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S. 2204 (113th): Proprietary Education Oversight Coordination Improvement Act

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The text of the bill below is as of Apr 3, 2014 (Introduced). The bill was not enacted into law.

II

113th CONGRESS

2d Session

S. 2204

IN THE SENATE OF THE UNITED STATES

April 3, 2014

(for himself, Mr. Harkin, and Mr. Brown) introduced the following bill; which was read twice and referred to the Committee on Health, Education, Labor, and Pensions

A BILL

To establish the Proprietary Education Oversight Coordination Committee.

1.

Short title

This Act may be cited as the Proprietary Education Oversight Coordination Improvement Act .

2.

Definitions

In this Act:

(1)

Executive officer

The term executive officer, with respect to a proprietary institution of higher education that is a publicly traded corporation, means—

(A)

the president of such corporation;

(B)

a vice president of such corporation who is in charge of a principal business unit, division, or function of such corporation, such as sales, administration, or finance; or

(C)

any other officer or person who performs a policy-making function for such corporation.

(2)

Federal education assistance

The term Federal education assistance means any Federal financial assistance provided under any Federal law through a grant, a contract, a subsidy, a loan, a guarantee, an insurance, or any other means to a proprietary institution of higher education, including Federal financial assistance that is disbursed or delivered to such institution, on behalf of a student, or to a student to be used to attend such institution, except that such term shall not include any monthly housing stipend provided under chapter 33 of title 38, United States Code.

(3)

Private education loan

The term private education loan—

(A)

means a loan provided by a private educational lender (as defined in section 140(a) of the Truth in Lending Act ( 15 U.S.C. 1650(a) )) that—

(i)

is not made, insured, or guaranteed under title IV of the Higher Education Act of 1965 (20 U.S.C. 1070 et seq.);

(ii)

is issued expressly for postsecondary educational expenses to a borrower, regardless of whether the loan is provided through the educational institution that the subject student attends or directly to the borrower from the private educational lender (as so defined); and

(iii)

is not made, insured, or guaranteed under title VII or title VIII of the Public Health Service Act ( 42 U.S.C. 292 et seq. and 296 et seq.); and

(B)

does not include an extension of credit under an open-end consumer credit plan, a reverse mortgage transaction, a residential mortgage transaction, or any other loan that is secured by real property or a dwelling.

(4)

Proprietary institution of higher education

The term proprietary institution of higher education has the meaning given the term in section 102(b) of the Higher Education Act of 1965 (20 U.S.C. 1002(b)).

(5)

Recruiting and marketing activities

(A)

In general

Except as provided in subparagraph (B), the term recruiting and marketing activities means activities that consist of the following:

(i)

Advertising and promotion activities, including paid announcements in newspapers, magazines, radio, television, billboards, electronic media, naming rights, or any other public medium of communication, including paying for displays or promotions at job fairs, military installations, or college recruiting events.

(ii)

Efforts to identify and attract prospective students, either directly or through a contractor or other third party, including contact concerning a prospective student’s potential enrollment or application for a grant, a loan, or work assistance under title IV of the Higher Education Act of 1965 (20 U.S.C. 1070 et seq.) or participation in preadmission or advising activities, including—

(I)

paying employees responsible for overseeing enrollment and for contacting potential students in-person, by phone, by email, or by other internet communications regarding enrollment; and

(II)

soliciting an individual to provide contact information to an institution of higher education, including through websites established for such purpose and funds paid to third parties for such purpose.

(iii)

Such other activities as the Secretary of Education may prescribe, including paying for promotion or sponsorship of education or military-related associations.

(B)

Exceptions

Any activity that is required as a condition of receipt of funds by an institution under title IV of the Higher Education Act of 1965 (20 U.S.C. 1070 et seq.), is specifically authorized under such title, or is otherwise specified by the Secretary of Education, shall not be considered to be a recruiting and marketing activity under subparagraph (A).

(6)

State approval agency

The term State approval agency means any State agency that determines whether an institution of higher education is legally authorized within such State to provide a program of education beyond secondary education.

(7)

Veterans service organization

The term veterans service organization means an organization recognized by the Secretary of Veterans Affairs for the representation of veterans under section 5902 of title 38, United States Code.

3.

Establishment of Committee

(a)

Establishment

There is established a committee to be known as the Proprietary Education Oversight Coordination Committee (referred to in this Act as the Committee ) and to be composed of the head (or the designee of such head) of each of the following Federal entities:

(1)

The Department of Education.

(2)

The Consumer Financial Protection Bureau.

(3)

The Department of Justice.

(4)

The Securities and Exchange Commission.

(5)

The Department of Defense.

(6)

The Department of Veterans Affairs.

(7)

The Federal Trade Commission.

(8)

The Department of Labor.

(9)

The Internal Revenue Service.

(10)

At the discretion of the President, any other relevant Federal agency or department.

(b)

Purposes

The Committee shall have the following purposes:

(1)

Coordinate Federal oversight of proprietary institutions of higher education to—

(A)

improve enforcement of applicable Federal laws and regulations;

(B)

increase accountability of proprietary institutions of higher education to students and taxpayers; and

(C)

ensure the promotion of quality education programs.

(2)

Coordinate Federal activities to protect students from unfair, deceptive, abusive, unethical, fraudulent, or predatory practices, policies, or procedures of proprietary institutions of higher education.

(3)

Encourage information sharing among agencies related to Federal investigations, audits, or inquiries of proprietary institutions of higher education.

(4)

Increase coordination and cooperation between Federal and State agencies, including State Attorneys General and State approval agencies, with respect to improving oversight and accountability of proprietary institutions of higher education.

(5)

Develop best practices and consistency among Federal and State agencies in the dissemination of consumer information regarding proprietary institutions of higher education to ensure that students, parents, and other stakeholders have easy access to such information.

(c)

Membership

(1)

Designees

For any designee described in subsection (a), the head of the member entity shall appoint a high-level official who exercises significant decisionmaking authority for the oversight or investigatory activities and responsibilities related to proprietary institutions of higher education of the respective Federal entity of such head.

(2)

Chairperson

The Secretary of Education or the designee of such Secretary shall serve as the Chairperson of the Committee.

(3)

Committee support

The head of each entity described in subsection (a) shall ensure appropriate staff and officials of such entity are available to support the Committee-related work of such entity.

4.

Meetings

(a)

Committee meetings

The members of the Committee shall meet regularly, but not less than once during each quarter of each fiscal year, to carry out the purposes described in section 3(b).

(b)

Meetings with State agencies and stakeholders

The Committee shall meet not less than once each fiscal year, and shall otherwise interact regularly, with State Attorneys General, State approval agencies, veterans service organizations, and consumer advocates to carry out the purposes described in section 3(b).

5.

Report

(a)

In general

The Committee shall submit a report each year to the Committee on Health, Education, Labor, and Pensions of the Senate, the Committee on Education and the Workforce of the House of Representatives, and any other committee of Congress that the Committee determines appropriate.

(b)

Public access

The report described in subsection (a) shall be made available to the public in a manner that is easily accessible to parents, students, and other stakeholders in accordance with the best practices developed under section 3(b)(5).

(c)

Contents

(1)

In general

The report shall include—

(A)

an accounting of any action (as defined in paragraph (3)) taken by the Federal Government, any member entity of the Committee, or a State—

(i)

to enforce Federal or State laws and regulations applicable to proprietary institutions of higher education;

(ii)

to hold proprietary institutions of higher education accountable to students and taxpayers; and

(iii)

to promote quality education programs;

(B)

a summary of complaints against each proprietary institution of higher education received by any member entity of the Committee;

(C)

the data described in paragraph (2) and any other data relevant to proprietary institutions of higher education that the Committee determines appropriate; and

(D)

recommendations of the Committee for such legislative and administrative actions as the Committee determines are necessary to—

(i)

improve enforcement of applicable Federal laws;

(ii)

increase accountability of proprietary institutions of higher education to students and taxpayers; and

(iii)

ensure the promotion of quality education programs.

(2)

Data

(A)

Industry-wide data

The report shall include data on all proprietary institutions of higher education that consists of information regarding—

(i)

the total amount of Federal education assistance that proprietary institutions of higher education received for the previous academic year, and the percentage of the total amount of Federal education assistance provided to institutions of higher education (as defined in section 102 of the Higher Education Act of 1965 ( 20 U.S.C. 1002 )) for such previous academic year that reflects such total amount of Federal education assistance provided to proprietary institutions of higher education for such previous academic year;

(ii)

the total amount of Federal education assistance that proprietary institutions of higher education received for the previous academic year, disaggregated by—

(I)

educational assistance in the form of a loan provided under title IV of the Higher Education Act of 1965 (20 U.S.C. 1070 et seq.);

(II)

educational assistance in the form of a grant provided under title IV of the Higher Education Act of 1965 (20 U.S.C. 1070 et seq.);

(III)

educational assistance provided under chapter 33 of title 38, United States Code;

(IV)

tuition assistance provided under section 2007 of title 10, United States Code;

(V)

assistance provided under section 1784a of title 10, United States Code; and

(VI)

Federal education assistance not described in subclauses (I) through (V);

(iii)

the percentage of the total amount of Federal education assistance provided to institutions of higher education (as defined in section 102 of the Higher Education Act of 1965 ( 20 U.S.C. 1002 )) for such previous academic year for each of the programs described in subclauses (I) through (V) of clause (ii) that reflects such total amount of Federal education assistance provided to proprietary institutions of higher education for such previous academic year for each of such programs;

(iv)

the average retention and graduation rates for students pursuing a degree at proprietary institutions of higher education;

(v)

the average cohort default rate (as defined in section 435(m) of the Higher Education Act of 1965 ( 20 U.S.C. 1085(m) ) for proprietary institutions of higher education, and an annual list of cohort default rates (as defined in such section) for all proprietary institutions of higher education;

(vi)

for careers requiring the passage of a licensing examination—

(I)

the passage rate of individuals who attended a proprietary institution of higher education taking such examination to pursue such a career; and

(II)

the passage rate of all individuals taking such exam to pursue such a career; and

(vii)

the use of private education loans at proprietary institutions of higher education that includes—

(I)

an estimate of the total number of such loans; and

(II)

information on the average debt, default rate, and interest rate of such loans.

(B)

Data on publicly traded corporations

(i)

In general

The report shall include data on proprietary institutions of higher education that are publicly traded corporations, consisting of information on—

(I)

any pre-tax profit of such proprietary institutions of higher education—

(aa)

reported as a total amount and an average percent of revenue for all such proprietary institutions of higher education; and

(bb)

reported for each such proprietary institution of higher education;

(II)

revenue for such proprietary institutions of higher education spent on recruiting and marketing activities, student instruction, and student support services, reported—

(aa)

as a total amount and an average percent of revenue for all such proprietary institutions of higher education; and

(bb)

for each such proprietary institution of higher education;

(III)

total compensation packages of the executive officers of each such proprietary institution of higher education;

(IV)

a list of institutional loan programs offered by each such proprietary institution of higher education that includes information on the default and interest rates of such programs; and

(V)

the data described in clauses (ii) and (iii).

(ii)

Disaggregated by ownership

The report shall include data on proprietary institutions of higher education that are publicly traded corporations, disaggregated by corporate or parent entity, brand name, and campus, consisting of—

(I)

the total cost of attendance for each program at each such proprietary institution of higher education, and information comparing such total cost for each such program to—

(aa)

the total cost of attendance for each program at each public institution of higher education; and

(bb)

the average total cost of attendance for each program at all institutions of higher education, including such institutions that are public and such institutions that are private;

(II)

total enrollment, dis­ag­gre­gat­ed by—

(aa)

individuals enrolled in programs taken online; and

(bb)

individuals enrolled in programs that are not taken online;

(III)

the average retention and graduation rates for students pursuing a degree at such proprietary institutions of higher education;

(IV)

the percentage of students enrolled in such proprietary institutions of higher education who complete a program of such an institution within—

(aa)

the standard period of completion for such program; and

(bb)

a period that is 150 percent of such standard period of completion;

(V)

the total cost of attendance for each program at such proprietary institutions of higher education;

(VI)

the average cohort default rate, as defined in section 435(m) of the Higher Education Act of 1965 (20 U.S.C. 1085(m)), for such proprietary institutions of higher education, and an annual list of cohort default rates (as defined in such section) for all proprietary institutions of higher education;

(VII)

the median educational debt incurred by students who complete a program at such a proprietary institution of higher education;

(VIII)

the median educational debt incurred by students who start but do not complete a program at such a proprietary institution of higher education;

(IX)

the job placement rate for students who complete a program at such a proprietary institution of higher education and the type of employment obtained by such students;

(X)

for careers requiring the passage of a licensing examination, the rate of individuals who attended such a proprietary institution of higher education and passed such an examination; and

(XI)

the number of complaints from students enrolled in such proprietary institutions of higher education who have submitted a complaint to any member entity of the Committee.

(iii)

Department of Defense and Veterans Affairs assistance

(I)

In general

To the extent practicable, the report shall provide information on the data described in clause (ii) for individuals using, to pay for the costs of attending such a proprietary institution of higher education, Federal education assistance provided under—

(aa)

chapter 33 of title 38, United States Code;

(bb)

section 2007 of title 10, United States Code; and

(cc)

section 1784a of title 10, United States Code.

(II)

Revenue

The report shall provide information on the revenue of proprietary institutions of higher education that are publicly traded corporations that is derived from the Federal education assistance described in subclause (I).

(C)

Comparison data

To the extent practicable, the report shall provide information comparing the data described in subparagraph (B) for proprietary institutions of higher education that are publicly traded corporations with such data for public institutions of higher education disaggregated by State.

(3)

Accounting of any action

For the purposes of paragraph (1)(A), the term any action shall include—

(A)

a complaint filed by a Federal or State agency in a local, State, Federal, or tribal court;

(B)

an administrative proceeding by a Federal or State agency involving noncompliance of any applicable law or regulation; or

(C)

any other review, audit, or administrative process by any Federal or State agency that results in a penalty, suspension, or termination from any Federal or State program.

6.

For-profit college warning list for parents and students

(a)

In general

Each academic year, the Committee shall publish a list to be known as the For-Profit College Warning List for Parents and Students to be comprised of proprietary institutions of higher education—

(1)

that have engaged in illegal activity during the previous academic year as determined by a Federal or State court;

(2)

that have entered into a settlement resulting in a monetary payment;

(3)

that have had any higher education program withdrawn or suspended; or

(4)

for which the Committee has sufficient evidence of widespread or systemic unfair, deceptive, abusive, unethical, fraudulent, or predatory practices, policies, or procedures that pose a threat to the academic success, financial security, or general best interest of students.

(b)

Determinations

In making a determination pursuant to subsection (a)(4), the Committee may consider evidence that includes the following:

(1)

Any consumer complaint collected by any member entity of the Committee.

(2)

Any complaint filed by a Federal or State agency in a Federal, State, local, or tribal court.

(3)

Any administrative proceeding by a Federal or State agency involving noncompliance of any applicable law or regulation.

(4)

Any other review, audit, or administrative process by any Federal or State agency that results in a penalty, suspension, or termination from any Federal or State program.

(5)

Data or information submitted by a proprietary institution of higher education to any accrediting agency or association recognized by the Secretary of Education pursuant to section 496 of the Higher Education Act of 1965 (20 U.S.C. 1099b) or the findings or adverse actions of any such accrediting agency or association.

(6)

Information submitted by a proprietary institution of higher education to any member entity of the Committee.

(7)

Any other evidence that the Committee determines relevant in making a determination pursuant to subsection (a)(4).

(c)

Publication

Not later than July 1 of each fiscal year, the Committee shall publish the list described in subsection (a) prominently and in a manner that is easily accessible to parents, students, and other stakeholders in accordance with any best practices developed under section 3(b)(5).