[106th Congress Public Law 420]
[From the U.S. Government Printing Office]


<DOC>
[DOCID: f:publ420.106]


[[Page 114 STAT. 1867]]

Public Law 106-420
106th Congress

                                 An Act


 
To enhance protections against <<NOTE: Nov. 1, 2000 -  [S. 1455]>> fraud 
 in the offering of financial assistance for college education, and for 
                             other purposes.

    Be it enacted by the Senate and House of <<NOTE: College Scholarship 
Fraud Prevention Act of 2000.>> Representatives of the United States of 
America in Congress assembled,

SECTION 1. <<NOTE: 20 USC 1001 note.>> SHORT TITLE.

    This Act may be cited as the ``College Scholarship Fraud Prevention 
Act of 2000''.

SEC. 2. <<NOTE: 20 USC 1092d note.>> FINDINGS.

    Congress makes the following findings:
            (1) A substantial amount of fraud occurs in the offering of 
        college education financial assistance services to consumers.
            (2) Such fraud includes the following:
                    (A) Misrepresentations regarding the provision of 
                sources from which consumers may obtain financial 
                assistance (including scholarships, grants, loans, 
                tuition, awards, and other assistance) for purposes of 
                financing a college education.
                    (B) Misrepresentations regarding the provision of 
                portfolios of such assistance tailored to the needs of 
                specific consumers.
                    (C) Misrepresentations regarding the pre-selection 
                of students as eligible to receive such assistance.
                    (D) Misrepresentations that such assistance will be 
                provided to consumers who purchase specified services 
                from specified entities.
                    (E) Misrepresentations regarding the business 
                relationships between particular entities and entities 
                that award or may award such assistance.
                    (F) Misrepresentations regarding refunds of 
                processing fees if consumers are not provided specified 
                amounts of such assistance, and other misrepresentations 
                regarding refunds.
            (3) In 1996, the Federal Trade Commission launched ``Project 
        Scholarscam'', a joint law enforcement and consumer education 
        campaign directed at fraudulent purveyors of so-called 
        ``scholarship services''.
            (4) Despite the efforts of the Federal Trade Commission, 
        colleges and universities, and nongovernmental organizations, 
        the continued lack of awareness about scholarship fraud permits 
        a significant amount of fraudulent activity to occur.

[[Page 114 STAT. 1868]]

SEC. 3. SENTENCING <<NOTE: 28 USC 994 note.>> ENHANCEMENT FOR 
                    HIGHER EDUCATION FINANCIAL ASSISTANCE FRAUD.

    Pursuant to its authority under section 994(p) of title 28, United 
States Code, the United States Sentencing Commission shall amend the 
Federal sentencing guidelines in order to provide for enhanced penalties 
for any offense involving fraud or misrepresentation in connection with 
the obtaining or providing of, or the furnishing of information to a 
consumer on, any scholarship, grant, loan, tuition, discount, award, or 
other financial assistance for purposes of financing an education at an 
institution of higher education, such that those penalties are 
comparable to the base offense level for misrepresentation that the 
defendant was acting on behalf of a charitable, educational, religious, 
or political organization, or a government agency.
SEC. 4. EXCLUSION OF DEBTS RELATING TO COLLEGE FINANCIAL 
                    ASSISTANCE SERVICES FRAUD FROM PERMISSIBLE 
                    EXEMPTIONS OF PROPERTY FROM ESTATES IN 
                    BANKRUPTCY.

    Section 522(c) of title 11, United States Code, is amended--
            (1) by striking ``or'' at the end of paragraph (2);
            (2) by striking the period at the end of paragraph (3) and 
        inserting ``; or''; and
            (3) by adding at the end the following:
            ``(4) a debt in connection with fraud in the obtaining or 
        providing of any scholarship, grant, loan, tuition, discount, 
        award, or other financial assistance for purposes of financing 
        an education at an institution of higher education (as that term 
        is defined in section 101 of the Higher Education Act of 1965 
        (20 U.S.C. 1001)).''.
SEC. 5. SCHOLARSHIP <<NOTE: 20 USC 1092d.>> FRAUD ASSESSMENT AND 
                    AWARENESS ACTIVITIES.

    (a) Annual Report on Scholarship Fraud.--
            (1) Requirement.--The Attorney General and the Secretary of 
        Education, in conjunction with the Federal Trade Commission, 
        shall jointly submit to Congress each year a report on fraud in 
        the offering of financial assistance for purposes of financing 
        an education at an institution of higher education. Each report 
        shall contain an assessment of the nature and quantity of 
        incidents of such fraud during the one-year period ending on the 
        date of such report.
            (2) <<NOTE: Deadline.>>  Initial report.--The first report 
        under paragraph (1) shall be submitted not later than 18 months 
        after the date of the enactment of this Act.

    (b) <<NOTE: Internet.>>  National Awareness Activities.--The 
Secretary of Education shall, in conjunction with the Federal Trade 
Commission, maintain a scholarship fraud awareness site on the Internet 
web site of the Department of Education. The scholarship fraud awareness 
site may include the following:
            (1) Appropriate materials from the Project Scholarscam 
        awareness campaign of the Commission, including examples of 
        common fraudulent schemes.
            (2) A list of companies and individuals who have been 
        convicted of scholarship fraud in Federal or State court.
            (3) An Internet-based message board to provide a forum for 
        public complaints and experiences with scholarship fraud.

[[Page 114 STAT. 1869]]

            (4) An electronic comment form for individuals who have 
        experienced scholarship fraud or have questions about 
        scholarship fraud, with appropriate mechanisms for the transfer 
        of comments received through such forms to the Department and 
        the Commission.
            (5) Internet links to other sources of information on 
        scholarship fraud, including Internet web sites of appropriate 
        nongovernmental organizations, colleges and universities, and 
        government agencies.
            (6) An Internet link to the Better Business Bureau in order 
        to assist individuals in assessing the business practices of 
        other persons and entities.
            (7) Information on means of communicating with the Federal 
        Student Aid Information Center, including telephone and Internet 
        contact information.

    Approved November 1, 2000.

LEGISLATIVE HISTORY--S. 1455:
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CONGRESSIONAL RECORD:
                                                        Vol. 145 (1999):
                                    Nov. 4, considered and passed 
                                        Senate.
                                                        Vol. 146 (2000):
                                    Sept. 25, considered and passed 
                                        House.

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