S3727-118

1. Short title This Act may be cited as the Proprietary Education Oversight Task Force Act.

2. Definitions In this Act: The term accrediting agency means a private educational association that acts as a reliable authority on the quality of education or training provided by an institution of higher education and is recognized by the Secretary under section 496 of the Higher Education Act of 1965 (20 U.S.C. 1099b). Unless otherwise expressly provided, the term Department means the Department of Education. The term executive officer, with respect to a proprietary institution of higher education that is a publicly traded corporation, means— the president of the corporation; a vice president of the corporation who is in charge of a principal business unit, division, or function of the corporation, such as sales, administration, or finance; or any other officer or person who performs a policy-making function for the corporation, including an executive officer of a subsidiary of the corporation if the officer performs a policy making function for the corporation. The term Federal education assistance when used with respect to a proprietary institution of higher education, means Federal funds that are disbursed or delivered by the Department, the Department of Veterans Affairs, or the Department of Defense to, or on behalf of, a student to be used for tuition, fees, instruction, or any other component of the student’s cost of attendance (as defined in section 472 of the Higher Education Act of 1965 (20 U.S.C. 1087ll)) to attend the institution. The term institutional debt means any debt owed by a student or the parent of a student to an institution of higher education, including— debt owed through a private loan program, income-share agreement, or other financing product operated by the institution; debt owed from a return of student assistance made, insured, or guaranteed under title IV of the Higher Education Act 1965 (20 U.S.C. 1070 et seq.) to the Department; and debt owed from the student’s nonpayment of institutional charges or fees. The term private education loan— 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— is not made, insured, or guaranteed under title IV of the Higher Education Act of 1965 (20 U.S.C. 1070 et seq.); 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 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 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. 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)). Except as provided in subparagraph (B), the term recruiting and marketing activities means activities that include any of the following: Advertising and promotional 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, that are made directly or indirectly to a student, a prospective student, the public, an accrediting agency, a State agency, or to the Secretary by a proprietary institution of higher education, one of its representatives, or any person with whom the institution has an agreement to provide educational programs, advertising, or admissions services. Misleading statement, misrepresentation, and substantial misrepresentation (as defined in section 668.71(c) of title 34, Code of Federal Regulations, or any successor regulation). 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 soliciting an individual to provide contact information to a proprietary institution of higher education, including through websites established for that purpose and funds paid to third parties for that purpose. Other activities as the Secretary may prescribe, including paying for promotion or sponsorship of education or military-related associations. Any activity that is required as a condition of the receipt of funds by an institution of higher education under title IV of the Higher Education Act of 1965 (20 U.S.C. 1070 et seq.), is specifically authorized under that title, or is otherwise specified by the Secretary, is not a recruiting and marketing activity under subparagraph (A). Unless otherwise expressly provided, the term Secretary means the Secretary of Education. The term State approval agency means any State agency that determines whether an institution of higher education is legally authorized within the State to provide a program of education beyond secondary education. The term veterans service organization means an organization that is— recognized by the Secretary of Veterans Affairs for the representation of veterans under section 5902 of title 38, United States Code; congressionally chartered under title 36, United States Code, and serves or represents veterans; recognized by the Secretary of Veteran Affairs under section 14.628 of title 38, Code of Federal Regulations (or a successor regulation), as a national organization, State organization, tribal organization, or regional or local organization; or an organization that has a record of demonstrating expertise in, assists in, or serves the interests of veterans in education.

3. Establishment of Proprietary Education Interagency Oversight Committee There is established the Proprietary Education Interagency Oversight Committee (referred to in this Act as the Committee) to be composed of the head (or the designee of the head who is designated under subsection (d)) of each of the following: The Department. The Consumer Financial Protection Bureau. The Department of Justice. The Securities and Exchange Commission. The Department of Defense. The Department of Veterans Affairs. The Federal Trade Commission. The Department of Labor. The Internal Revenue Service. At the discretion of the President, any other relevant Federal agency. The Committee shall have the following purposes: To improve enforcement of applicable Federal laws and regulations. To increase accountability of proprietary institutions of higher education to students and taxpayers. To ensure the promotion of high-quality education programs. To reduce and prevent fraud and abuse by proprietary institutions of higher education. To meet the purposes described in subsection (b), the Committee shall— coordinate administrative oversight of proprietary institutions of higher education— such that the Federal agencies represented on the Committee may develop a memorandum of understanding to specify responsibilities of each of those agencies in creating the report under section 6; to encourage information-sharing, to the extent practicable, among those agencies related to Federal investigations, audits, or inquiries of proprietary institutions of higher education; and to 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; and synthesize cross-agency industry data on proprietary institutions of higher education to— develop an annual report under section 6; publish a For-Profit College Warning List for Parents and Students, in accordance with section 7; and develop 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 that information. The head of a Federal agency listed in subsection (a) may designate a high-ranking official of the agency to serve as a designee on the Committee. The designee shall be, whenever possible, the head of the portion of the agency that is most relevant to the purposes described in subsection (b). The Secretary or the Secretary's designee shall serve as the Chairperson of the Committee. The Chairperson of the Committee shall ensure that appropriate staff and officials at the Department are available to support Committee-related work. The members of the Committee shall meet regularly, but not less often than once during each quarter of each fiscal year, to carry out the purposes described in subsection (b) and the responsibilities described in subsection (c). The head of each Federal agency listed in subsection (a) shall notify each individual who submits to the Federal agency a complaint with respect to a proprietary institution of higher education that information from the complaint may be used to carry out the purposes described in subsection (b).

4. Proprietary Education Oversight Advisory Committee The Department shall establish a Proprietary Education Oversight Advisory Committee (referred to in this Act as the Advisory Committee) to advise the Committee. The Advisory Committee shall meet not less often than twice each fiscal year. The Advisory Committee shall be subject to chapter 10 of title 5, United States Code (commonly referred to as the Federal Advisory Committee Act). The Advisory Committee shall have 13 members, of which— 4 members shall be representatives from State attorneys general— 2 of whom shall be appointed by the Speaker of the House of Representatives, 1 of whom shall be appointed on the recommendation of the majority leader of the House of Representatives, and 1 of whom shall be appointed on the recommendation of the minority leader of the House of Representatives; and 2 of whom shall be appointed by the President pro tempore of the Senate, 1 of whom shall be appointed on the recommendation of the majority leader of the Senate, and 1 of whom shall be appointed on the recommendation of the minority leader of the Senate; and 9 members shall be appointed by the Secretary, of whom— 1 member shall be a representative from a State approval agency; 1 member shall be a representative from a veterans service organization; 1 member shall be a representative from an accrediting agency; 1 member shall be a representative from a civil rights organization; 1 member shall be a representative from a proprietary institution of higher education; 1 member shall be a current student of a proprietary institution of higher education who is a dependent student; 1 member shall be a current student of a proprietary institution of higher education who is an independent student; 1 member shall be a representative from a consumer advocate organization; and 1 member shall be a representative from a legal assistance organization that represents students or borrowers. Individuals shall be appointed as members of the Advisory Committee— on the basis of the individuals' experience, integrity, impartiality, and good judgment; and on the basis of the individuals' technical qualifications, professional standing, and demonstrated knowledge in the field of proprietary education. The term of office of each member of the Advisory Committee shall be for 6 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. A vacancy on the Advisory 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. The Advisory Committee shall provide advice and recommendations to the Committee with respect to— complaints filed against proprietary institutions of higher education with State attorneys general or State approval agencies; State enforcement actions against proprietary institutions of higher education; minority enrollment in proprietary institutions of higher education; veteran enrollment in proprietary institutions of higher education; outcome measures at proprietary institutions of higher education, including graduation rates, percent of graduates earning more than a high school graduate, and licensure pass rates; student loan burden from enrollment at proprietary institutions of higher education, including median amount owed disaggregated by degree type, cohort default rate, and percent of students in repayment; marketing and recruitment practices at proprietary institutions of higher education; per pupil expenditure for instructional purposes at proprietary institutions of higher education; enforcement actions the Federal Government should take against proprietary institutions of higher education; and preparation of the report under section 6. To carry out the duties described under subsection (d), the Advisory Committee may share among the members of the Advisory Committee and the Committee information from complaints filed against proprietary institutions of higher education consistent with the protection of the privacy and confidentiality of personally identifiable information.

5. Collection and tracking of complaints In consultation with the Committee, the Secretary shall establish a single, toll-free telephone number, a website, and a database (or use an existing database) to facilitate the centralized collection of, monitoring of, and response to student complaints regarding the services or activities of any proprietary institution of higher education that is eligible for Federal education assistance. The Committee shall coordinate with the Federal agencies represented on the Committee to route complaints to those agencies, where appropriate, and consistent with— the protection of the privacy and confidentiality of personally identifiable information; and data security and integrity. Information collected from complaints under subsection (a) shall be used— to facilitate coordination among the Federal agencies represented on the Committee; to facilitate investigations and enforcement actions against proprietary institutions of higher education; to prepare the report under section 6; and to prepare the For-Profit College Warning List for Parents and Students under section 7. To the extent practicable, State approval agencies may receive appropriate complaints from the systems established under subsection (a), if— the State approval agency system has the functional capacity to receive calls or electronic reports routed by the systems of the Department; the State approval agency has satisfied any conditions of participation in the system that the Department may establish, including treatment of personally identifiable information and sharing of information on complaint resolution or related compliance procedures and resources; and participation by the State approval agency includes measures necessary to provide for protection of personally identifiable information that conform to the Federal laws and standards for protection of the privacy and confidentiality of personally identifiable information and for data integrity and security that apply to the Federal agencies described in subsection (d). To facilitate preparation of the reports required under section 6, supervision and enforcement activities, and monitoring of the market for educational services provided by any proprietary institution of higher education that is eligible for Federal education assistance, the Committee members shall share student complaint information with accrediting agencies, the Federal Trade Commission, other Federal agencies, and State agencies, subject to the Federal laws and standards applicable to Federal agencies for the protection of the privacy and confidentiality of personally identifiable information and for data security and integrity. The accrediting agencies, the Federal Trade Commission, and other Federal agencies shall share data relating to student complaints regarding educational services provided by any proprietary institution of higher education with the Department, subject to the Federal laws and standards applicable to Federal agencies for the protection of the privacy and confidentiality of personally identifiable information and for data security and integrity.

6. Report The Committee shall submit an annual report 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. The report described in subsection (a)— shall not contain any personally identifiable information; and shall be made available to the public in a manner that is easily accessible to parents, students, and other stakeholders. The report described in subsection (a) shall include— a description of the role of each member of the Committee in achieving the purposes described in section 3(b); an accounting of any negative or adverse action taken by the Federal Government, any member agency of the Committee, or a State to enforce Federal or State laws and regulations applicable to a proprietary institution of higher education; a summary of complaints received, resolved, or pending against each proprietary institution of higher education during the applicable year, including— student complaints collected by the complaint system established under section 5 or received by any member agency of the Committee; any complaint filed by a Federal or State agency in a Federal, State, local, or Tribal court; any administrative proceeding by a Federal or State agency involving noncompliance of any applicable law or regulation; 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; and any complaint, review, audit, or administrative process by an accrediting agency that results in probation or equivalent action, denial, withdrawal, suspension, or termination of accreditation; the data described in paragraph (2) and any other data relevant to proprietary institutions of higher education that the Committee determines appropriate; and recommendations of the Committee for the legislative and administrative actions as the Committee determines are necessary to— improve enforcement of applicable Federal laws; increase accountability of proprietary institutions of higher education to students, parents, and taxpayers; reduce and prevent fraud and abuse by proprietary institutions of higher education; and ensure the promotion of quality education programs. The report described in subsection (a) shall include data on all proprietary institutions of higher education that consists of information regarding— 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 the previous academic year that reflects the total amount of Federal education assistance provided to proprietary institutions of higher education for the previous academic year; the total amount of Federal education assistance that proprietary institutions of higher education received for the previous academic year, disaggregated by— 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.); 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.); educational assistance provided under chapter 33 of title 38, United States Code; assistance for tuition and expenses under section 2007 of title 10, United States Code; assistance provided under section 1784a of title 10, United States Code; and Federal education assistance not described in subclauses (I) through (V); 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 the previous academic year for each of the programs described in subclauses (I) through (VI) of clause (ii), that reflects the total amount of Federal education assistance provided to proprietary institutions of higher education for the previous academic year for each of those programs; the average retention and graduation rates for students pursuing a degree at proprietary institutions of higher education; 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 the cohort default rate for each proprietary institution of higher education; the average pre-enrollment expenditures on a per-enrolled-student basis, including expenditures on recruiting and marketing activities; the average educational and general expenditures (as defined in section 502 of the Higher Education Act of 1965 (20 U.S.C. 1101a)) per student, excluding all pre-enrollment expenditures; for careers requiring the passage of a licensing examination— the passing rate of individuals who attended a proprietary institution of higher education taking the examination to pursue such a career; and the passing rate of all individuals taking the exam to pursue such a career; and the use of private education loans at proprietary institutions of higher education that includes— an estimate of the total number of those loans; information on the average debt, default rate, and interest rate of those loans; and the names of each lender providing private education loans to borrowers with respect to each proprietary institution of higher education in the prior academic year, including— the number of borrowers receiving loans from each lender; and the volume of dollars provided to borrowers with respect to the proprietary institution of higher education by each lender. The report described in subsection (a) shall include data on proprietary institutions of higher education that are publicly traded corporations, consisting of information on— any pre-tax profit of those proprietary institutions of higher education— reported as a total amount and an average percent of revenue for all those proprietary institutions of higher education; and reported for each of those proprietary institutions of higher education; revenue for those proprietary institutions of higher education spent on recruiting and marketing activities, student instruction, and student support services, reported— as a total amount and an average percentage of revenue for all those proprietary institutions of higher education; and for each of those proprietary institutions of higher education; total compensation packages, including bonuses, of the executive officers of each of those proprietary institutions of higher education; a list of institutional loan programs offered by each of those proprietary institutions of higher education that includes information on the default and interest rates of those programs; and the data described in clauses (ii) and (iii). 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— the average total cost of attendance at each proprietary institution of higher education, and information comparing the total cost for each program to— the average total cost of attendance— at each public institution of higher education; and at each public institution of higher education that offers the same level of education degree or certification as the proprietary institution of higher education; and the average total cost of attendance— at all institutions of higher education, including institutions that are public and institutions that are private; and at all institutions of higher education that offer the same level of education degree or certification as the proprietary institution of higher education, including institutions that are public and institutions that are private; total enrollment, disaggregated by— individuals enrolled in programs taken online; individuals enrolled in programs that are not taken online; and individuals enrolled in programs taken both online and not online; the average retention and graduation rates for students pursuing a degree at proprietary institutions of higher education; the percentage of students enrolled in proprietary institutions of higher education who complete a program of an institution within— the standard period of completion for the program; and a period that is 150 percent of the standard period of completion; the average total cost of attendance for each program at proprietary institutions of higher education; 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 so defined) for all proprietary institutions of higher education; the median Federal educational debt incurred by students who complete a program at a proprietary institution of higher education; the median Federal educational debt incurred by students who start but do not complete a program at a proprietary institution of higher education; the job placement rate for students who complete a program at a proprietary institution of higher education and the type of employment obtained by those students; for careers requiring the passage of a licensing examination, the passing rate for individuals who attended a proprietary institution of higher education and passed the examination; the number of complaints from students enrolled in proprietary institutions of higher education who have submitted a complaint to any member agency of the Committee; and the volume of institutional debt, number of students who owe institutional debts, and average amount of institutional debt owed by each student. To the extent practicable, the report described in subsection (a) shall provide information on the data described in clause (ii) for individuals using, to pay for the costs of attending a proprietary institution of higher education, Federal education assistance provided under— chapter 33 of title 38, United States Code; section 2007 of title 10, United States Code; and section 1784a of title 10, United States Code. 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). 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 data for public institutions of higher education disaggregated by State. As used in paragraph (1)(B), the term any negative or adverse action includes— a complaint filed by a Federal or State agency in a local, State, Federal, or Tribal court; an administrative proceeding by a Federal or State agency involving noncompliance with any applicable law or regulation; or 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.

7. For-profit college warning list for parents and students Each academic year, the Secretary on behalf of the Committee shall publish a list to be known as the For-Profit College Warning List for Parents and Students to be comprised of the names of proprietary institutions of higher education— that have been sued for financial relief by a Federal or State authority, or through a qui tam action in which the Federal Government has intervened; that are required to pay a debt or incur a liability from a settlement, arbitration proceeding, or final judgment in a judicial proceeding with a Federal or State agency and the case addresses misrepresentation, fraud, liability under sections 3729 through 3733 of title 31, United States Code (commonly known as the False Claims Act), or other borrower-defense-to-repayment claims; that have pending claims for borrower relief discharge under the borrower defense to repayment regulations from students or former students of the institution and the Secretary has formed a group process to consider the claims; that have had any eligibility for participation withdrawn or suspended with respect to— 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.); 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.); educational assistance provided under chapter 33 of title 38, United States Code; assistance for tuition and expenses under section 2007 of title 10, United States Code; assistance provided under section 1784a of title 10, United States Code; or Federal education assistance not described in subparagraphs (A) through (E); or that have been deemed ineligible to receive Federal education assistance for the next year or required to repay Federal education assistance previously received in an applicable report year. The For-Profit College Warning List for Parents and Students shall include a summary in plain language of the basis of each proprietary institution of higher education’s inclusion on the list. The Committee shall establish and apply review procedures for the For-Profit College Warning List for Parents and Students, including evaluation and withdrawal proceedings that provide— for adequate written specification of— the procedure for identifying proprietary intuitions of higher education for inclusion on the list; and identified deficiencies at the proprietary institutions of higher education; and for sufficient opportunity for a written response by a proprietary institution of higher education regarding any deficiencies identified by the Committee— within a timeframe determined by the Committee; and prior to the final publication of the For-Profit College Warning List for Parents and Students. Not later than July 1 of each fiscal year, on behalf of the Committee, the Secretary shall publish the For-Profit College Warning List for Parents and Students prominently and in a manner that— is easily accessible to parents, current students, prospective students, and other stakeholders; and does not contain any personally identifiable information. The Secretary may incorporate the For-Profit College Warning List for Parents and Students into preexisting, widely used platforms.