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S. 3018: Degrees Not Debt Act of 2018

The text of the bill below is as of Jun 6, 2018 (Introduced).


II

115th CONGRESS

2d Session

S. 3018

IN THE SENATE OF THE UNITED STATES

June 6, 2018

introduced the following bill; which was read twice and referred to the Committee on Finance

A BILL

To give middle-class families access to the maximum Federal Pell Grant, to increase college transparency, and State maintenance of efforts, and for other purposes.

1.

Short title

This Act may be cited as the Degrees Not Debt Act of 2018.

2.

Increase in the maximum amount of a Federal Pell Grant

Section 401(b)(7)(C) of the Higher Education Act of 1965 (20 U.S.C. 1070a(b)(7)(C)) is amended—

(1)

in clause (i)(I), by striking clause (iv)(II) and inserting clause (v)(II);

(2)

in clause (ii)(I), by striking clause (iv)(II) and inserting clause (v)(II);

(3)

by redesignating clauses (iii) and (iv) as clauses (iv) and (v), respectively;

(4)

by inserting after clause (ii) the following:

(iii)

Award year 2018–2019

For award year 2018–2019, the amount determined under this subparagraph for purposes of subparagraph (B)(iii) shall be equal to—

(I)

$10,000; reduced by

(II)

the maximum Federal Pell Grant for which a student would be eligible using the criteria provided under section 479; and

(III)

rounded to the nearest $5.

; and

(5)

by striking clause (iv), as redesignated by paragraph (3), and inserting the following:

(iv)

Subsequent award years

For award year 2019–2020 and each subsequent award year, the amount determined under this subparagraph for purposes of subparagraph (B)(iii) shall be equal to—

(I)

the amount determined under this subparagraph for the preceding award year; increased by

(II)

a percentage equal to the annual adjustment percentage for the award year for which the amount under this subparagraph is being determined; and

(III)

rounded to the nearest $5.

.

3.

Increase family income threshold for determination of expected family contribution equal to zero

(a)

In general

Section 479 of the Higher Education Act of 1965 (20 U.S.C. 1087ss) is amended to read as follows:

479.

Simplified application

(a)

Simplified application Section

(1)

In general

The Secretary shall develop and use an easily identifiable simplified application section as part of the common financial reporting form prescribed under section 483(a) for families described in subsection (b).

(2)

Reduced data requirements

The simplified application form shall in the case of a family meeting the requirements of subsection (b), permit such family to be treated as having an expected family contribution equal to zero for purposes of establishing such eligibility and to submit only the data elements required to make a determination under subsection (b).

(b)

Zero expected family contribution

The Secretary shall consider an applicant to have an expected family contribution equal to zero if—

(1)

in the case of a dependent student, the sum of the adjusted gross income of the student's parents is less than or equal to 250 percent of the poverty line (as defined by the Office of Management and Budget, and revised annually in accordance with section 673(2) of the Community Services Block Grant Act (42 U.S.C. 9902(2))) applicable to a family of the size involved;

(2)

in the case of an independent student with dependents other than a spouse, the sum of the adjusted gross income of the student and the student's spouse (if appropriate) is less than or equal to 250 percent of the poverty line (as defined by the Office of Management and Budget, and revised annually in accordance with section 673(2) of the Community Services Block Grant Act (42 U.S.C. 9902(2))) applicable to a family of the size involved; or

(3)

in the case of an independent student without dependents other than a spouse, the sum of the adjusted gross income of the student and the student's spouse (if appropriate) is less than or equal to 250 percent of the poverty line (as defined by the Office of Management and Budget, and revised annually in accordance with section 673(2) of the Community Services Block Grant Act (42 U.S.C. 9902(2))) applicable to a family of the size involved.

(c)

Adjustments

An individual is not required to qualify or file for the earned income credit in order to be eligible under this subsection. The Secretary shall annually adjust the income level necessary to qualify an applicant for the zero expected family contribution. The income level shall be adjusted according to increases in the Consumer Price Index, as defined in section 478(f).

.

(b)

Adjustments in income protection allowances

For each academic year, the Secretary of Education shall continue to publish in the Federal Register a revised table of income protection allowances pursuant to section 478(b)(1)(A) of the Higher Education Act of 1965 (20 U.S.C. 1087rr(b)(1)(A)).

4.

State responsibility

(a)

Maintenance of effort requirements

Section 401 of the Higher Education Act of 1965 (20 U.S.C. 1070a) is amended by adding at the end the following:

(k)

Institutional ineligibility based on failure of State To maintain higher education appropriations level

(1)

In general

Each State that receives funds under this Act shall maintain expenditures and State financial aid for institutions of higher education in the State, with respect to a fiscal year, at an amount that is equal to or more than the average amount of State expenditures and State financial aid for institutions of higher education in the State for the 10 fiscal years preceding such fiscal year.

(2)

Consequences of failure to maintain effort

Notwithstanding any other provision of law and beginning 5 years after the date of enactment of the Degrees Not Debt Act of 2018, the Secretary shall not make a payment under this subpart to an institution of higher education for a fiscal year for the purpose of making a Federal Pell Grant to eligible students in attendance at such institution and any such student shall not be eligible to receive a Federal Pell Grant for attendance at such institution for the fiscal year, if the institution—

(A)

is an institution of higher education, as defined in section 102; and

(B)

is located in a State that has not maintained expenditures and State financial aid for institutions of higher education in the State, with respect to the fiscal year, at an amount that is equal to or more than the average amount of State expenditures and State financial aid for institutions of higher education in the State for the 5 fiscal years preceding such fiscal year.

(3)

Waiver

The Secretary may waive the requirement of paragraph (1) for a State, for one fiscal year at a time, and the provisions of paragraph (2) shall have no effect for such fiscal year if the Secretary determines that granting a waiver would be equitable due to exceptional or uncontrollable circumstances such as a natural disaster or a precipitous and unforeseen decline in the financial resources of the State.

.

5.

College and university responsibility

(a)

Program participation agreements

Section 487 of the Higher Education Act of 1965 (20 U.S.C. 1094) is amended—

(1)

in subsection (a), by adding at the end the following:

(30)

The institution will put a prominent link on the homepage of the institution's primary website that goes directly to a report of a standard set of key performance indicators with respect to the institution, as described in subsection (k).

; and

(2)

by adding at the end the following:

(k)

Performance indicators

(1)

In general

The key performance indicators under this subsection are the following:

(A)
(i)

Graduation rates—

(I)

at 100 percent of the normal time for graduation;

(II)

at 150 percent of the normal time for graduation;

(III)

at 200 percent of the normal time for graduation; and

(IV)

each of which is disaggregated by age (25 years old and younger, and older than 25 years old), income, race and ethnicity, and first-generation college status.

(ii)

Transfer out rates. Each such rate shall be disaggregated by age (25 years old and younger, and older than 25 years old), income, race and ethnicity, and first-generation college status.

(iii)

Withdrawal rates, including rates of students who withdraw from a certificate program to seek employment in a related field of study.

(B)

Employment outcomes, including the following:

(i)

The average salary of a graduate 3 years after graduation.

(ii)

The percentage of graduates who, 180 days after graduation—

(I)

are employed full time;

(II)

are employed part-time;

(III)

are employed in the graduate's field of study or certificate; and

(IV)

make more than $25,000 a year.

(iii)

The cohort repayment rate.

(C)

Student satisfaction rate as indicated by a survey of all students and recent alumni with the following 2 questions using a 5-point Likert scale:

(i)

How satisfied are you with your educational experience at [name of institution]?

(ii)

If you were making the decision today, how likely would you be to choose to attend [name of institution] again?

(D)

The percentage of students who continue enrollment at the institution after the first year of enrollment.

(E)

The average net price for the institution’s most recent cohort of graduates, disaggregated by income quartile.

(F)

The average annual net price for full-time attendance, broken out by tuition, fees, living costs, and other (indirect) costs.

(G)

The median time to degree completion.

(H)

The percentage of enrolled students with student loan debt.

(I)

The average student loan debt at time of graduation for the most recent cohort of graduates who borrowed money.

(J)

The average student loan debt at time of withdrawal for the most recent cohort of non-graduates who borrowed money.

(2)

Cohort repayment rate

(A)

In general

In this subsection, the term cohort repayment rate means, for any fiscal year beginning with fiscal year 2022—

(i)

in the case in which 30 or more borrowers at the institution enter repayment on Federal Direct Stafford Loans, Federal Direct Unsubsidized Stafford Loans, Federal Direct PLUS Loans, or Federal Direct Consolidation Loans, received for attendance at the institution, the percentage of those borrowers who are not in default and who make at least a one dollar reduction on their initial student loan principal balance before the end of the second fiscal year following the fiscal year in which the borrowers entered repayment, except as provided in subparagraph (B); and

(ii)

in the case in which less than 30 borrowers at the institution enter repayment on Federal Direct Stafford Loans, Federal Direct Unsubsidized Stafford Loans, Federal Direct PLUS Loans, or Federal Direct Consolidation Loans, received for attendance at the institution, the percentage of those borrowers plus all of the borrowers at the institution who entered repayment on such loans (or on the portion of a loan made under section 428C that is used to repay any such loans) in the 3 fiscal years preceding the fiscal year for which the determination is made, who are not in default and who make at least a one dollar reduction on their initial student loan principal balance before the end of the second fiscal year following the year in which the borrowers entered repayment, except as provided in subparagraph (B).

(B)

Exception

The cohort repayment rate calculation under subparagraph (A) shall not include in the calculation a borrower who is—

(i)

in deferment on repayment of a loan described in subparagraph (A) due to study in an approved graduate fellowship program or in an approved rehabilitation training program for the disabled;

(ii)

in deferment on repayment of a loan described in subparagraph (A) during a period of at least half-time enrollment in college or a career school;

(iii)

in deferment on repayment of a loan described in subparagraph (A) during a period of service qualifying for loan discharge or cancellation under part E;

(iv)

in deferment on repayment of a loan described in subparagraph (A) due to active duty military service of the borrower during a war, military operation, or national emergency;

(v)

in deferment on repayment of a loan described in subparagraph (A) during the 13 months following the conclusion of qualifying active duty military service by the borrower, or until the borrower returns to enrollment on at least a half-time basis, whichever is earlier, if the borrower is a member of the National Guard or other reserve component of the Armed Forces and was called or ordered to active duty while enrolled at least half-time at an eligible school or within 6 months of having been enrolled at least half-time;

(vi)

in mandatory forbearance on repayment of a loan described in subparagraph (A) for the full fiscal year; or

(vii)

serving as a volunteer under the Peace Corps Act (22 U.S.C. 2501 et seq.) or the Domestic Volunteer Service Act of 1973 (42 U.S.C. 4950 et seq.).

(3)

New data points

The Secretary shall work with the National Center for Education Statistics to identify new data points that need to be collected to assist colleges and universities with the collection, organization, and distribution of key performance indicators and cohort repayment rates.

(4)

Guidance

The Secretary shall issue guidance, with input from stakeholders, to facilitate the data collection and display of key performance indicators.

.

(b)

Enhanced data collection for institutions with enrollment rates of less than 5,000 students

Section 489(a) of the Higher Education Act of 1965 (20 U.S.C. 1096(a)) is amended—

(1)

in the first sentence, by inserting (or, in the case of an institution with an enrollment of less than 5,000 students, $6) after $5 ; and

(2)

by adding at the end the following: In addition, the Secretary shall provide funds to assist small institutions of higher education, with enrollment rates of less than 5,000 students, with data collection, organization, and distribution of performance indicators and cohort repayment rates..

6.

Repeal of increased alternative minimum tax exemption amount for individuals

(a)

In general

Section 55(d) of the Internal Revenue Code of 1986 is amended by striking paragraph (4).

(b)

Effective date

The amendment made by this section shall apply to taxable years beginning after December 31, 2017.

7.

Repeal of increased estate and gift tax exemption

(a)

In general

Section 2010(c)(3) of the Internal Revenue Code of 1986 is amended by striking January 1, 2026 and inserting the date of the enactment of the Degrees Not Debt Act of 2018.

(b)

Effective date

The amendment made by this section shall apply to estates of decedents dying and gifts made after the date of the enactment of this Act.