2011.
(b) Exit Counseling for Borrowers.--(1)(A) Each eligible
institution shall, through financial aid offices or otherwise,
provide counseling to borrowers of loans that are made,
insured, or guaranteed under part B (other than loans made
pursuant to section 428C or loans under section 428B made on
behalf of a student) or made under part D (other than Federal
Direct Consolidation Loans or Federal Direct PLUS Loans made on
behalf of a student) or made under part E of this title prior
to the completion of the course of study for which the borrower
enrolled at the institution or at the time of departure from
such institution. The counseling required by this subsection
shall include--
(i) information on the repayment plans available,
including a description of the different features of
each plan and sample information showing the average
anticipated monthly payments, and the difference in
interest paid and total payments, under each plan;
(ii) debt management strategies that are designed to
facilitate the repayment of such indebtedness;
(iii) an explanation that the borrower has the
options to prepay each loan, pay each loan on a shorter
schedule, and change repayment plans;
(iv) for any loan forgiveness or cancellation
provision of this title, a general description of the
terms and conditions under which the borrower may
obtain full or partial forgiveness or cancellation of
the principal and interest, and a copy of the
information provided by the Secretary under section
485(d);
(v) for any forbearance provision of this title, a
general description of the terms and conditions under
which the borrower may defer repayment of principal or
interest or be granted forbearance, and a copy of the
information provided by the Secretary under section
485(d);
(vi) the consequences of defaulting on a loan,
including adverse credit reports, delinquent debt
collection procedures under Federal law, and
litigation;
(vii) information on the effects of using a
consolidation loan under section 428C or a Federal
Direct Consolidation Loan to discharge the borrower's
loans under parts B, D, and E, including at a minimum--
(I) the effects of consolidation on total
interest to be paid, fees to be paid, and
length of repayment;
(II) the effects of consolidation on a
borrower's underlying loan benefits, including
grace periods, loan forgiveness, cancellation,
and deferment opportunities;
(III) the option of the borrower to prepay
the loan or to change repayment plans; and
(IV) that borrower benefit programs may vary
among different lenders;
(viii) a general description of the types of tax
benefits that may be available to borrowers;
(ix) a notice to borrowers about the availability of
the National Student Loan Data System and how the
system can be used by a borrower to obtain information
on the status of the borrower's loans; and
(x) an explanation that--
(I) the borrower may be
contacted during the repayment
period by third-party student
debt relief companies;
(II) the borrower should use
caution when dealing with those
companies; and
(III) the services that those
companies typically provide are
already offered to borrowers
free of charge through the
Department or the borrower's
servicer; and
(B) In the case of borrower who leaves an institution without
the prior knowledge of the institution, the institution shall
attempt to provide the information described in subparagraph
(A) to the student in writing.
(2)(A) Each eligible institution shall require that the
borrower of a loan made under part B, D, or E submit to the
institution, during the exit interview required by this
subsection--
(i) the borrower's expected permanent address after
leaving the institution (regardless of the reason for
leaving);
(ii) the name and address of the borrower's expected
employer after leaving the institution;
(iii) the address of the borrower's next of kin; and
(iv) any corrections in the institution's records
relating the borrower's name, address, social security
number, references, and driver's license number.
(B) The institution shall, within 60 days after the
interview, forward any corrected or completed information
received from the borrower to the guaranty agency indicated on
the borrower's student aid records.
(C) Nothing in this subsection shall be construed to prohibit
an institution of higher education from utilizing electronic
means to provide personalized exit counseling.
(c) Financial Assistance Information Personnel.--Each
eligible institution shall designate an employee or group of
employees who shall be available on a full-time basis to assist
students or potential students in obtaining information as
specified in subsection (a). The Secretary may, by regulation,
waive the requirement that an employee or employees be
available on a full-time basis for carrying out
responsibilities required under this section whenever an
institution in which the total enrollment, or the portion of
the enrollment participating in programs under this title at
that institution, is too small to necessitate such employee or
employees being available on a full-time basis. No such waiver
may include permission to exempt any such institution from
designating a specific individual or a group of individuals to
carry out the provisions of this section.
(d) Departmental Publication of Descriptions of Assistance
Programs.--(1) The Secretary shall make available to eligible
institutions, eligible lenders, and secondary schools
descriptions of Federal student assistance programs including
the rights and responsibilities of student and institutional
participants, in order to (A) assist students in gaining
information through institutional sources, and (B) assist
institutions in carrying out the provisions of this section, so
that individual and institutional participants will be fully
aware of their rights and responsibilities under such programs.
In particular, such information shall include information to
enable students and prospective students to assess the debt
burden and monthly and total repayment obligations that will be
incurred as a result of receiving loans of varying amounts
under this title. Such information shall also include
information on the various payment options available for
student loans, including income-sensitive and income-based
repayment plans for loans made, insured, or guaranteed under
part B and income-contingent and income-based repayment plans
for loans made under part D. In addition, such information
shall include information to enable borrowers to assess the
practical consequences of loan consolidation, including
differences in deferment eligibility, interest rates, monthly
payments, and finance charges, and samples of loan
consolidation profiles to illustrate such consequences. The
Secretary shall provide information concerning the specific
terms and conditions under which students may obtain partial or
total cancellation or defer repayment of loans for service,
shall indicate (in terms of the Federal minimum wage) the
maximum level of compensation and allowances that a student
borrower may receive from a tax-exempt organization to qualify
for a deferment, and shall explicitly state that students may
qualify for such partial cancellations or deferments when they
serve as a paid employee of a tax-exempt organization. The
Secretary shall also provide information on loan forbearance,
including the increase in debt that results from capitalization
of interest. Such information shall be provided by eligible
institutions and eligible lenders at any time that information
regarding loan availability is provided to any student.
(2) The Secretary, to the extent the information is
available, shall compile information describing State and other
prepaid tuition programs and savings programs and disseminate
such information to States, eligible institutions, students,
and parents in departmental publications.
(3) The Secretary, to the extent practicable, shall update
the Department's Internet site to include direct links to
databases that contain information on public and private
financial assistance programs. The Secretary shall only provide
direct links to databases that can be accessed without charge
and shall make reasonable efforts to verify that the databases
included in a direct link are not providing fraudulent
information. The Secretary shall prominently display adjacent
to any such direct link a disclaimer indicating that a direct
link to a database does not constitute an endorsement or
recommendation of the database, the provider of the database,
or any services or products of such provider. The Secretary
shall provide additional direct links to information resources
from which students may obtain information about fraudulent and
deceptive practices in the provision of services related to
student financial aid.
(4) The Secretary shall widely publicize the location of the
information described in paragraph (1) among the public,
eligible institutions, and eligible lenders, and promote the
use of such information by prospective students, enrolled
students, families of prospective and enrolled students, and
borrowers.
(e) Disclosures Required With Respect to Athletically Related
Student Aid.--(1) Each institution of higher education which
participates in any program under this title and is attended by
students receiving athletically related student aid shall
annually submit a report to the Secretary which contains--
(A) the number of students at the institution of
higher education who received athletically related
student aid broken down by race and sex in the
following sports: basketball, football, baseball, cross
country/track, and all other sports combined;
(B) the number of students at the institution of
higher education, broken down by race and sex;
(C) the completion or graduation rate for students at
the institution of higher education who received
athletically related student aid broken down by race
and sex in the following sports: basketball, football,
baseball, cross country/track and all other sports
combined;
(D) the completion or graduation rate for students at
the institution of higher education, broken down by
race and sex;
(E) the average completion or graduation rate for the
4 most recent completing or graduating classes of
students at the institution of higher education who
received athletically related student aid broken down
by race and sex in the following categories:
basketball, football, baseball, cross country/track,
and all other sports combined; and
(F) the average completion or graduation rate for the
4 most recent completing or graduating classes of
students at the institution of higher education broken
down by race and sex.
(2) When an institution described in paragraph (1) of this
subsection offers a potential student athlete athletically
related student aid, such institution shall provide to the
student and the student's parents, guidance counselor, and
coach the information contained in the report submitted by such
institution pursuant to paragraph (1). If the institution is a
member of a national collegiate athletic association that
compiles graduation rate data on behalf of the association's
member institutions that the Secretary determines is
substantially comparable to the information described in
paragraph (1), the distribution of the compilation of such data
to all secondary schools in the United States shall fulfill the
responsibility of the institution to provide information to a
prospective student athlete's guidance counselor and coach.
(3) For purposes of this subsection, institutions
may--
(A) exclude from the reporting requirements
under paragraphs (1) and (2) the completion or
graduation rates of students and student
athletes who leave school to serve in the Armed
Forces, on official church missions, or with a
recognized foreign aid service of the Federal
Government; or
(B) in cases where the students described in
subparagraph (A) represent 20 percent or more
of the certificate- or degree-seeking, full-
time, undergraduate students at the
institution, calculate the completion or
graduation rates of such students by excluding
from the calculations described in paragraph
(1) the time period during which such students
were not enrolled due to their service in the
Armed Forces, on official church missions, or
with a recognized foreign aid service of the
Federal Government.
(4) Each institution of higher education described in
paragraph (1) may provide supplemental information to students
and the Secretary showing the completion or graduation rate
when such completion or graduation rate includes students
transferring into and out of such institution.
(5) The Secretary, using the reports submitted under this
subsection, shall compile and publish a report containing the
information required under paragraph (1) broken down by--
(A) individual institutions of higher education; and
(B) athletic conferences recognized by the National
Collegiate Athletic Association and the National
Association of Intercollegiate Athletics.
(6) The Secretary shall waive the requirements of this
subsection for any institution of higher education that is a
member of an athletic association or athletic conference that
has voluntarily published completion or graduation rate data or
has agreed to publish data that, in the opinion of the
Secretary, is substantially comparable to the information
required under this subsection.
(7) The Secretary, in conjunction with the National Junior
College Athletic Association, shall develop and obtain data on
completion or graduation rates from two-year colleges that
award athletically related student aid. Such data shall, to the
extent practicable, be consistent with the reporting
requirements set forth in this section.
(8) For purposes of this subsection, the term ``athletically
related student aid'' means any scholarship, grant, or other
form of financial assistance the terms of which require the
recipient to participate in a program of intercollegiate
athletics at an institution of higher education in order to be
eligible to receive such assistance.
(9) The reports required by this subsection shall be due each
July 1 and shall cover the 1-year period ending August 31 of
the preceding year.
(f) Disclosure of Campus Security Policy and Campus Crime
Statistics.--(1) Each eligible institution participating in any
program under this title, other than a foreign institution of
higher education, shall on August 1, 1991, begin to collect the
following information with respect to campus crime statistics
and campus security policies of that institution, and beginning
September 1, 1992, and each year thereafter, prepare, publish,
and distribute, through appropriate publications or mailings,
to all current students and employees, and to any applicant for
enrollment or employment upon request, an annual security
report containing at least the following information with
respect to the campus security policies and campus crime
statistics of that institution:
(A) A statement of current campus policies regarding
procedures and facilities for students and others to
report criminal actions or other emergencies occurring
on campus and policies concerning the institution's
response to such reports.
(B) A statement of current policies concerning
security and access to campus facilities, including
campus residences, and security considerations used in
the maintenance of campus facilities.
(C) A statement of current policies concerning campus
law enforcement, including--
(i) the law enforcement authority of campus
security personnel;
(ii) the working relationship of campus
security personnel with State and local law
enforcement agencies, including whether the
institution has agreements with such agencies,
such as written memoranda of understanding, for
the investigation of alleged criminal offenses;
and
(iii) policies which encourage accurate and
prompt reporting of all crimes to the campus
police and the appropriate law enforcement
agencies, when the victim of such crime elects
or is unable to make such a report.
(D) A description of the type and frequency of
programs designed to inform students and employees
about campus security procedures and practices and to
encourage students and employees to be responsible for
their own security and the security of others.
(E) A description of programs designed to inform
students and employees about the prevention of crimes.
(F) Statistics concerning the occurrence on campus,
in or on noncampus buildings or property, and on public
property during the most recent calendar year, and
during the 2 preceding calendar years for which data
are available--
(i) of the following criminal offenses
reported to campus security authorities or
local police agencies:
(I) murder;
(II) sex offenses, forcible or
nonforcible;
(III) robbery;
(IV) aggravated assault;
(V) burglary;
(VI) motor vehicle theft;
(VII) manslaughter;
(VIII) arson;
(IX) arrests or persons referred for
campus disciplinary action for liquor
law violations, drug-related
violations, and weapons possession; and
(ii) of the crimes described in subclauses
(I) through (VIII) of clause (i), of larceny-
theft, simple assault, intimidation, and
destruction, damage, or vandalism of property,
and of other crimes involving bodily injury to
any person, in which the victim is
intentionally selected because of the actual or
perceived race, gender, religion, national
origin, sexual orientation, gender identity,,
ethnicity, or disability of the victim that are
reported to campus security authorities or
local police agencies, which data shall be
collected and reported according to category of
prejudice; and
(iii) of domestic violence, dating violence,
and stalking incidents that were reported to
campus security authorities or local police
agencies.
(G) A statement of policy concerning the monitoring
and recording through local police agencies of criminal
activity at off-campus student organizations which are
recognized by the institution and that are engaged in
by students attending the institution, including those
student organizations with off-campus housing
facilities.
(H) A statement of policy regarding the possession,
use, and sale of alcoholic beverages and enforcement of
State underage drinking laws and a statement of policy
regarding the possession, use, and sale of illegal
drugs and enforcement of Federal and State drug laws
and a description of any drug or alcohol abuse
education programs as required under section 120 of
this Act.
(I) A statement advising the campus community where
law enforcement agency information provided by a State
under section 170101(j) of the Violent Crime Control
and Law Enforcement Act of 1994 (42 U.S.C. 14071(j)),
concerning registered sex offenders may be obtained,
such as the law enforcement office of the institution,
a local law enforcement agency with jurisdiction for
the campus, or a computer network address.
(J) A statement of current campus policies
regarding immediate emergency response and
evacuation procedures, including the use of
electronic and cellular communication (if
appropriate), which policies shall include
procedures to--
(i) immediately notify the campus
community upon the confirmation of a
significant emergency or dangerous
situation involving an immediate threat
to the health or safety of students or
staff occurring on the campus, as
defined in paragraph (6), unless
issuing a notification will compromise
efforts to contain the emergency;
(ii) publicize emergency response and
evacuation procedures on an annual
basis in a manner designed to reach
students and staff; and
(iii) test emergency response and
evacuation procedures on an annual
basis.
(2) Nothing in this subsection shall be construed to
authorize the Secretary to require particular policies,
procedures, or practices by institutions of higher education
with respect to campus crimes or campus security.
(3) Each institution participating in any program under this
title, other than a foreign institution of higher education,
shall make timely reports to the campus community on crimes
considered to be a threat to other students and employees
described in paragraph (1)(F) that are reported to campus
security or local law police agencies. Such reports shall be
provided to students and employees in a manner that is timely,
that withholds the names of victims as confidential, and that
will aid in the prevention of similar occurrences.
(4)(A) Each institution participating in any program under
this title, other than a foreign institution of higher
education, that maintains a police or security department of
any kind shall make, keep, and maintain a daily log, written in
a form that can be easily understood, recording all crimes
reported to such police or security department, including--
(i) the nature, date, time, and general location of
each crime; and
(ii) the disposition of the complaint, if known.
(B)(i) All entries that are required pursuant to this
paragraph shall, except where disclosure of such information is
prohibited by law or such disclosure would jeopardize the
confidentiality of the victim, be open to public inspection
within two business days of the initial report being made to
the department or a campus security authority.
(ii) If new information about an entry into a log becomes
available to a police or security department, then the new
information shall be recorded in the log not later than two
business days after the information becomes available to the
police or security department.
(iii) If there is clear and convincing evidence that the
release of such information would jeopardize an ongoing
criminal investigation or the safety of an individual, cause a
suspect to flee or evade detection, or result in the
destruction of evidence, such information may be withheld until
that damage is no longer likely to occur from the release of
such information.
(5) On an annual basis, each institution participating in any
program under this title, other than a foreign institution of
higher education, shall submit to the Secretary a copy of the
statistics required to be made available under paragraph
(1)(F). The Secretary shall--
(A) review such statistics and report to the
authorizing committees on campus crime statistics by
September 1, 2000;
(B) make copies of the statistics submitted to the
Secretary available to the public; and
(C) in coordination with representatives of
institutions of higher education, identify exemplary
campus security policies, procedures, and practices and
disseminate information concerning those policies,
procedures, and practices that have proven effective in
the reduction of campus crime.
(6)(A) In this subsection:
(i) The terms ``dating violence'', ``domestic
violence'', and ``stalking'' have the meaning given
such terms in section 40002(a) of the Violence Against
Women Act of 1994 (42 U.S.C. 13925(a)).
(ii) The term ``campus'' means--
(I) any building or property owned or
controlled by an institution of higher
education within the same reasonably contiguous
geographic area of the institution and used by
the institution in direct support of, or in a
manner related to, the institution's
educational purposes, including residence
halls; and
(II) property within the same reasonably
contiguous geographic area of the institution
that is owned by the institution but controlled
by another person, is used by students, and
supports institutional purposes (such as a food
or other retail vendor).
(iii) The term ``noncampus building or property''
means--
(I) any building or property owned or
controlled by a student organization recognized
by the institution; and
(II) any building or property (other than a
branch campus) owned or controlled by an
institution of higher education that is used in
direct support of, or in relation to, the
institution's educational purposes, is used by
students, and is not within the same reasonably
contiguous geographic area of the institution.
(iv) The term ``public property'' means all public
property that is within the same reasonably contiguous
geographic area of the institution, such as a sidewalk,
a street, other thoroughfare, or parking facility, and
is adjacent to a facility owned or controlled by the
institution if the facility is used by the institution
in direct support of, or in a manner related to the
institution's educational purposes.
(v) The term ``sexual assault'' means an offense
classified as a forcible or nonforcible sex offense
under the uniform crime reporting system of the Federal
Bureau of Investigation.
(B) In cases where branch campuses of an institution of
higher education, schools within an institution of higher
education, or administrative divisions within an institution
are not within a reasonably contiguous geographic area, such
entities shall be considered separate campuses for purposes of
the reporting requirements of this section.
(7) The statistics described in clauses (i) and (ii) of
paragraph (1)(F) shall be compiled in accordance with the
definitions used in the uniform crime reporting system of the
Department of Justice, Federal Bureau of Investigation, and the
modifications in such definitions as implemented pursuant to
the Hate Crime Statistics Act. For the offenses of domestic
violence, dating violence, and stalking, such statistics shall
be compiled in accordance with the definitions used in section
40002(a) of the Violence Against Women Act of 1994 (42 U.S.C.
13925(a)). Such statistics shall not identify victims of crimes
or persons accused of crimes.
(8)(A) Each institution of higher education participating in
any program under this title and title IV of the Economic
Opportunity Act of 1964, other than a foreign institution of
higher education, shall develop and distribute as part of the
report described in paragraph (1) a statement of policy
regarding--
(i) such institution's programs to prevent domestic
violence, dating violence, sexual assault, and
stalking; and
(ii) the procedures that such institution will follow
once an incident of domestic violence, dating violence,
sexual assault, or stalking has been reported,
including a statement of the standard of evidence that
will be used during any institutional conduct
proceeding arising from such a report.
(B) The policy described in subparagraph (A) shall address
the following areas:
(i) Education programs to promote the awareness of
rape, acquaintance rape, domestic violence, dating
violence, sexual assault, and stalking, which shall
include--
(I) primary prevention and awareness programs
for all incoming students and new employees,
which shall include--
(aa) a statement that the institution
of higher education prohibits the
offenses of domestic violence, dating
violence, sexual assault, and stalking;
(bb) the definition of domestic
violence, dating violence, sexual
assault, and stalking in the applicable
jurisdiction;
(cc) the definition of consent, in
reference to sexual activity, in the
applicable jurisdiction;
(dd) safe and positive options for
bystander intervention that may be
carried out by an individual to prevent
harm or intervene when there is a risk
of domestic violence, dating violence,
sexual assault, or stalking against a
person other than such individual;
(ee) information on risk reduction to
recognize warning signs of abusive
behavior and how to avoid potential
attacks; and
(ff) the information described in
clauses (ii) through (vii); and
(II) ongoing prevention and awareness
campaigns for students and faculty, including
information described in items (aa) through
(ff) of subclause (I).
(ii) Possible sanctions or protective measures that
such institution may impose following a final
determination of an institutional disciplinary
procedure regarding rape, acquaintance rape, domestic
violence, dating violence, sexual assault, or stalking.
(iii) Procedures victims should follow if a sex
offense, domestic violence, dating violence, sexual
assault, or stalking has occurred, including
information in writing about--
(I) the importance of preserving evidence as
may be necessary to the proof of criminal
domestic violence, dating violence, sexual
assault, or stalking, or in obtaining a
protection order;
(II) to whom the alleged offense should be
reported;
(III) options regarding law enforcement and
campus authorities, including notification of
the victim's option to--
(aa) notify proper law enforcement
authorities, including on-campus and
local police;
(bb) be assisted by campus
authorities in notifying law
enforcement authorities if the victim
so chooses; and
(cc) decline to notify such
authorities; and
(IV) where applicable, the rights of victims
and the institution's responsibilities
regarding orders of protection, no contact
orders, restraining orders, or similar lawful
orders issued by a criminal, civil, or tribal
court.
(iv) Procedures for institutional disciplinary action
in cases of alleged domestic violence, dating violence,
sexual assault, or stalking, which shall include a
clear statement that--
(I) such proceedings shall--
(aa) provide a prompt, fair, and
impartial investigation and resolution;
and
(bb) be conducted by officials who
receive annual training on the issues
related to domestic violence, dating
violence, sexual assault, and stalking
and how to conduct an investigation and
hearing process that protects the
safety of victims and promotes
accountability;
(II) the accuser and the accused are entitled
to the same opportunities to have others
present during an institutional disciplinary
proceeding, including the opportunity to be
accompanied to any related meeting or
proceeding by an advisor of their choice; and
(III) both the accuser and the accused shall
be simultaneously informed, in writing, of--
(aa) the outcome of any institutional
disciplinary proceeding that arises
from an allegation of domestic
violence, dating violence, sexual
assault, or stalking;
(bb) the institution's procedures for
the accused and the victim to appeal
the results of the institutional
disciplinary proceeding;
(cc) of any change to the results
that occurs prior to the time that such
results become final; and
(dd) when such results become final.
(v) Information about how the institution will
protect the confidentiality of victims, including how
publicly-available recordkeeping will be accomplished
without the inclusion of identifying information about
the victim, to the extent permissible by law.
(vi) Written notification of students and employees
about existing counseling, health, mental health,
victim advocacy, legal assistance, and other services
available for victims both on-campus and in the
community.
(vii) Written notification of victims about options
for, and available assistance in, changing academic,
living, transportation, and working situations, if so
requested by the victim and if such accommodations are
reasonably available, regardless of whether the victim
chooses to report the crime to campus police or local
law enforcement.
(C) A student or employee who reports to an institution of
higher education that the student or employee has been a victim
of domestic violence, dating violence, sexual assault, or
stalking, whether the offense occurred on or off campus, shall
be provided with a written explanation of the student or
employee's rights and options, as described in clauses (ii)
through (vii) of subparagraph (B).
(9) The Secretary, in consultation with the Attorney General
of the United States, shall provide technical assistance in
complying with the provisions of this section to an institution
of higher education who requests such assistance.
(10) Nothing in this section shall be construed to require
the reporting or disclosure of privileged information.
(11) The Secretary shall report to the appropriate committees
of Congress each institution of higher education that the
Secretary determines is not in compliance with the reporting
requirements of this subsection.
(12) For purposes of reporting the statistics with respect to
crimes described in paragraph (1)(F), an institution of higher
education shall distinguish, by means of separate categories,
any criminal offenses that occur--
(A) on campus;
(B) in or on a noncampus building or property;
(C) on public property; and
(D) in dormitories or other residential facilities
for students on campus.
(13) Upon a determination pursuant to section 487(c)(3)(B)
that an institution of higher education has substantially
misrepresented the number, location, or nature of the crimes
required to be reported under this subsection, the Secretary
shall impose a civil penalty upon the institution in the same
amount and pursuant to the same procedures as a civil penalty
is imposed under section 487(c)(3)(B).
(14)(A) Nothing in this subsection may be construed to--
(i) create a cause of action against any institution
of higher education or any employee of such an
institution for any civil liability; or
(ii) establish any standard of care.
(B) Notwithstanding any other provision of law, evidence
regarding compliance or noncompliance with this subsection
shall not be admissible as evidence in any proceeding of any
court, agency, board, or other entity, except with respect to
an action to enforce this subsection.
(15) The Secretary shall annually report to the
authorizing committees regarding compliance with this
subsection by institutions of higher education,
including an up-to-date report on the Secretary's
monitoring of such compliance.
(16)(A) The Secretary shall seek the advice and counsel of
the Attorney General of the United States concerning the
development, and dissemination to institutions of higher
education, of best practices information about campus safety
and emergencies.
(B) The Secretary shall seek the advice and counsel of the
Attorney General of the United States and the Secretary of
Health and Human Services concerning the development, and
dissemination to institutions of higher education, of best
practices information about preventing and responding to
incidents of domestic violence, dating violence, sexual
assault, and stalking, including elements of institutional
policies that have proven successful based on evidence-based
outcome measurements.
(17) No officer, employee, or agent of an institution
participating in any program under this title shall retaliate,
intimidate, threaten, coerce, or otherwise discriminate against
any individual for exercising their rights or responsibilities
under any provision of this subsection.
(18) This subsection may be cited as the ``Jeanne Clery
Disclosure of Campus Security Policy and Campus Crime
Statistics Act''.
(g) Data Required.--
(1) In general.--Each coeducational institution of
higher education that participates in any program under
this title, and has an intercollegiate athletic
program, shall annually, for the immediately preceding
academic year, prepare a report that contains the
following information regarding intercollegiate
athletics:
(A) The number of male and female full-time
undergraduates that attended the institution.
(B) A listing of the varsity teams that
competed in intercollegiate athletic
competition and for each such team the
following data:
(i) The total number of participants,
by team, as of the day of the first
scheduled contest for the team.
(ii) Total operating expenses
attributable to such teams, except that
an institution may also report such
expenses on a per capita basis for each
team and expenditures attributable to
closely related teams such as track and
field or swimming and diving, may be
reported together, although such
combinations shall be reported
separately for men's and women's teams.
(iii) Whether the head coach is male
or female and whether the head coach is
assigned to that team on a full-time or
part-time basis. Graduate assistants
and volunteers who serve as head
coaches shall be considered to be head
coaches for the purposes of this
clause.
(iv) The number of assistant coaches
who are male and the number of
assistant coaches who are female for
each team and whether a particular
coach is assigned to that team on a
full-time or part-time basis. Graduate
assistants and volunteers who serve as
assistant coaches shall be considered
to be assistant coaches for the
purposes of this clause.
(C) The total amount of money spent on
athletically related student aid, including the
value of waivers of educational expenses,
separately for men's and women's teams overall.
(D) The ratio of athletically related student
aid awarded male athletes to athletically
related student aid awarded female athletes.
(E) The total amount of expenditures on
recruiting, separately for men's and women's
teams overall.
(F) The total annual revenues generated
across all men's teams and across all women's
teams, except that an institution may also
report such revenues by individual team.
(G) The average annual institutional salary
of the head coaches of men's teams, across all
offered sports, and the average annual
institutional salary of the head coaches of
women's teams, across all offered sports.
(H) The average annual institutional salary
of the assistant coaches of men's teams, across
all offered sports, and the average annual
institutional salary of the assistant coaches
of women's teams, across all offered sports.
(I)(i) The total revenues, and the revenues
from football, men's basketball, women's
basketball, all other men's sports combined and
all other women's sports combined, derived by
the institution from the institution's
intercollegiate athletics activities.
(ii) For the purpose of clause (i), revenues
from intercollegiate athletics activities
allocable to a sport shall include (without
limitation) gate receipts, broadcast revenues,
appearance guarantees and options, concessions,
and advertising, but revenues such as student
activities fees or alumni contributions not so
allocable shall be included in the calculation
of total revenues only.
(J)(i) The total expenses, and the expenses
attributable to football, men's basketball,
women's basketball, all other men's sports
combined, and all other women's sports
combined, made by the institution for the
institution's intercollegiate athletics
activities.
(ii) For the purpose of clause (i), expenses
for intercollegiate athletics activities
allocable to a sport shall include (without
limitation) grants-in-aid, salaries, travel,
equipment, and supplies, but expenses such as
general and administrative overhead not so
allocable shall be included in the calculation
of total expenses only.
(2) Special rule.--For the purposes of paragraph
(1)(G), if a coach has responsibilities for more than
one team and the institution does not allocate such
coach's salary by team, the institution should divide
the salary by the number of teams for which the coach
has responsibility and allocate the salary among the
teams on a basis consistent with the coach's
responsibilities for the different teams.
(3) Disclosure of information to students and
public.--An institution of higher education described
in paragraph (1) shall make available to students and
potential students, upon request, and to the public,
the information contained in the report described in
paragraph (1), except that all students shall be
informed of their right to request such information.
(4) Submission; report; information availability.--
(A) On an annual basis, each institution of higher
education described in paragraph (1) shall provide to
the Secretary, within 15 days of the date that the
institution makes available the report under paragraph
(1), the information contained in the report.
(B) The Secretary shall ensure that the reports
described in subparagraph (A) are made available to the
public within a reasonable period of time.
(C) Not later than 180 days after the date of
enactment of the Higher Education Amendments of 1998,
the Secretary shall notify all secondary schools in all
States regarding the availability of the information
made available under paragraph (1), and how such
information may be accessed.
(5) Definition.--For the purposes of this subsection,
the term ``operating expenses'' means expenditures on
lodging and meals, transportation, officials, uniforms
and equipment.
(h) Transfer of Credit Policies.--
(1) Disclosure.--Each institution of higher education
participating in any program under this title shall
publicly disclose, in a readable and comprehensible
manner, the transfer of credit policies established by
the institution which shall include a statement of the
institution's current transfer of credit policies that
includes, at a minimum--
(A) any established criteria the institution
uses regarding the transfer of credit earned at
another institution of higher education,
including with respect to the acceptance or
denial of such credit; and
(B) a list of institutions of higher
education with which the institution has
established an articulation agreement.
(2) Denial of credit transfer.--An institution may
not establish a transfer of credit policy which denies
credit earned at another institution based solely on
the source of accreditation of such other institution,
provided that such other institution is accredited by
an agency or association that is recognized by the
Secretary pursuant to section 496.
[(2)] (3) Rule of construction.--Nothing in this
subsection shall be construed to--
(A) authorize the Secretary or the National
Advisory Committee on Institutional Quality and
Integrity to require particular policies,
procedures, or practices by institutions of
higher education with respect to transfer of
credit;
(B) authorize an officer or employee of the
Department to exercise any direction,
supervision, or control over the curriculum,
program of instruction, administration, or
personnel of any institution of higher
education, or over any accrediting agency or
association;
(C) limit the application of the General
Education Provisions Act; or
(D) create any legally enforceable right on
the part of a student to require an institution
of higher education to accept a transfer of
credit from another institution.
(i) Disclosure of Fire Safety Standards and Measures.--
(1) Annual fire safety reports on student housing
required.--Each eligible institution participating in
any program under this title that maintains on-campus
student housing facilities shall, on an annual basis,
publish a fire safety report, which shall contain
information with respect to the campus fire safety
practices and standards of that institution,
including--
(A) statistics concerning the following in
each on-campus student housing facility during
the most recent calendar years for which data
are available:
(i) the number of fires and the cause
of each fire;
(ii) the number of injuries related
to a fire that result in treatment at a
medical facility;
(iii) the number of deaths related to
a fire; and
(iv) the value of property damage
caused by a fire;
(B) a description of each on-campus student
housing facility fire safety system, including
the fire sprinkler system;
(C) the number of regular mandatory
supervised fire drills;
(D) policies or rules on portable electrical
appliances, smoking, and open flames (such as
candles), procedures for evacuation, and
policies regarding fire safety education and
training programs provided to students,
faculty, and staff; and
(E) plans for future improvements in fire
safety, if determined necessary by such
institution.
(2) Report to the secretary.--Each institution
described in paragraph (1) shall, on an annual basis,
submit to the Secretary a copy of the statistics
required to be made available under paragraph (1)(A).
(3) Current information to campus community.--Each
institution described in paragraph (1) shall--
(A) make, keep, and maintain a log, recording
all fires in on-campus student housing
facilities, including the nature, date, time,
and general location of each fire; and
(B) make annual reports to the campus
community on such fires.
(4) Responsibilities of the secretary.--The Secretary
shall--
(A) make the statistics submitted under
paragraph (1)(A) to the Secretary available to
the public; and
(B) in coordination with nationally
recognized fire organizations and
representatives of institutions of higher
education, representatives of associations of
institutions of higher education, and other
organizations that represent and house a
significant number of students--
(i) identify exemplary fire safety
policies, procedures, programs, and
practices, including the installation,
to the technical standards of the
National Fire Protection Association,
of fire detection, prevention, and
protection technologies in student
housing, dormitories, and other
buildings;
(ii) disseminate the exemplary
policies, procedures, programs and
practices described in clause (i) to
the Administrator of the United States
Fire Administration;
(iii) make available to the public
information concerning those policies,
procedures, programs, and practices
that have proven effective in the
reduction of fires; and
(iv) develop a protocol for
institutions to review the status of
their fire safety systems.
(5) Rules of construction.--Nothing in this
subsection shall be construed to--
(A) authorize the Secretary to require
particular policies, procedures, programs, or
practices by institutions of higher education
with respect to fire safety, other than with
respect to the collection, reporting, and
dissemination of information required by this
subsection;
(B) affect section 444 of the General
Education Provisions Act (commonly known as the
``Family Educational Rights and Privacy Act of
1974'') or the regulations issued under section
264 of the Health Insurance Portability and
Accountability Act of 1996 (42 U.S.C. 1320d-2
note);
(C) create a cause of action against any
institution of higher education or any employee
of such an institution for any civil liability;
or
(D) establish any standard of care.
(6) Compliance report.--The Secretary shall annually
report to the authorizing committees regarding
compliance with this subsection by institutions of
higher education, including an up-to-date report on the
Secretary's monitoring of such compliance.
(7) Evidence.--Notwithstanding any other provision of
law, evidence regarding compliance or noncompliance
with this subsection shall not be admissible as
evidence in any proceeding of any court, agency, board,
or other entity, except with respect to an action to
enforce this subsection.
(j) Missing Person Procedures.--
(1) Option and procedures.--Each institution of
higher education that provides on-campus housing and
participates in any program under this title shall--
(A) establish a missing student notification
policy for students who reside in on-campus
housing that--
(i) informs each such student that
such student has the option to identify
an individual to be contacted by the
institution not later than 24 hours
after the time that the student is
determined missing in accordance with
official notification procedures
established by the institution under
subparagraph (B);
(ii) provides each such student a
means to register confidential contact
information in the event that the
student is determined to be missing for
a period of more than 24 hours;
(iii) advises each such student who
is under 18 years of age, and not an
emancipated individual, that the
institution is required to notify a
custodial parent or guardian not later
24 hours after the time that the
student is determined to be missing in
accordance with such procedures;
(iv) informs each such residing
student that the institution will
notify the appropriate law enforcement
agency not later than 24 hours after
the time that the student is determined
missing in accordance with such
procedures; and
(v) requires, if the campus security
or law enforcement personnel has been
notified and makes a determination that
a student who is the subject of a
missing person report has been missing
for more than 24 hours and has not
returned to the campus, the institution
to initiate the emergency contact
procedures in accordance with the
student's designation; and
(B) establish official notification
procedures for a missing student who resides in
on-campus housing that--
(i) includes procedures for official
notification of appropriate individuals
at the institution that such student
has been missing for more than 24
hours;
(ii) requires any official missing
person report relating to such student
be referred immediately to the
institution's police or campus security
department; and
(iii) if, on investigation of the
official report, such department
determines that the missing student has
been missing for more than 24 hours,
requires--
(I) such department to
contact the individual
identified by such student
under subparagraph (A)(i);
(II) if such student is under
18 years of age, and not an
emancipated individual, the
institution to immediately
contact the custodial parent or
legal guardian of such student;
and
(III) if subclauses (I) or
(II) do not apply to a student
determined to be a missing
person, inform the appropriate
law enforcement agency.
(2) Rule of construction.--Nothing in this subsection
shall be construed--
(A) to provide a private right of action to
any person to enforce any provision of this
subsection; or
(B) to create a cause of action against any
institution of higher education or any employee
of the institution for any civil liability.
(k) Notice to Students Concerning Penalties for Drug
Violations.--
(1) Notice upon enrollment.--Each institution of
higher education shall provide to each student, upon
enrollment, a separate, clear, and conspicuous written
notice that advises the student of the penalties under
section 484(r).
(2) Notice after loss of eligibility.--An institution
of higher education shall provide in a timely manner to
each student who has lost eligibility for any grant,
loan, or work-study assistance under this title as a
result of the penalties listed under section 484(r)(1)
a separate, clear, and conspicuous written notice that
notifies the student of the loss of eligibility and
advises the student of the ways in which the student
can regain eligibility under section 484(r)(2).
(l) Entrance Counseling for Borrowers.--
(1) Disclosure required prior to disbursement.--
(A) In general.--Each eligible institution
shall, at or prior to the time of a
disbursement to a first-time borrower of a loan
made, insured, or guaranteed under part B
(other than a loan made pursuant to section
428C or a loan made on behalf of a student
pursuant to section 428B) or made under part D
(other than a Federal Direct Consolidation Loan
or a Federal Direct PLUS loan made on behalf of
a student), ensure that the borrower receives
comprehensive information on the terms and
conditions of the loan and of the
responsibilities the borrower has with respect
to such loan in accordance with paragraph (2).
Such information--
(i) shall be provided in a simple and
understandable manner; and
(ii) may be provided--
(I) during an entrance
counseling session conduction
in person;
(II) on a separate written
form provided to the borrower
that the borrower signs and
returns to the institution; or
(III) online, with the
borrower acknowledging receipt
of the information.
(B) Use of interactive programs.--The
Secretary shall encourage institutions to carry
out the requirements of subparagraph (A)
through the use of interactive programs that
test the borrower's understanding of the terms
and conditions of the borrower's loans under
part B or D, using simple and understandable
language and clear formatting.
(2) Information to be provided.--The information to
be provided to the borrower under paragraph (1)(A)
shall include the following:
(A) To the extent practicable, the effect of
accepting the loan to be disbursed on the
eligibility of the borrower for other forms of
student financial assistance.
(B) An explanation of the use of the master
promissory note.
(C) Information on how interest accrues and
is capitalized during periods when the interest
is not paid by either the borrower or the
Secretary.
(D) In the case of a loan made under section
428B or 428H, a Federal Direct PLUS Loan, or a
Federal Direct Unsubsidized Stafford Loan, the
option of the borrower to pay the interest
while the borrower is in school.
(E) The definition of half-time enrollment at
the institution, during regular terms and
summer school, if applicable, and the
consequences of not maintaining half-time
enrollment.
(F) An explanation of the importance of
contacting the appropriate offices at the
institution of higher education if the borrower
withdraws prior to completing the borrower's
program of study so that the institution can
provide exit counseling, including information
regarding the borrower's repayment options and
loan consolidation.
(G) Sample monthly repayment amounts based
on--
(i) a range of levels of indebtedness
of--
(I) borrowers of loans under
section 428 or 428H; and
(II) as appropriate, graduate
borrowers of loans under
section 428, 428B, or 428H; or
(ii) the average cumulative
indebtedness of other borrowers in the
same program as the borrower at the
same institution.
(H) The obligation of the borrower to repay
the full amount of the loan, regardless of
whether the borrower completes or does not
complete the program in which the borrower is
enrolled within the regular time for program
completion.
(I) The likely consequences of default on the
loan, including adverse credit reports,
delinquent debt collection procedures under
Federal law, and litigation.
(J) Information on the National Student Loan
Data System and how the borrower can access the
borrower's records.
(K) The name of and contact information for
the individual the borrower may contact if the
borrower has any questions about the borrower's
rights and responsibilities or the terms and
conditions of the loan.
(m) Disclosures of Reimbursements for Service on Advisory
Boards.--
(1) Disclosure.--Each institution of higher education
participating in any program under this title shall
report, on an annual basis, to the Secretary, any
reasonable expenses paid or provided under section
140(d) of the Truth in Lending Act to any employee who
is employed in the financial aid office of the
institution, or who otherwise has responsibilities with
respect to education loans or other financial aid of
the institution. Such reports shall include--
(A) the amount for each specific instance of
reasonable expenses paid or provided;
(B) the name of the financial aid official,
other employee, or agent to whom the expenses
were paid or provided;
(C) the dates of the activity for which the
expenses were paid or provided; and
(D) a brief description of the activity for
which the expenses were paid or provided.
(2) Report to congress.--The Secretary shall
summarize the information received from institutions of
higher education under paragraph (1) in a report and
transmit such report annually to the authorizing
committees.
* * * * * * *
SEC. 487. PROGRAM PARTICIPATION AGREEMENTS.
(a) Required for Programs of Assistance; Contents.--In order
to be an eligible institution for the purposes of any program
authorized under this title, an institution must be an
institution of higher education or an eligible institution (as
that term is defined for the purpose of that program) and
shall, except with respect to a program under subpart 4 of part
A, enter into a program participation agreement with the
Secretary. The agreement shall condition the initial and
continuing eligibility of an institution to participate in a
program upon compliance with the following requirements:
(1) The institution will use funds received by it for
any program under this title and any interest or other
earnings thereon solely for the purpose specified in
and in accordance with the provision of that program.
(2) The institution shall not charge any student a
fee for processing or handling any application, form,
or data required to determine the student's eligibility
for assistance under this title or the amount of such
assistance.
(3) The institution will establish and maintain such
administrative and fiscal procedures and records as may
be necessary to ensure proper and efficient
administration of funds received from the Secretary or
from students under this title, together with
assurances that the institution will provide, upon
request and in a timely fashion, information relating
to the administrative capability and financial
responsibility of the institution to--
(A) the Secretary;
(B) the appropriate guaranty agency; and
(C) the appropriate accrediting agency or
association.
(4) The institution will comply with the provisions
of subsection (c) of this section and the regulations
prescribed under that subsection, relating to fiscal
eligibility.
(5) The institution will submit reports to the
Secretary and, in the case of an institution
participating in a program under part B or part E, to
holders of loans made to the institution's students
under such parts at such times and containing such
information as the Secretary may reasonably require to
carry out the purpose of this title.
(6) The institution will not provide any student with
any statement or certification to any lender under part
B that qualifies the student for a loan or loans in
excess of the amount that student is eligible to borrow
in accordance with sections 425(a), 428(a)(2), and
428(b)(1) (A) and (B).
(7) The institution will comply with the requirements
of section 485.
(8) In the case of an institution that advertises job
placement rates as a means of attracting students to
enroll in the institution, the institution will make
available to prospective students, at or before the
time of application (A) the most recent available data
concerning employment statistics, graduation
statistics, and any other information necessary to
substantiate the truthfulness of the advertisements,
and (B) relevant State licensing requirements of the
State in which such institution is located for any job
for which the course of instruction is designed to
prepare such prospective students.
(9) In the case of an institution participating in a
program under part B or D, the institution will inform
all eligible borrowers enrolled in the institution
about the availability and eligibility of such
borrowers for State grant assistance from the State in
which the institution is located, and will inform such
borrowers from another State of the source for further
information concerning such assistance from that State.
(10) The institution certifies that it has in
operation a drug abuse prevention program that is
determined by the institution to be accessible to any
officer, employee, or student at the institution.
(11) In the case of any institution whose students
receive financial assistance pursuant to section
484(d), the institution will make available to such
students a program proven successful in assisting
students in obtaining a certificate of high school
equivalency.
(12) The institution certifies that--
(A) the institution has established a campus
security policy; and
(B) the institution has complied with the
disclosure requirements of section 485(f).
(13) The institution will not deny any form of
Federal financial aid to any student who meets the
eligibility requirements of this title on the grounds
that the student is participating in a program of study
abroad approved for credit by the institution.
(14)(A) The institution, in order to participate as
an eligible institution under part B or D, will develop
a Default Management Plan for approval by the Secretary
as part of its initial application for certification as
an eligible institution and will implement such Plan
for two years thereafter.
(B) Any institution of higher education which changes
ownership and any eligible institution which changes
its status as a parent or subordinate institution
shall, in order to participate as an eligible
institution under part B or D, develop a Default
Management Plan for approval by the Secretary and
implement such Plan for two years after its change of
ownership or status.
(C) This paragraph shall not apply in the case of an
institution in which (i) neither the parent nor the
subordinate institution has a cohort default rate in
excess of 10 percent, and (ii) the new owner of such
parent or subordinate institution does not, and has
not, owned any other institution with a cohort default
rate in excess of 10 percent.
(15) The institution acknowledges the authority of
the Secretary, guaranty agencies, lenders, accrediting
agencies, the Secretary of Veterans Affairs, and the
State agencies under subpart 1 of part H to share with
each other any information pertaining to the
institution's eligibility to participate in programs
under this title or any information on fraud and abuse.
(16)(A) The institution will not knowingly employ an
individual in a capacity that involves the
administration of programs under this title, or the
receipt of program funds under this title, who has been
convicted of, or has pled nolo contendere or guilty to,
a crime involving the acquisition, use, or expenditure
of funds under this title, or has been judicially
determined to have committed fraud involving funds
under this title or contract with an institution or
third party servicer that has been terminated under
section 432 involving the acquisition, use, or
expenditure of funds under this title, or who has been
judicially determined to have committed fraud involving
funds under this title.
(B) The institution will not knowingly contract with
or employ any individual, agency, or organization that
has been, or whose officers or employees have been--
(i) convicted of, or pled nolo contendere or
guilty to, a crime involving the acquisition,
use, or expenditure of funds under this title;
or
(ii) judicially determined to have committed
fraud involving funds under this title.
[(17) The institution will complete surveys conducted
as a part of the Integrated Postsecondary Education
Data System (IPEDS) or any other Federal postsecondary
institution data collection effort, as designated by
the Secretary, in a timely manner and to the
satisfaction of the Secretary.]
(17) The institution or the assigned agent of the
institution will collect and submit to the Commissioner
for Education Statistics data in accordance with
section 132(f), the non-student related surveys within
the Integrated Postsecondary Education Data System
(IPEDS), or any other Federal institution of higher
education data collection effort (as designated by the
Secretary), in a timely manner and to the satisfaction
of the Secretary.
(18) The institution will meet the requirements
established pursuant to section 485(g).
(19) The institution will not impose any penalty,
including the assessment of late fees, the denial of
access to classes, libraries, or other institutional
facilities, or the requirement that the student borrow
additional funds, on any student because of the
student's inability to meet his or her financial
obligations to the institution as a result of the
delayed disbursement of the proceeds of a loan made
under this title due to compliance with the provisions
of this title, or delays attributable to the
institution.
[(20) The institution will not provide any
commission, bonus, or other incentive payment based
directly or indirectly on success in securing
enrollments or financial aid to any persons or entities
engaged in any student recruiting or admission
activities or in making decisions regarding the award
of student financial assistance, except that this
paragraph shall not apply to the recruitment of foreign
students residing in foreign countries who are not
eligible to receive Federal student assistance.]
(20) The institution will not provide any commission,
bonus, or other incentive payment based directly or
indirectly on success in securing enrollments or
financial aid to any persons or entities engaged in any
student recruiting or admission activities, or in
making decisions regarding the award of student
financial assistance, except that this paragraph shall
not apply--
(A) to the recruitment of foreign students
residing in foreign countries who are not
eligible to receive Federal student assistance;
or
(B) to a third party where--
(i) the third party is providing the
institution recruiting or admissions
activities as part of a larger bundle
of services not covered by this
paragraph and which may include
marketing or advertising activities
that broadly disseminate or distribute
widely available information;
(ii) the third party does not provide
any commission, bonus, or other
incentive-based payments to its
employees or subcontractors who are
providing services to the institution
covered in this paragraph; and
(iii) the third party is not awarding
or disbursing Federal financial aid
awards.
(21) The institution will meet the requirements
established by the Secretary and accrediting agencies
or associations, and will provide evidence to the
Secretary that the institution has the authority to
operate within a State.
(22) The institution will comply with the refund
policy established pursuant to section 484B.
(23)(A) The institution, if located in a State to
which section 4(b) of the National Voter Registration
Act of 1993 (42 U.S.C. 1973gg-2(b)) does not apply,
will make a good faith effort to distribute a mail
voter registration form, requested and received from
the State, to each student enrolled in a degree or
certificate program and physically in attendance at the
institution, and to make such forms widely available to
students at the institution.
(B) The institution shall request the forms from the
State 120 days prior to the deadline for registering to
vote within the State. If an institution has not
received a sufficient quantity of forms to fulfill this
section from the State within 60 days prior to the
deadline for registering to vote in the State, the
institution shall not be held liable for not meeting
the requirements of this section during that election
year.
(C) This paragraph shall apply to general and special
elections for Federal office, as defined in section
301(3) of the Federal Election Campaign Act of 1971 (2
U.S.C. 431(3)), and to the elections for Governor or
other chief executive within such State).
(D) The institution shall be considered in
compliance with the requirements of
subparagraph (A) for each student to whom the
institution electronically transmits a message
containing a voter registration form acceptable
for use in the State in which the institution
is located, or an Internet address where such a
form can be downloaded, if such information is
in an electronic message devoted exclusively to
voter registration.
[(24) In the case of a proprietary institution of
higher education (as defined in section 102(b)), such
institution will derive not less than ten percent of
such institution's revenues from sources other than
Federal funds that are disbursed or delivered to or on
behalf of a student to be used to attend such
institution (referred to in this paragraph and
subsection (d) as ``Federal education assistance
funds''), as calculated in accordance with subsection
(d)(1), or will be subject to the sanctions described
in subsection (d)(2).]
(25) In the case of an institution that participates
in a loan program under this title, the institution
will--
(A) develop a code of conduct with respect to
such loans with which the institution's
officers, employees, and agents shall comply,
that--
(i) prohibits a conflict of interest
with the responsibilities of an
officer, employee, or agent of an
institution with respect to such loans;
and
(ii) at a minimum, includes the
provisions described in subsection (e);
(B) publish such code of conduct prominently
on the institution's website; and
(C) administer and enforce such code by, at a
minimum, requiring that all of the
institution's officers, employees, and agents
with responsibilities with respect to such
loans be annually informed of the provisions of
the code of conduct.
(26) The institution will, upon written request,
disclose to the alleged victim of any crime of violence
(as that term is defined in section 16 of title 18,
United States Code), or a nonforcible sex offense, the
report on the results of any disciplinary proceeding
conducted by such institution against a student who is
the alleged perpetrator of such crime or offense with
respect to such crime or offense. If the alleged victim
of such crime or offense is deceased as a result of
such crime or offense, the next of kin of such victim
shall be treated as the alleged victim for purposes of
this paragraph.
(27) In the case of an institution that has entered
into a preferred lender arrangement, the institution
will at least annually compile, maintain, and make
available for students attending the institution, and
the families of such students, a list, in print or
other medium, of the specific lenders for loans made,
insured, or guaranteed under this title or private
education loans that the institution recommends,
promotes, or endorses in accordance with such preferred
lender arrangement. In making such list, the
institution shall comply with the requirements of
subsection (h).
(28)(A) The institution will, upon the request of an
applicant for a private education loan, provide to the
applicant the form required under section 128(e)(3) of
the Truth in Lending Act (15 U.S.C. 1638(e)(3)), and
the information required to complete such form, to the
extent the institution possesses such information.
(B) For purposes of this paragraph, the term
``private education loan'' has the meaning given such
term in section 140 of the Truth in Lending Act.
(29) The institution certifies that the institution--
(A) has developed plans to effectively combat
the unauthorized distribution of copyrighted
material, including through the use of a
variety of technology-based deterrents; and
(B) will, to the extent practicable, offer
alternatives to illegal downloading or peer-to-
peer distribution of intellectual property, as
determined by the institution in consultation
with the chief technology officer or other
designated officer of the institution.
(b) Hearings.--(1) An institution that has received written
notice of a final audit or program review determination and
that desires to have such determination reviewed by the
Secretary shall submit to the Secretary a written request for
review not later than 45 days after receipt of notification of
the final audit or program review determination.
(2) The Secretary shall, upon receipt of written notice under
paragraph (1), arrange for a hearing and notify the institution
within 30 days of receipt of such notice the date, time, and
place of such hearing. Such hearing shall take place not later
than 120 days from the date upon which the Secretary notifies
the institution.
(c) Audits; Financial Responsibility; Enforcement of
Standards.--(1) Notwithstanding any other provisions of this
title, the Secretary shall prescribe such regulations as may be
necessary to provide for--
(A)(i) except as provided in clauses (ii) and (iii),
a financial audit of an eligible institution with
regard to the financial condition of the institution in
its entirety, and a compliance audit of such
institution with regard to any funds obtained by it
under this title or obtained from a student or a parent
who has a loan insured or guaranteed by the Secretary
under this title, on at least an annual basis and
covering the period since the most recent audit,
conducted by a qualified, independent organization or
person in accordance with standards established by the
Comptroller General for the audit of governmental
organizations, programs, and functions, and as
prescribed in regulations of the Secretary, the results
of which shall be submitted to the Secretary and shall
be available to cognizant guaranty agencies, eligible
lenders, State agencies, and the appropriate State
agency notifying the Secretary under subpart 1 of part
H, except that the Secretary may modify the
requirements of this clause with respect to
institutions of higher education that are foreign
institutions, and may waive such requirements with
respect to a foreign institution whose students receive
less than $500,000 in loans under this title during the
award year preceding the audit period;
(ii) with regard to an eligible institution which is
audited under chapter 75 of title 31, United States
Code, deeming such audit to satisfy the requirements of
clause (i) for the period covered by such audit; or
(iii) at the discretion of the Secretary, with regard
to an eligible institution (other than an eligible
institution described in section 102(a)(1)(C)) that has
obtained less than $200,000 in funds under this title
during each of the 2 award years that precede the audit
period and submits a letter of credit payable to the
Secretary equal to not less than \1/2\ of the annual
potential liabilities of such institution as determined
by the Secretary, deeming an audit conducted every 3
years to satisfy the requirements of clause (i), except
for the award year immediately preceding renewal of the
institution's eligibility under section 498(g);
(B) in matters not governed by specific program
provisions, the establishment of reasonable standards
of financial responsibility and appropriate
institutional capability for the administration by an
eligible institution of a program of student financial
aid under this title, including any matter the
Secretary deems necessary to the sound administration
of the financial aid programs, such as the pertinent
actions of any owner, shareholder, or person exercising
control over an eligible institution;
(C)(i) except as provided in clause (ii), a
compliance audit of a third party servicer (other than
with respect to the servicer's functions as a lender if
such functions are otherwise audited under this part
and such audits meet the requirements of this clause),
with regard to any contract with an eligible
institution, guaranty agency, or lender for
administering or servicing any aspect of the student
assistance programs under this title, at least once
every year and covering the period since the most
recent audit, conducted by a qualified, independent
organization or person in accordance with standards
established by the Comptroller General for the audit of
governmental organizations, programs, and functions,
and as prescribed in regulations of the Secretary, the
results of which shall be submitted to the Secretary;
or
(ii) with regard to a third party servicer that is
audited under chapter 75 of title 31, United States
Code, such audit shall be deemed to satisfy the
requirements of clause (i) for the period covered by
such audit;
(D)(i) a compliance audit of a secondary market with
regard to its transactions involving, and its servicing
and collection of, loans made under this title, at
least once a year and covering the period since the
most recent audit, conducted by a qualified,
independent organization or person in accordance with
standards established by the Comptroller General for
the audit of governmental organizations, programs, and
functions, and as prescribed in regulations of the
Secretary, the results of which shall be submitted to
the Secretary; or
(ii) with regard to a secondary market that is
audited under chapter 75 of title 31, United States
Code, such audit shall be deemed to satisfy the
requirements of clause (i) for the period covered by
the audit;
(E) the establishment, by each eligible institution
under part B responsible for furnishing to the lender
the statement required by section 428(a)(2)(A)(i), of
policies and procedures by which the latest known
address and enrollment status of any student who has
had a loan insured under this part and who has either
formally terminated his enrollment, or failed to re-
enroll on at least a half-time basis, at such
institution, shall be furnished either to the holder
(or if unknown, the insurer) of the note, not later
than 60 days after such termination or failure to re-
enroll;
(F) the limitation, suspension, or termination of the
participation in any program under this title of an
eligible institution, or the imposition of a civil
penalty under paragraph (3)(B) whenever the Secretary
has determined, after reasonable notice and opportunity
for hearing, that such institution has violated or
failed to carry out any provision of this title, any
regulation prescribed under this title, or any
applicable special arrangement, agreement, or
limitation, except that no period of suspension under
this section shall exceed 60 days unless the
institution and the Secretary agree to an extension or
unless limitation or termination proceedings are
initiated by the Secretary within that period of time;
(G) an emergency action against an institution, under
which the Secretary shall, effective on the date on
which a notice and statement of the basis of the action
is mailed to the institution (by registered mail,
return receipt requested), withhold funds from the
institution or its students and withdraw the
institution's authority to obligate funds under any
program under this title, if the Secretary--
(i) receives information, determined by the
Secretary to be reliable, that the institution
is violating any provision of this title, any
regulation prescribed under this title, or any
applicable special arrangement, agreement, or
limitation,
(ii) determines that immediate action is
necessary to prevent misuse of Federal funds,
and
(iii) determines that the likelihood of loss
outweighs the importance of the procedures
prescribed under subparagraph (D) for
limitation, suspension, or termination,
except that an emergency action shall not exceed 30
days unless limitation, suspension, or termination
proceedings are initiated by the Secretary against the
institution within that period of time, and except that
the Secretary shall provide the institution an
opportunity to show cause, if it so requests, that the
emergency action is unwarranted;
(H) the limitation, suspension, or termination of the
eligibility of a third party servicer to contract with
any institution to administer any aspect of an
institution's student assistance program under this
title, or the imposition of a civil penalty under
paragraph (3)(B), whenever the Secretary has
determined, after reasonable notice and opportunity for
a hearing, that such organization, acting on behalf of
an institution, has violated or failed to carry out any
provision of this title, any regulation prescribed
under this title, or any applicable special
arrangement, agreement, or limitation, except that no
period of suspension under this subparagraph shall
exceed 60 days unless the organization and the
Secretary agree to an extension, or unless limitation
or termination proceedings are initiated by the
Secretary against the individual or organization within
that period of time; and
(I) an emergency action against a third party
servicer that has contracted with an institution to
administer any aspect of the institution's student
assistance program under this title, under which the
Secretary shall, effective on the date on which a
notice and statement of the basis of the action is
mailed to such individual or organization (by
registered mail, return receipt requested), withhold
funds from the individual or organization and withdraw
the individual or organization's authority to act on
behalf of an institution under any program under this
title, if the Secretary--
(i) receives information, determined by the
Secretary to be reliable, that the individual
or organization, acting on behalf of an
institution, is violating any provision of this
title, any regulation prescribed under this
title, or any applicable special arrangement,
agreement, or limitation,
(ii) determines that immediate action is
necessary to prevent misuse of Federal funds,
and
(iii) determines that the likelihood of loss
outweighs the importance of the procedures
prescribed under subparagraph (F), for
limitation, suspension, or termination,
except that an emergency action shall not exceed 30
days unless the limitation, suspension, or termination
proceedings are initiated by the Secretary against the
individual or organization within that period of time,
and except that the Secretary shall provide the
individual or organization an opportunity to show
cause, if it so requests, that the emergency action is
unwarranted.
(2) If an individual who, or entity that, exercises
substantial control, as determined by the Secretary in
accordance with the definition of substantial control in
subpart 3 of part H, over one or more institutions
participating in any program under this title, or, for purposes
of paragraphs (1) (H) and (I), over one or more organizations
that contract with an institution to administer any aspect of
the institution's student assistance program under this title,
is determined to have committed one or more violations of the
requirements of any program under this title, or has been
suspended or debarred in accordance with the regulations of the
Secretary, the Secretary may use such determination,
suspension, or debarment as the basis for imposing an emergency
action on, or limiting, suspending, or terminating, in a single
proceeding, the participation of any or all institutions under
the substantial control of that individual or entity.
(3)(A) Upon determination, after reasonable notice and
opportunity for a hearing, that an eligible institution has
engaged in substantial misrepresentation of the nature of its
educational program, its financial charges, or the
employability of its graduates, the Secretary may suspend or
terminate the eligibility status for any or all programs under
this title of any otherwise eligible institution, in accordance
with procedures specified in paragraph (1)(D) of this
subsection, until the Secretary finds that such practices have
been corrected.
(B)(i) Upon determination, after reasonable notice and
opportunity for a hearing, that an eligible institution--
(I) has violated or failed to carry out any provision
of this title or any regulation prescribed under this
title; or
(II) has engaged in substantial misrepresentation of
the nature of its educational program, its financial
charges, and the employability of its graduates,
the Secretary may impose a civil penalty upon such institution
of not to exceed $25,000 for each violation or
misrepresentation.
(ii) Any civil penalty may be compromised by the Secretary.
In determining the amount of such penalty, or the amount agreed
upon in compromise, the appropriateness of the penalty to the
size of the institution of higher education subject to the
determination, and the gravity of the violation, failure, or
misrepresentation shall be considered. The amount of such
penalty, when finally determined, or the amount agreed upon in
compromise, may be deducted from any sums owing by the United
States to the institution charged.
(4) The Secretary shall publish a list of State agencies
which the Secretary determines to be reliable authority as to
the quality of public postsecondary vocational education in
their respective States for the purpose of determining
eligibility for all Federal student assistance programs.
(5) The Secretary shall make readily available to appropriate
guaranty agencies, eligible lenders, State agencies notifying
the Secretary under subpart 1 of part H, and accrediting
agencies or associations the results of the audits of eligible
institutions conducted pursuant to paragraph (1)(A).
(6) The Secretary is authorized to provide any information
collected as a result of audits conducted under this section,
together with audit information collected by guaranty agencies,
to any Federal or State agency having responsibilities with
respect to student financial assistance, including those
referred to in subsection (a)(15) of this section.
(7) Effective with respect to any audit conducted under this
subsection after December 31, 1988, if, in the course of
conducting any such audit, the personnel of the Department of
Education discover, or are informed of, grants or other
assistance provided by an institution in accordance with this
title for which the institution has not received funds
appropriated under this title (in the amount necessary to
provide such assistance), including funds for which
reimbursement was not requested prior to such discovery or
information, such institution shall be permitted to offset that
amount against any sums determined to be owed by the
institution pursuant to such audit, or to receive reimbursement
for that amount (if the institution does not owe any such
sums).
[(d) Implementation of Non-Federal Revenue Requirement.--
[(1) Calculation.--In making calculations under
subsection (a)(24), a proprietary institution of higher
education shall--
[(A) use the cash basis of accounting, except
in the case of loans described in subparagraph
(D)(i) that are made by the proprietary
institution of higher education;
[(B) 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 this title;
[(ii) activities conducted by the
institution that are necessary for the
education and training of the
institution's students, if such
activities are--
[(I) conducted on campus or
at a facility under the control
of the institution;
[(II) performed under the
supervision of a member of the
institution's faculty; and
[(III) required to be
performed by all students in a
specific educational program at
the institution; and
[(iii) funds paid by a student, or on
behalf of a student by a party other
than the institution, for an education
or training program that is not
eligible for funds under this title, if
the program--
[(I) is approved or licensed
by the appropriate State
agency;
[(II) is accredited by an
accrediting agency recognized
by the Secretary; or
[(III) provides an industry-
recognized credential or
certification;
[(C) presume that any Federal education
assistance funds that are disbursed or
delivered to or on behalf of a student will be
used to pay the student's tuition, fees, or
other institutional charges, regardless of
whether the institution credits those funds to
the student's account or pays those 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 non-
Federal public agencies or private
sources independent of the institution;
[(ii) funds provided under a
contractual arrangement with a Federal,
State, or local government agency for
the purpose of providing job training
to low-income individuals who are in
need of that training;
[(iii) funds used by a student from
savings plans for educational expenses
established by or on behalf of the
student and which qualify for special
tax treatment under the Internal
Revenue Code of 1986; or
[(iv) institutional scholarships
described in subparagraph (D)(iii);
[(D) include institutional aid as revenue to
the school only as follows:
[(i) in the case of loans made by a
proprietary institution of higher
education on or after July 1, 2008 and
prior to July 1, 2012, the net present
value of such loans made by the
institution during the applicable
institutional fiscal year accounted for
on an accrual basis and estimated in
accordance with generally accepted
accounting principles and related
standards and guidance, if the loans--
[(I) are bona fide as
evidenced by enforceable
promissory notes;
[(II) are issued at intervals
related to the institution's
enrollment periods; and
[(III) are subject to regular
loan repayments and
collections;
[(ii) in the case of loans made by a
proprietary institution of higher
education on or after July 1, 2012,
only the amount of loan repayments
received during the applicable
institutional fiscal year, excluding
repayments on loans made and accounted
for as specified in clause (i); and
[(iii) in the case of scholarships
provided by a proprietary institution
of higher education, only those
scholarships provided by the
institution in the form of monetary aid
or tuition discounts based upon the
academic achievements or financial need
of students, disbursed during each
fiscal year from an established
restricted account, and only to the
extent that funds in that account
represent designated funds from an
outside source or from income earned on
those funds;
[(E) in the case of each student who receives
a loan on or after July 1, 2008, and prior to
July 1, 2011, that is authorized under section
428H or that is a Federal Direct Unsubsidized
Stafford Loan, treat as revenue received by the
institution from sources other than funds
received under this title, the amount by which
the disbursement of such loan received by the
institution exceeds the limit on such loan in
effect on the day before the date of enactment
of the Ensuring Continued Access to Student
Loans Act of 2008; and
[(F) exclude from revenues--
[(i) the amount of funds the
institution received under part C,
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;
[(iii) the amount of funds provided
by the institution as matching funds
for a program under this title;
[(iv) the amount of funds provided by
the institution for a program under
this title that are required to be
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.
[(2) Sanctions.--
[(A) Ineligibility.--A proprietary
institution of higher education that fails to
meet a requirement of subsection (a)(24) for
two consecutive institutional fiscal years
shall be ineligible to participate in the
programs authorized by this title for a period
of not less than two institutional fiscal
years. To regain eligibility to participate in
the programs authorized by this title, a
proprietary institution of higher education
shall demonstrate compliance with all
eligibility and certification requirements
under section 498 for a minimum of two
institutional fiscal years after the
institutional fiscal year in which the
institution became ineligible.
[(B) Additional enforcement.--In addition to
such other means of enforcing the requirements
of this title as may be available to the
Secretary, if a proprietary institution of
higher education fails to meet a requirement of
subsection (a)(24) for any institutional fiscal
year, then the institution's eligibility to
participate in the programs authorized by this
title becomes provisional for the two
institutional fiscal years after the
institutional fiscal year in which the
institution failed to meet the requirement of
subsection (a)(24), except that such
provisional eligibility shall terminate--
[(i) on the expiration date of the
institution's program participation
agreement under this subsection that is
in effect on the date the Secretary
determines that the institution failed
to meet the requirement of subsection
(a)(24); or
[(ii) in the case that the Secretary
determines that the institution failed
to meet a requirement of subsection
(a)(24) for two consecutive
institutional fiscal years, on the date
the institution is determined
ineligible in accordance with
subparagraph (A).
[(3) Publication on college navigator website.--The
Secretary shall publicly disclose on the College
Navigator website--
[(A) the identity of any proprietary
institution of higher education that fails to
meet a requirement of subsection (a)(24); and
[(B) the extent to which the institution
failed to meet such requirement.
[(4) Report to congress.--Not later than July 1,
2009, and 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 this
title, as provided in the audited financial statements
submitted to the Secretary by each institution pursuant
to the requirements of subsection (a)(24)--
[(A) the amount and percentage of such
institution's revenues received from sources
under this title; and
[(B) the amount and percentage of such
institution's revenues received from other
sources.]
[(e)] (d) Code of Conduct Requirements.--An institution of
higher education's code of conduct, as required under
subsection (a)(25), shall include the following requirements:
(1) Ban on revenue-sharing arrangements.--
(A) Prohibition.--The institution shall not
enter into any revenue-sharing arrangement with
any lender.
(B) Definition.--For purposes of this
paragraph, the term ``revenue-sharing
arrangement'' means an arrangement between an
institution and a lender under which--
(i) a lender provides or issues a
loan that is made, insured, or
guaranteed under this title to students
attending the institution or to the
families of such students; and
(ii) the institution recommends the
lender or the loan products of the
lender and in exchange, the lender pays
a fee or provides other material
benefits, including revenue or profit
sharing, to the institution, an officer
or employee of the institution, or an
agent.
(2) Gift ban.--
(A) Prohibition.--No officer or employee of
the institution who is employed in the
financial aid office of the institution or who
otherwise has responsibilities with respect to
education loans, or agent who has
responsibilities with respect to education
loans, shall solicit or accept any gift from a
lender, guarantor, or servicer of education
loans.
(B) Definition of gift.--
(i) In general.--In this paragraph,
the term ``gift'' means any gratuity,
favor, discount, entertainment,
hospitality, loan, or other item having
a monetary value of more than a de
minimus amount. The term includes a
gift of services, transportation,
lodging, or meals, whether provided in
kind, by purchase of a ticket, payment
in advance, or reimbursement after the
expense has been incurred.
(ii) Exceptions.--The term ``gift''
shall not include any of the following:
(I) Standard material,
activities, or programs on
issues related to a loan,
default aversion, default
prevention, or financial
literacy, such as a brochure, a
workshop, or training.
(II) Food, refreshments,
training, or informational
material furnished to an
officer or employee of an
institution, or to an agent, as
an integral part of a training
session that is designed to
improve the service of a
lender, guarantor, or servicer
of education loans to the
institution, if such training
contributes to the professional
development of the officer,
employee, or agent.
(III) Favorable terms,
conditions, and borrower
benefits on an education loan
provided to a student employed
by the institution if such
terms, conditions, or benefits
are comparable to those
provided to all students of the
institution.
(IV) Entrance and exit
counseling services provided to
borrowers to meet the
institution's responsibilities
for entrance and exit
counseling as required by
subsections (b) and (l) of
section 485, as long as--
(aa) the
institution's staff are
in control of the
counseling, (whether in
person or via
electronic
capabilities); and
(bb) such counseling
does not promote the
products or services of
any specific lender.
(V) Philanthropic
contributions to an institution
from a lender, servicer, or
guarantor of education loans
that are unrelated to education
loans or any contribution from
any lender, guarantor, or
servicer that is not made in
exchange for any advantage
related to education loans.
(VI) State education grants,
scholarships, or financial aid
funds administered by or on
behalf of a State.
(iii) Rule for gifts to family
members.--For purposes of this
paragraph, a gift to a family member of
an officer or employee of an
institution, to a family member of an
agent, or to any other individual based
on that individual's relationship with
the officer, employee, or agent, shall
be considered a gift to the officer,
employee, or agent if--
(I) the gift is given with
the knowledge and acquiescence
of the officer, employee, or
agent; and
(II) the officer, employee,
or agent has reason to believe
the gift was given because of
the official position of the
officer, employee, or agent.
(3) Contracting arrangements prohibited.--
(A) Prohibition.--An officer or employee who
is employed in the financial aid office of the
institution or who otherwise has
responsibilities with respect to education
loans, or an agent who has responsibilities
with respect to education loans, shall not
accept from any lender or affiliate of any
lender any fee, payment, or other financial
benefit (including the opportunity to purchase
stock) as compensation for any type of
consulting arrangement or other contract to
provide services to a lender or on behalf of a
lender relating to education loans.
(B) Exceptions.--Nothing in this subsection
shall be construed as prohibiting--
(i) an officer or employee of an
institution who is not employed in the
institution's financial aid office and
who does not otherwise have
responsibilities with respect to
education loans, or an agent who does
not have responsibilities with respect
to education loans, from performing
paid or unpaid service on a board of
directors of a lender, guarantor, or
servicer of education loans;
(ii) an officer or employee of the
institution who is not employed in the
institution's financial aid office but
who has responsibility with respect to
education loans as a result of a
position held at the institution, or an
agent who has responsibility with
respect to education loans, from
performing paid or unpaid service on a
board of directors of a lender,
guarantor, or servicer of education
loans, if the institution has a written
conflict of interest policy that
clearly sets forth that officers,
employees, or agents must recuse
themselves from participating in any
decision of the board regarding
education loans at the institution; or
(iii) an officer, employee, or
contractor of a lender, guarantor, or
servicer of education loans from
serving on a board of directors, or
serving as a trustee, of an
institution, if the institution has a
written conflict of interest policy
that the board member or trustee must
recuse themselves from any decision
regarding education loans at the
institution.
(4) Interaction with borrowers.--The institution
shall not--
(A) for any first-time borrower, assign,
through award packaging or other methods, the
borrower's loan to a particular lender; or
(B) refuse to certify, or delay certification
of, any loan based on the borrower's selection
of a particular lender or guaranty agency.
(5) Prohibition on offers of funds for private
loans.--
(A) Prohibition.--The institution shall not
request or accept from any lender any offer of
funds to be used for private education loans
(as defined in section 140 of the Truth in
Lending Act), including funds for an
opportunity pool loan, to students in exchange
for the institution providing concessions or
promises regarding providing the lender with--
(i) a specified number of loans made,
insured, or guaranteed under this
title;
(ii) a specified loan volume of such
loans; or
(iii) a preferred lender arrangement
for such loans.
(B) Definition of opportunity pool loan.--In
this paragraph, the term ``opportunity pool
loan'' means a private education loan made by a
lender to a student attending the institution
or the family member of such a student that
involves a payment, directly or indirectly, by
such institution of points, premiums,
additional interest, or financial support to
such lender for the purpose of such lender
extending credit to the student or the family.
(6) Ban on staffing assistance.--
(A) Prohibition.--The institution shall not
request or accept from any lender any
assistance with call center staffing or
financial aid office staffing.
(B) Certain assistance permitted.--Nothing in
paragraph (1) shall be construed to prohibit
the institution from requesting or accepting
assistance from a lender related to--
(i) professional development training
for financial aid administrators;
(ii) providing educational counseling
materials, financial literacy
materials, or debt management materials
to borrowers, provided that such
materials disclose to borrowers the
identification of any lender that
assisted in preparing or providing such
materials; or
(iii) staffing services on a short-
term, nonrecurring basis to assist the
institution with financial aid-related
functions during emergencies, including
State-declared or federally declared
natural disasters, federally declared
national disasters, and other localized
disasters and emergencies identified by
the Secretary.
(7) Advisory board compensation.--Any employee who is
employed in the financial aid office of the
institution, or who otherwise has responsibilities with
respect to education loans or other student financial
aid of the institution, and who serves on an advisory
board, commission, or group established by a lender,
guarantor, or group of lenders or guarantors, shall be
prohibited from receiving anything of value from the
lender, guarantor, or group of lenders or guarantors,
except that the employee may be reimbursed for
reasonable expenses incurred in serving on such
advisory board, commission, or group.
[(f)] (e) Institutional Requirements for Teach-Outs.--
(1) In general.--In the event the Secretary initiates
the limitation, suspension, or termination of the
participation of an institution of higher education in
any program under this title under the authority of
subsection (c)(1)(F) or initiates an emergency action
under the authority of subsection (c)(1)(G) and its
prescribed regulations, the Secretary shall require
that institution to prepare a teach-out plan for
submission to the institution's accrediting agency or
association in compliance with section 496(c)(3), the
Secretary's regulations on teach-out plans, and the
standards of the institution's accrediting agency or
association.
(2) Teach-out plan defined.--In this subsection, the
term ``teach-out plan'' means a written plan that
provides for the equitable treatment of students if an
institution of higher education ceases to operate
before all students have completed their program of
study, and may include, if required by the
institution's accrediting agency or association, an
agreement between institutions for such a teach-out
plan.
[(g)] (f) Inspector General Report on Gift Ban Violations.--
The Inspector General of the Department shall--
(1) submit an annual report to the authorizing
committees identifying all violations of an
institution's code of conduct that the Inspector
General has substantiated during the preceding year
relating to the gift ban provisions described in
subsection (e)(2); and
(2) make the report available to the public through
the Department's website.
[(h)] (g) Preferred Lender List Requirements.--
(1) In general.--In compiling, maintaining, and
making available a preferred lender list as required
under subsection (a)(27), the institution will--
(A) clearly and fully disclose on such
preferred lender list--
(i) not less than the information
required to be disclosed under section
153(a)(2)(A);
(ii) why the institution has entered
into a preferred lender arrangement
with each lender on the preferred
lender list, particularly with respect
to terms and conditions or provisions
favorable to the borrower; and
(iii) that the students attending the
institution, or the families of such
students, do not have to borrow from a
lender on the preferred lender list;
(B) ensure, through the use of the list of
lender affiliates provided by the Secretary
under paragraph (2), that--
(i) there are not less than three
lenders of loans made under part B that
are not affiliates of each other
included on the preferred lender list
and, if the institution recommends,
promotes, or endorses private education
loans, there are not less than two
lenders of private education loans that
are not affiliates of each other
included on the preferred lender list;
and
(ii) the preferred lender list under
this paragraph--
(I) specifically indicates,
for each listed lender, whether
the lender is or is not an
affiliate of each other lender
on the preferred lender list;
and
(II) if a lender is an
affiliate of another lender on
the preferred lender list,
describes the details of such
affiliation;
(C) prominently disclose the method and
criteria used by the institution in selecting
lenders with which to enter into preferred
lender arrangements to ensure that such lenders
are selected on the basis of the best interests
of the borrowers, including--
(i) payment of origination or other
fees on behalf of the borrower;
(ii) highly competitive interest
rates, or other terms and conditions or
provisions of loans under this title or
private education loans;
(iii) high-quality servicing for such
loans; or
(iv) additional benefits beyond the
standard terms and conditions or
provisions for such loans;
(D) exercise a duty of care and a duty of
loyalty to compile the preferred lender list
under this paragraph without prejudice and for
the sole benefit of the students attending the
institution, or the families of such students;
(E) not deny or otherwise impede the
borrower's choice of a lender or cause
unnecessary delay in loan certification under
this title for those borrowers who choose a
lender that is not included on the preferred
lender list; and
(F) comply with such other requirements as
the Secretary may prescribe by regulation.
(2) Lender affiliates list.--
(A) In general.--The Secretary shall maintain
and regularly update a list of lender
affiliates of all eligible lenders, and shall
provide such list to institutions for use in
carrying out paragraph (1)(B).
(B) Use of most recent list.--An institution
shall use the most recent list of lender
affiliates provided by the Secretary under
subparagraph (A) in carrying out paragraph
(1)(B).
[(i)] (h) Definitions.--For the purpose of this section:
(1) Agent.--The term ``agent'' has the meaning given
the term in section 151.
(2) Affiliate.--The term ``affiliate'' means a person
that controls, is controlled by, or is under common
control with another person. A person controls, is
controlled by, or is under common control with another
person if--
(A) the person directly or indirectly, or
acting through one or more others, owns,
controls, or has the power to vote five percent
or more of any class of voting securities of
such other person;
(B) the person controls, in any manner, the
election of a majority of the directors or
trustees of such other person; or
(C) the Secretary determines (after notice
and opportunity for a hearing) that the person
directly or indirectly exercises a controlling
interest over the management or policies of
such other person's education loans.
(3) Education loan.--The term ``education loan'' has
the meaning given the term in section 151.
(4) Eligible institution.--The term ``eligible
institution'' means any such institution described in
section 102 of this Act.
(5) Officer.--The term ``officer'' has the meaning
given the term in section 151.
(6) Preferred lender arrangement.--The term
``preferred lender arrangement'' has the meaning given
the term in section 151.
[(j)] (i) Construction.--Nothing in the amendments made by
the Higher Education Amendments of 1992 shall be construed to
prohibit an institution from recording, at the cost of the
institution, a hearing referred to in subsection (b)(2),
subsection (c)(1)(D), or subparagraph (A) or (B)(i) of
subsection (c)(2), of this section to create a record of the
hearing, except the unavailability of a recording shall not
serve to delay the completion of the proceeding. The Secretary
shall allow the institution to use any reasonable means,
including stenographers, of recording the hearing.
SEC. 487A. REGULATORY RELIEF AND IMPROVEMENT.
(a) Quality Assurance Program.--
(1) In general.--The Secretary is authorized to
select institutions for voluntary participation in a
Quality Assurance Program that provides participating
institutions with an alternative management approach
through which individual schools develop and implement
their own comprehensive systems, related to processing
and disbursement of student financial aid, verification
of student financial aid application data, and entrance
and exit interviews, thereby enhancing program
integrity within the student aid delivery system.
(2) Criteria and consideration.--The Quality
Assurance Program authorized by this section shall be
based on criteria that include demonstrated
institutional performance, as determined by the
Secretary, and shall take into consideration current
quality assurance goals, as determined by the
Secretary. The selection criteria shall ensure the
participation of a diverse group of institutions of
higher education with respect to size, mission, and
geographical distribution.
(3) Waiver.--The Secretary is authorized to waive for
any institution participating in the Quality Assurance
Program any regulations dealing with reporting or
verification requirements in this title that are
addressed by the institution's alternative management
system, and may substitute such quality assurance
reporting as the Secretary determines necessary to
ensure accountability and compliance with the purposes
of the programs under this title. The Secretary shall
not modify or waive any statutory requirements pursuant
to this paragraph.
(4) Determination.--The Secretary is authorized to
determine--
(A) when an institution that is unable to
administer the Quality Assurance Program shall
be removed from such program; and
(B) when institutions desiring to cease
participation in such program will be required
to complete the current award year under the
requirements of the Quality Assurance Program.
(5) Review and evaluation.--The Secretary shall
review and evaluate the Quality Assurance Program
conducted by each participating institution and, on the
basis of that evaluation, make recommendations
regarding amendments to this Act that will streamline
the administration and enhance the integrity of Federal
student assistance programs. Such recommendations shall
be submitted to the authorizing committees.
(b) Regulatory Improvement and Streamlining Experiments.--
(1) In general.--The Secretary shall continue the
voluntary participation of any experimental sites in
existence as of July 1, 2007, unless the Secretary
determines that such site's participation has not been
successful in carrying out the purposes of this
section. Any experimental sites approved by the
Secretary prior to such date that have not been
successful in carrying out the purposes of this section
shall be discontinued not later than June 30, 2010.
(2) Report.--The Secretary shall review and evaluate
the experience of institutions participating as
experimental sites and shall, on a biennial basis,
submit a report based on the review and evaluation to
the authorizing committees. Such report shall include--
(A) a list of participating institutions and
the specific statutory or regulatory waivers
granted to each institution;
(B) the findings and conclusions reached
regarding each of the experiments conducted;
and
(C) recommendations for amendments to improve
and streamline this Act, based on the results
of the experiment.
(3) Selection.--
(A) In general.--The Secretary is authorized
to periodically select a limited number of
additional institutions for voluntary
participation as experimental sites to provide
recommendations to the Secretary on the impact
and effectiveness of proposed regulations or
new management initiatives.
(B) Waivers.--The Secretary is authorized to
waive, for any institution participating as an
experimental site under subparagraph (A), any
requirements in this title, including
requirements related to the award process and
disbursement of student financial aid (such as
innovative delivery systems for modular or
compressed courses, or other innovative
systems), verification of student financial aid
application data, entrance and exit interviews,
or other management procedures or processes as
determined in the negotiated rulemaking process
under section 492, or regulations prescribed
under this title, that will bias the results of
the experiment, except that the Secretary shall
not waive any provisions with respect to award
rules (other than an award rule related to an
experiment in modular or compressed schedules),
grant and loan maximum award amounts, and need
analysis requirements unless the waiver of such
provisions is authorized by another provision
under this title.
(4) Determination of success.--For the purposes of
paragraph (1), the Secretary shall make a determination
of success regarding an institution's participation as
an experimental site based on--
(A) the ability of the experimental site to
reduce administrative burdens to the
institution, as documented in the Secretary's
biennial report under paragraph (2), without
creating costs for the taxpayer; and
(B) whether the experimental site has
improved the delivery of services to, or
otherwise benefitted, students.
(c) Alternative Quality Assurance Experimental Site
Initiative.--
(1) Experimental site authorized.--The Secretary
shall select, in accordance with paragraph (4),
eligible entities that voluntarily seek to participate
in an Alternative Quality Assurance experimental site
initiative for a duration of 5 years and receive the
waivers or other flexibility described in paragraph (5)
to evaluate whether the eligible entities, during such
5-year period, can maintain high student achievement
outcomes while participating in programs under this
title without being accredited by an accrediting agency
or association recognized under section 496.
(2) Eligible entity defined.--For purposes of this
subsection, an eligibility entity means--
(A) an institution of higher education (as
defined in section 102); or
(B) an educational provider that--
(i) is not an institution of higher
education;
(ii) does not receive funding under
this Act;
(iii) is not accredited by an
accrediting agency or association for
the purposes of this title; and
(iv) is authorized to operate in the
State in which the provider is located.
(3) Application.--
(A) In general.--Each eligible entity
desiring to participate in the experimental
site initiative under this subsection shall
submit an application to the Secretary, at such
time and in such manner as the Secretary may
require, which shall contain the information
described in subparagraph (B). The Secretary
may not require any information in such an
application that is not described in
subparagraph (B).
(B) Contents.--Each application under
paragraph (1) shall include--
(i) a description of which program of
study offered at the eligible entity
will be included in the experimental
site initiative, including--
(I) in the case of an
eligible entity that is an
institution of higher
education, an attestation that
such program meets the
standards of accreditation of
the institution's accrediting
agency or association described
in clauses (i) through (iv) of
section 496(a)(5)(A) (including
the standard requiring that the
median value-added earnings of
students who complete the
program are greater than the
median total price charged to
students for the program); and
(II) in the case of an
eligible entity defined in
paragraph (2)(B), documentation
and verified administrative
data that the program meets
standards similar to the
standards of accreditation
referenced in subclause (I);
(ii) a justification of the reason
why the eligible entity seeks to
receive the waiver described in
paragraph (5)(A), including estimates
or documentation of the potential
savings to the entity of receiving such
waiver; and
(iii) a description of how the
eligible entity plans to share the
financial risk with the Secretary of
receiving the waivers described in
paragraph (5), such as by--
(I) providing matching non-
Federal funds to the Secretary
to cover the cost of at least
half of the expected
disbursements under this title
to the students that enroll in
such program for the first year
of the experiment;
(II) providing a letter of
credit to the Secretary to
cover the cost described in
subclause (I); or
(III) requesting to be placed
on a reimbursement system of
payment.
(4) Selection.--No later than 6 months after the
experimental site initiative is announced, the
Secretary shall select eligible entities to participate
in the initiative based on the applications submitted
under paragraph (3). In making such selections, the
Secretary--
(A) shall consider--
(i) the number and quality of
applications;
(ii) each applicant's ability to
effectively share the financial risk as
required under paragraph (3)(B)(iii);
and
(iii) in the case of an applicant
that is an institution of higher
education, the applicant's history of
compliance with the requirements of
this Act;
(B) shall ensure that the selected eligible
entities represent a variety of eligible
entities with respect to size, mission, and
geographic distribution;
(C) shall ensure that the number of eligible
entities selected that are institutions of
higher education described in paragraph (2)(B)
is equal to the number of eligible entities
selected that are educational providers
described in paragraph (2)(B); and
(D) may not select any eligible entity whose
approval to operate in a State is at risk.
(5) Waivers.--The Secretary is authorized to waive,
for any eligible entity participating in the
experimental site initiative under this subsection--
(A) any requirements conditioning an eligible
entity's eligibility to participate in programs
under this title to being accredited by an
accrediting agency or association recognized
under section 496; and
(B) any other requirements of this title
determined necessary by the Secretary to carry
out such initiative (including requirements
related to the award process and disbursement
of student financial aid, or other management
procedures or processes), except that the
Secretary shall not waive any provisions with
respect to award rules (other than an award
rule related to an experiment in modular or
compressed schedules), grant and loan maximum
award amounts, and need analysis requirements,
unless the waiver of such provisions is
authorized by another provision under this
title.
(6) Review and evaluation.--
(A) In general.--The Secretary shall review
and evaluate the experimental site initiative
conducted under this subsection, including by
evaluating, with respect to each participating
program of each participating eligible entity,
whether--
(i) the median value-added earnings
of students who complete the program of
study are greater than the median total
price charged to students for such
program; and
(ii) the program of study is meeting
other student achievement outcomes
(such as outcomes based on standards of
accreditation described in section
496(a)(5)(A)), as appropriate for the
program.
(B) Recommendations.--If, based on such
evaluation, the Secretary determines that
participating eligible entities were able to
meet the requirement of subparagraph (A)(i) and
the other student achievement outcomes
evaluated by the Secretary under subparagraph
(A)(ii), the Secretary shall submit to the
authorizing committees recommendations
regarding amendments to this Act that will
streamline and enhance the quality assurance
process of institutions of higher education,
and educational providers described in
paragraph (2)(B).
[(c)] (d) Definitions.--For purposes of this section, the
term ``current award year'' means the award year during which
the participating institution indicates the institution's
intention to cease participation.
* * * * * * *
SEC. 492A. LIMITATION ON AUTHORITY OF THE SECRETARY TO PROPOSE OR ISSUE
REGULATIONS AND EXECUTIVE ACTIONS.
(a) Draft Regulations.--Beginning after the date of enactment
of this section, a draft regulation implementing this title (as
described in section 492(b)(1)) that is determined by the
Secretary to be economically significant shall be subject to
the following requirements (regardless of whether negotiated
rulemaking occurs):
(1) The Secretary shall determine whether the draft
regulation, if implemented, would result in an increase
in a subsidy cost.
(2) If the Secretary determines under paragraph (1)
that the draft regulation would result in an increase
in a subsidy cost, then the Secretary may take no
further action with respect to such regulation.
(b) Proposed or Final Regulations and Executive Actions.--
Beginning after the date of enactment of this section, the
Secretary may not issue a proposed rule, final regulation, or
executive action implementing this title if the Secretary
determines that the rule, regulation, or executive action--
(1) is economically significant; and
(2) would result in an increase in a subsidy cost.
(c) Relationship to Other Requirements.--The analyses
required under subsections (a) and (b) shall be in addition to
any other cost analysis required under law for a regulation
implementing this title, including any cost analysis that may
be required pursuant to Executive Order 12866 (58 Fed. Reg.
51735; relating to regulatory planning and review), Executive
Order 13563 (76 Fed. Reg. 3821; relating to improving
regulation and regulatory review), or any related or successor
orders.
(d) Definition.--In this section, the term ``economically
significant'', when used with respect to a draft, proposed, or
final regulation or executive action, means that the regulation
or executive action is likely, as determined by the Secretary--
(1) to have an annual effect on the economy of
$100,000,000 or more; or
(2) adversely to affect in a material way the
economy, a sector of the economy, productivity,
competition, jobs, the environment, public health or
safety, or State, local, or tribal governments or
communities.
* * * * * * *
[Matt is reviewing from here down.]
SEC. 493C. INCOME-BASED REPAYMENT.
(a) Definitions.--In this section:
(1) Excepted plus loan.--The term ``excepted PLUS
loan'' means a loan under section 428B, or a Federal
Direct PLUS Loan, that is made, insured, or guaranteed
on behalf of a dependent student.
(2) Excepted consolidation loan.--The term ``excepted
consolidation loan'' means a consolidation loan under
section 428C, or a Federal Direct Consolidation Loan,
if the proceeds of such loan were used to the discharge
the liability on an excepted PLUS loan.
(3) Partial financial hardship.--The term ``partial
financial hardship'', when used with respect to a
borrower, means that for such borrower--
(A) the annual amount due on the total amount
of loans made, insured, or guaranteed under
part B or D (other than an excepted PLUS loan
or excepted consolidation loan) to a borrower
as calculated under the standard repayment plan
under section 428(b)(9)(A)(i) or 455(d)(1)(A),
based on a 10-year repayment period; exceeds
(B) 15 percent of the result obtained by
calculating, on at least an annual basis, the
amount by which--
(i) the borrower's, and the
borrower's spouse's (if applicable),
adjusted gross income; exceeds
(ii) 150 percent of the poverty line
applicable to the borrower's family
size as determined under section 673(2)
of the Community Services Block Grant
Act (42 U.S.C. 9902(2)).
(b) Income-Based Repayment Program Authorized.--
Notwithstanding any other provision of this Act, the Secretary
shall carry out a program under which--
(1) a borrower of any loan made, insured, or
guaranteed under part B or D (other than an excepted
PLUS loan or excepted consolidation loan) who has a
partial financial hardship (whether or not the
borrower's loan has been submitted to a guaranty agency
for default aversion or had been in default) may elect,
during any period the borrower has the partial
financial hardship, to have the borrower's aggregate
monthly payment for all such loans not exceed the
result described in subsection (a)(3)(B) divided by 12;
(2) the holder of such a loan shall apply the
borrower's monthly payment under this subsection first
toward interest due on the loan, next toward any fees
due on the loan, and then toward the principal of the
loan;
(3) any interest due and not paid under paragraph
(2)--
(A) shall, on subsidized loans, be paid by
the Secretary for a period of not more than 3
years after the date of the borrower's election
under paragraph (1), except that such period
shall not include any period during which the
borrower is in deferment due to an economic
hardship described in section 435(o); and
(B) shall accrue but not be capitalized--
(i) in the case of a subsidized loan,
subject to subparagraph (A), at the
time the borrower--
(I) ends the election to make
income-based repayment under
this subsection; or
(II) begins making payments
of not less than the amount
specified in paragraph (6)(A);
or
(ii) in the case of an unsubsidized
loan, at the time the borrower--
(I) ends the election to make
income-based repayment under
this subsection; or
(II) begins making payments
of not less than the amount
specified in paragraph (6)(A);
(4) any principal due and not paid under paragraph
(2) shall be deferred;
(5) the amount of time the borrower makes monthly
payments under paragraph (1) may exceed 10 years;
(6) if the borrower no longer has a partial financial
hardship or no longer wishes to continue the election
under this subsection, then--
(A) the maximum monthly payment required to
be paid for all loans made to the borrower
under part B or D (other than an excepted PLUS
loan or excepted consolidation loan) shall not
exceed the monthly amount calculated under
section 428(b)(9)(A)(i) or 455(d)(1)(A), based
on a 10-year repayment period, when the
borrower first made the election described in
this subsection; and
(B) the amount of time the borrower is
permitted to repay such loans may exceed 10
years;
(7) the Secretary shall repay or cancel any
outstanding balance of principal and interest due on
all loans made under part B or D (other than a loan
under section 428B or a Federal Direct PLUS Loan) to a
borrower who--
(A) at any time, elected to participate in
income-based repayment under paragraph (1); and
(B) for a period of time prescribed by the
Secretary, not to exceed 25 years, meets 1 or
more of the following requirements--
(i) has made reduced monthly payments
under paragraph (1) or paragraph (6);
(ii) has made monthly payments of not
less than the monthly amount calculated
under section 428(b)(9)(A)(i) or
455(d)(1)(A), based on a 10-year
repayment period, when the borrower
first made the election described in
this subsection;
(iii) has made payments of not less
than the payments required under a
standard repayment plan under section
428(b)(9)(A)(i) or 455(d)(1)(A) with a
repayment period of 10 years;
(iv) has made payments under an
income-contingent repayment plan under
section 455(d)(1)(D); or
(v) has been in deferment due to an
economic hardship described in section
435(o);
(8) a borrower who is repaying a loan made under part
B or D pursuant to income-based repayment may elect, at
any time, to terminate repayment pursuant to income-
based repayment and repay such loan under the standard
repayment plan; and
(9) the special allowance payment to a lender
calculated under section 438(b)(2)(I), when calculated
for a loan in repayment under this section, shall be
calculated on the principal balance of the loan and on
any accrued interest unpaid by the borrower in
accordance with this section.
(c) Eligibility Determinations.--
(1) In general.--The Secretary shall establish
procedures for annually determining the borrower's
eligibility for income-based repayment, including
verification of a borrower's annual income and the
annual amount due on the total amount of loans made,
insured, or guaranteed under part B or D (other than an
excepted PLUS loan or excepted consolidation loan), and
such other procedures as are necessary to effectively
implement income-based repayment under this section.
(2) Procedures for eligibility.--The Secretary
shall--
(A) consider, but is not limited to, the
procedures established in accordance with
section 455(e)(1) or in connection with income
sensitive repayment schedules under section
428(b)(9)(A)(iii) or 428C(b)(1)(E); and
(B) carry out, with respect to borrowers of
any loan made under part D (other than an
excepted PLUS loan or excepted consolidation
loan), procedures for income-based repayment
plans that are equivalent to the procedures
carried out under section 455(e)(8) with
respect to income-contingent repayment plans.
(d) Special Rule for Married Borrowers Filing Separately.--In
the case of a married borrower who files a separate Federal
income tax return, the Secretary shall calculate the amount of
the borrower's income-based repayment under this section solely
on the basis of the borrower's student loan debt and adjusted
gross income.
(e) Special Terms for New Borrowers on and After July 1,
2014.--With respect to any loan made to a new borrower on or
after July 1, 2014--
(1) subsection (a)(3)(B) shall be applied by
substituting ``10 percent'' for ``15 percent''; and
(2) subsection (b)(7)(B) shall be applied by
substituting ``20 years'' for ``25 years''.
* * * * * * *
PART H--PROGRAM INTEGRITY
* * * * * * *
Subpart 2--Accrediting Agency Recognition
SEC. 496. RECOGNITION OF ACCREDITING AGENCY OR ASSOCIATION.
(a) Criteria Required.--No accrediting agency or association
may be determined by the Secretary to be a reliable authority
as to the quality of education [or training] skills development
offered for the purposes of this Act or for other Federal
purposes, unless the agency or association meets criteria
established by the Secretary pursuant to this section. The
Secretary shall, after notice and opportunity for a hearing,
establish criteria for such determinations. Such criteria shall
include an appropriate measure or measures of student
achievement. Such criteria shall require that--
[(1) the accrediting agency or association shall be a
State, regional, or national agency or association and
shall demonstrate the ability and the experience to
operate as an accrediting agency or association within
the State, region, or nationally, as appropriate;]
(1) the accrediting agency or association (other than
an accrediting agency or association described in
paragraph (2)(D)) shall be a State or national agency
or association and shall demonstrate the ability to
operate as an institutional or programmatic accrediting
agency or association within the State or nationally,
as appropriate;
(2) such agency or association--
(A)(i) for the purpose of participation in
programs under this Act, has a voluntary
membership of institutions of higher education
and has as a [principal] purpose the
accrediting of institutions of higher
education; or
(ii) for the purpose of participation in
other programs administered by the Department
of Education or other Federal agencies, has a
voluntary membership and has as [its principal]
a purpose the accrediting of institutions of
higher education or programs;
(B) is a State agency approved by the
Secretary for the purpose described in
subparagraph (A); or
(C) is an agency or association that, for the
purpose of determining eligibility for student
assistance under this title, conducts
accreditation through (i) a voluntary
membership organization of individuals
participating in a profession, or (ii) an
agency or association which has as its
principal purpose the accreditation of programs
within institutions, which institutions are
accredited by another agency or association
recognized by the Secretary; or
(D) is an entity (such as an industry-
specific quality assurance entity) that has
been--
(i) determined by a State to be a
reliable authority as to the quality of
education or skills development offered
in such State for the purposes of this
Act; and
(ii) designated (in accordance with
subsection (b)(1)) by such State as an
accrediting agency or association with
respect to such State for such
purposes;
(3) if such agency or association is an agency or
association described in--
[(A) subparagraph (A)(i) of paragraph (2),
then such agency or association is separate and
independent, both administratively and
financially of any related, associated, or
affiliated trade association or membership
organization;]
(A) subparagraph (A), (C), or (D) of
paragraph (2), then such agency or association
is--
(i) distinctly incorporated or
organized; and
(ii) both administratively and
financially separate from, and
independent of, any related,
associated, or affiliated trade
association or membership organization,
by ensuring that--
(I) the members of the board
or governing body of the
accrediting agency or
association are not elected or
selected by the board or chief
executive officer (or the
representative of such board or
officer) of any related,
associated, or affiliated trade
association or membership
organization;
(II) among the membership of
the board or governing body of
the accrediting agency or
association--
(aa) if such board or
body is comprised of 5
or fewer members, there
is a minimum of one
public member who
represents business and
who is not a member of
any related,
associated, or
affiliated trade
association or
membership
organization; and
(bb) if such board or
body is comprised of 6
or more members, there
is a minimum of 1 such
public member for every
6 members;
(III) guidelines are
established for such members to
avoid conflicts of interest,
including specific guidelines
to ensure that no such member
is an employee of any
institution accredited by the
agency or association or has a
financial interest in any such
institution;
(IV) dues to the accrediting
agency or association are paid
separately from any dues paid
to any related, associated, or
affiliated trade association or
membership organization; and
(V) the budget of the
accrediting agency or
association is developed,
decided, and maintained by the
accrediting agency or
association without any review
by, consultation with, or
approval by any related,
associated, or affiliated trade
association or membership
organization;
(B) subparagraph (B) of paragraph (2), then
such agency or association has been recognized
by the Secretary on or before October 1, 1991;
[or]
[(C) subparagraph (C) of paragraph (2) and
such agency or association has been recognized
by the Secretary on or before October 1, 1991,
then the Secretary may waive the requirement
that such agency or association is separate and
independent, both administratively and
financially of any related, associated, or
affiliated trade association or membership
organization upon a demonstration that the
existing relationship has not served to
compromise the independence of its
accreditation process;]
(4)(A) such agency or association consistently
applies and enforces standards that respect the stated
mission of the institution of higher education,
including religious missions (in the manner described
in subparagraph (B)), and that ensure that the courses
or programs of instruction, training, or study offered
by the institution of higher education, including
distance education or correspondence courses or
programs, are of sufficient quality to achieve, for the
duration of the accreditation period, the stated
objective for which the courses or the programs are
offered; [and]
[(B) if such agency or association has or seeks to
include within its scope of recognition the evaluation
of the quality of institutions or programs offering
distance education or correspondence education, such
agency or association shall, in addition to meeting the
other requirements of this subpart, demonstrate to the
Secretary that--
[(i) the agency or association's standards
effectively address the quality of an
institution's distance education or
correspondence education in the areas
identified in paragraph (5), except that--
[(I) the agency or association shall
not be required to have separate
standards, procedures, or policies for
the evaluation of distance education or
correspondence education institutions
or programs in order to meet the
requirements of this subparagraph; and
[(II) in the case that the agency or
association is recognized by the
Secretary, the agency or association
shall not be required to obtain the
approval of the Secretary to expand its
scope of accreditation to include
distance education or correspondence
education, provided that the agency or
association notifies the Secretary in
writing of the change in scope; and
[(ii) the agency or association requires an
institution that offers distance education or
correspondence education to have processes
through which the institution establishes that
the student who registers in a distance
education or correspondence education course or
program is the same student who participates in
and completes the program and receives the
academic credit;]
(B) such accrediting agency or association
consistently applies and enforces standards
that respect the stated religious mission of an
institution of higher education by--
(i) basing decisions regarding
accreditation and preaccreditation on
the standards of accreditation of such
agency or association; and
(ii) not using as a negative factor
the institution's religious mission
based policies, decisions, and
practices in the areas covered by
subparagraphs (B), (C), (D), (E), and
(F) of paragraph (5), except that the
agency or association may require that
the institution's or a program of
study's curricula include all core
components required by the agency or
association that are not inconsistent
with the institution's religious
mission; and
(C) such agency or association demonstrates
the ability to review, evaluate, and assess the
quality of any instruction delivery model or
method such agency or association has or seeks
to include within its scope of recognition,
without giving preference to or differentially
treating a particular instruction delivery
model or method offered by an institution of
higher education or program, except that--
(i) in a case in which the
instruction delivery model allows for
the separation of the student from the
instructor, the agency or association
shall not be required to have separate
standards, procedures, or policies for
the evaluation of the quality of any
instruction delivery model or method in
order to meet the requirements of this
subparagraph; and
(ii) in the case in which the
instruction delivery model allows for
the separation of the student from the
instructor--
(I) the agency or association
requires the institution to
have processes through which
the institution establishes
that the student who registers
in a course or program is the
same student who participates
in the program (including, to
the extent practicable, the
testing or other assessments
required under the program),
completes the program, and
receives the academic credit;
and
(II) the agency or
association requires that any
process used by an institution
to comply with the requirement
under clause (I) does not
infringe upon student privacy
and is implemented in a manner
that is minimally burdensome to
the student;
(5) the standards for accreditation of the agency or
association assess the institution's--
[(A) success with respect to student
achievement in relation to the institution's
mission, which may include different standards
for different institutions or programs, as
established by the institution, including, as
appropriate, consideration of State licensing
examinations, consideration of course
completion, and job placement rates;]
(A) success with respect to student
achievement outcomes in relation to the
institution's mission and to the programs the
institution offers, or the mission of a
specific degree, certificate, or credential
program, which may include different standards
for different institutions or programs, and
which shall include--
(i) standards for consideration of
the median total price charged to
students for a program of study in
relation to the median value-added
earnings of students who completed such
program;
(ii) standards for consideration of
learning outcomes measures (such as
competency attainment and licensing
examination passage rates);
(iii) standards for consideration of
labor market outcomes measures (such as
employer satisfaction surveys,
employability measures, earnings gains,
employment rates, or other similar
approaches); and
(iv) standards for consideration of
student success outcomes measures (such
as completion rates, retention rates,
and loan repayment rates);
(B) curricula;
(C) faculty;
(D) facilities, equipment, and supplies;
(E) fiscal and administrative capacity as
appropriate to the specified scale of
operations;
(F) student support services;
(G) recruiting and admissions practices,
academic calendars, catalogs, publications,
grading and advertising;
(H) measures of program length and the
objectives of the degrees or credentials
offered;
[(I) record of student complaints received
by, or available to, the agency or association;
and]
(I) record of student complaints received by,
or available to, the agency or association, and
a process for resolving complaints received by
the institution; and
(J) record of compliance with its program
responsibilities under title IV of this Act
based on the most recent student loan default
rate data provided by the Secretary and the
median total price charged to students for a
program of study in relation to the median
value-added earnings of students who completed
such program provided by the Secretary, the
results of financial or compliance audits,
program reviews, and any such other information
as the Secretary may provide to the agency or
association;
except that subparagraphs (A), (H), and (J) shall not
apply to agencies or associations described in
paragraph (2)(A)(ii) of this subsection;
(6) such an agency or association shall establish and
apply review procedures throughout the accrediting
process, including evaluation and withdrawal
proceedings, which comply with due process procedures
that provide--
(A) for adequate written specification of--
(i) requirements, including clear
standards for an institution of higher
education or program to be accredited;
and
(ii) identified deficiencies at the
institution or program examined;
(B) for sufficient opportunity for a written
response, by an institution or program,
regarding any deficiencies identified by the
agency or association to be considered by the
agency or association--
(i) within a timeframe determined by
the agency or association; and
(ii) prior to final action in the
evaluation and withdrawal proceedings;
(C) upon the written request of an
institution or program, for an opportunity for
the institution or program to appeal any
adverse action under this section, including
denial, withdrawal, suspension, or termination
of accreditation, taken against the institution
or program, prior to such action becoming final
at a hearing before an appeals panel that--
(i) shall not include current members
of the agency's or association's
underlying decisionmaking body that
made the adverse decision; and
(ii) is subject to a conflict of
interest policy;
(D) for the right to representation and
participation by counsel for an institution or
program during an appeal of the adverse action;
(E) for a process, in accordance with written
procedures developed by the agency or
association, through which an institution or
program, before a final adverse action based
solely upon a failure to meet a standard or
criterion pertaining to finances, may on one
occasion seek review of significant financial
information that was unavailable to the
institution or program prior to the
determination of the adverse action, and that
bears materially on the financial deficiencies
identified by the agency or association;
(F) in the case that the agency or
association determines that the new financial
information submitted by the institution or
program under subparagraph (E) meets the
criteria of significance and materiality
described in such subparagraph, for
consideration by the agency or association of
the new financial information prior to the
adverse action described in such subparagraph
becoming final; and
(G) that any determination by the agency or
association made with respect to the new
financial information described in subparagraph
(E) shall not be separately appealable by the
institution or program;
(7) such agency or association shall notify the
Secretary and the appropriate State licensing or
authorizing agency within 30 days of the accreditation
of an institution or any final denial, withdrawal,
suspension, or termination of accreditation or
placement on probation of an institution, together with
any other adverse action taken with respect to an
institution; and
(8) such agency or association shall make available
to the public, upon request, and to the Secretary, and
the State licensing or authorizing agency a summary of
any review resulting in a final accrediting decision
involving denial, termination, or suspension of
accreditation, together with the comments of the
affected institution.
[(b) Separate and Independent Defined.--For the purpose of
subsection (a)(3), the term ``separate and independent'' means
that--
[(1) the members of the postsecondary education
governing body of the accrediting agency or association
are not elected or selected by the board or chief
executive officer of any related, associated, or
affiliated trade association or membership
organization;
[(2) among the membership of the board of the
accrediting agency or association there shall be one
public member (who is not a member of any related trade
or membership organization) for each six members of the
board, with a minimum of one such public member, and
guidelines are established for such members to avoid
conflicts of interest;
[(3) dues to the accrediting agency or association
are paid separately from any dues paid to any related,
associated, or affiliated trade association or
membership organization; and
[(4) the budget of the accrediting agency or
association is developed and determined by the
accrediting agency or association without review or
resort to consultation with any other entity or
organization.]
(b) Secretarial Requirements and Authority.--
(1) State designated accrediting agency.--
(A) Approval of state plans.--The Secretary
shall--
(i) approve a State's designation of
an entity as an accrediting agency or
association for the purposes described
in subsection (a)(2)(D) for a 5-year
period, beginning not later than 30
days after receipt of the plan from
such State with respect to such
designation, if such plan includes each
of the elements listed in subparagraph
(B);
(ii) submit to the State and the
authorizing committees, and make
publicly available the Secretary's
response to the State with respect to
such plan, including whether the plan
includes each of the elements listed in
subparagraph (B); and
(iii) if a State's designation of an
entity as an accrediting agency or
association is approved pursuant to
this subparagraph, publish in the
Federal Register with a 30-day public
comment period--
(I) the plan submitted by
such State with respect to such
designation; and
(II) the Secretary's response
to such plan.
(B) Required plan elements.--The required
elements of a State plan submitted under
subparagraph (A) with respect to the
designation of an entity as an accrediting
agency or association are as follows:
(i) A description of the process the
State used to select the entity for
such designation.
(ii) A justification of the State's
decision to select the entity for such
designation.
(iii) A description of any
requirements (in addition to the
requirements of this section), that the
State required the entity to comply
with as a condition of receiving and
maintaining such designation.
(iv) A copy of the standards,
policies, and procedures of the entity
that the State considered in selecting
the entity for such designation.
(v) The State's assessment of how the
standards for accreditation of the
entity will be effective in meeting the
requirements of subsection (a)(5).
(vi) Evidence that at least one other
State has determined that such entity
is a reliable authority as to the
quality of education offered for the
purposes of this Act.
(vii) An assurance that the State
will comply with the monitoring
requirements described in subparagraph
(C).
(C) State monitoring.--
(i) In general.--A State that has
designated an entity as an accrediting
agency or association for the purposes
described in subsection (a)(2)(D) shall
submit to the Secretary, and to the
State authorizing entity, as
appropriate, a report at the end of the
5-year period for which the entity has
received such designation, which shall
include, with respect to each
postsecondary education program or
institution that has been accredited by
such entity during such period, and
disaggregated by type of credential,
certification, or degree--
(I) the number and percentage
of students who have
successfully obtained a
postsecondary education
credential, certification, or
degree offered by such program
or institution; and
(II) the number and
percentage of students who were
enrolled and did not
successfully obtain such a
credential, certification, or
degree within 150 percent of
the program length.
(ii) Counting transfer students.--For
purposes of clause (i)(I), a student
shall be counted as obtaining a
credential, certification, or degree
offered by a program or institution
that was accredited by the entity
during the period for which the report
under this subparagraph is being
submitted, if the student obtains such
credential, certification, or degree
after transferring to another
institution during such period.
(2) Authority to provide an accelerated path to
recognition.--With respect to a prospective accrediting
agency or association that submits to the Secretary an
application for initial recognition under this Act, the
Secretary may provide such recognition to such agency
or association within 2 years after receipt of such
application, if such application--
(A) demonstrates that the agency or
association--
(i) has at least one year of
experience in making accreditation or
preaccreditation decisions; and
(ii) has policies in place that meet
all the criteria under subsection (a)
for recognition covering the range of
the specific degrees, certificates,
institutions, or program of study for
which the agency or association seeks
such recognition; and
(B) provides an assurance that if the agency
or association receives such recognition, the
agency or association will submit to the
Secretary monitoring reports regarding
accreditation or preaccreditation decisions, as
appropriate.
(3) Development of common terminology.--Not later
than 18 months after the date of enactment of the
College Cost Reduction Act, the Secretary shall--
(A) convene a panel of experts to develop
common terminology for accrediting agencies or
associations to use in making accrediting
decisions with respect to program of study or
institutions, such as a common understanding of
monitoring, warning, show cause, and other
relevant statuses, as appropriate; and
(B) publish the recommendations for such
common terminology in the Federal Register with
a 60-day public comment period.
(c) Operating Procedures Required.--No accrediting agency or
association may be recognized by the Secretary as a reliable
authority as to the quality of education or training offered by
an institution seeking to participate in the programs
authorized under this title, unless the agency or association--
(1) performs, at regularly established intervals
(which may vary based on institutional risk consistent
with policies promulgated by the agency or association
to determine such risk and interval frequency as
authorized under subsection (p)), on-site inspections
and reviews of institutions of higher education (which
may include unannounced site visits) with particular
focus on educational quality and program effectiveness,
and ensures that accreditation team members are well-
trained and knowledgeable with respect to their
responsibilities[, including those regarding distance
education];
(2) develops a policy process to identify any
institution or program of study accredited by the
agency or association that is not meeting the standards
for accreditation of the agency or association, with a
focus on the standards assessing an institution's or
program of study's student achievement outcomes
described in subsection (a)(5)(A), and other
indicators, which shall include--
(A) not less than annually, evaluating the
extent to which such an identified institution
or program of study continues to be in
compliance with such standards or other
indicators; and
(B) as appropriate, requiring the institution
or program of study to submit a plan, on an
annual basis, to the accrediting agency or
association to--
(i) address and remedy performance
issues with respect to such compliance;
and
(ii) ensure that such plan is
successfully implemented;
[(2)] (3) monitors the growth of programs at
institutions that are experiencing significant
enrollment growth;
[(3)] (4) requires an institution to submit for
approval to the accrediting agency a teach-out plan
upon the occurrence of any of the following events:
(A) the Department notifies the accrediting
agency of an action against the institution
pursuant to section 487(f);
(B) the accrediting agency acts to withdraw,
terminate, or suspend the accreditation of the
institution; or
(C) the institution notifies the accrediting
agency that the institution intends to cease
operations;
[(4) requires that any institution of higher
education subject to its jurisdiction which plans to
establish a branch campus submit a business plan,
including projected revenues and expenditures, prior to
opening the branch campus;]
(5) establishes and applies or maintains policies,
which ensure that any substantive change to the
educational mission, program of study, or program of
study of an institution after the agency or association
has granted the institution accreditation or
preaccreditation status does not adversely affect the
capacity of the institution to continue to meet the
agency's or association's standards for such
accreditation or preaccreditation status, which shall
include policies that--
(A) require the institution to obtain the
agency's or association's approval of the
substantive change before the agency or
association includes the change in the scope of
the institution's accreditation or
preaccreditation status; and
(B) define substantive change to include, at
a minimum--
(i) any change in the established
mission or objectives of the
institution;
(ii) any change in the legal status,
form of control, or ownership of the
institution, including the acquisition
or addition of any other institution or
new location where more than 50 percent
of a program is offered;
(iii) the addition of program of
study at a higher credential level from
the credential level previously
accredited by the agency or
association; or
(iv) the entering into a contract
under which an institution or
organization not certified to
participate in programs under this
title offers more than 25 percent but
less than 50 percent of the instruction
of an educational program of the
institution with such accreditation or
preaccreditation status;
[(5)] (6) agrees to conduct, as soon as practicable,
but within a period of not more than 6 months of the
establishment of a new branch campus or a change of
ownership of an institution of higher education, an on-
site visit of that branch campus or of the institution
after a change of ownership;
[(6)] (7) requires that teach-out agreements among
institutions are subject to approval by the accrediting
agency or association consistent with standards
promulgated by such agency or association;
[(7)] (8) makes available to the public, on the
agency's or association's website, and the State
licensing or authorizing agency, and submits to the
Secretary, a summary of agency or association actions,
including--
(A) the award of accreditation or
reaccreditation of an institution;
(B) final denial, withdrawal, suspension, or
termination of accreditation of an institution,
and any findings made in connection with the
action taken, together with the official
comments of the affected institution; and
(C) any other adverse action taken with
respect to an institution or placement on
probation of an institution, and a summary of
why such action was taken or such placement was
made;
[(8)] (9) discloses publicly whenever an institution
of higher education subject to its jurisdiction is
being considered for accreditation or reaccreditation;
[and]
[(9)] (10) confirms, as a part of the agency's or
association's review for accreditation or
reaccreditation, that the institution has transfer of
credit policies--
(A) that are publicly disclosed; and
(B) that include a statement of the criteria
established by the institution regarding the
transfer of credit earned at another
institution of higher education[.], including
an assurance that the institution does not deny
a transfer of credit based solely on the
accreditation of the institution at which the
credit was earned;
(11) such agency or association shall make publicly
available, on the agency or association's website, a
list of the institutions of higher education or program
of study accredited by such agency or association,
which includes, with respect to each such institution
or program of study--
(A) the year accreditation was granted;
(B) the most recent date of an award of
accreditation or reaccreditation; and
(C) the anticipated date of the institution's
next evaluation for reaccreditation;
(12) confirms that the standards for accreditation of
the agency or association do not--
(A) except as provided in subparagraph (B)--
(i) require, encourage, or coerce any
institution to--
(I) support, oppose, or
commit to supporting or
opposing--
(aa) a specific
partisan, political, or
ideological viewpoint
or belief or set of
such viewpoints or
beliefs; or
(bb) a specific
viewpoint or belief or
set of viewpoints or
beliefs on social,
cultural, or political
issues; or
(II) support or commit to
supporting the disparate
treatment of any individual or
group of individuals on the
basis of any protected class
under Federal civil rights law,
except as required by Federal
law or a court order; or
(ii) assess an institution's or
program of study's commitment to any
ideology, belief, or viewpoint; or
(B) prohibit an institution--
(i) from having a religious mission
or from requiring an applicant,
student, employee, or independent
contractor (such as an adjunct
professor) of such an institution to--
(I) provide or adhere to a
statement of faith; or
(II) adhere to a code of
conduct consistent with the
stated religious mission of
such institution or the
religious tenets of such
organization; or
(ii) from requiring an applicant,
student, employee, or contractor to
take an oath to uphold the Constitution
of the United States; or
(C) require, encourage, or coerce an
institution of higher education to violate any
right protected by the Constitution;
(13) confirms that the standards for accreditation of
the agency or association do not assess the roles
(including actions or statements) of elected and
appointed State and Federal officials and legislative
bodies; and
(14) confirms that the standards for accreditation of
the agency or association do not require an institution
to develop a program of study leading to a degree,
certificate, or recognized postsecondary credential
that is not in response to the needs of an industry or
occupation.
(d) Length of Recognition.--[No accrediting]
(1) In general._Except as otherwise provided in
paragraph (2), no accrediting agency or association
may be recognized by the Secretary for the purpose of
this Act for a period of more than 5 years.
(2) Longer recognition authorized for certain
agencies and associations.--Notwithstanding paragraph
(1), an accrediting agency or association that has been
recognized by the Secretary for the purpose of this Act
for a period of 5 years, may be recognized for an
additional period of up to 3 years, if the Secretary
determines, based on the performance of the accrediting
agency or association during its recognition period
under this Act, that the accrediting agency or
association--
(A) has the capability to evaluate the
quality of institutions or program of study;
and
(B) has maintained compliance with the
criteria for accrediting agencies or
associations required by this section.
(e) Initial Arbitration Rule.--The Secretary may not
recognize the accreditation of any institution of higher
education unless the institution of higher education agrees to
submit any dispute involving the final denial, withdrawal, or
termination of accreditation to initial arbitration prior to
any other legal action.
(f) Jurisdiction.--Notwithstanding any other provision of
law, any civil action brought by an institution of higher
education seeking accreditation from, or accredited by, an
accrediting agency or association recognized by the Secretary
for the purpose of this title and involving the denial,
withdrawal, or termination of accreditation of the institution
of higher education, shall be brought in the appropriate United
States district court.
[(g) Limitation on Scope of Criteria.--Nothing in this Act
shall be construed to permit the Secretary to establish
criteria for accrediting agencies or associations that are not
required by this section. Nothing in this Act shall be
construed to prohibit or limit any accrediting agency or
association from adopting additional standards not provided for
in this section. Nothing in this section shall be construed to
permit the Secretary to establish any criteria that specifies,
defines, or prescribes the standards that accrediting agencies
or associations shall use to assess any institution's success
with respect to student achievement.
[(h) Change of Accrediting Agency.--The Secretary shall not
recognize the accreditation of any otherwise eligible
institution of higher education if the institution of higher
education is in the process of changing its accrediting agency
or association, unless the eligible institution submits to the
Secretary all materials relating to the prior accreditation,
including materials demonstrating reasonable cause for changing
the accrediting agency or association.
[(i) Dual Accreditation Rule.--The Secretary shall not
recognize the accreditation of any otherwise eligible
institution of higher education if the institution of higher
education is accredited, as an institution, by more than one
accrediting agency or association, unless the institution
submits to each such agency and association and to the
Secretary the reasons for accreditation by more than one such
agency or association and demonstrates to the Secretary
reasonable cause for its accreditation by more than one agency
or association. If the institution is accredited, as an
institution, by more than one accrediting agency or
association, the institution shall designate which agency's
accreditation shall be utilized in determining the
institution's eligibility for programs under this Act.]
(g) Limitation on Scope of Criteria.--
(1) In general.--The Secretary shall not establish
criteria for accrediting agencies or associations that
are not required by this section.
(2) Institutional eligibility.--An institution of
higher education shall be eligible for participation in
programs under this title if the institution is in
compliance with the standards of its accrediting agency
or association that assess the institution in
accordance with subsection (a)(5), regardless of any
additional standards adopted by the agency or
association for purposes unrelated to participation in
programs under this title.
(h) Change of Accrediting Agency or Association.--
(1) In general.--The Secretary shall recognize the
accreditation of any otherwise eligible institution or
program of study if the institution (or program) is in
the process of changing its accrediting agency or
association, unless the institution (or program) is
subject to one or more covered actions.
(2) Covered action defined.--For purposes of this
subsection, the term ``covered action'' means one or
more of the following, when used with respect to an
institution or program of study:
(A) A pending or final action brought by a
State agency to suspend, revoke, withdraw, or
terminate the institution's legal authority to
provide postsecondary education in the State.
(B) A decision by a recognized accrediting
agency or association to deny accreditation or
preaccreditation to the institution or program
of study.
(C) A pending or final action brought by a
recognized accrediting agency or association to
suspend, revoke, withdraw, or terminate the
institution's or program of study's
accreditation or preaccreditation.
(D) Probation or an equivalent status imposed
on the institution or program of study by a
recognized accrediting agency or association.
(3) Institutions of higher education not subject to
covered actions.--An institution (or program of study )
that is not subject to a covered action described in
paragraph (1) and that desires to change its
accrediting agency or association for a reason not
related to any such covered action (such as compliance
with State law) may make such a change without the
approval of the Secretary, as long as the institution
(or program) and the new accrediting agency or
association of the institution (or program), not later
than 30 days after the accreditation decision by such
agency or association, notify the Secretary, in
writing, of the effective date of the institution's (or
program's)accreditation by such agency or association.
(i) Dual Accreditation Rule.--
(1) Recognition by secretary.--The Secretary shall
recognize the accreditation of any otherwise eligible
institution of higher education if the institution of
higher education is accredited, as an institution, by
more than one accrediting agency or association.
(2) Designation by institution.--If the institution
is accredited, as an institution, by more than one
accrediting agency or association, the institution--
(A) shall designate which agency's or
association's accreditation shall be utilized
in determining the institution's eligibility
for participation in programs under this Act;
and
(B) may change this designation at the end of
the institution's period of recognition.
(j) Impact of Loss of Accreditation.--An institution may not
be certified or recertified as an institution of higher
education under section 102 and subpart 3 of this part or
participate in any of the other programs authorized by this Act
if such institution--
(1) is not currently accredited by any agency or
association recognized by the Secretary;
(2) has had its accreditation withdrawn, revoked, or
otherwise terminated for cause during the preceding 24
months, unless such withdrawal, revocation, or
termination has been rescinded by the same accrediting
agency; or
(3) has withdrawn from accreditation voluntarily
under a show cause or suspension order during the
preceding 24 months, unless such order has been
rescinded by the same accrediting agency.
[(k) Religious Institution Rule.--Notwithstanding subsection
(j), the Secretary shall allow an institution that has had its
accreditation withdrawn, revoked, or otherwise terminated, or
has voluntarily withdrawn from an accreditation agency, to
remain certified as an institution of higher education under
section 102 and subpart 3 of this part for a period sufficient
to allow such institution to obtain alternative accreditation,
if the Secretary determines that the reason for the withdrawal,
revocation, or termination--
[(1) is related to the religious mission or
affiliation of the institution; and
[(2) is not related to the accreditation criteria
provided for in this section.]
(k) Religious Institution Rule.--
(1) In general.--Notwithstanding subsection (j), the
Secretary shall allow an institution that has had its
accreditation withdrawn, revoked, or otherwise
terminated, or has voluntarily withdrawn from an
accreditation agency, to remain certified as an
institution of higher education under section 102 and
subpart 3 of this part for a period sufficient to allow
such institution to obtain alternative accreditation,
if the Secretary determines that the withdrawal,
revocation, or termination--
(A) is related to the religious mission or
affiliation of the institution; and
(B) is not related to the accreditation
criteria provided for in this section.
(2) Administrative complaint for failure to respect
religious mission.--
(A) In general.--
(i) Institution.--If an institution
of higher education believes that an
adverse action of an accrediting agency
or association fails to respect the
institution's religious mission in
violation of subsection (a)(4)(B), the
institution--
(I) may file a complaint with
the Secretary to review the
adverse action of the agency or
association; and
(II) prior to filing such
complaint, shall notify the
Secretary and the agency or
association of an intent to
file such complaint not later
than 30 days after--
(aa) receiving the
adverse action from the
agency or association;
or
(bb) determining that
discussions with or the
processes of the agency
or association to
remedy the failure to
respect the religious
mission of the
institution will fail
to result in the
withdrawal of the
adverse action by the
agency or association.
(ii) Accrediting agency or
association.--Upon notification of an
intent to file a complaint and through
the duration of the complaint process
under this paragraph, the Secretary and
the accrediting agency or association
shall treat the accreditation status of
the institution of higher education as
if the adverse action for which the
institution is filing the complaint had
not been taken.
(B) Complaint.--Not later than 45 days after
providing notice of the intent to file a
complaint, the institution shall file the
complaint with the Secretary (and provide a
copy to the accrediting agency or association),
which shall include--
(i) a description of the adverse
action;
(ii) how the adverse action fails to
respect the institution's religious
mission in violation of subsection
(a)(4)(B); and
(iii) any other information the
institution determines relevant to the
complaint.
(C) Response.--
(i) In general.--The accrediting
agency or association shall have 30
days from the date the complaint is
filed with the Secretary to file with
the Secretary (and provide a copy to
the institution) a response to the
complaint, which response shall
include--
(I) how the adverse action is
based on a violation of the
agency or association's
standards for accreditation;
and
(II) how the adverse action
does not fail to respect the
religious mission of the
institution and is in
compliance with subsection
(a)(4)(B).
(ii) Burden of proof.--
(I) In general.--The
accrediting agency or
association shall bear the
burden of proving that the
agency or association has not
taken the adverse action as a
result of the institution's
religious mission, and that the
action does not fail to respect
the institution's religious
mission in violation of
subsection (a)(4)(B), by
showing that the adverse action
does not impact the aspect of
the religious mission claimed
to be affected in the
complaint.
(II) Insufficient proof.--Any
evidence that the adverse
action results from the
application of a neutral and
generally applicable rule shall
be insufficient to prove that
the action does not fail to
respect an institution's
religious mission.
(D) Additional institution response.--The
institution shall have 30 days from the date on
which the agency or association's response is
filed with the Secretary to--
(i) file with the Secretary (and
provide a copy to the agency or
association) a response to any issues
raised in the response of the agency or
association; or
(ii) inform the Secretary and the
agency or association that the
institution elects to waive the right
to respond to the response of the
agency or association.
(E) Secretarial action.--
(i) In general.--Not later than 30
days of receipt of the institution's
response under subparagraph (D) or
notification that the institution
elects not to file a response under
such subparagraph--
(I) the Secretary shall
review the materials to
determine if the accrediting
agency or association has met
its burden of proof under
subparagraph (C)(ii)(I); or
(II) in a case in which the
Secretary fails to conduct such
review--
(aa) the Secretary
shall be deemed as
determining that the
adverse action fails to
respect the religious
mission of the
institution; and
(bb) the accrediting
agency or association
shall be required to
reverse the action
immediately and take no
further action with
respect to such adverse
action.
(ii) Review of complaint.--In
reviewing the complaint under clause
(i)(I)--
(I) the Secretary shall
consider the institution to be
correct in the assertion that
the adverse action fails to
respect the institution's
religious mission and shall
apply the burden of proof
described in subparagraph
(C)(ii)(I) with respect to the
accrediting agency or
association; and
(II) if the Secretary
determines that the accrediting
agency or association fails to
meet such burden of proof--
(aa) the Secretary
shall notify the
institution and the
agency or association
that the agency or
association is not in
compliance with
subsection (a)(4)(B),
and that such agency or
association shall carry
out the requirements of
item (bb) to be in
compliance with
subsection (a)(4)(B);
and
(bb) the agency or
association shall
reverse the adverse
action immediately and
take no further action
with respect to such
adverse action.
(iii) Final departmental action.--The
Secretary's determination under this
subparagraph shall be the final action
of the Department on the complaint.
(F) Rule of construction.--Nothing in this
paragraph shall prohibit--
(i) an accrediting agency or
association from taking an adverse
action against an institution of higher
education for a failure to comply with
the agency or association's standards
of accreditation as long as such
standards are in compliance with
subsection (a)(4)(B) and any other
applicable requirements of this
section; or
(ii) an institution of higher
education from exercising any other
rights to address concerns with respect
to an accrediting agency or association
or the accreditation process of an
accrediting agency or association.
(G) Guidance.--
(i) In general.--The Secretary may
only issue guidance under this
paragraph that explains or clarifies
the process for providing notice of an
intent to file a complaint or for
filing a complaint under this
paragraph.
(ii) Clarification.--The Secretary
may not issue guidance, or otherwise
determine or suggest, when discussions
to remedy the failure by an accrediting
agency or association to respect the
religious mission of an institution of
higher education referred to in
subparagraph (A)(i)(II)(bb) have failed
or will fail.
(3) Religious mission defined.--In this Act, the term
``religious mission''--
(A) means a published institutional mission
that is approved by the governing body of an
institution of higher education and that
includes, refers to, or is predicated upon
religious tenets, beliefs, or teachings; and
(B) may be reflected in any of the
institution's policies, decisions, or practices
related to such tenets, beliefs, or teachings
(including any policies or decisions concerning
housing, employment, curriculum, self-
governance, or student admission, continuing
enrollment, or graduation).
(l) Limitation, Suspension, or Termination of Recognition.--
(1) If the Secretary determines that an accrediting agency or
association has failed to apply effectively the criteria in
this section, or is otherwise not in compliance with the
requirements of this section, the Secretary shall--
(A) after notice and opportunity for a hearing,
limit, suspend, or terminate the recognition of the
agency or association; or
(B) require the agency or association to take
appropriate action to bring the agency or association
into compliance with such requirements within a
timeframe specified by the Secretary, except that--
(i) such timeframe shall not exceed 12 months
unless the Secretary extends such period for
good cause; and
(ii) if the agency or association fails to
bring the agency or association into compliance
within such timeframe, the Secretary shall,
after notice and opportunity for a hearing,
limit, suspend, or terminate the recognition of
the agency or association.
(2) The Secretary may determine that an accrediting agency or
association has failed to apply effectively the standards
provided in this section if an institution of higher education
seeks and receives accreditation from the accrediting agency or
association during any period in which the institution is the
subject of any interim action by another accrediting agency or
association, described in paragraph (2)(A)(i), (2)(B), or
(2)(C) of subsection (a) of this section, leading to the
suspension, revocation, or termination of accreditation or the
institution has been notified of the threatened loss of
accreditation, and the due process procedures required by such
suspension, revocation, termination, or threatened loss have
not been completed.
(m) Limitation on the Secretary's Authority.--The Secretary
may only recognize accrediting agencies or associations which
accredit institutions of higher education for the purpose of
enabling such institutions to establish eligibility to
participate in the programs under this Act or which accredit
institutions of higher education or higher education programs
for the purpose of enabling them to establish eligibility to
participate in other programs administered by the Department of
Education or other Federal agencies.
(n) Independent Evaluation.--(1) The Secretary shall conduct
a comprehensive review and evaluation of the performance of all
accrediting agencies or associations which seek recognition by
the Secretary in order to determine whether such accrediting
agencies or associations meet the criteria established by this
section. The Secretary shall conduct an independent evaluation
of the information provided by such agency or association. Such
evaluation shall include--
(A) the solicitation of third-party information
concerning the performance of the accrediting agency or
association; and
(B) site visits, including unannounced site visits as
appropriate, at accrediting agencies and associations,
and, at the Secretary's discretion, at representative
member institutions.
(2) The Secretary shall place a priority for review of
accrediting agencies or associations on those agencies or
associations that accredit institutions of higher education
that participate most extensively in the programs authorized by
this title and on those agencies or associations which have
been the subject of the most complaints or legal actions.
(3) The Secretary shall consider all available relevant
information concerning the compliance of the accrediting agency
or association with the criteria provided for in this section,
including any complaints or legal actions against such agency
or association. In cases where deficiencies in the performance
of an accreditation agency or association with respect to the
requirements of this section are noted, the Secretary shall
take these deficiencies into account in the recognition
process. The Secretary shall not, under any circumstances, base
decisions on the recognition or denial of recognition of
accreditation agencies or associations on criteria other than
those contained in this section. When the Secretary decides to
recognize an accrediting agency or association, the Secretary
shall determine the agency or association's scope of
recognition. [If the agency or association reviews institutions
offering distance education courses or programs and the
Secretary determines that the agency or association meets the
requirements of this section, then the agency shall be
recognized and the scope of recognition shall include
accreditation of institutions offering distance education
courses or programs.]
(4) The Secretary shall maintain sufficient documentation to
support the conclusions reached in the recognition process,
and, if the Secretary does not recognize any accreditation
agency or association, shall make publicly available the reason
for denying recognition, including reference to the specific
criteria under this section which have not been fulfilled.
(o) Regulations.--The Secretary shall by regulation provide
procedures for the recognition of accrediting agencies or
associations and for the appeal of the Secretary's decisions.
Notwithstanding any other provision of law, the Secretary shall
not promulgate any regulation with respect to the standards of
an accreditation agency or association described in subsection
(a)(5), or with respect to the policies and procedures of an
accreditation agency or association described in paragraph (2)
or (5) of subsection (c) or how the agency or association
carries out such policies and procedures.
[(p) Rule of Construction.--Nothing in subsection (a)(5)
shall be construed to restrict the ability of--
[(1) an accrediting agency or association to set,
with the involvement of its members, and to apply,
accreditation standards for or to institutions or
programs that seek review by the agency or association;
or
[(2) an institution to develop and use institutional
standards to show its success with respect to student
achievement, which achievement may be considered as
part of any accreditation review.
[(q) Review of Scope Changes.--The Secretary shall require a
review, at the next available meeting of the National Advisory
Committee on Institutional Quality and Integrity, of any change
in scope undertaken by an agency or association under
subsection (a)(4)(B)(i)(II) if the enrollment of an institution
that offers distance education or correspondence education that
is accredited by such agency or association increases by 50
percent or more within any one institutional fiscal year.]
(p) Risk-based or Differentiated Review Processes or
Procedures.--
(1) In general.--Notwithstanding any other provision
of law (including subsection (a)(4)(A)), an accrediting
agency or association shall establish risk-based
processes or procedures for assessing compliance with
the accrediting agency or association's standards
(including policies related to substantive change and
award of accreditation statuses) under which the agency
or association--
(A) creates a system for understanding an
institution's or program of study's performance
in comparison with other similarly situated
institutions or programs of study (which may
include past performance with respect to
meeting the accrediting agency or association's
standards, including the standards relating to
the student achievement outcomes described in
subclauses (I) through (IV) of subsection
(a)(5)(A));
(B) requires for each institution and program
of study designated as high-risk, in accordance
with the accrediting agency or association's
system in subparagraph (A), to submit the
annual plans described in subsection (c)(2)(B)
to the agency or association that address the
performance issues of such institution or
program of study that resulted in such
designation;
(C) with respect to institutions or program
of study meeting or exceeding performance as
described in subparagraph (A), reduces any
compliance requirements with the standards of
accreditation of the agency that are not
assessing an institution or program of study
under subsection (a)(5), such as on-site
inspections; and
(D) may require an institution or program of
study that has declining performance (such as
an institution or program of study with a high-
risk designation under subparagraph (B)), which
has not improved as required by the annual plan
submitted under subsection (c)(2)(B), to take
actions to avoid or minimize the risks that may
lead to revocation of accreditation (such as
limiting certain program of study enrollment or
recommending to the Secretary to limit funds
under this title for such an institution or
program.
(2) Prohibition.--Any risk-based review process or
procedure established pursuant to this subsection shall
not discriminate against, or otherwise preclude,
institutions of higher education based on institutional
sector or category, including an institution of higher
education's tax status.
(q) Total Price Defined.--For purposes of this section, the
term ``total price'' has the meaning given such term in section
454(d)(3).
* * * * * * *
Subpart 3--Eligibility and Certification Procedures
SEC. 498. ELIGIBILITY AND CERTIFICATION PROCEDURES.
(a) General Requirement.--For purposes of qualifying
institutions of higher education for participation in programs
under this title, the Secretary shall determine the legal
authority to operate within a State, the accreditation status,
and the administrative capability and financial responsibility
of an institution of higher education in accordance with the
requirements of this section.
(b) Single Application Form.--The Secretary shall prepare and
prescribe a single application form which--
(1) requires sufficient information and documentation
to determine that the requirements of eligibility,
accreditation, financial responsibility, and
administrative capability of the institution of higher
education are met;
(2) requires a specific description of the
relationship between a main campus of an institution of
higher education and all of its branches, including a
description of the student aid processing that is
performed by the main campus and that which is
performed at its branches;
(3) requires--
(A) a description of the third party
servicers of an institution of higher
education; and
(B) the institution to maintain a copy of any
contract with a financial aid service provider
or loan servicer, and provide a copy of any
such contract to the Secretary upon request;
(4) requires such other information as the Secretary
determines will ensure compliance with the requirements
of this title with respect to eligibility,
accreditation, administrative capability and financial
responsibility; and
(5) provides, at the option of the institution, for
participation in one or more of the programs under part
B or D.
(c) Financial Responsibility Standards.--(1) The Secretary
shall determine whether an institution has the financial
responsibility required by this title on the basis of whether
the institution is able--
(A) to provide the services described in its official
publications and statements;
(B) to provide the administrative resources necessary
to comply with the requirements of this title; and
(C) to meet all of its financial obligations,
including (but not limited to) refunds of institutional
charges and repayments to the Secretary for liabilities
and debts incurred in programs administered by the
Secretary.
(2) Notwithstanding [paragraph (1), if] paragraph (1), the
Secretary shall prescribe criteria regarding ratios that aid in
the determination financial responsibility. Such ratios shall
be first issued in draft form to the institution to allow for
adequate review, consisting of an appeals process, by such
institutions of higher education. If an institution fails to
meet criteria [prescribed by the Secretary regarding ratios]
prescribed by the Secretary regarding the final ratios that
demonstrate financial responsibility, then the institution
shall provide the Secretary with satisfactory evidence of its
financial responsibility in accordance with paragraph (3). Such
criteria shall take into account any differences in generally
accepted accounting principles, and the financial statements
required thereunder, that are applicable to for-profit, public,
and nonprofit institutions. The Secretary shall take into
account an institution's total financial circumstances in
making a determination of its ability to meet the standards
herein required.
(3) Notwithstanding paragraph (2), the Secretary shall take
into account an institution's current total financial
circumstances, including any subsequent change in the
institution's overall fiscal health based on the standards in
paragraph (2), when making a determination of its ability to
meet the standards herein required before any subsequent action
is taken under paragraph (4). If an institution meets the
standards in paragraph (2), the institution shall be seen as
financially responsible.
[(3)] (4) The Secretary shall determine an institution to be
financially responsible, notwithstanding the institution's
failure to meet the criteria under paragraphs (1) and (2), if--
(A) such institution submits to the Secretary third-
party financial guarantees that the Secretary
determines are reasonable, such as performance bonds or
letters of credit payable to the Secretary, which
third-party financial guarantees shall equal not less
than one-half of the annual potential liabilities of
such institution to the Secretary for funds under this
title, including loan obligations discharged pursuant
to section 437, and to students for refunds of
institutional charges, including funds under this
title;
(B) such institution has its liabilities backed by
the full faith and credit of a State, or its
equivalent;
(C) such institution [establishes to the satisfaction
of the Secretary, with] establishes, with the support
of a financial statement audited by an independent
certified public accountant in accordance with
generally accepted auditing standards, that the
institution has sufficient resources to ensure against
the precipitous closure of the institution, including
the ability to meet all of its financial obligations
(including refunds of institutional charges and
repayments to the Secretary for liabilities and debts
incurred in programs administered by the Secretary); or
(D) such institution has met standards of financial
responsibility, prescribed by the Secretary by
regulation, that indicate a level of financial strength
not less than those required in paragraph (2).
[(4)] (5) If an institution of higher education that provides
a 2-year or 4-year program of instruction for which the
institution awards an associate or baccalaureate degree fails
to meet the criteria imposed by the Secretary pursuant to
paragraph (2), the Secretary shall waive that particular
requirement for that institution if the institution
demonstrates to the satisfaction of the Secretary that--
(A) there is no reasonable doubt as to its continued
solvency and ability to deliver quality educational
services; and
(B) it is current in its payment of all current
liabilities, including student refunds, repayments to
the Secretary, payroll, and payment of trade creditors
and withholding taxes[; and].
[(C) it has substantial equity in school-occupied
facilities, the acquisition of which was the direct
cause of its failure to meet the criteria.]
[(5)] (6) The determination as to whether an institution has
met the standards of financial responsibility provided for in
paragraphs (2) and [(3)(C)] (4)(C) shall be based on an audited
and certified financial statement of the institution. Such
audit shall be conducted by a qualified independent
organization or person in accordance with standards established
by the American Institute of Certified Public Accountants. Such
statement shall be submitted to the Secretary at the time such
institution is considered for certification or recertification
under this section. If the institution is permitted to be
certified (provisionally or otherwise) and such audit does not
establish compliance with paragraph (2), the Secretary may
require that additional audits be submitted.
[(6)] (7)(A) The Secretary shall establish requirements for
the maintenance by an institution of higher education of
sufficient cash reserves to ensure repayment of any required
refunds.
(B) The Secretary shall provide for a process under which the
Secretary shall exempt an institution of higher education from
the requirements described in subparagraph (A) if the Secretary
determines that the institution--
(i) is located in a State that has a tuition recovery
fund that ensures that the institution meets the
requirements of subparagraph (A);
(ii) contributes to the fund; and
(iii) otherwise has legal authority to operate within
the State.
(8) Not later than 18 months after the date of enactment of
the College Cost Reduction Act, the Secretary shall pursue a
process to update the ratios regarding financial responsibility
as identified in paragraph (2). The Secretary shall report the
revised ratios to--
(A) the Committee on Education and the Workforce of
the House of Representatives; and
(B) the Committee on Health, Education, Labor, and
Pensions of the Senate.
(d) Administrative Capacity Standard.--The Secretary is
authorized--
(1) to establish procedures and requirements relating
to the administrative capacities of institutions of
higher education, including--
(A) consideration of past performance of
institutions or persons in control of such
institutions with respect to student aid
programs; and
(B) maintenance of records; and
(2) to establish such other reasonable procedures as
the Secretary determines will contribute to ensuring
that the institution of higher education will comply
with administrative capability required by this title.
(e) Financial Guarantees From Owners.--(1) Notwithstanding
any other provision of law, the Secretary may, to the extent
necessary to protect the financial interest of the United
States, require--
(A) financial guarantees from an institution
participating, or seeking to participate, in a program
under this title, or from one or more individuals who
the Secretary determines, in accordance with paragraph
(2), exercise substantial control over such
institution, or both, in an amount determined by the
Secretary to be sufficient to satisfy the institution's
potential liability to the Federal Government, student
assistance recipients, and other program participants
for funds under this title; and
(B) the assumption of personal liability, by one or
more individuals who exercise substantial control over
such institution, as determined by the Secretary in
accordance with paragraph (2), for financial losses to
the Federal Government, student assistance recipients,
and other program participants for funds under this
title, and civil and criminal monetary penalties
authorized under this title.
(2)(A) The Secretary may determine that an individual
exercises substantial control over one or more institutions
participating in a program under this title if the Secretary
determines that--
(i) the individual directly or indirectly controls a
substantial ownership interest in the institution;
(ii) the individual, either alone or together with
other individuals, represents, under a voting trust,
power of attorney, proxy, or similar agreement, one or
more persons who have, individually or in combination
with the other persons represented or the individual
representing them, a substantial ownership interest in
the institution; or
(iii) the individual is a member of the board of
directors, the chief executive officer, or other
executive officer of the institution or of an entity
that holds a substantial ownership interest in the
institution.
(B) The Secretary may determine that an entity exercises
substantial control over one or more institutions participating
in a program under this title if the Secretary determines that
the entity directly or indirectly holds a substantial ownership
interest in the institution.
(3) For purposes of this subsection, an ownership interest is
defined as a share of the legal or beneficial ownership or
control of, or a right to share in the proceeds of the
operation of, an institution or institution's parent
corporation. An ownership interest may include, but is not
limited to--
(A) a sole proprietorship;
(B) an interest as a tenant-in-common, joint tenant,
or tenant by the entireties;
(C) a partnership; or
(D) an interest in a trust.
(4) The Secretary shall not impose the requirements described
in subparagraphs (A) and (B) of paragraph (1) on an institution
that--
(A) has not been subjected to a limitation,
suspension, or termination action by the Secretary or a
guaranty agency within the preceding 5 years;
(B) has not had, during its 2 most recent audits of
the institutions conduct of programs under this title,
an audit finding that resulted in the institution being
required to repay an amount greater than 5 percent of
the funds the institution received from programs under
this title for any year;
(C) meets and has met, for the preceding 5 years, the
financial responsibility standards under subsection
(c); and
(D) has not been cited during the preceding 5 years
for failure to submit audits required under this title
in a timely fashion.
(5) For purposes of section 487(c)(1)(G), this section shall
also apply to individuals or organizations that contract with
an institution to administer any aspect of an institution's
student assistance program under this title.
(6) Notwithstanding any other provision of law, any
individual who--
(A) the Secretary determines, in accordance with
paragraph (2), exercises substantial control over an
institution participating in, or seeking to participate
in, a program under this title;
(B) is required to pay, on behalf of a student or
borrower, a refund of unearned institutional charges to
a lender, or to the Secretary; and
(C) willfully fails to pay such refund or willfully
attempts in any manner to evade payment of such refund,
shall, in addition to other penalties provided by law, be
liable to the Secretary for the amount of the refund not paid,
to the same extent with respect to such refund that such an
individual would be liable as a responsible person for a
penalty under section 6672(a) of Internal Revenue Code of 1986
with respect to the nonpayment of taxes.
(f) Actions on Applications and Site Visits.--The Secretary
shall ensure that prompt action is taken by the Department on
any application required under subsection (b). The personnel of
the Department of Education may conduct a site visit at each
institution before certifying or recertifying its eligibility
for purposes of any program under this title. The Secretary
shall establish priorities by which institutions are to receive
site visits, and shall, to the extent practicable, coordinate
such visits with site visits by States, guaranty agencies, and
accrediting bodies in order to eliminate duplication, and
reduce administrative burden.
(g) Time Limitations on, and Renewal of, Eligibility.--
(1) General rule.--After the expiration of the
certification of any institution under the schedule
prescribed under this section (as this section was in
effect prior to the enactment of the Higher Education
Act Amendments of 1998), or upon request for initial
certification from an institution not previously
certified, the Secretary may certify the eligibility
for the purposes of any program authorized under this
title of each such institution for a period not to
exceed 6 years.
(2) Notification.--The Secretary shall notify each
institution of higher education not later than 6 months
prior to the date of the expiration of the
institution's certification.
(3) Institutions outside the united states.--The
Secretary shall promulgate regulations regarding the
recertification requirements applicable to an
institution of higher education outside of the United
States that meets the requirements of section
102(a)(1)(C) and received less than $500,000 in funds
under part B for the most recent year for which data
are available.
(h) Provisional Certification of Institutional Eligibility.--
(1) Notwithstanding subsections (d) and (g), the Secretary may
provisionally certify an institution's eligibility to
participate in programs under this title--
(A) for not more than one complete award year in the
case of an institution of higher education seeking an
initial certification; and
(B) for not more than 3 complete award years if--
(i) the institution's administrative
capability and financial responsibility is
being determined for the first time;
(ii) there is a complete or partial change of
ownership, as defined under subsection (i), of
an eligible institution; or
(iii) the Secretary determines that an
institution that seeks to renew its
certification is, in the judgment of the
Secretary, in an administrative or financial
condition that may jeopardize its ability to
perform its financial responsibilities under a
program participation agreement.
(2) Whenever the Secretary withdraws the recognition of any
accrediting agency, an institution of higher education which
meets the requirements of accreditation, eligibility, and
certification on the day prior to such withdrawal, the
Secretary may, notwithstanding the withdrawal, continue the
eligibility of the institution of higher education to
participate in the programs authorized by this title for a
period not to exceed 18 months from the date of the withdrawal
of recognition.
(3) If, prior to the end of a period of provisional
certification under this subsection, the Secretary determines
that the institution is unable to meet its responsibilities
under its program participation agreement, the Secretary may
terminate the institution's participation in programs under
this title.
(i) Treatment of Changes of Ownership And Proposed Changes of
Ownership.--[(1)] (1) [An eligible institution] (A) An eligible
institution of higher education that has had a change in
ownership resulting in a change of control shall not qualify to
participate in programs under this title after the change in
control (except as provided in paragraph (3)) unless it
establishes that it meets [the requirements of section 102
(other than the requirements in subsections (b)(5) and (c)(3))]
the applicable requirements of section 102 or 103(13) and this
section after such change in control.
(B)(i) Prior to a change in ownership resulting in a change
of control, an institution may seek a pretransaction
determination about whether the institution will meet the
applicable requirements of section 102 or 103(13) and this
section after such proposed change in ownership by submitting
to the Secretary a materially complete pretransaction review
application.
(ii) In reviewing applications submitted under clause
(i), the Secretary shall only provide a comprehensive
review of each such application, and may not provide an
abbreviated or partial review.
(iii) If an institution submits a materially complete
pretransaction review application at least 90 days
prior to the transaction and the Secretary approves the
application, the subsequent change in ownership
application shall also be approved and the institution
shall be certified as meeting the requirements for such
transaction, provided that the institution--
(I) complies with the applicable terms of
this section; and
(II) the transaction resulting in a change of
control does not differ materially in its terms
from the transaction proposed in the
pretransaction review application.
(2) An action resulting in a change in control may include
(but is not limited to)--
(A) the sale of the institution or the majority of
its assets;
(B) the transfer of the controlling interest of stock
of the institution or its parent corporation;
(C) the merger of two or more eligible institutions;
(D) the division of one or more institutions into two
or more institutions;
(E) the transfer of the controlling interest of stock
of the institutions to its parent corporation; [or]
(F) the transfer of the liabilities of the
institution to its parent corporation[.]; or
(G) in the case of a proprietary institution of
higher education, a conversion to a public or other
nonprofit institution of higher education.
(3) An action that may be treated as not resulting in a
change in control includes (but is not limited to)--
(A) the sale or transfer, upon the death of an owner
of an institution, of the ownership interest of the
deceased in that institution to a family member or to a
person holding an ownership interest in that
institution; or
(B) another action determined by the Secretary to be
a routine business practice.
(4)(A) The Secretary may provisionally certify an institution
seeking approval of a change in ownership based on the
preliminary review by the Secretary of a materially complete
application that is received by the Secretary within 10
business days of the transaction for which the approval is
sought.
(B) A provisional certification under this paragraph shall
expire not later than the end of the month following the month
in which the transaction occurred, except that if the Secretary
has not issued a decision on the application for the change of
ownership within that period, the Secretary may continue such
provisional certification on a month-to-month basis until such
decision has been issued.
(5)(A) Subject to subparagraph (B), when any institution
submits an application for a change in ownership resulting in a
change in control under this section or submits a
pretransaction review application under paragraph (1)(B) (other
than in the case of a conversion transaction), the institution
shall be required to pay to the Secretary an administrative fee
that shall--
(i) be in an amount equal to 0.15 percent of the
total institutional revenue derived from this title by
such institution for the most fiscal year for which
data is available; and
(ii) be used exclusively for expenses related to the
processing of such application, and be available to the
Secretary without further appropriation, exclusively
for expenses related to the processing of such approval
or application.
(B) In the case of a proprietary institution submitting an
application for conversion, or a pretransaction review
application for conversion, the institution shall be required
to pay to the Secretary an administrative fee that shall--
(i) be in an amount equal to 0.30 percent of the
total institutional revenue derived from this title by
such institution for the most fiscal year for which
data is available; and
(ii) be used exclusively for expenses related to the
processing of such application, and of which--
(I) 50 percent shall be available to the
Secretary without further appropriation,
exclusively for expenses related to the
processing of such application; and
(II) 50 percent shall be remitted by the
Secretary to the Commissioner of the Internal
Revenue, and shall be available, without
further appropriation, to the Commissioner of
Internal Revenue exclusively for purposes of
determining whether the institution seeking
such conversion or pretransaction review is an
institution exempt from tax and is otherwise in
compliance with applicable requirements of the
Internal Revenue Code of 1986.
(C) An institution that pays a fee under subparagraph
(A) or (B) for a pretransaction application with
respect to a proposed transaction shall not be required
to pay another fee under such subparagraph for a change
in ownership application with respect to such
transaction.
(D) In no case may any fee remitted under subparagraph (A) or
(B) exceed $120,000 for any transaction (or pretransaction)
application, nor may the Secretary require an institution that
has paid a fee under subparagraph (B) to pay an additional fee
under subparagraph (A).
(6)(A) The Secretary shall approve or deny a materially
complete application (including pretransaction reviews and
conversion applications) submitted under this section as soon
as practicable and not later than the 90-day period beginning
on the date of receipt of such an application, except that in a
case in which the Secretary determines, on a nondelegable
basis, that good cause exists to not make the determination
during such 90-day period, the Secretary shall notify the
institution in writing detailing the reasons for a good cause
extension.
(B) If the Secretary fails to approve or deny a materially
complete application during the period described in
subparagraph (A) and does not find good cause for extension,
the materially complete application shall be deemed approved.
(C) In no case may the Secretary grant a good cause extension
under this section to an institution for more than one month at
a time, or for a total of more than more than 12 months.
(D) To ensure timely submission of all relevant
documentation, the Secretary may deny an application if an
institution does not make a good faith effort to submit to the
Secretary, in a timely manner--
(i) all relevant documentation; or
(ii) a materially complete application.
(E)(i) Upon approving or denying an application under this
paragraph, the Secretary shall publish in the Federal Register
the reasoning for such approval or denial, including--
(I) a copy of the approval or denial letter sent to
the institution; and
(II) any analysis regarding how the Secretary
determined under paragraph 7(A)(iii) that a director of
the institution was an interested or disinterested
party to the transaction.
(ii) The Secretary shall not publish under clause (i) any
information that is otherwise exempt from disclosure under
section 552 of title 5, United States Code (relating to the
Freedom of Information Act), including trade secrets and
commercial or financial information that is privileged or
confidential.
(7)(A) In the case of a proprietary institution that
subsequent to the transaction would be owned and operated by an
entity (in this paragraph referred to as the ``buyer'') seeking
to be recognized as a public or other nonprofit institution,
the buyer shall meet the definition of a nonprofit institution
under section 103(13) if--
(i) the buyer pays no more than fair market value for
any assets of the proprietary institution;
(ii) the buyer pays no more than fair market value
for any service or lease contracts, including such
service and lease contracts provided by the entity
selling the proprietary institution; and
(iii) to prevent self-dealing in the case where one
or more individuals with a substantial ownership or
controlling interests in the proprietary institution
will also have substantial or controlling interests in
the institution seeking to be recognized as a public or
other nonprofit institution (meaning that one or more
individuals are on both sides of the transaction), the
change of control transaction, and any substantial
asset acquisition, service, or lease agreements with
the proprietary institution shall be approved by a
disinterested committee of directors of the entity that
seeks to be recognized as a public or other nonprofit
institution.
(B) For the purposes of this paragraph, parties to the
transaction are entitled to a rebuttable presumption that the
assets, lease contracts, and service contracts that are part of
the transaction are purchased at fair market value if--
(i) the acquiring entity pays no more than fair
market value for such assets, lease contracts, or
service contracts; and
(ii) the value of the assets, lease contracts, or
service contracts are evaluated by at least one
independent third-party entity hired by parties on both
sides of the transaction.
(8)(A) An institution that has been approved for conversion
by the Secretary shall be subject to a monitoring period for a
5-year period beginning on the day after the date of such
approval. In conducting the monitoring of the institution under
this paragraph, the Secretary--
(i) shall only conduct monitoring to ensure that the
institution is in compliance with the requirements of
section 103(13) and paragraph (7) of this subsection;
and
(ii) may require the institution to submit regular
reports or conduct audits of such institution relating
to such compliance.
(B) Each institution that is subject to the monitoring period
under this paragraph shall remit an annual fee to the
Secretary--
(i) in an amount equal to 0.15 percent of the total
revenue derived from this title by such institution for
the most recent fiscal year for which data is
available; and
(ii) that shall be exclusively for expenses related
to monitoring of the institution for the period
described in subparagraph (A)--
(I) of which 50 percent shall be used by the
Secretary, without further appropriation,
exclusively for expenses related to monitoring
of the institution during such period; and
(II) of which 50 percent shall be remitted by
the Secretary to the Commissioner of Internal
Revenue, to be available to such Commissioner,
without further appropriation, exclusively for
monitoring compliance with the Internal Revenue
Code of such institution during such period.
(C) An institution may not be subject to an annual fee under
subparagraph (B) for monitoring related to a conversion that
exceeds $60,000.
(D) If the Secretary determines that an institution should be
subject to the monitoring under this paragraph beyond the 5-
year period described in subparagraph (A), the Secretary shall
provide the reasons justifying an extension in writing to the
institution (and in the Federal Register) at least 30 days
before the expiration of such period.
(E) Any institution that is subject to monitoring under this
paragraph may seek a waiver to be exempt from such monitoring
(including the annual fee under subparagraph (B)) on an annual
basis for any year during the monitoring period and the
Secretary shall grant such waiver if there is no ongoing
contractual or financial relationship between the institution
and the former entity or individuals that previously owned the
institution. The Secretary may grant a waiver for more than 1
year in the case where the entity that formerly owned the
proprietary institution has closed or no longer exists and the
Secretary determines the institution is not at risk of
violating the requirements of section 103(13) or paragraph (7)
of this subsection.
(9) Any institution that submits an application for
conversion shall not promote or market itself, in any manner,
as a public or other nonprofit institution of higher education
unless--
(A) the Secretary has provided final approval of the
conversion of the institution to a public or other
nonprofit institution of higher education under this
section;
(B) an accrediting agency or association recognized
by the Secretary pursuant to section 496 has approved
such public or nonprofit status of the institution;
(C) the State has given final approval to the
institution as a public or nonprofit institution of
higher education, as applicable; and
(D) in the case of an institution seeking nonprofit
status, the Commissioner of Internal Revenue has
approved the institution as tax exempt pursuant to the
Internal Revenue Code of 1986.
(10) Not later than 270 days after the date of enactment of
the College Cost Reduction Act, and periodically thereafter,
the Secretary shall publish (and update as necessary) in the
Federal Register--
(A) descriptions of the documents and materials the
Secretary expects or requires institutions of higher
education to submit (including any standardized forms)
as part of any pretransaction application or change in
ownership application under this section, including a
description of what the Secretary considers to be a
materially complete application; and
(B) after at least a 30-day notice and comment
period, responses to any public comments received with
respect to such descriptions or updates to such
descriptions.
(11) In a case in which the Secretary requests a document
under this section as part of a pretransaction or change in
ownership application that is not described in the Federal
Register under paragraph (10), the Secretary shall--
(A) substantiate, in writing to the institution, the
reasons why the Secretary is requesting such documents;
and
(B) publish such reasons in the Federal Register,
including whether the Secretary may request other
institutions that submit applications under this
section to produce similar documentation.
(12)(A) Not later than 18 months after the date of enactment
of the College Cost Reduction Act, and annually thereafter, the
Secretary shall submit a report to authorizing committees, and
post such report on a publicly available website regarding
implementation of the amendments made to this section by such
Act, including the following information:
(i) The mean and median length of time taken by the
Secretary to review applications under this section
during the preceding 12-month period.
(ii) The number of applications approved or denied
during the preceding 12-month period.
(iii) For any application not processed during the
90-day period beginning on the date of receipt of the
application for which the Secretary found good cause
under paragraph (6)(A) to extend the deadline in which
the application shall be processed, a copy of the
letter sent to the institution explaining why the
Secretary believed good cause existed for such
extension.
(iv) For any application not processed during such
90-day period, which was deemed to be automatically
approved by the requirements of this section under
paragraph (6)(B), the name of each institution involved
and an explanation for why the application was not
processed in a timely manner.
(v) Any legislative suggestions the Secretary may
have to improve the application or monitoring process
under this section.
(B) If the Secretary fails to submit a report under this
paragraph by not later than 90 days after the deadline for such
submission under subparagraph (A), the Secretary may not, for
the 12-month period following such failure, spend the fees
remitted by institutions under this section or remit such fees
to the Commissioner unless Congress provides for such use by
further appropriation.
(13) For the purposes of this subsection, the term
``conversion'' means any transaction under which--
(A) a proprietary institution is reorganized and
seeks recognition as a public or other nonprofit
institution; or
(B) the control of a proprietary institution is
transferred as a result of a sale, donation, or other
method to an entity that seeks certification under this
section as a public or other nonprofit institution.
(j) Treatment of Branches.--(1) A branch of an eligible
institution of higher education, as defined pursuant to
regulations of the Secretary, shall be certified under this
subpart before it may participate as part of such institution
in a program under this title, except that such branch shall
not be required to meet the requirements of sections
102(b)(1)(E) and 102(c)(1)(C) prior to seeking such
certification. Such branch is required to be in existence at
least 2 years after the branch is certified by the Secretary as
a branch campus participating in a program under this title,
prior to seeking certification as a main campus or free-
standing institution.
(2) The Secretary may waive the requirement of section
101(a)(2) for a branch that (A) is not located in a State, (B)
is affiliated with an eligible institution, and (C) was
participating in one or more programs under this title on or
before January 1, 1992.
(k) Treatment of Teach-Outs at Additional Locations.--
(1) In general.--A location of a closed institution
of higher education shall be eligible as an additional
location of an eligible institution of higher
education, as defined pursuant to regulations of the
Secretary, for the purposes of a teach-out described in
section 487(f), if such teach-out has been approved by
the institution's accrediting agency.
(2) Special rule.--An institution of higher education
that conducts a teach-out through the establishment of
an additional location described in paragraph (1) shall
be permitted to establish a permanent additional
location at a closed institution and shall not be
required--
(A) to meet the requirements of sections
102(b)(1)(E) and 102(c)(1)(C) for such
additional location; or
(B) to assume the liabilities of the closed
institution.
SEC. 498A. PROGRAM REVIEW AND DATA.
(a) General Authority.--In order to strengthen the
administrative capability and financial responsibility
provisions of this title, the Secretary--
(1) shall provide for the conduct of program reviews
on a systematic basis designed to include all
institutions of higher education participating in
programs authorized by this title;
(2) shall give priority for program review to
institutions of higher education that are--
(A) institutions with a cohort default rate
for loans under part B of this title in excess
of 25 percent or which places such institutions
in the highest 25 percent of such institutions;
(B) institutions with a default rate in
dollar volume for loans under part B of this
title which places the institutions in the
highest 25 percent of such institutions;
(C) institutions with a significant
fluctuation in Federal Stafford Loan volume,
Federal Direct Stafford/Ford Loan volume, or
Federal Pell Grant award volume, or any
combination thereof, in the year for which the
determination is made, compared to the year
prior to such year, that are not accounted for
by changes in the Federal Stafford Loan
program, the Federal Direct Stafford/Ford Loan
program, or the Pell Grant program, or any
combination thereof;
(D) institutions reported to have
deficiencies or financial aid problems by the
State licensing or authorizing agency, or by
the appropriate accrediting agency or
association;
(E) institutions with high annual dropout
rates; and
(F) such other institutions that the
Secretary determines may pose a significant
risk of failure to comply with the
administrative capability or financial
responsibility provisions of this title; and
(3) shall establish and operate a central data base
of information on institutional accreditation,
eligibility, and certification that includes--
(A) all relevant information available to the
Department;
(B) all relevant information made available
by the Secretary of Veterans Affairs;
(C) all relevant information from accrediting
agencies or associations;
(D) all relevant information available from a
guaranty agency; and
(E) all relevant information available from
States under subpart 1.
(b) Special Administrative Rules.--In carrying out paragraphs
(1) and (2) of subsection (a) and any other relevant provisions
of this title, the Secretary shall--
(1) establish guidelines designed to ensure
uniformity of practice in the conduct of program
reviews of institutions of higher education;
(2) make available to each institution participating
in programs authorized under this title complete copies
of all review guidelines and procedures used in program
reviews;
(3) permit the institution to correct or cure an
administrative, accounting, or recordkeeping error if
the error is not part of a pattern of error and there
is no evidence of fraud or misconduct related to the
error;
(4) base any civil penalty assessed against an
institution of higher education resulting from a
program review or audit on the gravity of the
violation, failure, or misrepresentation;
(5) inform the appropriate State and accrediting
agency or association whenever the Secretary takes
action against an institution of higher education under
this section, section 498, or section 432;
(6) provide to an institution of higher education an
adequate opportunity to review and respond to any
program review report and relevant materials related to
the report before any final program review report is
issued;
(7) review and take into consideration an institution
of higher education's response in any final program
review report or audit determination, and include in
the report or determination--
(A) a written statement addressing the
institution of higher education's response;
(B) a written statement of the basis for such
report or determination; and
(C) a copy of the institution's response; and
(8) maintain and preserve at all times the
confidentiality of any program review report until the
requirements of paragraphs (6) and (7) are met, and
until a final program review is issued, other than to
the extent required to comply with paragraph (5),
except that the Secretary shall promptly disclose any
and all program review reports to the institution of
higher education under review.
(c) Data Collection Rules.--The Secretary shall develop and
carry out a plan for the data collection responsibilities
described in paragraph (3) of subsection (a). The Secretary
shall make the information obtained under such paragraph (3)
readily available to all institutions of higher education,
guaranty agencies, States, and other organizations
participating in the programs authorized by this title.
(d) Training.--The Secretary shall provide training to
personnel of the Department, including criminal investigative
training, designed to improve the quality of financial and
compliance audits and program reviews conducted under this
title.
(e) Special Rule.--The provisions of section 103(b) of the
Department of Education Organization Act shall not apply to
Secretarial determinations made regarding the appropriate
length of instruction for programs measured in clock hours.
(f) Time Limit on Program Review Activities.--In conducting,
responding to, and concluding program review activities, the
Secretary shall--
(1) provide to the institution the initial report
finding not later than 90 days after concluding an
initial site visit;
(2) upon each receipt of an institution's response
during a program review inquiry, respond in a
substantive manner within 90 days;
(3) upon each receipt of an institution's written
response to a draft final program review report,
provide the final program review report and
accompanying enforcement actions, if any, within 90
days; and
(4) conclude the entire program review process not
later than 2 years after the initiation of a program
review, unless the Secretary determines that such a
review is sufficiently complex and cannot reasonably be
concluded before the expiration of such 2-year period,
in which case the Secretary shall promptly notify the
institution of the reasons for such delay and provide
an anticipated date for conclusion of the review.
* * * * * * *
TITLE VII--GRADUATE AND POSTSECONDARY IMPROVEMENT PROGRAMS
* * * * * * *
PART B--FUND FOR THE IMPROVEMENT OF POSTSECONDARY EDUCATION
SEC. 741. FUND FOR THE IMPROVEMENT OF POSTSECONDARY
EDUCATION.
(a) Authority.--The Secretary is authorized to make grants
to, or enter into contracts with, institutions of higher
education, combinations of such institutions, and other public
and private nonprofit institutions and agencies, to enable such
institutions, combinations, and agencies to improve
postsecondary education opportunities by--
(1) the encouragement of reform and improvement of,
and innovation in, postsecondary education and the
provision of educational opportunity for all students,
including nontraditional students;
(2) the creation of institutions, programs, and joint
efforts involving paths to career and professional
training, including--
(A) efforts that provide academic credit for
programs; and
(B) combinations of academic and experiential
learning;
(3) the establishment and continuation of
institutions, programs, consortia, collaborations, and
other joint efforts based on communications technology,
including those efforts that utilize distance education
and technological advancements to educate and train
postsecondary students (including health professionals
serving medically underserved populations);
(4) the carrying out, in postsecondary educational
institutions, of changes in internal structure and
operations designed to clarify institutional priorities
and purposes;
(5) the design and introduction of cost-effective
methods of instruction and operation;
(6) the introduction of institutional reforms
designed to expand individual opportunities for
entering and reentering postsecondary institutions and
pursuing programs of postsecondary study tailored to
individual needs;
(7) the introduction of reforms in graduate
education, in the structure of academic professions,
and in the recruitment and retention of faculties;
(8) the creation of new institutions and programs for
examining and awarding credentials to individuals, and
the introduction of reforms in current institutional
practices related thereto;
(9) the introduction of reforms in remedial
education, including English language instruction, to
customize remedial courses to student goals and help
students progress rapidly from remedial courses into
core courses and through postsecondary program
completion;
(10) the provision of support and assistance to
partnerships between institutions of higher education
and secondary schools with a significant population of
students identified as late-entering limited English
proficient students, to establish programs that--
(A) result in increased secondary school
graduation rates of limited English proficient
students; and
(B) increase the number of participating
late-entering limited English proficient
students who pursue postsecondary education;
(11) the creation of consortia that join diverse
institutions of higher education to design and offer
curricular and cocurricular interdisciplinary programs
at the undergraduate and graduate levels, sustained for
not less than a 5 year period, that--
(A) focus on poverty and human capability;
and
(B) include--
(i) a service-learning component; and
(ii) the delivery of educational
services through informational resource
centers, summer institutes, midyear
seminars, and other educational
activities that stress the effects of
poverty and how poverty can be
alleviated through different career
paths;
(12) the provision of support and assistance for
demonstration projects to provide comprehensive support
services to ensure that homeless students, or students
who were in foster care or were a ward of the court at
any time before the age of 13, enroll and succeed in
postsecondary education, including providing housing to
such students during periods when housing at the
institution of higher education is closed or generally
unavailable to other students; and
(13) the support of efforts to work with institutions
of higher education, and nonprofit organizations, that
seek to promote cultural diversity in the entertainment
media industry, including through the training of
students in production, marketing, and distribution of
culturally relevant content.
[(b) Planning Grants.--The Secretary is authorized to make
planning grants to institutions of higher education for the
development and testing of innovative techniques in
postsecondary education. Such grants shall not exceed $20,000.
[(c) Center for Best Practices To Support Single Parent
Students.--
[(1) Program authorized.--The Secretary is authorized
to award one grant or contract to an institution of
higher education to enable such institution to
establish and maintain a center to study and develop
best practices for institutions of higher education to
support single parents who are also students attending
such institutions.
[(2) Institution requirements.--The Secretary shall
award the grant or contract under this subsection to a
four-year institution of higher education that has
demonstrated expertise in the development of programs
to assist single parents who are students at
institutions of higher education, as shown by the
institution's development of a variety of targeted
services to such students, including on-campus housing,
child care, counseling, advising, internship
opportunities, financial aid, and financial aid
counseling and assistance.
[(3) Center activities.--The center funded under this
section shall--
[(A) assist institutions implementing
innovative programs that support single parents
pursuing higher education;
[(B) study and develop an evaluation protocol
for such programs that includes quantitative
and qualitative methodologies;
[(C) provide appropriate technical assistance
regarding the replication, evaluation, and
continuous improvement of such programs; and
[(D) develop and disseminate best practices
for such programs.]
(b) Grants.--
(1) Definitions.--In this subsection:
(A) Completion rate.--The term ``completion
rate'' means--
(i) the percentage of students from
an initial cohort enrolled at an
institution of higher education that is
a 2-year institution who have graduated
from the institution or transferred to
a 4-year institution of higher
education; or
(ii) the percentage of students from
an initial cohort enrolled at an
institution of higher education in the
State that is a 4-year institution who
have graduated from the institution.
(B) Eligible entity.--The term ``eligible
entity'' means--
(i) an institution of higher
education;
(ii) a partnership between a
nonprofit educational organization and
an institution of higher education; and
(iii) a consortium of institutions of
higher education.
(C) Eligible indian entity.--The term
``eligible Indian entity'' means the entity
responsible for the governance, operation, or
control of a Tribal College or University.
(D) Evidence-based.--The term ``evidence-
based'' has the meaning given the term in
section 8101(21)(A) of the Elementary and
Secondary Education Act of 1965 (20 U.S.C.
7801(21)(A)), except that such term shall also
apply to institutions of higher education.
(E) Evidence tiers.--
(i) Evidence tier 1 reform or
practice.--The term ``evidence tier 1
reform or practice'' means a reform or
practice that prior research suggests
has promise for the purpose of
successfully improving student
achievement or attainment for high-need
students.
(ii) Evidence tier 2 reform or
practice.--The term ``evidence tier 2
reform or practice'' means a reform or
practice described in clause (i), or
other practice meeting similar
criteria, that measures impact and cost
effectiveness of student success
activities, and, through rigorous
evaluation (including through the use
of existing administrative data, as
applicable), has been found to be
successfully implemented.
(iii) Evidence tier 3 reform or
practice.--The term ``evidence tier 3
reform or practice'' means a reform or
practice described in clause (ii), or
other practice meeting similar
criteria, that has been found to
produce sizable, important impacts on
student success and--
(I) determines whether such
impacts can be successfully
reproduced and sustained over
time; and
(II) identifies the
conditions in which such reform
or practice is most effective.
(F) First generation college student.--The
term ``first generation college student'' has
the meaning given the term in section 402A(h)
of the Higher Education Act of 1965 (20 U.S.C.
1070a-11(h)).
(G) High-need student.--The term ``high-need
student'' means--
(i) a student from low-income
background;
(ii) first generation college
students;
(iii) caregiver students;
(iv) students with disabilities;
(v) students who stopped out before
completing;
(vi) reentering justice-impacted
students; and
(vii) military-connected students.
(H) Secretary The term ``Secretary'' means
the Secretary of Education.
(I) Tribal college or university.--The term
``Tribal College or University'' has the
meaning given the term in section 316(b) of the
Higher Education Act of 1965 (20 U.S.C.
1059c(b)).
(2) Reservation of funds for eligible indian
entities.--From the total amount appropriated to carry
out this subsection for a fiscal year, the Secretary
shall reserve 2 percent for grants to eligible Indian
entities to increase participation and completion rates
of high-need students.
(3) Authorization of postsecondary student success
competitive grants.--
(A) Grant authorization.--For each of fiscal
years 2025 through 2030, the Secretary shall
award, on a competitive basis, grants to
eligible entities to provide student services
to increase participation, retention, and
completion rates of high-need students.
(B) Application.--An eligible entity desiring
a grant under this section shall submit an
application to the Secretary at such time, in
such manner, and containing the information
required under subparagraph (C).
(C) Contents.--An application submitted under
this paragraph shall include the following:
(i) A plan to increase, with respect
to all students enrolled at the
institution of higher education,
attainment and completion rates or
graduation rates, including--
(I) a description of which
evidence tiers would be met by
the evidence-based reforms or
practices; and
(II) a particular focus on
serving high-need students
through student services and
collaboration among 2-year
programs, 4-year programs, and
workforce systems.
(ii) Annual benchmarks for student
outcomes with respect to evidence-based
reforms or practices.
(iii) A plan to evaluate the
evidence-based reforms or practices
carried out pursuant to a grant
received under this subsection.
(iv) Rates of enrolled students who
received a Federal Pell Grant under
section 401.
(v) Demographics of enrolled
students, including high-need students.
(vi) A description of how the
eligible entity will, directly or in
collaboration with institutions of
higher education or nonprofit
organizations, use the grant funds to
implement 1 or more of the following
evidence-based reforms or practices:
(I) Providing comprehensive
academic, career, and student
services, which may include
mentoring, advising, or case
management services.
(II) Providing accelerated
learning opportunities, which
may include dual or concurrent
enrollment programs and early
college high school programs.
(III) Reforming course
scheduling or credit-awarding
policies.
(IV) Improving transfer
pathways between the
institution of higher
education, or eligible Indian
entity, and other institutions
of higher education.
(vii) A description of how the
evidence-based reforms or practices
carried out pursuant to a grant under
this subsection will be sustained once
the grant expires.
(D) Evidence-based student success
programs.--From the total amount appropriated
to carry out this subsection for a fiscal year
and not reserved under paragraph (4), the
Secretary shall reserve not less than 20
percent to award grants to eligible entities
with applications that propose to include
reforms or practices--
(i) at least 1 of which is a tier 3
reform or practice; and
(ii) the rest of which are tier 1 or
tier 2 reforms or practices.
(E) Required use of funds.--An eligible
entity that receives a grant under this section
shall use the grant funds to carry out the
plans submitted pursuant to subparagraph (C)
and for evidence-based reforms or practices for
improving retention and completion rates of
students that may include the following:
(i) Student services to support
retention, completion, and success,
which may include--
(I) faculty and peer
counseling;
(II) use of real-time data on
student progress;
(III) improving transfer
student success; and
(IV) incentives for students
to re-enroll or stay on track.
(ii) Direct student support services,
including a combination of--
(I) tutoring, academic
supports, and enrichment
services; and
(II) emergency financial
assistance.
(iii) Efforts to prepare students for
a career, which may include--
(I) career coaching, career
counseling and planning
services, and efforts to lower
student to advisor ratios;
(II) networking and work-
based learning opportunities to
support the development of
skills and professional
relationships;
(III) utilizing career
pathways; and
(IV) boosting experiences
necessary to obtain and succeed
in high-wage, high-skilled, (as
described in section 122 of the
Carl D. Perkins Career and
Technical Education Act of 2006
(20 U.S.C. 2342)) or in-demand
industry sectors or occupations
(as defined in section 3 of the
Workforce Innovation and
Opportunity Act (29 U.S.C.
3102)).
(iv) Efforts to recruit and retain
faculty and other instructional staff.
(F) Permissive use of funds.--From the total
amount appropriated to carry out this
subsection for a fiscal year, and not reserved
under paragraph (4) or subparagraph (D), the
Secretary may set aside--
(i) not more than 5 percent for
administration, capacity building,
research, evaluation, and reporting;
and
(ii) not more than 2 percent for
technical assistance to eligible
entities.
(G) Evaluations.--
(i) In general.--For the purpose of
improving the effectiveness of the
evidence-based reforms or practices
carried out by eligible entities
pursuant to a grant under this
subsection, the Secretary shall make
grants to or enter into contracts with
one or more organizations to--
(I) evaluate the
effectiveness of such reforms
or practices; and
(II) disseminate information
on the impact of such reforms
or practices in increasing
completion and retention
activities of students, as well
as other appropriate measures.
(ii) Issues to be evaluated.--The
evaluations required under clause (i)
shall measure the effectiveness of the
evidence-based reforms or practices
carried out by eligible entities
pursuant to a grant under this
subsection in--
(I) whether such eligible
entity implemented the plans,
and carried out the activities,
described in subparagraph (C);
and
(II) comparing the completion
and retention rates of students
who participated in such
reforms or practices with the
rates of students of similar
backgrounds who did not
participate in such reforms or
practices.
(iii) Results.--Not later than 18
months after the date of the enactment
of this subsection, the Secretary shall
submit to the authorizing committees a
final report.
(H) Grant limit.--An institution with branch
campuses that is an eligible entity may only
receive a grant under this subsection for 1
campus of such institution at a time.
(4) Authorization of appropriations.--There are
authorized to be appropriated to carry out this
subsection, $45,000,000, for each of fiscal years 2026
through 2031.
[(d)] (c) Prohibition.--
(1) In general.--No funds made available under this
part shall be used to provide direct financial
assistance in the form of grants or scholarships to
students who do not meet the requirements of section
484(a).
(2) Rule of construction.--Nothing in this subsection
shall be construed to prevent a student who does not
meet the requirements of section 484(a) from
participating in programs funded under this part.
[(e) Priority.--In making grants under this part to any
institution of higher education after the date of enactment of
theHigher Education Opportunity Act, the Secretary may give
priority to institutions that meet or exceed the most current
version of ASHRAE/IES Standard 90.1 (as such term is used in
section 342(a)(6) of the Energy Policy and Conservation Act (42
U.S.C. 6313(a)(6)) for any new facilities construction or major
renovation of the institution after such date, except that this
subsection shall not apply with respect to barns or greenhouses
or similar structures owned by the institution.
[(f) Scholarship Program for Family Members of Veterans or
Members of the Military.--
[(1) Authorization.--The Secretary shall enter into a
contract with a nonprofit organization with
demonstrated success in carrying out the activities
described in this subsection to carry out a program to
provide postsecondary education scholarships for
eligible students.
[(2) Definition of eligible student.--In this
subsection, the term ``eligible student'' means an
individual who is enrolled as a full-time or part-time
student at an institution of higher education (as
defined in section 102) and is--
[(A) a dependent student who is a child of--
[(i) an individual who is--
[(I) serving on active duty
during a war or other military
operation or national emergency
(as defined in section 481); or
[(II) performing qualifying
National Guard duty during a
war or other military operation
or national emergency (as
defined in section 481); or
[(ii) a veteran who--
[(I) served or performed, as
described in clause (i), since
September 11, 2001; and
[(II) died, or has been
disabled, as a result of such
service or performance; or
[(B) an independent student who--
[(i) is a spouse of an individual who
is--
[(I) serving on active duty
during a war or other military
operation or national emergency
(as defined in section 481); or
[(II) performing qualifying
National Guard duty during a
war or other military operation
or national emergency (as
defined in section 481);
[(ii) was (at the time of death of
the veteran) a spouse of a veteran
who--
[(I) served or performed, as
described in clause (i), since
September 11, 2001; and
[(II) died as a result of
such service or performance; or
[(iii) is a spouse of a veteran who--
[(I) served or performed, as
described in clause (i), since
September 11, 2001; and
[(II) has been disabled as a
result of such service or
performance.
[(3) Awarding of scholarships.--Scholarships awarded
under this subsection shall be awarded based on need
with priority given to eligible students who are
eligible to receive Federal Pell Grants under subpart 1
of part A of title IV.
[(4) Maximum scholarship amount.--The maximum
scholarship amount awarded to an eligible student under
this subsection for an award year shall be the lesser
of $5,000, or the student's cost of attendance (as
defined in section 472).
[(5) Amounts for scholarships.--All of the amounts
appropriated to carry out this subsection for a fiscal
year shall be used for scholarships awarded under this
subsection, except that the nonprofit organization
receiving a contract under this subsection may use not
more than one percent of such amounts for the
administrative costs of the contract.]
[SEC. 742. BOARD OF THE FUND FOR THE IMPROVEMENT OF POSTSECONDARY
EDUCATION.
[(a) Establishment.--There is established a National Board of
the Fund for the Improvement of Postsecondary Education (in
this part referred to as the ``Board''). The Board shall
consist of 15 members appointed by the Secretary for
overlapping 3-year terms. A majority of the Board shall
constitute a quorum. Any member of the Board who has served for
6 consecutive years shall thereafter be ineligible for
appointment to the Board during a 2-year period following the
expiration of such sixth year.
[(b) Membership.--The Secretary shall designate one of the
members of the Board as Chairperson of the Board. A majority of
the members of the Board shall be public interest
representatives, including students, and a minority shall be
educational representatives. All members selected shall be
individuals able to contribute an important perspective on
priorities for improvement in postsecondary education and
strategies of educational and institutional change.
[(c) Duties.--The Board shall--
[(1) advise the Secretary on priorities for the
improvement of postsecondary education and make such
recommendations as the Board may deem appropriate for
the improvement of postsecondary education and for the
evaluation, dissemination, and adaptation of
demonstrated improvements in postsecondary educational
practice;
[(2) advise the Secretary on the operation of the
Fund for the Improvement of Postsecondary Education,
including advice on planning documents, guidelines, and
procedures for grant competitions prepared by the Fund;
and
[(3) meet at the call of the Chairperson, except that
the Board shall meet whenever one-third or more of the
members request in writing that a meeting be held.
[(d) Information and Assistance.--The Secretary shall make
available to the Board such information and assistance as may
be necessary to enable the Board to carry out its functions.
[SEC. 743. ADMINISTRATIVE PROVISIONS.
[The Secretary may appoint, for terms not to exceed 3 years,
without regard to the provisions of title 5, United States
Code, governing appointments in the competitive service, not
more than 7 technical employees to administer this part who may
be paid without regard to the provisions of chapter 51 and
subchapter III of chapter 53 of such title relating to
classification and General Schedule pay rates.
[SEC. 744. SPECIAL PROJECTS.
[(a) Grant Authority.--The Secretary is authorized to make
grants to institutions of higher education, or consortia
thereof, and such other public agencies and nonprofit
organizations as the Secretary deems necessary for innovative
projects concerning one or more areas of particular national
need identified by the Secretary.
[(b) Application.--No grant shall be made under this part
unless an application is made at such time, in such manner, and
contains or is accompanied by such information as the Secretary
may require.
[(c) Areas of National Need.--Areas of national need shall
include, at a minimum, the following:
[(1) Institutional restructuring to improve learning
and promote productivity, efficiency, quality
improvement, and cost reduction.
[(2) Improvements in academic instruction and student
learning, including efforts designed to assess the
learning gains made by postsecondary students.
[(3) Articulation between two- and four-year
institutions of higher education, including developing
innovative methods for ensuring the successful transfer
of students from two- to four-year institutions of
higher education.
[(4) Development, evaluation, and dissemination of
model courses, including model courses that--
[(A) provide students with a broad and
integrated knowledge base;
[(B) include, at a minimum, broad survey
courses in English literature, American and
world history, American political institutions,
economics, philosophy, college-level
mathematics, and the natural sciences; and
[(C) include study of a foreign language that
leads to reading and writing competency in the
foreign language.
[(5) International cooperation and student exchanges
among postsecondary educational institutions.
[(6) Support of centers to incorporate education in
quality and safety into the preparation of medical and
nursing students, through grants to medical schools,
nursing schools, and osteopathic schools. Such grants
shall be used to assist in providing courses of
instruction that specifically equip students to--
[(A) understand the causes of, and remedies
for, medical error, medically induced patient
injuries and complications, and other defects
in medical care;
[(B) engage effectively in personal and
systemic efforts to continually reduce medical
harm; and
[(C) improve patient care and outcomes, as
recommended by the Institute of Medicine of the
National Academies.
[SEC. 745. AUTHORIZATION OF APPROPRIATIONS.
[There are authorized to be appropriated to carry out this
part such sums as may be necessary for fiscal year 2009 and
each of the five succeeding fiscal years.]
----------
HIGHER EDUCATION OPPORTUNITY ACT
* * * * * * *
TITLE IV--STUDENT ASSISTANCE
* * * * * * *
PART G--GENERAL PROVISIONS RELATING TO STUDENT ASSISTANCE
* * * * * * *
SEC. 484. MODEL INSTITUTION FINANCIAL AID OFFER FORM.
(a) Model Format.--The Secretary of Education shall--
(1) not later than six months after the date of
enactment of the Higher Education Opportunity Act,
convene a group of students, families of students,
secondary school guidance counselors, representatives
of institutions of higher education (including
financial aid administrators, registrars, and business
officers), and nonprofit consumer groups for the
purpose of offering recommendations for improvements
that--
(A) can be made to financial aid offer forms;
and
(B) include the information described in
subsection (b);
(2) develop a model format for financial aid offer
forms based on the recommendations of the group; and
(3) not later than one year after the date of
enactment of the Higher Education Opportunity Act--
(A) submit recommendations to the authorizing
committees (as defined in section 103 of the
Higher Education Act of 1965 (20 U.S.C. 1003);
and
(B) make the recommendations and model format
widely available.
(b) Contents.--The recommendations developed under subsection
(a) for model financial aid offer forms shall include, in a
consumer-friendly manner that is simple and understandable, the
following:
(1) Information on the student's cost of attendance,
including the following:
(A) Tuition and fees.
(B) Room and board costs.
(C) Books and supplies.
(D) Transportation.
(2) The amount of financial aid that the student does
not have to repay, such as scholarships, grants, and
work-study assistance, offered to the student for such
year, and the conditions of such financial aid.
(3) The types and amounts of loans under part B, D,
or E of title IV of the Higher Education Act of 1965
(20 U.S.C. 1071 et seq., 1087a et seq., 1087aa et seq.)
for which the student is eligible for such year, and
the applicable terms and conditions of such loans.
(4) The net amount that the student, or the student's
family on behalf of the student, will have to pay for
the student to attend the institution for such year,
equal to--
(A) the cost of attendance for the student
for such year; minus
(B) the amount of financial aid described in
paragraphs (2) and (3) that is offered in the
financial aid offer form.
(5) Where a student or the student's family can seek
additional information regarding the financial aid
offered.
(6) Any other information the Secretary of Education
determines necessary so that students and parents can
make informed student loan borrowing decisions.
(c) Sunset.--The authority of the Secretary to carry out this
section shall terminate on the date on which the standard form
for financial aid offers under section 124 of the Higher
Education Act of 1965 (20 U.S.C. 1001 et seq.) is released.
* * * * * * *
----------
GENERAL EDUCATION PROVISIONS ACT
* * * * * * *
Part C--General Requirements and Conditions Concerning the Operation
and Administration of Education Programs; General Authority of the
Secretary
* * * * * * *
Subpart 4--Records; Privacy; Limitation on Withholding Federal Funds
* * * * * * *
protection of the rights and privacy of parents and students
Sec. 444. (a)(1)(A) No funds shall be made available under
any applicable program to any educational agency or institution
which has a policy of denying, or which effectively prevents,
the parents of students who are or have been in attendance at a
school of such agency or at such institution, as the case may
be, the right to inspect and review the education records of
their children. If any material or document in the education
record of a student includes information on more than one
student, the parents of one of such students shall have the
right to inspect and review only such part of such material or
document as relates to such student or to be informed of the
specific information contained in such part of such material.
Each educational agency or institution shall establish
appropriate procedures for the granting of a request by parents
for access to the education records of their children within a
reasonable period of time, but in no case more than forty-five
days after the request has been made.
(B) No funds under any applicable program shall be made
available to any State educational agency (whether or not that
agency is an educational agency or institution under this
section) that has a policy of denying, or effectively prevents,
the parents of students the right to inspect and review the
education records maintained by the State educational agency on
their children who are or have been in attendance at any school
of an educational agency or institution that is subject to the
provisions of this section.
(C) The first sentence of subparagraph (A) shall not operate
to make available to students in institutions of postsecondary
education the following materials:
(i) financial records of the parents of the student
or any information contained therein;
(ii) confidential letters and statements of
recommendation, which were placed in the education
records prior to January 1, 1975, if such letters or
statements are not used for purposes other than those
for which they were specifically intended;
(iii) if the student has signed a waiver of the
student's right of access under this subsection in
accordance with subparagraph (D), confidential
recommendations--
(I) respecting admission to any educational
agency or institution,
(II) respecting an application for
employment, and
(III) respecting the receipt of an honor or
honorary recognition.
(D) A student or a person applying for admission may waive
his right of access to confidential statements described in
clause (iii) of subparagraph (C), except that such waiver shall
apply to recommendations only if (i) the student is, upon
request, notified of the names of all persons making
confidential recommendations and (ii) such recommendations are
used solely for the purpose for which they were specifically
intended. Such waivers may not be required as a condition for
admission to, receipt of financial aid from, or receipt of any
other services or benefits from such agency or institution.
(2) No funds shall be made available under any applicable
program to any educational agency or institution unless the
parents of students who are or have been in attendance at a
school of such agency or at such institution are provided an
opportunity for a hearing by such agency or institution, in
accordance with regulations of the Secretary, to challenge the
content of such student's education records, in order to insure
that the records are not inaccurate, misleading, or otherwise
in violation of the privacy rights of students, and to provide
an opportunity for the correction or deletion of any such
inaccurate, misleading, or otherwise inappropriate data
contained therein and to insert into such records a written
explanation of the parents respecting the content of such
records.
(3) For the purposes of this section the term ``educational
agency or institution'' means any public or private agency or
institution which is the recipient of funds under any
applicable program.
(4)(A) For the purposes of this section, the term ``education
records'' means, except as may be provided otherwise in
subparagraph (B), those records, files, documents, and other
materials which--
(i) contain information directly related to a
student; and
(ii) are maintained by an educational agency or
institution or by a person acting for such agency or
institution.
(B) The term ``education records'' does not include--
(i) records of instructional, supervisory, and
administrative personnel and educational personnel
ancillary thereto which are in the sole possession of
the maker thereof and which are not accessible or
revealed to any other person except a substitute;
(ii) records maintained by a law enforcement unit of
the educational agency or institution that were created
by that law enforcement unit for the purpose of law
enforcement;
(iii) in the case of persons who are employed by an
educational agency or institution but who are not in
attendance at such agency or institution, records made
and maintained in the normal course of business which
relate exclusively to such person in that person's
capacity as an employee and are not available for use
for any other purpose; or
(iv) records on a student who is eighteen years of
age or older, or is attending an institution of
postsecondary education, which are made or maintained
by a physician, psychiatrist, psychologist, or other
recognized professional or paraprofessional acting in
his professional or paraprofessional capacity, or
assisting in that capacity, and which are made,
maintained, or used only in connection with the
provision of treatment to the student, and are not
available to anyone other than persons providing such
treatment, except that such records can be personally
reviewed by a physician or other appropriate
professional of the student's choice.
(5)(A) For the purposes of this section the term ``directory
information'' relating to a student includes the following: the
student's name, address, telephone listing, date and place of
birth, major field of study, participation in officially
recognized activities and sports, weight and height of members
of athletic teams, dates of attendance, degrees and awards
received, and the most recent previous educational agency or
institution attended by the student.
(B) Any educational agency or institution making public
directory information shall give public notice of the
categories of information which it has designated as such
information with respect to each student attending the
institution or agency and shall allow a reasonable period of
time after such notice has been given for a parent to inform
the institution or agency that any or all of the information
designated should not be released without the parent's prior
consent.
(6) For the purposes of this section, the term ``student''
includes any person with respect to whom an educational agency
or institution maintains education records or personally
identifiable information, but does not include a person who has
not been in attendance at such agency or institution.
(b)(1) No funds shall be made available under any applicable
program to any educational agency or institution which has a
policy or practice of permitting the release of education
records (or personally identifiable information contained
therein other than directory information, as defined in
paragraph (5) of subsection (a)) of students without the
written consent of their parents to any individual, agency, or
organization, other than to the following--
(A) other school officials, including teachers within
the educational institution or local educational
agency, who have been determined by such agency or
institution to have legitimate educational interests,
including the educational interests of the child for
whom consent would otherwise be required;
(B) officials of other schools or school systems in
which the student seeks or intends to enroll, upon
condition that the student's parents be notified of the
transfer, receive a copy of the record if desired, and
have an opportunity for a hearing to challenge the
content of the record;
(C)(i) authorized representatives of (I) the
Comptroller General of the United States, (II) the
Secretary, or (III) State educational authorities,
under the conditions set forth in paragraph (3), or
(ii) authorized representatives of the Attorney General
for law enforcement purposes under the same conditions
as apply to the Secretary under paragraph (3);
(D) in connection with a student's application for,
or receipt of, financial aid;
(E) State and local officials or authorities to whom
such information is specifically allowed to be reported
or disclosed pursuant to State statute adopted--
(i) before November 19, 1974, if the allowed
reporting or disclosure concerns the juvenile
justice system and such system's ability to
effectively serve the student whose records are
released, or
(ii) after November 19, 1974, if--
(I) the allowed reporting or
disclosure concerns the juvenile
justice system and such system's
ability to effectively serve, prior to
adjudication, the student whose records
are released; and
(II) the officials and authorities to
whom such information is disclosed
certify in writing to the educational
agency or institution that the
information will not be disclosed to
any other party except as provided
under State law without the prior
written consent of the parent of the
student.
(F) organizations conducting studies for, or on
behalf of, educational agencies or institutions for the
purpose of developing, validating, or administering
predictive tests, administering student aid programs,
and improving instruction, if such studies are
conducted in such a manner as will not permit the
personal identification of students and their parents
by persons other than representatives of such
organizations and such information will be destroyed
when no longer needed for the purpose for which it is
conducted;
(G) accrediting organizations in order to carry out
their accrediting functions;
(H) parents of a dependent student of such parents,
as defined in section 152 of the Internal Revenue Code
of 1986;
(I) subject to regulations of the Secretary, in
connection with an emergency, appropriate persons if
the knowledge of such information is necessary to
protect the health or safety of the student or other
persons;
(J)(i) the entity or persons designated in a Federal
grand jury subpoena, in which case the court shall
order, for good cause shown, the educational agency or
institution (and any officer, director, employee,
agent, or attorney for such agency or institution) on
which the subpoena is served, to not disclose to any
person the existence or contents of the subpoena or any
information furnished to the grand jury in response to
the subpoena; and
(ii) the entity or persons designated in any other
subpoena issued for a law enforcement purpose, in which
case the court or other issuing agency may order, for
good cause shown, the educational agency or institution
(and any officer, director, employee, agent, or
attorney for such agency or institution) on which the
subpoena is served, to not disclose to any person the
existence or contents of the subpoena or any
information furnished in response to the subpoena;
(K) the Secretary of Agriculture, or authorized
representative from the Food and Nutrition Service or
contractors acting on behalf of the Food and Nutrition
Service, for the purposes of conducting program
monitoring, evaluations, and performance measurements
of State and local educational and other agencies and
institutions receiving funding or providing benefits of
1 or more programs authorized under the Richard B.
Russell National School Lunch Act (42 U.S.C. 1751 et
seq.) or the Child Nutrition Act of 1966 (42 U.S.C.
1771 et seq.) for which the results will be reported in
an aggregate form that does not identify any
individual, on the conditions that--
(i) any data collected under this
subparagraph shall be protected in a manner
that will not permit the personal
identification of students and their parents by
other than the authorized representatives of
the Secretary; and
(ii) any personally identifiable data shall
be destroyed when the data are no longer needed
for program monitoring, evaluations, and
performance measurements[; and];
(L) an agency caseworker or other representative of a
State or local child welfare agency, or tribal
organization (as defined in section 4 of the Indian
Self-Determination and Education Assistance Act (25
U.S.C. 450b)), who has the right to access a student's
case plan, as defined and determined by the State or
tribal organization, when such agency or organization
is legally responsible, in accordance with State or
tribal law, for the care and protection of the student,
provided that the education records, or the personally
identifiable information contained in such records, of
the student will not be disclosed by such agency or
organization, except to an individual or entity engaged
in addressing the student's education needs and
authorized by such agency or organization to receive
such disclosure and such disclosure is consistent with
the State or tribal laws applicable to protecting the
confidentiality of a student's education records[.];
and
(M) an institution of postsecondary education in
which a student was previously enrolled, to which
records of postsecondary coursework and credits are
sent for the purpose of applying such coursework and
credits toward completion of a recognized postsecondary
credential (as that term is defined in section 3 of the
Workforce Innovation and Opportunity Act (29 U.S.C.
3102)), upon condition that the student provides
written consent prior to receiving such credential.
Nothing in subparagraph (E) of this paragraph shall prevent a
State from further limiting the number or type of State or
local officials who will continue to have access thereunder.
(2) No funds shall be made available under any applicable
program to any educational agency or institution which has a
policy or practice of releasing, or providing access to, any
personally identifiable information in education records other
than directory information, or as is permitted under paragraph
(1) of this subsection, unless--
(A) there is written consent from the student's
parents specifying records to be released, the reasons
for such release, and to whom, and with a copy of the
records to be released to the student's parents and the
student if desired by the parents, or
(B) except as provided in paragraph (1)(J), such
information is furnished in compliance with judicial
order, or pursuant to any lawfully issued subpoena,
upon condition that parents and the students are
notified of all such orders or subpoenas in advance of
the compliance therewith by the educational institution
or agency, except when a parent is a party to a court
proceeding involving child abuse and neglect (as
defined in section 3 of the Child Abuse Prevention and
Treatment Act (42 U.S.C. 5101 note)) or dependency
matters, and the order is issued in the context of that
proceeding, additional notice to the parent by the
educational agency or institution is not required.
(3) Nothing contained in this section shall preclude
authorized representatives of (A) the Comptroller General of
the United States, (B) the Secretary, or (C) State educational
authorities from having access to student or other records
which may be necessary in connection with the audit and
evaluation of Federally-supported education programs, or in
connection with the enforcement of the Federal legal
requirements which relate to such programs: Provided, That
except when collection of personally identifiable information
is specifically authorized by Federal law, any data collected
by such officials shall be protected in a manner which will not
permit the personal identification of students and their
parents by other than those officials, and such personally
identifiable data shall be destroyed when no longer needed for
such audit, evaluation, and enforcement of Federal legal
requirements.
(4)(A) Each educational agency or institution shall maintain
a record, kept with the education records of each student,
which will indicate all individuals (other than those specified
in paragraph (1) (A) of this subsection), agencies, or
organizations which have requested or obtained access to a
student's education records maintained by such educational
agency or institution, and which will indicate specifically the
legitimate interest that each such person, agency, or
organization has in obtaining this information. Such record of
access shall be available only to parents, to the school
official and his assistants who are responsible for the custody
of such records, and to persons or organizations authorized in,
and under the conditions of, clauses (A) and (C) of paragraph
(1) as a means of auditing the operation of the system.
(B) With respect to this subsection, personal information
shall only be transferred to a third party on the condition
that such party will not permit any other party to have access
to such information without the written consent of the parents
of the student. If a third party outside the educational agency
or institution permits access to information in violation of
paragraph (2)(A), or fails to destroy information in violation
of paragraph (1)(F), the educational agency or institution
shall be prohibited from permitting access to information from
education records to that third party for a period of not less
than five years.
(5) Nothing in this section shall be construed to prohibit
State and local educational officials from having access to
student or other records which may be necessary in connection
with the audit and evaluation of any federally or State
supported education program or in connection with the
enforcement of the Federal legal requirements which relate to
any such program, subject to the conditions specified in the
proviso in paragraph (3).
(6)(A) Nothing in this section shall be construed to prohibit
an institution of postsecondary education from disclosing, to
an alleged victim of any crime of violence (as that term is
defined in section 16 of title 18, United States Code), or a
nonforcible sex offense, the final results of any disciplinary
proceeding conducted by such institution against the alleged
perpetrator of such crime or offense with respect to such crime
or offense.
(B) Nothing in this section shall be construed to prohibit an
institution of postsecondary education from disclosing the
final results of any disciplinary proceeding conducted by such
institution against a student who is an alleged perpetrator of
any crime of violence (as that term is defined in section 16 of
title 18, United States Code), or a nonforcible sex offense, if
the institution determines as a result of that disciplinary
proceeding that the student committed a violation of the
institution's rules or policies with respect to such crime or
offense.
(C) For the purpose of this paragraph, the final results of
any disciplinary proceeding--
(i) shall include only the name of the student, the
violation committed, and any sanction imposed by the
institution on that student; and
(ii) may include the name of any other student, such
as a victim or witness, only with the written consent
of that other student.
(7)(A) Nothing in this section may be construed to prohibit
an educational institution from disclosing information provided
to the institution under section 170101 of the Violent Crime
Control and Law Enforcement Act of 1994 (42 U.S.C. 14071)
concerning registered sex offenders who are required to
register under such section.
(B) The Secretary shall take appropriate steps to notify
educational institutions that disclosure of information
described in subparagraph (A) is permitted.
(c) Not later than 240 days after the date of enactment of
the Improving America's Schools Act of 1994, the Secretary
shall adopt appropriate regulations or procedures, or identify
existing regulations or procedures, which protect the rights of
privacy of students and their families in connection with any
surveys or data-gathering activities conducted, assisted, or
authorized by the Secretary or an administrative head of an
education agency. Regulations established under this subsection
shall include provisions controlling the use, dissemination,
and protection of such data. No survey or data-gathering
activities shall be conducted by the Secretary, or an
administrative head of an education agency under an applicable
program, unless such activities are authorized by law.
(d) For the purposes of this section, whenever a student has
attained eighteen years of age, or is attending an institution
of postsecondary education, the permission or consent required
of and the rights accorded to the parents of the student shall
thereafter only be required of and accorded to the student.
(e) No funds shall be made available under any applicable
program to any educational agency or institution unless such
agency or institution effectively informs the parents of
students, or the students, if they are eighteen years of age or
older, or are attending an institution of postsecondary
education, of the rights accorded them by this section.
(f) The Secretary shall take appropriate actions to enforce
this section and to deal with violations of this section, in
accordance with this Act, except that action to terminate
assistance may be taken only if the Secretary finds there has
been a failure to comply with this section, and he has
determined that compliance cannot be secured by voluntary
means.
(g) The Secretary shall establish or designate an office and
review board within the Department for the purpose of
investigating, processing, reviewing, and adjudicating
violations of this section and complaints which may be filed
concerning alleged violations of this section. Except for the
conduct of hearings, none of the functions of the Secretary
under this section shall be carried out in any of the regional
offices of such Department.
(h) Nothing in this section shall prohibit an educational
agency or institution from--
(1) including appropriate information in the
education record of any student concerning disciplinary
action taken against such student for conduct that
posed a significant risk to the safety or well-being of
that student, other students, or other members of the
school community; or
(2) disclosing such information to teachers and
school officials, including teachers and school
officials in other schools, who have legitimate
educational interests in the behavior of the student.
(i) Drug and Alcohol Violation Disclosures.--
(1) In general.--Nothing in this Act or the Higher
Education Act of 1965 shall be construed to prohibit an
institution of higher education from disclosing, to a
parent or legal guardian of a student, information
regarding any violation of any Federal, State, or local
law, or of any rule or policy of the institution,
governing the use or possession of alcohol or a
controlled substance, regardless of whether that
information is contained in the student's education
records, if--
(A) the student is under the age of 21; and
(B) the institution determines that the
student has committed a disciplinary violation
with respect to such use or possession.
(2) State law regarding disclosure.--Nothing in
paragraph (1) shall be construed to supersede any
provision of State law that prohibits an institution of
higher education from making the disclosure described
in subsection (a).
(j) Investigation and Prosecution of Terrorism.--
(1) In general.--Notwithstanding subsections (a)
through (i) or any provision of State law, the Attorney
General (or any Federal officer or employee, in a
position not lower than an Assistant Attorney General,
designated by the Attorney General) may submit a
written application to a court of competent
jurisdiction for an ex parte order requiring an
educational agency or institution to permit the
Attorney General (or his designee) to--
(A) collect education records in the
possession of the educational agency or
institution that are relevant to an authorized
investigation or prosecution of an offense
listed in section 2332b(g)(5)(B) of title 18
United States Code, or an act of domestic or
international terrorism as defined in section
2331 of that title; and
(B) for official purposes related to the
investigation or prosecution of an offense
described in paragraph (1)(A), retain,
disseminate, and use (including as evidence at
trial or in other administrative or judicial
proceedings) such records, consistent with such
guidelines as the Attorney General, after
consultation with the Secretary, shall issue to
protect confidentiality.
(2) Application and approval.--
(A) In general.--An application under
paragraph (1) shall certify that there are
specific and articulable facts giving reason to
believe that the education records are likely
to contain information described in paragraph
(1)(A).
(B) The court shall issue an order described
in paragraph (1) if the court finds that the
application for the order includes the
certification described in subparagraph (A).
(3) Protection of educational agency or
institution.--An educational agency or institution
that, in good faith, produces education records in
accordance with an order issued under this subsection
shall not be liable to any person for that production.
(4) Record-keeping.--Subsection (b)(4) does not apply
to education records subject to a court order under
this subsection.
* * * * * * *
MINORITY VIEWS
Introduction
H.R. 6951, the College Cost Reduction Act, amends the
Higher Education Act of 1965 (HEA) in ways Committee Democrats
firmly believe will lower the quality of higher education and
make higher education more expensive for students. Although
H.R. 6951 makes good strides to improve transparency in higher
education, it falls short of holistically providing the key
data points students need to make informed decisions about
college enrollment. H.R. 6951 also includes provisions to
weaken the Direct Loan program and eliminate the PLUS Loan
program, which will make it harder for some students to afford
a college degree, and impossible for others. Finally, the bill
dismantles the existing higher education accountability
framework to protect students and taxpayers from waste, fraud,
and abuse without proposing a viable alternative framework.
Despite some of the bipartisan policies scattered throughout
H.R. 6951, on the whole this bill will have a net-negative
impact on both students and institutions of higher education.
Background on the Rising Cost of College and the Flawed Consideration
of H.R. 6951
The value of a college degree cannot be understated.
Research has consistently found that a college degree confers
significant financial and non-financial returns, particularly
for low-income students and students of color.\1\ Typically,
people with bachelor's degrees make over $1 million more than
high school graduates over their lifetimes.\2\ In addition to
increased learning potential, a college degree also provides
financial stability. During the COVID-19 pandemic, job losses
were concentrated in low wage industries and among workers who
had the least education.\3\ While access is important, success
in obtaining a college degree is crucial; research also shows
that students who do not complete college have higher levels of
debt, default, and repayment hardship.\4\
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\1\Susan K. Urahn et al., Pursuing the American Dream: Economic
Mobility Across Generations 3, The Pew Charitable Trusts (Jul. 2012),
https://www.pewtrusts.org//media/legacy/uploadedfiles/wwwpewtrustsorg/
reports/economic_mobility/pursuingamericandreampdf.pdf; H. Comm. on
Educ. & Lab., Don't Stop Believin' (In the Value of a College Degree)i,
(2019), https://democrats-edworkforce.house.gov/imo/media/doc/
Updated%20College%20Rerport%20Final.pdf.
\2\H. Comm. on Educ. & Labor, supra note 01 at i.
\3\Nicole Bateman & Martha Ross, The Pandemic Hurt Low-Wage Workers
the Most--and So Far, the Recovery has Helped Them the Least, The
Brookings Inst. (Jul. 28, 2021), https://www.brookings.edu/articles/
the-pandemic-hurt-
low-wage-workers-the-most-and-so-far-the-recovery-has-helped-them-the-
least/.
\4\Sandy Baum & Martha Johnson, Student Debt: Who Borrows Most?
What Lies Ahead? 7, The Urban Inst. (Apr. 2015), https://www.urban.org/
sites/default/files/alfresco/publication-pdfs/
2000191-Student-Debt-Who-Borrows-Most-What-Lies-Ahead.pdf; Nat'l Ass'n
of Student Fin. Aid Admins., The College Completion Crisi Fuels the
Student Debt Crisis 2, https://static1.squarespace.com/static/
63617bfab00c640904baab4c/t/65b9c02d84a68b37242921c6/
1706672174156/College_Completion_Crisis_Fuels_Student_Debt_Crisis.pdf.
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As the cost of obtaining a degree has risen sharply over
the last three decades, apprehension about the value of college
has risen as well. From 1990 to 2019, the net cost of
attendance has grown 81 percent at public four-year colleges,
33 percent at private nonprofit colleges, and 19 percent at
public two-year colleges.\5\ The cost of college has
significantly outpaced inflation, and many Americans' ability
to afford a college education has declined.\6\ Nearly 7 million
students, most of whom have family incomes under $40,000 a
year, rely on the Pell Grant to attend and complete college.\7\
However, the Pell Grant has not grown sufficiently to keep pace
with increases in tuition and fees. The Pell Grant now covers
the smallest share of college costs in four decades.\8\
Further, state investment in higher education has declined over
the decades. In 1980, 79 percent of revenue for public colleges
came from state and local investments, but in 2021 it was only
57 percent of revenue.\9\ Students are forced to make up that
difference; to cover the remaining costs of college, low-income
students are taking out loans at higher rates than their high-
income peers and graduating with higher debt loads.
---------------------------------------------------------------------------
\5\Rethinking Higher Education, U.S. Dep't of Education (Dec.
2018), https://files.eric.ed.gov/fulltext/ED591005.pdf.
\6\H. Comm. on Educ. & Labor, supra note 01, at 1.
\7\#DoublePell for College Affordability, NCAN, https://
www.ncan.org/page/Pell (last visited on Feb. 9, 2024).
\8\The Inst. For Coll. Access & Success, A State-by-State Look at
College (Un)Affordability 10, (Apr. 2017), https://ticas.org/files/
pub_files/college_costs_in_context.pdf; see also, #Double Pell, The
Case for Doubling the Pell Grant, (Jun. 2021), https://doublepell.org/
wp-content/uploads/2021/06/Double-Pell-Mini-Policy-Paper.pdf.
\9\See State Higher Educ. Exec. Officers Ass'n., State Higher
Education Finance: FY 2021 70-71, (2022), https://shef.sheeo.org/wp-
content/uploads/2022/06/
SHEEO_SHEF_FY21_Report.pdf.
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The federal government has a responsibility to support
students in achieving their higher education goals by
addressing these issues of the rising cost of college.
Regrettably, Committee Republicans are taking a flawed approach
to these issues through H.R. 6951. Although some policies in
this bill have the goal of incentivizing institutions to lower
their prices, the U.S. higher education system is not simply a
free market, and these faulty, incomplete policies will create
more questions and concerns than solutions for students and
institutions alike. The policies proposed in H.R. 6951 will
make it harder for institutions to deliver quality education,
for students to afford higher education, and for the federal
government to provide oversight of the federal student aid
program.
H.R. 6951 Makes Improvements to College Transparency
H.R. 6951 makes laudable strides to improve transparency
within higher education. Although there is substantial room for
improvement, the transparency provisions in the bill could
significantly increase many students' and families' ability to
make informed financial decisions in postsecondary education.
Committee Democrats stand eager to work in a bipartisan,
bicameral fashion to build upon shared goals and enact policies
that will meaningfully improve student-level and program-level
data on college pricing and outcomes.
FINANCIAL AID OFFERS
H.R. 6951 requires the Secretary of Education to create a
standardized financial aid form for all institutions of higher
education to use to provide students and families with
information about the cost of college and their financial aid
award. Currently, there is no federal law requiring
standardization between institutions when transmitting
financial aid reward offers to students.\10\ A uniform
standardized financial aid form would provide students and
parents with a detailed comparable data points on the cost of
college. Committee Democrats support creating a standardized
financial aid form to provide students and families with more
clarity on college costs.
---------------------------------------------------------------------------
\10\Stephen Burd et al., Decoding the Cost of College: The Case for
Transparent Financial Aid Award Letters 7, New America (Jun. 5, 2018),
https://d1y8sb8igg2f8e.cloudfront.net/documents
/Decoding_the_Cost_of_College_Final_6218.pdf; U.S. Gov't Accountability
Off., GAO-23-104708, Financial Aid Offers: Action Needed to Improve
Information on College Costs and Student Aid 36, (2022), https://
www.gao.gov/assets/gao-23 104708.pdf.
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COLLEGE SCORECARD
H.R. 6951 proposes improvements to the College
Scorecard,\11\, a key tool prospective students can use to
compare colleges. Specifically, the bill requires the College
Scorecard to include program-level data on costs, student aid,
and outcomes. Program-level data allows students to more easily
determine whether a program of study best fits their academic
needs. By collecting thorough data on whether individual
programs meet the needs of their students, program-level data
also provides institutions granularity necessary to identify
and reform low-performing programs.\12\ The bill further
improves the ability of students to comparison shop between
different institutions by building on the bipartisan, bicameral
Net Price Calculator Improvement Act, introduced by Reps. Brett
Guthrie (R-KY) and Lori Trahan (D-MA), to streamline cost
comparisons.\13\ Specifically, it mandates the College
Scorecard include a universal net price calculator, giving
students better access to clear, standardized information about
college costs.\14\
---------------------------------------------------------------------------
\11\U.S Dep't of Educ., College Scorecard https://
collegescorecard.ed.gov (last visited Feb. 19, 2024).
\12\Michael Itzkowitz, Which College Programs Give Students the
Best Bang for Their Buck? 2, Third Way (Aug. 13, 2021), https://
thirdway.imgix.net/pdfs/which-college-programs-give-
students-the-best-bang-for-their-buck.pdf.
\13\H.R. 1214, 118th Cong. (as introduced in the House, Feb. 27,
2023).
\14\Monica Maldonado, How Net Price Calculators Can Better Serve
Students, Inst. for Higher Educ. Pol'y (Oct. 23, 2019), https://
www.ihep.org/how-net-price-calculators-can-better-serve-
students.
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Transparency in the college selection process is a
bipartisan concern; the award letter standardization and
college scorecard provisions of H.R. 6951 have strong
bipartisan support and could form the basis of legislation with
a viable chance of passage into law.
POSTSECONDARY STUDENT DATA SYSTEM
The postsecondary data system has long needed reform, but
the proposal under H.R. 6951 creates more problems than it
solves by insisting on a dogmatic, counterproductive federal
ban on student-level data collection. First proposed by
Chairwoman Foxx in an amendment to the College Cost Reduction
and Access Act in 2007,\15\ this ban prohibits the federal
government from collecting student-level data, something many
states already do to provide strong data on higher education
costs and benefits. Higher education stakeholders have long
advocated for the bipartisan College Transparency Act (CTA),
introduced in the 118th Congress by Reps. Raja Krishnamoorthi
(D-IL), Joe Wilson (R-SC), Suzanne Bonamici (D-OR), Nancy Mace
(R-SC) and Mikie Sherrill (D-NJ).\16\. The CTA, which is
supported by over 150 organizations,\17\ would lift the federal
ban and establish a comprehensive student-level data network
(SLDN) that would ``provide important, aggregate information on
all postsecondary students and their outcomes for
stakeholders.''\18\ This framework would provide key outcomes
data including enrollment, completion, and post-completion
success for all students in higher education; those data could
be aggregated and disaggregated to identify trends across
student populations, institutions, and other categories.\19\
Regrettably, H.R. 6951, does not lift the student-level data
ban and mandates data collection and reporting of data for only
recipients of federal student aid, Workforce Innovation and
Opportunity Act (WIOA) program participants, veterans'
education benefit recipients, and other military-connected
students. According to the Association of Public and Land Grant
Universities, this limitation will exclude data for roughly 30
percent of all students across higher education.\20\ Included
in this glaring gap are more than half of all community college
students in credit-bearing classes.\21\
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\15\College Cost Reduction and Access Act, Pub. L. No: 110 84, 121
Stat. 784 (2007) (codified at 20 U.S.C. 1001).
\16\H.R. 2957, 118 Cong. (as introduced in the House, Apr. 27,
2023).
\17\Letter from the Postsecondary Data Collaborative & National
Skills Coalition to Sen. Bill Cassidy, Sen. Elizabeth Warren, Sen.
Roger Marshall, Sen. Sheldon Whitehouse, Sen. Chuck Grassley, Sen. John
Hickenlooper, Rep. Raja Krishnamoorthi, Rep. Joe Wilson, Rep. Suzanne
Bonamici, Rep. Nancy Mace, and Rep. Mikie Sherrill 2-5 (May 2023),
available at https://www.ihep.org/wp-content/uploads/2023/05/
PostsecData-National-Skills-Coalition-2023-CTA-Sign-On-May-
2023.docx.pdf.
\18\Erin Dunlop Velez et al., Implementing a Federal Student-Level
Data Network: Advice from Experts, 2, RTI Int'l & Inst. for Higher
Educ. Pol'y (Aug. 2020), https://www.ihep.org/wp-content/uploads/2020/
11/ihep_sldn_brief_rd4_web.pdf.
\19\Sen. Bill Cassidy & Sen. Elizabeth Warren, College Transparency
Act, https://www.help.senate.gov/imo/media/doc/cta_one_pager.pdf (last
visited on Feb. 9, 2024).
\20\Letter from Mark Becker, President, Ass'n of Pub. and Land-
grant Univ., to Reps. Foxx & Scott (Jan. 29, 2024), available at
https://www.aplu.org/wp-content/uploads/CCRA-Markup-
Letter-Signed.pdf.
\21\Letter from Walter G. Bumphus, Ph.D., President & CEO, Am.
Ass'n of Comm. Colls., to Reps. Foxx & Scott (Jan. 30, 2024), available
at https://www.aacc.nche.edu/2024/01/31/aacc-
letter-on-college-cost-reduction-act/.
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In addition to resulting in incomplete data sets, the
student-level data ban places an unnecessary burden on
institutions. Institutions are already required under HEA to
report data to the Integrated Postsecondary Education Data
System (IPEDS) for all their students. As drafted, H.R. 6951
will require institutions to report to IPEDS and this new data
network using two unique sets of data. This duplication in data
reporting will be especially burdensome for community
colleges,\22\ since 1) they will have a disproportionate
percentage of students to exclude compared to other types of
institutions, and 2) they typically have fewer administrative
resources compared to other types of institutions. In
comparison, a core goal of the College Transparency Act
framework is to streamline the federal reporting system, in
turn decreasing institutional burden. Chairwoman Foxx continues
to oppose the College Transparency Act, arguing it is
``political hackery'' to give bureaucrats ``unfettered access
to pry into the lives of Americans.''\23\ In reality, the
College Transparency Act includes provisions to protect student
privacy by requiring the use of privacy-and security-enhanced
technology, mandating compliance with all Federal privacy and
data security laws, and explicitly prohibiting the collection
of student health data, discipline records, exact addresses,
citizenship status and national origin status, college entrance
exam results, political affiliation, and religion.\24\ Without
the comprehensive reform proposed in the College Transparency
Act, data provisions in H.R. 6951 will prevent students from
seeing the full picture of student outcome data and force
institutions into redundant and incomplete data submissions.
---------------------------------------------------------------------------
\22\Id.
\23\Scott Jaschik, House Approves College Transparency Act, Inside
Higher Ed (Feb. 6, 2022), https://www.insidehighered.com/news/ 2022/02/
07/house-passes-college-transparency-act.
\24\H.R. 2957, supra note 16.
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H.R. 6951 Decreases College Access and Makes College Less Affordable
H.R. 6951 proposes a package of damaging policies that will
create a bleak landscape for college access and affordability.
Committee Democrats are deeply concerned that the proposed
changes to federal student aid in H.R. 6951 will collectively
limit access to a range of programs of study for low-income
students, steer students into the private loan market, and make
it harder for borrowers to pay off their loans, in direct
opposition to the goals that drove the creation of the HEA.
CAPPING AID AT THE MEDIAN COST OF COLLEGE
H.R. 6951 caps the total amount of federal student aid that
any student can receive at the median cost of attendance for a
student enrolled in a similar program of study, based on
national data. The stated intent of this policy is to encourage
institutions of higher education to lower their tuition prices;
however, Committee Democrats are not aware of any research that
signals this policy is an appropriate approach to lower college
costs. As a threshold matter, capping aid at the median cost of
attendance would mean 50 percent of students who rely on
federal student aid would not receive enough federal aid to
cover the cost of their program. Higher education advocates
rightfully argue this will create a harmful funding gap that
impacts students' ability to cover the basics needs components
of their cost of attendance, such as housing and transportation
and will be detrimental to students' ability to obtain their
degree.\25\ Further, by using nationwide averages to cap costs,
students attending school in high cost of living areas will be
disproportionately impacted. Rep. Pramila Jayapal (D-WA)
offered an amendment to adjust the allowable amounts of federal
student aid based on location to account for high cost-of-
living areas, but Committee Republicans rejected the amendment
on a party-line vote. Without this adjustment, the basic needs
issues of students attending institutions in urban areas will
be exacerbated. Although Committee Republicans believe this aid
cap will incentivize institutions to lower their prices,
Committee Democrats believe this unfounded, procrustean
approach does not take into consideration variables across the
higher education system. When coupled with provisions limiting
the Secretary's ability to regulate discussed later in these
views, this provision would sew chaos throughout higher
education by discouraging students from entering school to
begin with or drive them into the private loan market.
---------------------------------------------------------------------------
\25\Letter from Justin Draeger, President & CEO, Nat'l Ass'n of
Student Fin. Aid Admins., to Reps. Foxx & Scott (Jan. 26, 2024),
available at https://www.nasfaa.org/uploads/documents/
College_Cost_Reduction_Act_Letter.pdf; Letter from Ted Mitchell,
President, Am. Council on Educ., to Reps. Foxx & Scott (Jan. 30, 2024),
available at https://www.aamc.org/media/74636/download.
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PELL GRANTS
H.R. 6951 as reported by the Committee does nothing to
strengthen the Pell Grant program--the cornerstone of federal
student aid. Despite the declining purchasing power of the Pell
Grant, it remains a powerful tool that unlocks significant
additional financial support for low-income students in higher
education.\26\
---------------------------------------------------------------------------
\26\National College Attainment Network, supra note 7.
---------------------------------------------------------------------------
In recent years, Congress has secured historic improvements
to the Pell Grant. Through the FAFSA Simplification Act of
2020, Congress significantly reformed the needs analysis
process to streamline the FAFSA form and make Pell Grants
accessible to more students.\27\ The Department of Education
has now estimated the reforms of the FAFSA Simplification Act
of 2020 will result in 610,000 more Pell Grant recipients and
nearly 1.5 million students receiving the maximum Pell Grant
this year.\28\ The FAFSA Simplification Act also restored Pell
Grant eligibility to incarcerated students, who had been denied
participation for decades.\29\ Further, Congressional Democrats
secured a $900 total increase in the maximum Pell Grant in the
year-end budget deals of fiscal years 2022 and 2023.\30\
---------------------------------------------------------------------------
\27\Consolidated Appropriations Act, Pub. L. No. 116-260, tit. VII
div. FF, Sec. 701, 134 Stat. 1182, 3137 (2021).
\28\Press Release, U.S. Dep't of Educ., U.S. Department of
Education Announces More Than 3.1 Million FAFSA Forms Successfully
Submitted and an Update to Student Aid Index Calculation (Jan. 30,
2024), https://www.ed.gov/news/press-releases/us-department-education-
announces-more-31-million-fafsa-forms-successfully-submitted-and-
update-student-aid-index-calculation.
\29\Nicholas Turner & Nazish Dholakia, After 29 Years, Incarcerated
Students Are Finally Going Back to School, Vera Institute of Justice
(Jun. 22, 2023), https://www.vera.org/news/after-29-years-incarcerated-
students-are-finally-going-back-to school::text=Vera%E2%80%94
along%20with%20other%20organizations,
Pell%20Grants%20to%20incarcerated%20students.
\30\Consolidated Appropriations Act, Pub. L. No. 117-103, 136 Stat.
49 (2022); Consolidated Appropriations Act, Pub. L. No. 117-328, 136
Stat. 4459 (2023).
---------------------------------------------------------------------------
Based on this track record of recent success, the so-called
College Cost Reduction Act would have been the perfect
opportunity to reduce college costs for students by increasing
the value of the Pell Grant for all students. Instead, H.R.
6951, as introduced included a ``Pell Plus'' program that
proposed to double the Pell Grant award amount for any junior
and senior on track to complete a bachelor's degree within four
years. While it is certainly true that increased aid has been
shown to improve completion rates for low-income students,\31\
the program's additional Pell funds would have only been
awarded to full-time, baccalaureate students. However, college
costs are not just rising for full-time students; all students
should be eligible to receive increased Pell Grant aid to
incentivize completion. For low-income students who are
balancing other responsibilities such as work and child care
alongside their education, part-time enrollment may be their
sole option, and they should not be penalized for that.
Further, research shows that at 80% of institutions, Pell Grant
recipients graduate on-time at a lower rate than non-Pell
recipients.\32\ H.R. 6951 attempted to address this by creating
an incentive for on-time completion, but the policy seems in no
way connected to the reasons why Pell recipients may not
complete college on time. Committee Democrats were prepared to
offer amendments to ensure that all Pell students had an
opportunity to receive this bonus, but surprisingly, the Pell
Plus proposal was removed from the bill with the adoption of
the amendment in the nature of a substitute (ANS) at
markup.\33\ Despite originally touting ``enhanced Pell
Grants''' in their promotional materials for H.R. 6951,\34\ the
removal of this provision resulted in Republicans marking up
and reporting to the House a bill ostensibly about college
costs that does nothing to reduce the cost of college for
students receiving a Pell Grant. With the removal of its sole
Pell Grant reform, H.R. 6591 is not a serious attempt at making
higher education more affordable for low-income students.
---------------------------------------------------------------------------
\31\Spiros Protopsaltis & Sharon Parrott, Pell Grants--a Key Tool
for Expanding College Access and Economic Opportunity--Need
Strengthening in, Not Cuts, Ctr. on Budget & Pol'y Priorities (Jul. 27,
2017), https://www.cbpp.org/research/pell-grants-a-key-tool-for-
expanding-college-access-and-economic-opportunity-need.
\32\Wesley Whistle & Tamara Hiler, The Pell Divide: How Four-Year
Institutions are Failing to Graduate Low-and Moderate-Income Students,
Third Way (May 1, 2018), https://www.thirdway.org/report/the-pell-
divide-how-four-year-institutions-are-failing-to- graduate-low-and-
moderate-income-students.
\33\H.R. 6951, 118th Cong. (as introduced in the House, Jan. 11,
2024).
\34\See The College Cost Reduction Act: Bill Summary, H. Comm. on
Educ. & the Workforce, https://edworkforce.house.gov/uploadedfiles/
college_cost_reduction_act_-_bill_summary_updatefd_final.pdf (last
visited February 12, 2024).
---------------------------------------------------------------------------
Committee Democrats were surprised Committee Republicans
removed the sole Pell Grant provision in their Amendment in the
Nature of a Substitute for the markup.\35\ Despite originally
touting ``enhanced Pell Grants'' in their original summary
documents,\36\ Committee Republicans removed this provision
before the markup, perhaps due in part to significant backlash
over the removal of the Federal Supplemental Opportunity Grants
(FSEOG) in their original bill, as discussed below. Instead of
responding to these concerns by restoring FSEOG and maintaining
their new Pell proposal, Republicans may have chosen to remove
the Pell investments to bolster the claim H.R. 6951 was
``putting taxpayers first.''\37\ With the removal of the sole
Pell Grant reform, H.R. 6591 is not a serious attempt at making
higher education more affordable for low-income students.
---------------------------------------------------------------------------
\35\Markup of H.R. 6951 in the H. Comm. on Educ. & the Workforce,
Amdt. in the Nature of a Substitute, Jan. 31, 2024, https://
edworkforce.house.gov/uploadedfiles/hr6951_owens_ans.pdf.
\36\See The College Cost Reduction Act: Bill Summary, H. Comm. on
Educ. & the Workforce, https://edworkforce.house.gov/uploadedfiles/
college_cost_reduction_act_-_bill_summary_updatefd_final.pdf (last
visited February 12, 2024).
\37\Bianca Quilantan & Dana Nickel, House Education Republicans
Pass Sweeping Higher Education Overhaul, PoliticoPro (Jan. 31, 2024),
https://subscriber.politicopro.com/article/2024/01/house-education-
republicans-pass-sweeping-higher-education-overhaul-00138978.
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Committee Democrats offered several amendments to make
meaningful reforms to the Pell Grant program. Vice Ranking
Member Jahana Hayes (D-CT) introduced an amendment to double
the maximum Pell Grant over six years and index the maximum
award to inflation. That amendment also allowed students who
receive certain federal means-tested benefits, such as the
Supplemental Nutrition Assistance Program (SNAP), to
automatically qualify for an additional $1,500 in grant aid in
addition to the maximum Pell award. Rep. Mark DeSaulnier (D-CA)
introduced an amendment to expand the semesters of Pell
eligibility from 12 back to 18, as it was prior to programmatic
changes made to address the 2011 budget shortfall in the Pell
Grant program.\38\ Additionally, Rep. Haley Stevens (D-MI)
introduced an amendment to allow students to utilize any
remaining Pell Grant eligibility they had after completing
their undergraduate degree towards graduate education.
Unfortunately, these amendments were all defeated on party-line
votes. Should Committee Republicans reconsider the Pell Plus
proposal again, Committee Democrats stand ready to craft policy
that incentivizes completion and improves the Pell Grant
program for all students.
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\38\The Consolidated Appropriations Act, 2012 (P.L. 112-74)
decreased the total lifetime Pell eligibility from 18 to 12 semesters
beginning in Academic Year 2012-2013. See Cassandria Dortch, Cong.
Rsch. Serv., R45418 Federal Pell Grant Program of Higher Education Act:
Primer, 10, (2023), https://crsreports.congress.gov/product/pdf/R/
R45418.
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CAMPUS-BASED AID
H.R. 6951 includes a new grant program, Promoting Real
Opportunities to Maximize Investments in Savings in Education
(PROMISE), that would issue performance-based grants to reward
institutions for providing strong earnings outcomes, keeping
tuition low, and matriculating low-income students. To receive
a PROMISE grant, an institution must provide students with a
maximum total price guarantee, establishing the most money an
institution could charge the student to complete their program,
based on the student's family income and financial need.
Though Committee Democrats generally support the creation
of programs that increase postsecondary access opportunities
for low-and middle-income students, we have several concerns
with the PROMISE program as conceived in H.R. 6951. First,
PROMISE grants would essentially function as a block grant to
institutions, with few enumerated requirements in the bill as
to their use. There was not even a provision requiring some
minimum percentage of the grant aid to be directly given to
students to offset their need, so a school could use its grant
for various purposes rather than ``maximizing investments in
savings in education''.
Additionally, Committee Democrats worry the maximum total
price guarantee requirement will disincentivize schools from
participating in the PROMISE program. While this attempt to
control college costs is commendable, it is imperative that
proposed policies to keep higher education affordable are
actually viable. In this case, it is unclear whether
institutions would significantly cap tuition costs just to
become eligible to participate in a program with no guarantee
that it will receive funds. Further, public institutions are
particularly at risk of not accessing these funds, since
tuition at most public institutions is determined by state and
local governments.\39\ The volatile and unpredictable nature of
state funding for higher education makes it challenging for
public institutions to guarantee tuition levels for multiple
years at a time, meaning they will likely be ineligible for
PROMISE grants due to factors beyond their control.\40\
---------------------------------------------------------------------------
\39\Mark Becker, supra note 20.
\40\Id.
---------------------------------------------------------------------------
Additionally, Committee Democrats worry whether the bill's
PROMISE provisions include resources sufficient enough to make
a meaningful difference for students. This is because the text
of H.R. 6951 as introduced funded the PROMISE grant in part by
eliminating the Federal Supplemental Education Opportunity
Grant, or FSEOG program.\41\ The FSEOG program delivers
supplemental grant aid directly to the students most in need on
a campus.\42\ But in the same way Pell Plus was eliminated from
H.R. 6951 at markup, the FSEOG program was restored in the
bill's ANS. While Committee Democrats view this as a
significant win for low-income students, the restoration of
FSEOG reduces the funding available for PROMISE grants. This
places a higher burden on the other source of PROMISE funding--
payments derived from the bill's so-called risk-sharing
proposal, discussed subsequently in this report.\43\ If the
risk sharing scheme does not produce enough funds for eligible
schools to receive PROMISE grants, the bill requires
prioritization of institutions with the highest percentages of
low-income students for PROMISE funding.\44\ Funding a proposal
in such a manner without a guarantee that all eligible
institutions, and most importantly students at their
institutions, will have the ability to benefit from the
program, is unwise.
---------------------------------------------------------------------------
\41\While the bill text does not make this explicit, initial
promotional materials from the Majority suggested this was the
implication of the policy, which is aligned with the Majority's
longstanding insistence on not providing additional budget authority
for higher education programs without an offset.
\42\See 20 U.S.C. Sec. 1070b. t
\43\See infra text accompanying notes 69-70.
\44\H.R. 6951, Amdt. in the Nature of a Substitute, Sec. 415E(b),
Jan. 31, 2024.
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Finally, it is not lost on Committee Democrats that this is
an attempt to co-opt the ``PROMISE'' branding in higher
education, which has generally come to refer to programs across
the country that provide free (or highly subsidized) semesters
of community college.\45\ Relatedly the America's College
Promise Act (ACP), a\46\ bill first introduced in 2015,
establishes a federal-state partnership to expand access to
higher education by providing two years of tuition-free
community college and creating grants for Historically Black
Colleges and Universities (HBCUs), Tribal Colleges and
Universities\47\ Minority (MSIs) to provide two years of
tuition-free education. The Republican's PROMISE program is
fundamentally different from what Committee Democrats offered
in ACP or the Promise programs that the non-profit College
Promise indicates are at ``approximately 104 community college
and university programs offered across 45 states.'' The PROMISE
program as included in H.R. 6951 does not offer a real
mechanism to solve issues of college affordability and
completion. At the markup, Rep. Teresa Leger Fernandez (D-NM)
offered an amendment to strike the PROMISE grant in the bill
and replace it with the America's College Promise Act. This
amendment failed along a party-line vote.
---------------------------------------------------------------------------
\45\See e.g. Edward Conroy, How Are the More Than 400 College
Promise Programs Helping Students?, Forbes (Jul. 13, 2023), https://
www.forbes.com/sites/edwardconroy/2023/07/13/how-are-the-more-than-400-
college-promise-programs-helping-students/?sh=5df32ad99039; Promise
Programs Database, W.E. Upjohn Institute, https://upjohn.org/promise/
promiseSearch.html#scrollSpot (last visited Feb. 12, 2024).
\46\President Obama first unveiled the America's College Promise
proposal in 2015, https://obamawhitehouse.archives.gov/the-press-
office/2015/01/09/
fact-sheet-white-house-unveils-america-s-college-promise-proposal-
tuitio. President Biden proposed a similar program in the FY2024
President's Budget. https://www2.ed.gov/about/overview/budget/budget24/
justifications/t-fcc.pdf. Rep. Scott and Sen. Tammy Baldwin (D-WI)
first introduced the America's College Promise Act in 2015. H.R. 2961,
115th Cong. (2015).
\47\ America's College Promise Act, H.R. 5998, 118th Cong. (2023).
---------------------------------------------------------------------------
LIMITING ACCESS TO FEDERAL STUDENT LOANS
H.R. 6951 revises the aggregate and annual Direct Loan
limits for undergraduate and graduate students. The current
aggregate Direct Loan limits are $31,000 for dependent
undergraduate students, $57,500 for independent undergraduate
students, and $138,500 for graduate and professional
students.\48\ The bill changes the aggregate limit to $50,000
for dependent and independent undergraduate students, $100,000
for graduate students, and raises the limit to $150,000 for
professional graduate students. Independent undergraduate
students and non-professional graduate students will face
drastic cuts to their total federal student loan eligibility
from these limits. In conjunction with other loan changes
detailed below, most students will be worse off with this
proposal.
---------------------------------------------------------------------------
\48\Alexandra Hegji, Cong. Rsch. Serv., R45931, Federal Student
Loans Made Through the William D. Ford Federal Direct Loan Program:
Terms and Conditions for Borrowers, 14-15 (2023).
---------------------------------------------------------------------------
The bill also allows institutions to cap loans even further
based on program of study. This will create significant
affordability issues for students preparing for impactful
careers in fields with traditionally low earnings, such as
teaching and social work. Several higher education and consumer
protection advocates fear that giving colleges this authority
will ``threaten universal access to student loans''\49\A and
restrict college access for students whose needs are not
otherwise met.\50\
---------------------------------------------------------------------------
\49\Ben Barrett, More than Tuition: Experimenting Loan Limits, New
America (May, 23, 2016) https://www.newamerica.org/education-policy/
edcentral/tuition-setting-student-loan-limits/.
\50\Letter from Christopher Chapman, Pres.& CEO, Access Lex
Institute, to Reps. Foxx & Scott, Jan. 22, 2024 (on file with author).]
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H.R. 6951 also eliminates Parent PLUS and Graduate PLUS
loans for all future borrowers. The PLUS program is not without
its faults,\51\ but taking a hatchet to the program instead of
a scalpel will only drive families and graduate students to the
predatory private loan market\52\ to finance higher education.
Advocates across the political spectrum have emphasized that to
successfully steer students and families away from PLUS loans,
robust front-end student aid and increased institutional aid
are essential.\53\ Eliminating PLUS Loans without providing
such additional front-end aid will likely have a disastrous
effect on the demographic group that disproportionately relies
on PLUS Loans, Black students and their families. Black
families tend to take out Parent PLUS loans at higher rates
compared to other student groups due in part to having less
generational wealth and fewer financial resources generally due
in part to systemic racism.\54\
---------------------------------------------------------------------------
\51\Victoria Jackson et al., Parent Plus Loans are a Double-Edged
Sword for Black Borrowers 6-7, Educ. Trust (Jun. 2023), https://
edtrust.org/wp-content/uploads/2014/09/ParentPLUS_Brief_V6.pdf.
\52\Ben Kaufman, Private Student Loans: New Report Sheds Light on
the Need for Borrower Protection an Opaque $130 Billion Market, Student
Borrower Protection Ctr. (Apr. 30, 2020), https://protectborrowers.org/
130-billion-psl-market/.
\53\Beth Akers et al., A Framework for Reforming Federal Graduate
Student Aid Policy, The Century Found. (Dec 8, 2023), https://tcf.org/
content/report/a-framework-for-reforming-federal-graduate-student-aid-
policy/.
\54\Jackson et al., supra note 51 at 4.
---------------------------------------------------------------------------
Taken together, H.R. 6951's ``affordability'' provisions
could result in many students being unable to afford graduate
degrees. By eliminating Grad PLUS loans, lowering Direct Loan
limits, and providing no other increases in grant aid, access
to careers that require graduate education will be severely
limited since the cost of attendance for many of these programs
will now exceed many students' total federal student aid
eligibility.\55\ This financing structure will inevitably harm
low-income students and students of color by either requiring
them to take out predatory private loans to finance their
education or forcing them to walk away from higher education
entirely. Rep. Ilhan Omar (D-MN) offered amendments striking
these loan limits and the elimination of the PLUS program,
which were both rejected by Committee Republicans. Committee
Democrats welcome conversations on ways to address the serious
concerns about the
---------------------------------------------------------------------------
\55\See Akers et al., supra note 53 (``However, such limits may
unintentionally prevent students from attending programs that could
leave them better off, particularly low-income students and students of
color who may lack alternative options to access graduate education
financing.'').
---------------------------------------------------------------------------
PLUS program but any actions we take must not come at the
expense of compromising access and affordability for students.
LOAN REPAYMENT PLANS
H.R. 6951 streamlines the repayment options available to
Direct Loan program participants into two plans: a standard
repayment plan and a repayment assistance plan. While higher
education advocates have long asked Congress to streamline the
loan program,\56\ the model in H.R. 6951 is not designed to
support borrowers; rather, its proposed ``assistance'' plan
will leave some borrowers paying until they die and will lead
many more to making decades of unaffordable payments. The
bill's assistance plan requires borrowers to make payments
equal to 10 percent of their discretionary income (calculated
as any income above 150 percent of the federal poverty level).
Unlike current income-based repayment plans, there is also no
opportunity for forgiveness after a predetermined number of
monthly payments, so borrowers could end up paying off their
loans for their entire life without receiving any relief.
Higher education advocates are concerned that this new plan
will make higher education less affordable and drive more
borrowers into delinquency and default.\57\
---------------------------------------------------------------------------
\56\Streamlining Student Loan Repayment, NASFAA (2015), https://
www.nasfaa.org/uploads/
documents/streamlining_repayment.pdf; Ted Mitchell, supra note 25.
\57\ Letter from Marc Egan, Dir. of Govt. Relations, Nat'l
Educ.Ass'n, to the H. Comm. on Educ. & the Workforce (Jan. 31, 2024),
available at https://www.nea.org/advocating-for-change/
action-center/letters-testimony/nea-urges-house-education-committee-
vote-
no-college-cost-reduction-act-hr-6951; Press Release, TICAS, Chairwoman
Foxx's Higher Education Proposal Fall Short on Student Protections,
College Affordability (Jan. 11, 2024), https://ticas.org/media/
chairwoman-foxxs-higher-education-proposal-
falls-short-on-student-protections-college-affordability/.
---------------------------------------------------------------------------
This proposal is a stark contrast to the new Saving on a
Valuable Education (SAVE) Plan developed by the Biden
Administration.\58\ The SAVE plan is the most generous
repayment plan ever established and is expected to drastically
help low-and middle-income borrowers finance their educations.
Compared to the proposed repayment assistance plan in H.R.
6951, the SAVE Plan requires borrowers to make payments equal
to 5 percent of their discretionary income (calculated as any
income above 225 percent of the federal poverty level). The
Department of Education estimates that once fully implemented,
more than one million low-income borrowers will qualify for $0
loan payments per month, allowing families to focus on the
basic needs of food, housing, and transportation.\59\ According
to the Biden Administration, ``borrowers will see their total
payments per dollar borrowed fall by 40%. Borrowers with the
lowest projected lifetime earnings will see payments per dollar
borrowed fall by 83 percent.\60\ Committee Democrats will
continue to advocate for the SAVE plan, which will better allow
borrowers to manage their higher education debt and focus on
their other financial needs.
---------------------------------------------------------------------------
\58\U.S. Dep't of Educ., The Saving on a Valuable education (SAVE)
Plan Offers Lower Monthly Loan Payments, https://studentaid.gov/
announcements-events/save-plan (last visited on Feb. 9, 2024).
\59\ Fact Sheet, The White House, FACT SHEET: The Biden-Harris
Administration Launches the SAVE Plan, the Most Affordable Student Loan
Repayment Plan Ever to Lower Monthly Payments for Millions of Borrowers
(Aug. 22, 2023), https://www.whitehouse.gov/
briefing-room/statements-releases/2023/08/22/fact-sheet-the-biden-
harris-administration-launches-the-save-plan-the-most-affordable-
student-loan-repayment-plan-ever-to-lower-monthly-payments-for-
millions-of-borrowers/.
\60\Id.
---------------------------------------------------------------------------
H.R. 6951 also prohibits the Secretary of Education
(Secretary) from developing new repayment plans or modifying
existing repayment plans if those changes increase subsidy
costs to the federal government. This is extremely concerning
because, if it became law, no future administration--Democrat
or Republican--would have the authority to make common-sense
changes to loan repayment that support the needs of borrowers.
This prohibition is a direct attack on the Biden Administration
and the significant progress it has made to improve student
loan repayment for borrowers.\61\ Any disinterested party would
realize it is crucial that the Secretary has the flexibility to
respond to the ever-changing needs of borrowers; the COVID-19
pandemic was a perfect example of the nimbleness needed to
address borrowers' economic struggles.\62\ Rep. Omar offered an
amendment to strike the loan repayment reforms that are less
beneficial for borrowers than those created under current laws
and regulations, but it was voted down along party lines.
---------------------------------------------------------------------------
\61\Such direct political attacks on Administration efforts are
infused throughout majority communications; the popup window on the
landing web page for the Committee on Education and the Workforce reads
``The Biden administration is pursuing reckless student loan policies
that are UNFAIR and costing taxpayers BILLIONS,''. https://
edworkforce.house.gov/ (last visited Feb. 9, 2024).
\62\U.S. Dep't of Educ., COVID-19 Emergency Relief and Federal
Student Aid, https://studentaid.gov/announcements-events/covid-19 (last
visited on Feb. 9, 2024).
---------------------------------------------------------------------------
BORROWER SUPPORTS
H.R. 6591 does include three strong bipartisan provisions
to support borrowers in repayment. First, it allows borrowers
to rehabilitate their defaulted loans twice, rather than the
current limit of just once. This will provide borrowers
struggling with default additional opportunities to improve
their financial wellbeing. Second, the bill eliminates interest
capitalization in all instances, which should stop borrowers
from seeing their loan balances grow from ballooning amortizing
interest despite monthly payments. This builds off recent work
the Biden Administration undertook to eliminate interest
capitalization in the six places in law it has the authority to
do so.\63\ Since the administration does not have the authority
to eliminate interest capitalization for the other four
instances of capitalization, Congress must address these in
statute.\64\ Third, the bill eliminates origination fees on all
new student loans, which were originally established to offset
costs of the now-defunct Federal Family Education Loan (FFEL)
program.\65\ The current origination fees of 1 percent for
Direct Loans and 4 percent for PLUS loans significantly
contribute to increased loan balance, especially for graduate
borrowers.\66\ These three provisions have significant
bipartisan support in Congress; the Lowering Obstacles to
Achieve Now (LOAN) Act, introduced by the Higher Education and
Workforce Development Subcommittee Ranking Member Frederica
Wilson (D-FL) and Ranking Member Bobby Scott (D-VA), would also
eliminate interest capitalization and origination fees and
support borrowers in default.\67\
---------------------------------------------------------------------------
\63\Namely: entering repayment status, annually in income-
contingent repayment (ICR) plans and alternative repayment plans, exit
from or failure to recertify income and family size in the PAYE and
REPAYE plans, end of partial financial hardship in PAYE plan, end of
forbearance, and in default. See Hegji, supra note 48, at 26-29; Press
Release, U.S. Dep't of Educ., Education Department Release Final
Regulations to Expand and Improve Targeted Debt Relief Programs (Oct.
31, 2022), https://www.ed.gov/news/press-releases/education-department-
releases-final-
regulations-expand-and-improve-targeted-debt-relief-programs.
\64\The Executive Branch does not have the authority to eliminate
interest in the following situations: exit from or failure to recertify
income and family size in an income-based repayment (IBR) plan, end of
partial financial hardship in IBR plans, end of loan deferment, and
loan consolidation. See Hegji, supra note 48, at 26-29.
\65\Fact Sheet, Nat'l Ass'n of Student Fin. Aid Adm'rs, Origination
Fees, (Apr. 2023), https://www.nasfaa.org/uploads/documents/Issue_Brief
_Origination _Fees.pdf.
\66\Id.
\67\ Lowering Obstacles to Achievement Now Act, H.R. 1731, 118th
Cong. (2023).
---------------------------------------------------------------------------
Committee Democrats offered multiple amendments to
strengthen support for borrowers that were unfortunately
defeated on party-line votes. Specifically Ranking Member Scott
offered an amendment to lower interest rates for students and
Ranking Member Wilson offered an amendment to expand access to
subsidized loans and improve loan rehabilitation. Furthermore,
Rep. Joe Courtney (D-CT) offered an amendment to improve the
Public Service Loan Forgiveness (PSLF) program and Rep. Alma
Adams (D-NC) offered amendments to eliminate student loan
defaults from borrowers' credit reports and to prohibit the
garnishment of Social Security benefits. Together, these
reforms would have helped low-income borrowers who, under H.R.
6951, will have significantly higher payments for longer
periods of time. Each proposed amendment failed on a party-line
vote.
H.R. 6951 Guts Federal Accountability Framework, Leaving Students and
Taxpayers Vulnerable
RISK SHARING AGREEMENTS
H.R. 6951 proposes a risk-sharing agreement in which all
institutions must compensate the federal government for a
portion of the unpaid principal and interest on loans for their
students. The ``risk sharing'' model has long been a Republican
policy goal designed to encourage institutions to ``have skin
in the game'' with respect to student loan repayment rates.\68\
---------------------------------------------------------------------------
\68\Kelly Field, A Day in the Life of Virginia Foxx, The Chron. of
Higher Educ. (Dec. 22, 2016), https://www.chronicle.com/article/a-day-
in-the-life-of-virginia-foxx/?sra=true; The College Cost Reduction Act
Fact Sheet, H. Comm. on Educ. & the Workforce (Jan. 11, 2024), https://
edworkforce.house.gov/uploadedfiles/
1.11.24_h.r._6951_the_college_cost_reduction_
act_fact_sheet_digital_final.pdf.
---------------------------------------------------------------------------
Committee Democrats, although not opposed to holding
institutions accountable for student outcomes, have significant
concerns with the risk-sharing proposal as drafted in H.R.
6951. This model will encourage institutions to judge programs
of study solely on their ability to provide immediate financial
benefits to their graduates. Many essential programs of study
such as education or social work, are obviously necessary but
do not always have simple return on investment equations. Other
programs, like many liberal arts programs, pay off for
students, but on a longer time horizon than contemplated by the
Republicans risk sharing scheme. The policy is also deeply
worrying for under-resourced institutions and institutions that
disproportionately serve low-income students and students of
color, such as community colleges, HBCUs, and MSIs. Many
scholars have expressed concern that without incorporating
multiple dynamic metrics that take into account the
demographics of students that institutions serve, the risk-
sharing model will create perverse incentivizes for
institutions to enroll high-income students who are most well
situated to graduate and repay their student debt.\69\ The bill
does not include any mechanisms to address these concerns, nor
does it contain anything requiring institutions or the federal
government to measure potential effects of the policy.
Committee Democrats support accountability frameworks that will
incentivize institutions to effectively serve high-need
students and ensure their degree completion, not proposals such
as the one included in H.R. 6951 that has the potential to deny
such students access to high-quality education.
---------------------------------------------------------------------------
\69\Ben Miller & Beth Akers, Designing Higher Education Risk-
Sharing Proposals 19-23, Ctr. for Am. Prog. (May, 2017), (https://
www.americanprogress.org/wp-content/uploads/sites/2/2017/05/
RiskSharingSynthesis-report.pdf.
---------------------------------------------------------------------------
Ultimately, the biggest concern for Committee Democrats is
that Committee Republicans view the risk-sharing model as the
sole accountability tool for institutions. Even if this model
was successful, it does not provide accountability for other
serious financial risks that unscrupulous institutions pose to
students and taxpayers.
DEREGULATION
By far one of the most egregious components of H.R. 6951 is
the complete dismantling of the existing federal accountability
framework designed to protect students and taxpayers from
waste, fraud, and abuse in higher education. The statutory and
regulatory oversight mechanisms repealed in the bill are vital
tools the Department of Education (Department) uses to ensure
students get the full benefit of federal student aid through
monitoring institutions that pose significant risks and
penalizing such institutions accordingly.
90/10
Repealed under H.R. 6951, the 90/10 rule requires that for-
profit institutions receive no greater than 90 percent of their
revenue from federal aid. This provision was first established
by Congress in the 1992 HEA reauthorization to prohibit for-
profit entities from deriving the entirety of their revenue
from the federal government.\70\ Unscrupulous for-profit
colleges have long preyed on vulnerable student populations to
increase their revenue without providing these students a
valuable education.\71\ In recent years, these institutions
have increasingly preyed on veterans, since their G.I. Benefits
did not count under the 90 percent cap.\72\ In 2021, Congress
passed the American Rescue Plan Act, which included a
bipartisan provision to close this loophole and prevent
institutions from targeting veterans for their benefits.\73\
---------------------------------------------------------------------------
\70\The original rule established in the 1992 HEA reauthorization
had an 85/15 revenue split. Id.
\71\Veterans Education Success, Why For-Profit Schools are
Targeting Veterans Education Benefits, Vet. Ed. Success (Jan. 1, 2014),
https://vetsedsuccess.org/why-for-profit-institutions-are-
targeting-veterans-education-benefits/.
\72\ Id.
\73\American Rescue Plan Act, Pub. L. No: 117-2, 135 Stat. 4
(2021).
---------------------------------------------------------------------------
Despite strong bipartisan support for closing this
loophole,\74\ Committee Republicans continue to argue that the
90/10 rule is another part of the Democratic ``educational
agenda'' to ``expand federal intervention at the expense of
students and taxpayers.''\75\ And it is worth noting that while
Committee Republicans regularly claim to prioritize taxpayers,
CBO estimated that a previous attempt by Republicans to repeal
the 90/10 rule would have cost taxpayers $2 billion over the
2018-2027 period.\76\
---------------------------------------------------------------------------
\74\Press Release, Sen. Tom Carper, On the Senate Floor, Carper
Offers Bipartisan Amendment to Protect Student Veterans and Finally
Close 90/10 Loophole (Mar. 6, 2021), https://www.carper.senate.gov/
newsroom/press-releases/on-the-senate-floor-carper-offers-bipartisan-
amendment-to-protect-student-veterans-and-finally-close-90-10-loophole/
; American Rescue Plan Act, H.R. 1319, 117 Cong. (2021); Press Release,
Vets. Ed. Success, Veterans Education Success Hails Closure of 90/10
Loophole (Mar. 6, 2021), https://vetsedsuccess.org/veterans-education-
success-hails-closure-of-9010-loophole/.
\75\Press Release, H. Comm. on Educ. & Lab., Foxx: ``Increasing
Educational Opportunities and Supporting Veterans Should Not be a
Partisan Issue'' (Mar. 4, 2021), https://edworkforce.
house.gov/news/documentsingle.aspx?DocumentID=407226.
\76\H.R. Rep. No. 115-500, at 308 (2018).
---------------------------------------------------------------------------
Committee Democrats have witnessed the ongoing predatory
behaviors of certain for-profit institutions, particularly with
respect to veterans,\77\ and are appalled by the removal of
this bipartisan accountability framework in H.R. 6951. Congress
has a responsibility to protect America's veterans from being
manipulated by the for-profit industry. At markup, Rep. Mark
Takano (D-CA) offered an amendment to strike the repeal of the
90/10 rule. Rep. Takano also offered an amendment that would
delay implementation of H.R. 6951 until the Department's Office
of the Inspector General (OIG), in consultation with the
Department of Veterans Affairs OIG, certifies that
implementation of the bill does not lead to fraud and abuse of
veterans. Neither of these amendments were adopted and failed
on a party-line vote.
---------------------------------------------------------------------------
\77\William Hubbard, For-Profit Colleges Prey on Veterans--The
Department of Education Must Say `No More', The Hill (Jan. 1, 2022),
https://thehill.com/opinion/education/589873-for-profit-
colleges-prey-on-veterans-the-department-of-education-must-say/; Arit
John, Veterans Burned by For Profit colleges Fight for Their Lost GI
Bill Benefits, L.A. Times (Apr. 17, 2023), https://www.latimes.com/
politics/story/2023-04-17/veterans-gi-bill-restoration-for-profit-
schools#::text=For%20years%2C%20for%2Dprofit%20schools,as%20loans%20or%2
0Pell %20Grants.
---------------------------------------------------------------------------
Gainful Employment
The gainful employment (GE) rule, also repealed by H.R.
6951, sets a meaningful and necessary framework for the
Department to enforce compliance with the statutory requirement
under the HEA that vocational training programs prepare
students for gainful employment. The GE rule helps ensure
students are attending programs designed to support their
postsecondary needs and prepare them to have good jobs in the
workforce. The rule also saves significant money for taxpayers;
analysis indicates that the Trump Administration's previous
recission of the GE rule risked losing roughly $6.2 billion in
taxpayer funds over ten years through Pell Grants and student
loans flowing to low-quality programs that leave students with
high levels of debt and low earnings.\78\
---------------------------------------------------------------------------
\78\Program Integrity: Gainful Employment, 84 Fed. Reg. 31392,
31447, (Jul. 1, 2019) (codified at 34 C.F.R. 600 and 34 C.F.R. 668).
---------------------------------------------------------------------------
Thankfully, in 2023, the Biden Administration released the
strongest ever GE rule to protect students from low-quality
training programs by establishing metrics related to high
levels of debt and low post-completion earnings.\79\ The
Department estimates that 92 percent of public institutions and
97 precent of private non-profit institutions have no programs
that fail the new GE rule.\80\ Comparatively, despite for-
profit institutions accounting for only 11 percent of GE
programs, 55 percent of these institutions have at least one
program of study that does not pass one of the two GE metrics,
and nearly 90 percent of students in failing GE programs attend
for-profit institutions.\81\ Due to the disproportionate level
of failing programs at for-profit institutions, the Department
estimates that as a consequence of the GE rule, there will be
significant enrollment shifts from low-quality programs to
programs at community colleges and HBCUs.
---------------------------------------------------------------------------
\79\Financial Value Transparency and Gainful Employment, 88 Fed.
Reg. 70004, 70004-70193 (Oct. 10, 2023) (codified at 34 C.F.R. pt. 600
and 34 C.F.R. pt. 668).
\80\U.S. Dep't of Educ., Biden-Harris Administration Announces
Landmark Regulations on Accountability, Transparency & Financial Value
for Postsecondary Students, 4, Dep't. of Educ. (2021), https://
www2.ed.gov/policy/highered/reg/
hearulemaking/2021/gainful-employment-notice-of-final-review-
factsheet.pdf?utm_
content=&utm_medium=email&utm_name=&utm_source=govdelivery&utm_term=.
\81\Id.
---------------------------------------------------------------------------
Committee Republicans have decried this rule as a ``witch
hunt'' against for-profit institutions\82\ and continue to
ignore the what the data clearly shows: low-quality for-profit
programs will continue to bilk students and taxpayers unless
they are held accountable for poor student outcomes. Rep.
Wilson offered an amendment to strike the repeal of the GE
rule, which was voted down along party-lines.
---------------------------------------------------------------------------
\82\Press Release, H. Comm. on Educ. & the Workforce, New
Regulations Fail to Protect Students and Taxpayers (May 17, 2023),
https://edworkforce.house.gov/news/document
single.aspx?DocumentID=409178.
---------------------------------------------------------------------------
Borrowers Defense to Repayment
H.R. 6951 eliminates the current borrowers defense to
repayment rule, a powerful legal tool providing loan
forgiveness for borrowers who have been defrauded by colleges
that engaged in certain instances of gross misconduct.\83\ In
2022, the Biden Administration released a new borrowers defense
regulation that establishes the strongest framework yet for
borrowers to raise a defense to repayment if their institution
has misled or harmed them.\84\ Since promulgating this rule,
the Department has discharged more than $14.8 billion in loans
for over one million borrowers through borrowers defense.\85\
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\83\The six grounds for a borrower defense charge as of 2023 are
substantial misrepresentation, substantial omission of fact, breach of
contract, aggressive and deceptive recruitment, judgement, and prior
secretarial action. See generally U.S. Dep't of Educ., Borrower Defense
Loan Discharge https://studentaid.gov/manage-loans/forgiveness-
cancellation/borrower-defense (providing an overview of Borrower
Defense process).
\84\U.S. Dep't of Education, supra note 63.
\85\Press Release, U.S. Dep't of Educ., Biden-Harris Administration
Approves $72 Million in Borrower Defense Discharges for over 2,300
Borrowers who Attended Ashford University (Aug. 30, 2023), https://
www.ed.gov/news/press-releases/biden-harris-administration-approves-72-
million-borrower-defense-discharges-over-2300-borrowers-who-attended-
ashford-university.
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While Committee Republicans paint the Department as being
the ``judge, jury, and executioner'' of targeted debt relief
such as borrowers defense,\86\ it must be underscored that
borrowers defense also helps recover significant amounts of
cancelled loan amounts from institutions, which helps ensure
taxpayers are not harmed by the gross misconduct of an
institution.\87\ While repealing this rule will make it
extremely hard for defrauded students to receive loan
discharges to which they are entitled, it will also allow
disreputable schools to get away with their misconduct and
leave taxpayers holding the bag. Committee Democrats remain
committed to supporting students who have been defrauded by
their institutions and, through no fault of their own, have not
reaped the benefits of a higher education. Rep. Jayapal offered
an amendment to strike the repeal of the borrowers defense to
repayment rule. The amendment was not adopted and failed on a
party-line vote.
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\86\Press Release, H. Comm. on Educ. & Lab., Foxx Reacts to
Democrats' PSLF Scheme (Oct. 6, 2021), https://edworkforce.house.gov/
news/documentsingle.aspx?DocumentID=407766.
\87\The Inst. for Coll. Access & Success, What to Know about the
Borrowed Defense to Repayment Rule, https://ticas.org/files/pub_files/
what_to_know_about_bd_factsheet.pdf (last visited on Feb. 7, 2024).
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Closed School Discharge
When institutions close precipitously, students are often
left scrambling to try to transfer to another institution, and
many do not ultimately transfer. The closed school discharge
rule helps borrowers get a ``fresh start'' after a school
closure by discharging student loans taken out at the closed
school.\88\ The Biden Administration strengthened the closed
school discharge rule by providing an automatic loan discharge
for all borrowers one year after the closure of their
institution.\89\ This rule is an essential backstop for
students who were promised an education and a credential they
never received through no fault of their own. H.R. 6951 will
wrongfully remove this tool from defrauded borrowers, and
Committee Republicans have produced no justification for its
elimination. Rep. Kathy Manning (D-NC) offered an amendment to
strike the repeal of the closed school discharge rule, but it
was voted down along party-lines.
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\88\U.S. Dep't of Educ., Off. of Postsecondary Educ., Issue Paper
#2: Closed School Discharge, (Oct. 2021), https://www2.ed.gov/policy/
highered/reg/hearulemaking/2021/2closedschooldisc.pdf.
\89\U.S. Dep't of Education, supra note 63.
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Incentive Compensation and Bundled Services Loophole
H.R. 6951 codifies what is known as the ``bundled services
loophole'' for third-party servicers that are contracted to
help institutions with recruitment efforts. In the 1992
reauthorization of the HEA, Congress adopted what is known as
the ``incentive compensation ban'' to ensure that higher
education recruiters and admissions counselors--especially
those not employed directly by an institution--are not
incentivized to take actions based on per-student enrollment
quotas.\90\ The incentive compensation ban was instituted
because of concerns that ``schools were creating incentives for
recruiters to enroll students who could not graduate or could
not find employment after graduating.''\91\ Although there are
a variety of third parties providing a range of services to
schools with the best interest of students in mind, there is
also a long history of unscrupulous actors in this space, and
institutions are currently rethinking their partnerships with
these entities.\92\
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\90\See Higher Education Amendments of 1992, Pub. L. 102-325,
Sec. 490(a)(3), (1992).
\91\The Bundled Services Loophole: What Is it Good For? Absolutely
Nothing, Nat`l Stud. Legal Def. Network (Mar. 2023), https://
www.defendstudents.org/news/body/SD Brief-Bundled-Services-
Loophole9099.pdf; Ass'n. of Priv. Sector Colls. and Univs. v. Duncan,
681 F. 3d 427, 434 (D.C. Cir. 2012).
\92\Tricia L. Naldolny & Chris Quintana, Black Men were Offered a
Second Change at College, Then the Pitfalls Piled Up, USA Today (Jun.
28, 2023), https://www.usatoday.com/in-depth/news/investigations/2023/
06/01/morehouse-college-online-program-falls-short/70225028007/; Paul
Pastorek, President Speaks: To Put Students First, Colleges Need to
Rethink the OPM Model, Higher Ed Dive (Dec. 12, 2022), https://
www.highereddive.com/news/president-speaks-university-arizona-global-
campus-uagc-cut-ties-opm/638420/; Matt Hamilton & Harriet Ryan, USC Cut
Ties to Controversial Online Degree Company 2U, L.A. Times (Nov. 11,
2023), https://www.latimes.com/california/story/2023-11-11/usc-cuts-
ties-to-controversial-online-degree-company-2u.
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In 2011, the Department issued additional guidance to
clarify that the incentive compensation ban has an exception
known as the ``bundled services loophole'' that allows for
tuition revenue sharing between an institution and a third-
party servicer on a per-student basis, so long as the third-
party also offers a range of bundled services in addition to
student recruiting.\93\
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\93\``Program Integrity Questions and Answers--Incentive
Compensation,'' U.S. Dep't of Educ., available at https://www2.ed.gov/
policy/highered/reg/hearulemaking/2009/compensation.html.
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In addition to serious questions regarding the legality of
this bundled services guidance,\94\ some higher education
advocates have expressed concerns that the loophole also
undermines the intent of the incentive compensation ban to
safeguard students. For example, one organization notes that
through codifying this concerning, outdated guidance, H.R. 6951
``creates a lucrative financial incentive for third-party
companies to recruit students through predatory means, hiding
behind the names of the postsecondary institutions with which
they contract.\95\ Congressional Democrats continue to have
concerns about this compensation structure,\96\ and Committee
Democrats are eager to see how the Biden Administration
addresses these concerns as they begin conversations about
incentive compensation.\97\
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\94\Letter from H. Comm. on Educ. & Lab. to Dept. of Educ. Sec'y
Miguel Cardona (Dec. 2, 2022), available at https://democrats-
edworkforce.house.gov/imo/media/doc/
scott_delauro_murray_warren_smith_letter_to_ed_re_online_program_manager
s.pdf; Natalie Schwartz, Are Tuition-Share Agreements between Colleges
and OPMS on Solid Legal Footing?, Higher Ed Dive (Jun. 18, 2021),
https://www.highereddive.com/news/are-tuition-share-agreements-between-
colleges-and-opms-on-solid-legal-footi/602051/.
\95\Letter from Kelly McManus, Vice President of Higher Education,
Arnold Ventures, to Rep. Foxx (Jan. 30, 2024), available at https://
craftmediabucket.s3.amazonaws.com/uploads/Arnold-Ventures-College-Cost-
Reduction-Act-Letter-1-30-2024.pdf.
\96\H. Comm. on Educ. & Lab., supra note 94; Natalie Schwartz, Are
Tuition-Share Agreements between Colleges and OPMS on Solid Legal
Footing?, Higher Ed Dive (Jun. 18, 2021), https://www.highereddive.com/
news/are-tuition-share-agreements-between-colleges-and-opms-on-solid-
legal-footi/602051/.
\97\Press Release, U.S. Dep't of Educ., U.S. Department of
Education Launches Review of Prohibition on Incentive Compensation for
College Recruiters (Feb. 15, 2023), https://www.ed.gov/news/press-
releases/us-department-education-launches-review-prohibition-incentive-
compensation-college-recruiters.
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Prohibition on Promulgating Regulations
H.R. 6951 prohibits the Secretary, and all future
Secretaries, from implementing any substantially similar
regulations to the repealed or revised regulations in the bill.
This is another direct attack on the significant progress the
Biden Administration has made to strengthen higher education
regulations to protect students and taxpayers.\98\ Throughout
this Congress, Committee Republicans have touted the importance
of accountability in higher education.\99\ Yet, they have
proposed to eliminate these protections and restrict future
federal engagement on them without proposing a robust
alternative accountability framework.
---------------------------------------------------------------------------
\98\Press Release, U.S. Dep't of Educ., Biden-Harris Administration
Releases Final Rules that Strengthen Accountability for Colleges and
Consumer Protection for Students (Oct. 24, 2023), https://www.ed.gov/
news/press-releases/biden-harris-administration-
releases-final-rules-strengthen-accountability-colleges-and-consumer-
protection-
students#::text=The%20final%20rules%20add%20several,requiring%
20adequate%20career%20services%3B%20and; Press Release, U.S. Dep't of
Educ., Biden-Harris Administration Announces Landmark Final Rules to
Protect Consumers from Unaffordable Student Debt and Increase
Transparency (Sep. 27, 2023), https://www.ed.gov/news/press-releases/
biden-harris-administration-announces-
landmark-final-rules-protect-consumers-unaffordable-student-debt-and-
increase-transparency; Press Release, U.S. Dep't of Educ., Final
Regulations: Borrower Defense to Repayment, Pre-dispute Arbitration,
Interest Capitalization, Total and Permanent Disability Discharges,
Closed School Discharges, Public Service Loan Forgiveness, and False
Certification Discharges (Nov. 1, 2022), https://fsapartners.ed.gov/
knowledge-center/library/
federal-registers/2022-11-01/final-regulations-borrower-defense-
repayment-
pre-dispute-arbitration-interest-capitalization-total-and-permanent-
disability-discharges-
closed-school-discharges-public-service-loan-forgiveness-and.
\99\Lowering Costs and Increasing Value for Students, Institutions,
and Taxpayers, Hearing Before the Subcomm. on Higher Educ. & Workforce
Development of the H. Comm. on Educ. & the Workforce, 118th Cong.
(2023).
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It cannot be understanded that this extreme deregulation
agenda will erode the integrity of the federal student aid
system and signal that the federal government does not have the
responsibility to protect students and taxpayers from waste,
fraud, and abuse in higher education. Committee Democrats
believe the existing accountability framework--augmented by the
ongoing improvements by the Biden Administration--is an
essential oversight mechanism for America's students and
taxpayers.
H.R. 6951 Radically Transforms Accreditation in Harmful Ways
H.R. 6951 makes sweeping reforms to the higher education
accreditation process. In general, these reforms provide ill-
informed flexibilities to both institutions and accreditors
which will erode the quality of education, insert politics and
culture wars into accreditation, and put higher education on a
path towards nothing more than glorified job training. Due to
all of these concerning accreditation provisions, Committee
Democrats expressed deep concerns with this section of H.R.
6951 and Reps. Hayes and Adams offered an amendment to rescind
these policies. However, this amendment was defeated on a
party-line vote.
ACCREDITATION TRANSPARENCY
H.R. 6951 provides one positive accreditation policy: it
establishes a set of reforms that improve clarity and
transparency for accreditors and the accreditation process.
Specifically, it requires accreditors to develop guidelines to
eliminate conflicts of interest within accrediting boards or
governing bodies. Further, it prohibits conflicts of interest
on the National Advisory Committee on Institutional Quality and
Integrity (NACIQI). One analysis showed that as of 2019, six of
the fourteen primary accrediting agencies have at least two
members serving in board positions with ``direct links to
colleges, suggesting that they lack the necessary
independence'' needed to serve as an independent reviewer.\100\
The transparency policies in H.R. 6951 will ensure that
education executives who lobby for their industry cannot also
oversee the development of quality standards for institutions
or accreditors; this recognition of conflict against the
greater public interest will surely improve the credibility and
integrity of the accreditation process.\101\
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\100\Ben Miller, Bolstering the Public Voice in Accreditation, Ctr.
for Am. Prog. (Jun. 6, 2019), https://www.americanprogress.org/article/
bolstering-public-voice-accreditation/.
\101\Robert Shireman, Good and Bad in the Republican Higher
Education Package, Accreditation Edition, The Century Found. (Jan. 29,
2024), https://tcf.org/content/commentary/good-and-bad-in-the-
republican-higher-education-package-accreditation-edition/.
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Regrettably, the rest of the accreditation provisions in
the bill are significantly concerning. They neither improve the
ability of accreditors to make determinations of institution
quality, nor have any apparent effect on college costs; their
inclusion poisons otherwise thoughtful accreditation reforms.
UNTESTED PATHS TO ACCREDITATION AND TITLE IV AID
H.R. 6951 establishes several alarming accelerated paths to
recognition for prospective accreditors and new paths for low-
quality education providers to receive Title IV aid without
accreditation. First, the bill allows states to designate their
own accrediting bodies to focus on specific workforce needs.
While this sounds viable in theory, it is unclear if states
have the capacity to implement this, given their significantly
low financial and personnel resources.\102\ It would also make
it easier for low-quality third-party entities to mask
themselves as accreditors without the Secretary having the
ability to provide robust oversight of the accreditation they
provide.\103\
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\102\Angela Boatman & Katrina Borowiec, State Authorization for
Short-Term Career-Oriented Credentials: Evidence from Five States,
SHEEO (Jul. 2021), https://sheeo.org/wp-content/uploads/2021/08/
Boatman_Borowiec.pdf.
\103\Kelly McManus, supra note 95.
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Second, H.R. 6951 creates an accelerated path to
recognition for accreditors at both the program and
institutional levels, allowing untested prospective accreditors
to gain recognition without adequately proving their ability to
evaluate institutions or programs. This new process will make
it easier for untested accreditors to provide lower quality
oversight of accreditation at the institutional level, creating
a loophole for underperforming institutions to evade
accountability and remain eligible to receive federal student
aid.\104\
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\104\Letter from Third Way to the U.S. Dep't. of Educ. Sec'y Miguel
Cardona (Jan. 9, 2024), available at https://www.thirdway.org/letter/
letter-to-the-department-of-education-on-
accreditation-rulemaking.
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Third, the bill establishes an Experimental Site Initiative
for non-accredited education providers to access Title IV aid.
Full aid access by unaccredited education providers presents a
serious risk to students and taxpayers. There are nearly 60,000
non-Title IV eligible providers,\105\ approximately 12 times
more than the number of institutions currently participating in
the Title IV federal student aid program. Although the
Experimental Site Initiative would not immediately expand
access to all 60,000 of these providers, this Initiative
signals a concerning shift in higher education policy through
the devaluing of accreditor oversight. Allowing federal aid to
be granted to unaccredited entities without requiring these
entities to meet the minimum requirements set forth by
Congress, the Department, and accreditors, opens the door to
bad actors enticing students to waste their time and money on
unvetted, poor-quality education programs. A similar pilot
program approved under the Trump Administration highlighted
significant concerns with this approach to Title IV
access.\106\ The pilot allowed institutions to partner with
non-institutional providers and permitted said providers to
access Title IV aid. The pilot raised serious concerns of which
Congress should take note: one participating institution had to
settle with students for fraud and misrepresentation, another
institution closed precipitously, and many institutions charged
unfounded premiums for low-income students to enroll in
programs offered in partnership with the non-institutional
provider.\107\ There is no room for more unscrupulous actors in
the Title IV program, and Congress should erecting bars to the
access, not flinging the doors open for them.
---------------------------------------------------------------------------
\105\Press Release, Credential Engine, Credential Confusion: New
Report Identifies More Than One Million Credentials Offered in the U.S.
across a Maze of Nearly 60,000 Providers (Dec. 7, 2022), https://
credentialengine.org/2022/12/07/credential-confusion-new-report-
identifies-more-than-one-million-credentials-offered-in-the-u-s-across-
a-maze-of-nearly-60000-providers/.
\106\Off. of Educ. Tech., Educational Quality through Innovated
Partnerships (EQUIP), U.S. Dep't. of Educ., https://tech.ed.gov/equip/
(last visited on Feb. 7, 2024).
\107\Press Release, N.Y. State A.G. Eric Schneiderman, A.G.
Schneiderman Announces $375,000 Settlement with Flatiron Computer
Coding School for Operating Without a License and for Its Employment
and Salary Claims (Oct. 13, 2017), https://ag.ny.gov/press-release/
2017/ag-schneiderman-announces-375000-settlement-flatiron-computer-
coding-school; Doug Lederman, Market Changes, Missteps and Maylhurst's
Closure, IHE (May 29, 2018), https://www.insidehighered.com/digital-
learning/article/2018/05/30/universitys-closure-and-its-
implications-online-learning-adult.
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These new pathways to federal recognition and Title IV aid
will create a hotbed of poorly regulated, low-quality programs.
In conjunction with the gutting of program integrity
regulations, these policies will significantly increase the
potential for waste, fraud, and abuse in the Title IV program,
yet again.\108\
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\108\Robert Shireman, The For-Profit College Story: Scandal,
Regulate, Forget, The Century Found. (Jan. 24, 2017) https://tcf.org/
content/report/profit-college-story-scandal-regulate-forget-repeat/.
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CULTURE WARS
H.R. 6951 further modifies requirements HEA places on
federally recognized accrediting agencies, in ways that
seriously hamper their ability to be effective arbiters of
academic quality in higher education. Current law mandates
operating procedures that any accrediting agency seeking
federal recognition must follow when making determinations of
school or program quality.\109\ The procedures currently
mandated by HEA are designed to ensure accreditors are
monitoring schools in a timely and common sense fashion to
ensure quality. This includes conducting ad hoc supervision as
needed when schools create new programs or expand to new
campuses, ensuring schools have policies around the transfer of
credit that students are aware of, and that schools have plans
in place to support students completing their education in the
event of loss of accreditation.\110\
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\109\Higher Education Act of 1965, Sec. 496, 20 U.S.C. 1099b.
\110\Id.
---------------------------------------------------------------------------
The bill adds a ``Prohibition on Litmus Tests'' under which
accrediting agencies must confirm that they do not require or
entice a school to take a stance on any ``specific partisan,
political, or ideological viewpoint or belief or set of such
viewpoints and beliefs.''\111\ At markup and in their
supporting materials,\112\ Committee Republicans claimed this
provision removes politics from academic considerations of
school quality, highlighting one particular field in general,
diversity, equity, and inclusion.
---------------------------------------------------------------------------
\111\H.R. 6951, Sec. 311(c)(5).
\112\H. Comm. on Educ. & the Workforce, supra note 36.
---------------------------------------------------------------------------
Diversity, Equity, and Inclusion (DEI) programs on college
campuses are programs designed with the recognition that most
college campuses are currently serving students from
demographics they were not initially designed to serve. While
no two DEI programs are identical, The Century Foundation has
provided a broad definition of the three key terms as they are
used in practice on college campuses.
Diversity refers to the range of different identities
within a particular space, whether it is based on race,
gender identification, sexual orientation, or other
factors; organizations seeking diversity value having a
community that represents humanity across the full
range of identities. Equity refers to the allocation of
an adequate amount of attention and/or resources toward
each identity to ensure that all groups can reach a
similar outcome; an organization seeking equity would
counter a community member's disadvantage by allocating
more resources and support toward that person. Finally,
inclusion refers to an organization's policies that
ensure its overall culture is welcoming to all
identities; an organization seeking inclusion could
create rules for conducting meetings or guidelines for
what would be considered inappropriate conversations .
. . DEI programs in colleges and universities aim to
create a campus culture that values and celebrates all
students' diverse life experiences and cultural
backgrounds. The central values of DEI are to ensure
equal access to success in higher education and provide
extra resources to specific populations to achieve
success standards similar to their peers. Universities
must provide adequate resources and tools for students
from different backgrounds to excel, considering
historical circumstances that often hindered their
access to higher education. In short, DEI programs
strive to foster an inclusive and equitable educational
environment for all students.\113\
\113\Jordan Nellums, Universities Need to Mount and Offensive for
Diversity, Equity, and Inclusion, The Century Found., Aug. 17, 2023,
https://tcf.org/content/commentary/universities-need-to-mount-an-
offensive-for-diversity-equity-and-inclusion/.
---------------------------------------------------------------------------
Republicans have not wasted a chance to denounce DEI
initiatives in industry, governmental, and educational
settings. For example, the ruling in the Harvard and UNC
affirmative action cases--in no way related to DEI--has been
used as pretext for many Republicans to declare all DEI
initiatives unconstitutional. Thirteen Republican state
attorneys general wrote a joint letter to the CEOs of the
Fortune 100 companies stating that ``diversity, equity, and
inclusion'' (DEI) efforts may amount to ``overt and pervasive
racial discrimination . . . [that] violates both state and
federal law''.\114\
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\114\Letter from Kris Kobach, Atty. Gen. of Kan. & 12 other State
Attys. Gen. to the CEOs of the Fortune 100 Companies (July 13, 2023),
https://ago.mo.gov/docs/default-source/press-
releases/corporate-racial-discrimination-multistate.pdf.
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The bill's ``litmus test'' provision also prohibits an
accrediting agency from requiring, encouraging, or coercing
schools to ``support or commit to supporting the disparate
treatment of any individual on the basis of any protected class
under Federal civil rights law, except as required by Federal
law or a court order''.\115\ This statement only makes sense in
a world where one believes DEI programs result in such
disparate treatment, as opposed to what they actually do, aim
to make campuses welcoming environments for all students.
---------------------------------------------------------------------------
\115\H.R. 6951, Sec. 311(c)(5).
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In a recent article examining this issue, the Chronicle of
Higher Education found that while accreditors are examining
college DEI policies as part of their assessment, that
examination is largely focused on determining whether schools
are living up to what the universities themselves are claiming
they are doing.\116\ Focusing on Cal Lutheran, a school whose
accreditor raised concerns around their treatment of faculty of
color (30% of the school's instructional staff) and outcomes
measures for varying student populations, the school's
President was quoted as saying they were not taking action ``.
. . because [the accreditor] says we have to, . . . . [W]e're
doing it because it's the right thing to do and it's mission-
driven.''\117\
---------------------------------------------------------------------------
\116\Eric Kelderman, The New Accountability: How accreditors are
measuring colleges' diversity, equity, and inclusion efforts, The
Chron. of Higher Educ., Apr. 3, 2023, https://www.chronicle.com/
article/the-new-accountability (``Today, six out of the seven major
institutional accreditors are developing ways to assess how colleges
serve historically underrepresented students, by examining
institutions' mission statements, the disparate outcomes between white
students and students of color, the diversity of their faculties, and
testimonies of community members about discrimination they face at the
colleges.'').
\117\Id.
---------------------------------------------------------------------------
Absent any evidence that accreditors are denying schools
accreditation based on DEI policies, Committee Democrats
believe the litmus test provision's desired effects are two-
fold. First, accreditors will be dissuaded from making any
assessment of what a school purports to do in the field of DEI.
This will allow schools to stand up Potemkin DEI policies that
promise an institutional focus on creating a campus welcoming
to all, knowing full well their accreditor will not actually
hold them accountable for these policies.
Republicans have long sought to politicize the academy,
blurring the lines between academic theory, research,
scientific method, political viewpoints, and belief.\118\ H.R.
6951 is the capstone of this effort, by inserting this blurring
of lines directly into the assessment of academic quality of a
school's programs itself. Any academic discipline that includes
a ``controversial'' view could be one that accreditors fear
assessing less they run afoul of the litmus test provision.
Accreditors are further refrained from assessing an institution
or program of study's commitment to any ideology, belief, or
viewpoint. For example, if H.R. 6951 became law, would a
program accreditor, in assessing the quality of a university
environmental science program, be forced to ignore that the
program banned the teaching of the consensus scientific belief
that man-made climate change is real because it was seen as
``political'' or merely a ``viewpoint''? The litmus test
provision will result in a chilling effect setting in among
accreditors, scaring them from taking an honest look at a
school's claims as to its mission or the quality its programs
if they wade into waters that could be considered
``controversial''.
---------------------------------------------------------------------------
\118\E.g., Luke Jones, Ohio bill would ban colleges from discussing
diversity, climate change, WKRC, May 8, 2023, https://dayton247now.com/
news/local/ohio-bill-would-ban-colleges-
discussing-diversity-climate-change-senate-bill-sb-83-controversial-
topics-banned-public-private-universities-schools-inclusion-equity-
illegal-topics-chinese-government-schools-cincinnati-ohio; Columbia L.
Sch., Sabin Ctr. for Climate Change L., Silencing Science Tracker,
https://
climate.law.columbia.edu/content/silencing-science-tracker.
---------------------------------------------------------------------------
In a final insult to the difficult pursuit of assessing
academic quality, H.R. 6951 prohibits accreditors from
``assessing the roles (including actions or statements) of
elected and appointed State and Federal officials and
legislative bodies. This provision may as well be called the
``DeSantis Derecognition'' loophole''. Upon reelection in 2022,
Florida Governor Ron DeSantis took several steps to ``reform''
higher education in Florida, taking dead aim at the New College
of Florida, a small long-acclaimed public liberal arts college
to be a ``beacon of conservatism''.\119\ If H.R. 6951 became
law, an accreditor reviewing New College in a few years, could
not assess the undeniably obvious role of state political
actors in substantially remaking the college's academic
offerings. Similarly, if a school had a DEI policy in place
that it was forced to remove due to a state law, the accreditor
could not take the role of the state legislature into account
in determining whether the change resulted in decreased
academic quality at the school.
---------------------------------------------------------------------------
\119\Patricia Mazzei, Desantis's Latest Target: A Small College of
`Free Thinkers', N.Y. Times, Feb. 14, 2023, https://www.nytimes.com/
2023/02/14/us/ron-desantis-new-college-florida.html.
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RELIGIOUS INSTITUTIONS
Religiously affiliated institutions of higher education
have been a part of our nation since its early beginnings.\120\
Data from IPEDS shows that during the 2022-2023 Academic Year,
14.5 percent of U.S. institutions of higher education were
religiously affiliated.\121\ And though the number of higher
education institutions fell by 14.4 percent from 2010 to 2020
due in part to enrollment declines of almost 10%, the number of
religiously affiliated institutions fell only 3.3% during this
same time period.\122\
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\120\Jessica Rose Daniels & Jacqueline N. Gustafson, Faith-Based
Institutions, Institutional Mission, and the Public Good, 6 Higher
Learning Research Communities, https://files.eric.ed.gov/fulltext/
EJ1132798.pdf (last visited on Feb. 12, 2024).
\121\U.S. Dep't of Educ., Integrated Postsecondary Education Data
System (IPEDS), Data Collection 2022 for Title IV-participating IHEs
with a Religious affiliation.
\122\Ricardo Azziz, Are Faith-Based Colleges in Trouble? It
Depends., Higher Ed Dive (Aug. 14, 2023), https://www.highereddive.com/
news/are-faith-based-colleges-in-trouble-it-depends/690597/.
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Under current law, accreditors must consistently apply and
enforce standards that respect an institution's mission,
including its religious mission, by basing decisions only on
the standards of accreditation.\123\ Current regulations also
prevent an accreditor from using policies of an institution
that reflect the institution's religious mission as a negative
factor in meeting certain required standards.\124\ Further,
current law provides that, in the rare event that a religiously
affiliated institution loses its accreditation due to its
religious mission and not due to other accreditation criteria,
the Secretary is required to continue the religious
institution's eligibility for Title IV funding until such time
that the institution can obtain alternative accreditation.\125\
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\123\20 U.S.C. Sec. 1099b(a)(4); 34 C.F.R. Sec. Sec. 600.18(a)-
(b)(3).
\124\34 C.F.R. Sec. 602.18(b)(3).
\125\20 U.S.C. Sec. 1099b(k). It should be noted that religiously
affiliated institutions also have the option to seek accreditation from
a religious accrediting body if that more appropriately meets their
needs. See Online Christian Colleges, Do Christian Colleges Have the
Same Accreditation Process as Public Colleges?, OCC, https://
www.onlinechristiancolleges.com/faq/do-christian-colleges-have-the-
same-accreditation-process-as-public-colleges/ (last visited Feb. 9,
2024).
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Against this backdrop, H.R. 6951 broadens protections
afforded to religious institutions of higher education in the
accreditation process and creates a special complaint procedure
for these institutions in a way that Committee Democrats
believe demeans and degrades the whole notion of accreditation.
Specifically, H.R. 6951 broadly defines religious mission to
encompass all policies or practices related to religious tenets
and beliefs, including as they relate to its policies and
practices with respect to housing, employment, curriculum,
self-governance, and student enrollment. This significantly
expands the definition of religious mission beyond what exists
in regulation as promulgated by the Trump administration in
2019,\126\ which rejected this expansive approach proposed by
Committee Republicans in the 115th Congress in H.R. 4508,
Promoting Real Opportunity, Success, and Prosperity through
Education Reform Act, in 2018.\127\ H.R. 6951 goes even further
providing that an accreditor may require a religious
institution's program of study to include all core components
required but only if those requirements are not inconsistent
with the institution's religious mission. This contrasts with
regulatory requirements, as promulgated by the Trump
administration, which allow accreditors to require that an
institution's curricula include all core components required by
the agency without exception.\128\ Taken together, the
provisions in H.R. 6951 swallow the entirety of the institution
under the definition of religious mission to effectively
prevent any meaningful oversight by accreditors of the
institution's program of study.
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\126\See 34 C.F.R. Sec. 600.2 (defining religious mission as ``[a]
published institutional mission that is approved by the governing body
of an institution of postsecondary education and that includes, refers
to, or is predicated upon religious tenets, beliefs, or teachings.'').
\127\Promoting Real Opportunity, Success, and Prosperity through
Education Reform Act, H.R. 4508, 115th Cong. (as reported by the
Committee on Education and the Workforce, Feb. 8, 2018).
\128\34 C.F.R. Sec. 600.18(b)(3).
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H.R. 6951 also creates an accreditation complaint procedure
available solely to religious institutions and establishes that
it is ``insufficient proof'' for an accreditor to offer a
defense that it was applying a neutral and generally applicable
rule in taking an adverse action against a religious
institution. As a result, H.R. 6951 creates, in effect, a
sweeping exemption for religious institutions from
accreditation, thereby allowing them to skirt accreditation
standards that apply to all other institutions.\129\ These
policies do a disservice to students at religiously affiliated
institutions who will have no way to know whether their program
of study truly meets accreditation standards.
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\129\Shireman, supra note 101.
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In summation, H.R. 6951 goes far beyond the current statute
and regulations, which ensure accreditors respect the missions
of institutions while still preserving the important function
of accreditors to confirm that programs of study meet stated
standards. Since religious institutions are currently able to
execute the requirements of the law to meet accreditation
standards while maintaining their religious identities, the
provisions in H.R. 6951 are a solution in search of a problem.
Student Success
Evidence shows that additional spending for student support
services or programs can improve graduation rates.\130\ Student
success programs consist of support such as academic advising,
financial help, career coaching and other assistance to aid
students in their degree completion.\131\ The establishment of
student success programs and initiatives are essential to
addressing the challenges and barriers students face today.
This is critical for colleges and universities seeking to serve
students coming from challenging circumstances.\132\ Some of
the obstacles noted by these students to campus success include
the lack of effective communication to them, limited
availability of resources and services on-campus, and lack of
mentorship between students and faculty.\133\ The removal of
barriers to student success should be a priority for all
colleges and universities to help ease the burden for students
as they work towards degree completion. While H.R. 6951
attempts to address several areas impacting student success and
despite a few areas of agreement, this bill still falls short
of providing significant support to students.
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\130\See, e.g., Douglas A. Webber & Ronald Ehrenberg, Do
Expenditures Other than Instructional Expenditures Affect Graduation
and Persistence Rates in American Higher Education?, 29 Econ. of Educ.
Rev. 947, 947-49 (Dec. 2010) (``Our most important finding is that
student service expenditures influence graduation and persistence rates
and their marginal effects are higher for students at institutions with
lower entrance test scores and higher Pell Grant expenditures per
student.'').
\131\See e.g: The Inst. for Stud. Access and Success, Comprehensive
Approaches to Student Success Programs (CASS) Key Lessons for State
Policymakers, 1 (2021), https://ticas.org/wp-content/uploads/2021/02/
Comprehensive-Approaches-to-Student-Success-Programs-fact-sheet.pdf.
\132\Libing Wang, Equity, Inclusion, and the Transformation of
Higher Education, UNESCO (Oct. 31, 2023), https://www.unesco.org/en/
articles/equity-inclusion-and-transformation-higher-education.
\133\Ashley Mowreader, Report: How Students See Their College
Experiences, IHE (Jan. 31, 2024), https://www.insidehighered.com/news/
student-success/
college-experience/2024/01/31/students-share-barriers-success-college.
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POSTSECONDARY STUDENT SUCCESS
H.R. 6951 codifies Postsecondary Student Success Grants
(PSSG), a program currently funded\134\ under the Fund for the
Improvement of Postsecondary Education (FIPSE)\135\. As
currently administered, it is ``designed to equitably improve
postsecondary student outcomes, including retention, transfer
(including successful transfer of completed credits), credit
accumulation, and completion, by leveraging data and
implementing, scaling, and rigorously evaluating evidence-based
activities to support data-driven decisions and actions by
institutional leaders committed to inclusive student
success.''\136\ Currently, PSSG is funded at $45 million,\137\
which is the authorization level in the bill.
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\134\Though there is no current authorization for the PSSG,
Congress first provided funds for the program in fiscal year (FY) 2022
appropriations and provided additional funding for FY 2023.
Consolidated Appropriations Act, Pub. L. No. 117-103, 136 Stat. 49
(2022); Consolidated Appropriations Act, Pub. L. No. 117-328, 136 Stat.
4459 (2023). Additional funding awards can be found on the Department
of Education's website here: https://www2.ed.gov/programs/pssp/
awards.html.
\135\20 U.S.C. Sec. 1138.
\136\U.S. Dep't of Educ., Postsecondary Student Success Program,
https://www2.ed.gov/
programs/pssp/index.html (last visited on Feb. 12, 2024).
\137\Explanatory Statement on Appropriations Act 2023, 160, Sen.
Comm. on Appropriations, https://www.appropriations.senate.gov/imo/
media/doc/Division%20H%20-%20LHHS%20Statement
%20FY23.pdf (last visited Feb. 12, 2024).
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It is worth noting, however, that the bill eliminates four
unfunded FIPSE programs that had the potential to assist school
in student success planning, support single-parent students
promote green construction on campuses, and provide scholarship
support for family members of veterans and active-duty military
members. As these programs have never received sustained
funding, striking them from law does not save taxpayers money.
Similarly, the bill eliminates the currently inactive FIPSE
governing board.
Committee Democrats support the codification of the PSSG It
is also worth noting that Congressional Democrats included $500
million for ``Retention and Completion'' grants, a similar
program to PSSG, in the Build Back Better Act in the 117th
Congress.\138\
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\138\Inflation Reduction Act of 2022, Pub. L. No. 117-169,
Sec. 791.
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CREDIT TRANSFER REFORMS
Committee Democrats were pleased to see that H.R. 6951
includes the bipartisan Reverse Transfer Efficiency Act,
introduced by Reps. Joe Neguse (D-CO) and John Curtis (R-UT),
which amends the Family Education Rights and Privacy Act
(FERPA) to allow institutions to release education records to
another institution to facilitate awarding students with
credentials for previous education they have completed.\139\
This equity-centered policy will ensure students who have not
completed their bachelor's degree can receive associate-level
credentials they have deserved through completed coursework.
This policy has significant bipartisan, bicameral support.\140\
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\139\Press Release, Rep. Joe Neguse, Rep. Neguse and Bipartisan
Lawmakers Introduce Legislation to Help Students Receive a Degree or
Certificate (Jun. 22, 2023), https://neguse.house.gov/media/press-
releases/rep-neguse-andbipartisan-lawmakers-introduce-legislation-
help-students.
\140\Press Release, Sen. Warner, Senators Introduce Bicameral,
Bipartisan Bill to Help Students `Reverse' Transfer Credits from Four-
Year Universities form Four-Year Universities to Community Colleges
(Jul. 19, 2021), https://www.warner.senate.gov/public/index.cfm/2021/7/
senators-introduce-bicameral-bipartisan-bill-to-help-students-reverse-
transfer-credits-from-four-year-universities-to-community-colleges.
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H.R. 6951 requires institutions participating in Title IV
programs to publicly disclose their transfer of credit
policies. This transparency is welcome, but concerningly, it
also prohibits institutions participating in Title IV programs
from denying credits earned at other institutions solely based
on the transferring institution's accreditor. While policy
disclosures are beneficial, the prohibition removes the
flexibility for institutions to determine if transfer students
have received quality education aligned with their
standards.\141\ This will be particularly concerning when
institutions have no mechanism to reject credits provided by
low-quality for-profit or unaccredited institutions. Committee
Democrats believe the better approach to strengthen transfer
pathways is through leveraging credit articulation agreements
between schools, which creates alignment of credits across
institutions and provides students with clear, standardized
information during the transfer process.\142\
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\141\Mark Becker, supra note 20.
\142\Seth Marc Kamen et al., Guide to Best Practices: Articulation
Agreements, AACRAO, https://www.aacrao.org/docs/default-source/
signature-initiative-docs/trending-topic-docs/transfer/aacrao-
articulation-agreement-final_aacraocover.pdf (last visited on Feb. 12,
2024).
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Concerns From the Higher Education Community
In the months since the Committee considered H.R. 6951, the
higher education community has had the opportunity to analyze
the potential impact of the proposed policies, and the
conclusions signal a dark future for both college affordability
and consumer protections.
Despite stakeholders' expressed interest in some of the
bipartisan provisions of the bill, stakeholders were not
supportive of how drastic H.R. 6951 alters the federal student
aid landscape. For example, the American Council on Education
(ACE) conducted analysis that found severe flaws in the
proposed risk-sharing policy, with an estimated $1.6 billion
being taken away from institutions, despite the infusion of
PROMISE grant funds.\143\ ACE anticipates that the risk-sharing
proposal would be ``most consequential for institutions that
enroll higher percentages of low-income students.''\144\ The
Association of Public and Land Grant Universities (APLU) also
expressed concerns that institutions in states with low state
appropriations for higher education would also be
disproportionally harmed by risk-sharing.\145\
---------------------------------------------------------------------------
\143\Ted Mitchell, supra note 25.
\144\Id.
\145\Mark Becker, supra note 20.
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Further, an analysis by The Institute for College Access
and Success (TICAS) found that the proposed repayment plan
changes in H.R. 6951 would drastically increase payments for
borrowers, require borrowers to pay more in total than under
current IDR plans, and force borrowers to remain in repayment
longer than current IDR plans.\146\ TICAS analysis shows that
an average borrower who graduated with a bachelor's degree
would have a monthly payment nearly triple what it would be
under the SAVE plan, and an average borrower who did not
complete their bachelor's degree would pay nine times as much
over the lifetime of their loan compared to the SAVE plan.\147\
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\146\Michele Shepard & Ellie Bruecker, House Republicans' Proposed
Student Loan Repayment Plan Would Increase Costs for Borrowers, TICAS
(Feb. 21, 2024), https://ticas.org/affordability-2/house-republicans-
proposed-student-loan-repayment-plan-would-increase-costs-for-
borrowers/.
\147\Id.
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The American Association of Universities (AAU) also
expressed significant apprehension about capping financial aid
at the median cost of college because the ``change would . . .
limit access for many students, particularly low income
students, who may not have the financial capacity to make up
additional costs beyond borrowing limits. Median costs may
[also] not cover the most suitable or highest quality program
for any given student.''\148\ By eliminating the SAVE plan and
capping federal student aid, low-income students would face
serious challenges affording higher education if H.R. 6951 were
enacted.
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\148\Letter from Barbara Snyder, President, Assoc. of Am. Univs.,
to Speaker Johnson & Minority Leader Jeffries (June 18, 2024),
available at https://www.aau.edu/key-issues/aau-submits-
letter-opposition-hr-6951-college-cost-reduction-act.
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Consumer protection advocates are also very worried about
the impact of repealing basic student and borrower protections
that have widespread support. For example, TICAS argues the
mass repeal of consumer protection regulations ``would undo
years of progress and bipartisan effort to prevent fraud and
hold colleges accountable.''\149\ Arnold Ventures also
emphasizes that this repeal undermines the goal of H.R. 6951 to
``improve student outcomes and leave[s] students vulnerable to
waste, fraud and abuse.''\150\
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\149\Press Release, TICAS, The College Cost Reduction Act Would
Make Higher Education Riskier and Loans Less Affordable (September 5,
2024), https://ticas.org/affordability-2/the-
college-cost-reduction-act-would-make-higher-education-riskier-and-
loans-less-affordable/.
\150\Kelly McManus, supra note 95.
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These concerns expressed across the higher education
community are underscored by an alarming analysis from the
nonpartisan Congressional Budget Office (CBO), which confirms
that H.R. 6951 would make drastic, long-lasting cuts across
higher education. The CBO estimates the bill would eliminate
$185.5 billion in higher education spending, including over
$153 billion of cuts to federal student aid alone.\151\ That
means fewer resources to students who need support to attend
college. However, H.R. 6951 would increase taxpayer spending on
proven low-quality educational programs that have poor outcome
or utilize predatory practices. Through the repeal of the
gainful employment and financial transparency regulations,
taxpayers would be on the hook for $9.1 billion of federal
student aid going towards programs that do not adequately
prepare students for the workforce.\152\ Further, the repeal of
the bipartisan 90/10 rule that protects veterans from fraud
would increase taxpayer spending by $2 billion.\153\ Through
these analyses, it is clear that Republicans' plan to reduce
the cost of college would actually make it more difficult for
low-income students to afford high-quality higher education.
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\151\Congressional Budget Office, H.R. 6951, College Cost Reduction
Act, https://www.cbo.gov/system/files/2024-05/hr6951.pdf.
\152\ Id. at 12.
\153\ Id. at 12.
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Democratic Amendments Offered During Markup of H.R. 6951
In total, Committee Democrats put forward 31 amendments to
improve the bill. Committee Republicans touted H.R. 6951 as a
bill that would provide meaningful initiatives to support
college student completion.\154\ Unfortunately, Committee
Republicans also rejected several proposals that would do
exactly that. In addition to the amendments described above,
Democrats offered additional amendments, including amendments
to support students with disabilities, support on-campus child
care, provide federal aid to students of the Northern Mariana
Islands and American Samoa, and protect comprehensive
healthcare--all of which would assist in improving student
college completion. Committee Democrats reiterate that we stand
ready to partner with Committee Republicans make meaningful
strides to implement evidence-based strategies to increase
higher education student success for all students.
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\154\ H. Comm. on Educ. & the Workforce, supra note 68.
Amendment Offered By Description Action Taken
#1 Ms. Hayes Doubles the Pell grant and allows Defeated
students who receive federal benefits
(SNAP, Medicaid) to automatically
qualify for the maximum Pell award and
receive an additional award of up to
$1,500 above the maximum Pell.
#2 Mr. DeSaulnier Increases the semesters of eligibility Defeated
for Pell Grants from 12 semesters to 18
semesters.
#3 Ms. Stevens Allows students to use Pell grants for Defeated
their post-grad Defeated education and
expands their lifetime Pell eligibility.
#4 Ms. Wilson Expands access to subsidized loans and Defeated
improves loan rehabilitation.
#5 Mr. Courtney Adds reforms to streamline and improve Defeated
the Public Service Loan Forgiveness
Program.
#6 Mr. Scott Lower the interest rates on all student Defeated
loans by tying rates to the federal 10-
year treasury note with a cap at 5
percent. Also allows borrowers to
refinance their old loans to access
better interest rates.
#7 Ms. Leger-Fernandez Strikes PROMISE and replaces with Defeated
America's College Promise Act.
#8 Mr. Takano Strikes the repeal of the 90/10 and the Defeated
bipartisan 90/10 veterans loophole fix.
#9 Ms. Wilson Strikes the repeal of gainful employment Defeated
#10 Ms. Manning Strikes the repeal of the Biden Defeated
Administration's Changes in Ownership
rule.
#11 Ms. McBath Strikes the repeal of Closed School Defeated
Discharge Rule.
#12 Ms. Jayapal Strikes repeal of borrower's defense. Defeated
#14 Ms. Omar Reauthorizes the CCAMPIS program. Defeated
#15 Ms. Bonamici Adds the Respond, Innovate, Succeed, Defeated
Defeated and Empower (RISE) Act.
#16 Ms. Adams Eliminate social security garnishment for Defeated
defaulted loans.
#17 Mr. Scott Rule of construction to ensure nothing in Defeated
this bill shall prevent a graduate
student employee from joining a union
#18 Ms. Manning Rule of construction that nothing shall Defeated
prevent an institution from providing
information on contraception to
students.
#19 Mr. Bowman Rule of construction that nothing shall Defeated
prevent an institution from teaching any
academic subjects including gender
studies, African-American history,
Latino history, Asian American, Native
Hawaiian, and Pacific Islander history,
LGBTQ+ history, Jewish history, or
women's history.
#21 Mr. Scott Strikes provision limiting the Defeated
Secretary's ability to regulate on
accountability rules.
#22 Ms. Omar Strike the provision that prohibits the Defeated
Secretary from modifying any existing
repayment plans or developing any new
repayment plans.
#24 Ms. Adams Insert Student Loan Rehabilitation and Defeated
Credit Score Improvement Act.
#26 Ms. Hayes & Ms. Adams Strike accreditation provisions. Defeated
#27 Mr. Takano Require OIG report to ensure that the Defeated
bill shall not take effect until the
U.S. Department of Education Office of
Inspector General, in consultation with
U.S. Department of Veterans Affairs
Office of Inspector General, certifies
that such implementation shall not
result in fraud and abuse of students
who are veterans.
#33 Mr. Bowman Prohibiting the influence of legacy or Defeated
donor status in admissions
#62 Ms. Hayes Allows teachers' five years of classroom Defeated
service to qualify for both the Stafford
Student Loan Forgiveness (SSLF) program
and toward the ten years of loan
payments required for Public Service
Loan Forgiveness (PSLF) program.
#67 Ms. Omar Strikes the section which eliminates the Defeated
Parent PLUS and Graduate PLUS loans for
all future borrowers
#68 Ms. Omar Strikes the section that modifies the Defeated
Direct Loan program into two repayment
plans
#71 Ms. Leger-Fernandez Directs the Department of Education to Defeated
create a personal finance education
portal for voluntary use by recipients
of federal financial aid. The portal
must be on a centralized and publicly
available website and include
information on personal finance
concepts.
#86 Ms. Jayapal Amends the Postsecondary Student Data Defeated
System to include and disaggregate data
on individuals who have applied, and are
admitted or waitlisted at each
institution.
#87 Ms. Jayapal Allows the Secretary to consider students Defeated
in high costs-of-living areas when
determining the median cost of college
attendance.
#33 Mr. Sablan Establishes a grant program to cover the Defeated
difference between in-state tuition and
out-of-state tuition for students who
are from either the Northern Mariana
Islands or American Samoa and who
Defeated attend a public institution of
higher education in a different state or
territory.
Conclusion
Admittedly, H.R. 6951 includes several strong policies
that could improve transparency in higher education and begin
addressing how to improve college student success. However,
Committee Democrats were disappointed to see that these
bipartisan, common-sense policies were the exception, and not
the rule. H.R. 6951 includes countless harmful policies that
will erode the integrity of the Title IV program and the U.S.
higher education system as a whole. Regressive student loan,
accreditation, and accountability provisions, coupled with no
investments in the Pell Grant program, show that Committee
Republicans are not seriously interested in meaningfully
lowering the cost of college or improving student outcomes for
students. Committee Democrats cannot support legislation that
will leave students and borrowers worse off. For this and the
reasons stated above, Committee Democrats unanimously opposed
H.R. 6951 when the Committee on Education and the Workforce
considered it on January 31, 2024. We strongly urge the House
of Representatives to do the same.
Robert C. ``Bobby'' Scott,
Ranking Member.
Gregorio Kilili Camacho Sablan,
Frederica S. Wilson,
Mark DeSaulnier,
Members of Congress.