119-hr2899

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2899 Introduced in House

    (IH) ]

<DOC>

119th CONGRESS
 1st Session
 H. R. 2899

 To provide for accountability in higher education.

_______________________________________________________________________

 IN THE HOUSE OF REPRESENTATIVES

 April 10, 2025

 Mr. Takano (for himself, Ms. Lee of Nevada, Mr. Krishnamoorthi, Ms. 
 Waters, and Ms. Adams) introduced the following bill; which was 
 referred to the Committee on Education and Workforce, and in addition 
 to the Committee on the Judiciary, for a period to be subsequently 
 determined by the Speaker, in each case for consideration of such 
 provisions as fall within the jurisdiction of the committee concerned

_______________________________________________________________________

 A BILL

 To provide for accountability in higher education.

 Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

 This Act may be cited as the ``Preventing Risky Operations from 
Threatening the Education and Career Trajectories of Students Act of 
2025'' or the ``PROTECT Students Act of 2025''.

SEC. 2. TABLE OF CONTENTS.

 The table of contents for this Act is as follows:

Sec. 1. Short title.

Sec. 2. Table of contents.

Sec. 3. References.
 TITLE I--STUDENT AND TAXPAYER PROTECTIONS

Sec. 101. Gainful employment and financial value transparency.

Sec. 102. Borrower defense and substantial misrepresentations.

Sec. 103. Closed school discharge.

Sec. 104. Prohibition on institutions limiting student legal action.

Sec. 105. Incentive compensation.
 TITLE II--ENSURING INTEGRITY AT INSTITUTIONS OF HIGHER EDUCATION AND 
 INSTITUTIONAL CONTRACTORS

Sec. 201. Updating Federal oversight of third-party servicers.

Sec. 202. Job placement rates.

Sec. 203. Allocation of tuition and fee revenue by title IV 
 institutions.

Sec. 204. Past performance.

Sec. 205. Recoupment.
 TITLE III--IMPROVING OVERSIGHT

Sec. 301. Enforcement in the Office of Federal Student Aid.

Sec. 302. For-Profit Education Oversight Coordination Committee.

Sec. 303. Establishment and maintenance of complaint resolution and 
 tracking system.

Sec. 304. Reforms to eligibility and certification procedures.

Sec. 305. State oversight.

Sec. 306. Accrediting agency oversight.

Sec. 307. Mandatory spending for administrative costs of operating the 
 student aid programs.
 TITLE IV--IMPROVING ACCESS TO STUDENT AND TAXPAYER INFORMATION

Sec. 401. Reporting and disclosures from institutions of higher 
 education.

Sec. 402. Transparency of oversight activities.

SEC. 3. REFERENCES.

 Except as otherwise expressly provided in this Act, wherever in 
this Act an amendment or repeal is expressed in terms of an amendment 
to, or a repeal of, a section or other provision, the reference shall 
be considered to be made to that section or other provision of the 
Higher Education Act of 1965 (20 U.S.C. 1001 et seq.).

 TITLE I--STUDENT AND TAXPAYER PROTECTIONS

SEC. 101. GAINFUL EMPLOYMENT AND FINANCIAL VALUE TRANSPARENCY.

    (a) Defining Gainful Employment Programs.--

    (1) Additional institutions.--

Section 101

    (b) (20 U.S.C. 
 1001

    (b) ) is amended in paragraph

    (1) , by inserting ``, 
 including that meets the standards for debt-to-earnings and 
 earnings premium in 

section 498C,'' after ``gainful employment 
 in a recognized occupation''.

    (2) Proprietary institution of higher education.--

Section 102

    (b)

    (1)
        (A)
            (i) (20 U.S.C. 1002

    (b)

    (1)
        (A)
            (i) ) is amended, by 
 inserting ``, including that meets the standards for debt-to-
 earnings and earnings premium in 

section 498C'' after ``gainful 
 employment in a recognized occupation''.

    (3) Postsecondary vocational institution.--

Section 102
            (c) (1)
        (A) (20 U.S.C. 1002
            (c) (1)
        (A) ) is amended, by inserting 
 ``, including that meets the standards for debt-to-earnings and 
 earnings premium in 

section 498C'' after ``gainful employment 
 in a recognized occupation''.

    (4) Eligible program.--

Section 481

    (b)

    (1)
        (A)
            (i) (20 U.S.C. 
 1088

    (b)

    (1)
        (A)
            (i) ) is amended, by inserting ``, including that 
 meets the standards for debt-to-earnings and earnings premium 
 in 

section 498C'' after ``gainful employment in a recognized 
 profession''.

    (b) Debt-to-Earnings and Earnings Premium.--Subpart 3 of part H of 
title IV (20 U.S.C. 1099c et seq.) is amended by adding at the end the 
following:

``

SEC. 498C. DEBT-TO-EARNINGS AND EARNINGS PREMIUM.

 ``

    (a) 

=== Definitions. ===
-In this section:
 ``

    (1) Annual debt-to-earnings rate.--The term `annual debt-
 to-earnings rate' means the rate that is calculated for a 
 cohort of students by taking the annual loan payment for such 
 cohort, as calculated by the Secretary, divided by the median 
 annual earnings for such cohort.
 ``

    (2) Annual loan payment.--The term `annual loan payment' 
 means, for a cohort of students, as defined by the Secretary, 
 who completed an eligible program, their total annual payment 
 on loans borrowed to enroll in the institution that offered the 
 eligible program, measured not less than 2 and not more than 4 
 years after their completion.
 ``

    (3) Discretionary debt-to-earnings rate.--The term 
 `discretionary debt-to-earnings rate' means the rate that is 
 calculated for a cohort of students by taking the annual loan 
 payment for such cohort, as calculated by the Secretary, 
 divided by the discretionary earnings for such cohort.
 ``

    (4) Discretionary earnings.--The term `discretionary 
 earnings' means, for a cohort of students, as defined by the 
 Secretary, who completed an eligible program, the median annual 
 earnings minus the amount that is 150 percent of the poverty 
 level for an individual, as determined by the Department of 
 Health and Human Services.
 ``

    (5) Earnings premium.--The term `earnings premium' means 
 the amount by which the median annual earnings exceed the 
 median earnings for working adults with not more than a high 
 school diploma, as determined using data from the Bureau of the 
 Census--
 ``
        (A) in the State where the institution that 
 provides the eligible program is located; or
 ``
        (B) if fewer than half of the students in the 
 eligible program are from the State where the 
 institution that provides the eligible program is 
 located, or if the institution is a foreign 
 institution, nationally.
 ``

    (6) Median annual earnings.--The term `median annual 
 earnings' means, for a cohort of students, as defined by the 
 Secretary, who completed an eligible program, the midpoint of 
 their annual earnings measured not less than 2 and not more 
 than 4 years after their completion.
 ``

    (b) Standards.--
 ``

    (1) In general.--An eligible program does not meet the 
 standards for debt-to-earnings or earnings premium if it fails 
 the debt-to-earnings rates or fails the earnings premium, as 
 described in paragraph

    (2) , in 2 out of any 3 consecutive 
 years.
 ``

    (2) Failing.--An eligible program--
 ``
        (A) fails the debt-to-earnings rates if it has--
 ``
            (i) a discretionary debt-to-earnings rate 
 equal to or greater than 20 percent; and
 ``
            (ii) an annual debt-to-earnings rate 
 equal to or greater than 8 percent; and
 ``
        (B) fails the earnings premium if it has an 
 earnings premium of zero or a negative amount.
 ``
            (c) Process.--
 ``

    (1) Data match.--In order to ensure compliance with 
 paragraph

    (2) , the Commissioner of the Internal Revenue 
 Service, the Commissioner of the Social Security 
 Administration, and the head of any other Federal agency that 
 administers the database of individual-level earnings data 
 shall, in coordination with the Secretary, timely ensure 
 secure, annual data matches of earnings data with Department of 
 Education data to produce the median annual earnings of each 
 eligible program.
 ``

    (2) Requirements of the secretary.--The Secretary shall--
 ``
        (A) on an annual calendar year basis--
 ``
            (i) for each eligible program--
 ``
            (I) calculate for each award year 
 the discretionary debt-to-earnings 
 rate, the annual debt-to-earnings rate, 
 and the earnings premium for the 
 program; and
 ``
            (II) publish the discretionary 
 debt-to-earnings rate, the annual debt-
 to-earnings rate, and the earnings 
 premium for the eligible program for 
 each award year on a website 
 established and maintained by the 
 Secretary;
 ``
            (ii) for each eligible program that is a 
 program of training to prepare students for 
 gainful employment in a recognized occupation 
 or a graduate or professional degree program 
 offered by an institution of higher education 
 described in 

section 101

    (a) , issue a notice of 
 determination not later than 45 days after 
 completing the data match described in 
 paragraph

    (1) , informing the institution that 
 provides the program--
 ``
            (I) of the final discretionary 
 debt-to-earnings rate, the annual debt-
 to-earnings rate, and the earnings 
 premium for the program, which may not 
 be appealed by the institution unless 
 the institution believes that the 
 Secretary erred in the calculation of 
 any such measure;
 ``
            (II) of the final determination 
 regarding whether the program fails the 
 debt-to-earnings rates or fails the 
 earnings premium, as described in 
 subsection

    (b)

    (2) ;
 ``
            (III) whether the program does 
 not meet the standards for debt-to-
 earnings or earnings premium as 
 described in subsection

    (b)

    (1) or could 
 not meet such standards in the next 
 year if it fails the debt-to-earnings 
 rates or fails the earnings premium, as 
 described in subsection

    (b)

    (2) , in such 
 next year; and
 ``
            (IV) whether the institution is 
 required to provide warnings to 
 enrolled students and prospective 
 students of the program's failure, or 
 risk of failure, to meet the standards, 
 as determined under subclause
            (III) ; 
 and
 ``
            (iii) for each eligible program that is a 
 program of training to prepare students for 
 gainful employment in a recognized occupation 
 that does not meet the standards for debt-to-
 earnings and earnings premium as described in 
 subsection

    (b)

    (1) , enforce the consequences 
 under subsection
            (d) ; and
 ``
        (B) develop processes to verify, on an annual 
 calendar year basis--
 ``
            (i) that each eligible program that is a 
 program of training to prepare students for 
 gainful employment in a recognized occupation 
 or a graduate or professional degree program 
 offered by an institution of higher education 
 described in 

section 101

    (a) , provides the 
 warning described in subparagraph
        (A)
            (ii) 
            (IV) , 
 if applicable; and
 ``
            (ii) that each eligible program that is a 
 program of training to prepare students for 
 gainful employment in a recognized occupation 
 that does not meet the standards for debt-to-
 earnings or earnings premium as described in 
 subsection

    (b)

    (1) , does not receive funds as 
 described in subsection
            (d) .
 ``
            (d) Consequences of Not Meeting Standards.--
 ``

    (1) No disbursement of funds for enrollment in ineligible 
 programs.--An institution may not disburse program funds under 
 this title to students enrolled in a program of training to 
 prepare students for gainful employment in a recognized 
 occupation that does not meet the standards for debt-to-
 earnings and earnings premium as described in this section.
 ``

    (2) Time period to reestablish eligibility.--An 
 institution may not seek to reestablish the eligibility of a 
 program of training to prepare students for gainful employment 
 in a recognized occupation that does not meet the standards for 
 debt-to-earnings and earnings premium as described in this 
 section or establish the eligibility of a program of training 
 to prepare students for gainful employment in a recognized 
 occupation that is substantially similar to the program that 
 did not meet such standards until the date that is 3 years 
 after the date of the notice of determination issued under 
 subsection
            (c) (2)
        (A)
            (ii) that the program of training to 
 prepare students for gainful employment in a recognized 
 occupation does not meet the standards.
 ``

    (e) Regulations.--The Secretary shall issue regulations to carry 
out this section not later than 1 year after the date of enactment of 
the Preventing Risky Operations from Threatening the Education and 
Career Trajectories of Students Act of 2025, except that such 
regulations shall not be subject to the requirements of sections 482 or 
492.''.

SEC. 102. BORROWER DEFENSE AND SUBSTANTIAL MISREPRESENTATIONS.

    (a) Borrower Defense to Repayment.--

Section 455

    (h) (20 U.S.C. 
1087e

    (h) ) is amended to read as follows:
 ``

    (h) Borrower Defenses.--
 ``

    (1) In general.--Notwithstanding any other provision of 
 State or Federal law, the Secretary shall discharge a covered 
 loan in repayment made to a borrower with a defense to 
 repayment of the loan, as described in this section.
 ``

    (2) === Definitions. ===
-In this subsection:
 ``
        (A) Repayment.--The term `repayment' means the 
 period after any in-school deferment or grace period 
 and before a loan is paid in full other than by a 
 consolidation loan made under this title, including, 
 without limitation, a loan in default.
 ``
        (B) Covered loan.--The term `covered loan' means 
 a loan made, insured, or guaranteed under this title 
 that has an outstanding balance comprised in whole or 
 in part by repayment obligations incurred to cover the 
 cost of attendance at an institution of higher 
 education.
 ``

    (3) Basis for defense to repayment.--
 ``
        (A) In general.--For purposes of discharge under 
 this section, a borrower defense to repayment is 
 established when the Secretary concludes by a 
 preponderance of the evidence that a qualifying act, 
 omission, or event occurred, and the student whose cost 
 of attendance was paid in whole or in part by the 
 proceeds of a covered loan suffered detriment in the 
 nature and degree warranting a borrower defense 
 discharge.
 ``
        (B) Qualifying acts, omissions, or events.--A 
 qualifying act, omission, or event includes without 
 limitation any of the following:
 ``
            (i) The institution, one of its 
 representatives, or a third-party servicer of 
 the institution made a substantial 
 misrepresentation (as described in 

section 481

    (g) ), directly or indirectly, to the 
 borrower in connection with the borrower's 
 decision to attend, or to continue attending, 
 the institution or the borrower's decision to 
 take out a covered loan.
 ``
            (ii) The institution failed to perform 
 its obligations under the terms of a contract 
 with the student and such obligation was 
 undertaken as consideration or in exchange for 
 the borrower's decision to attend, or to 
 continue attending, the institution, for the 
 borrower's decision to take out a covered loan, 
 or for funds disbursed in connection with a 
 covered loan.
 ``
            (iii) The institution engaged in 
 aggressive and deceptive recruitment conduct or 
 tactics in connection with the borrower's 
 decision to attend, or to continue attending, 
 the institution or the borrower's decision to 
 take out a covered loan. Aggressive and 
 deceptive recruitment tactics or conduct 
 include actions by the institution, any of its 
 representatives, or any entity, organization, 
 or person with whom the institution has an 
 agreement to provide educational programs, 
 marketing, recruitment, or lead generation 
 services that pressure a student to make 
 enrollment or loan-related decisions, take 
 unreasonable advantage of a student's lack of 
 knowledge, discourage a student or prospective 
 student from consulting an advisor prior to 
 making enrollment or loan-related decisions, 
 use threatening or abusive language, or 
 repeatedly engage in unsolicited contact.
 ``
            (iv) The borrower, whether as an 
 individual or as a member of a class, or a 
 governmental agency has obtained against the 
 institution a favorable judgment based on State 
 or Federal law in a court or administrative 
 tribunal of competent jurisdiction based on the 
 institution's act or omission relating to the 
 making of a covered loan, or the provision of 
 educational services for which the loan was 
 provided, notwithstanding any possible appeal.
 ``
            (v) The Secretary sanctioned or otherwise 
 took adverse action against the institution at 
 which the borrower enrolled, based on the 
 institution's acts or omissions that could give 
 rise to a borrower defense under clause
            (i) ,
            (ii) , or
            (iii) .
 ``
            (vi) The institution committed any act or 
 omission that relates to the making of the 
 covered loan for enrollment at the institution 
 or the provision of educational services for 
 which the covered loan was provided that would 
 give rise to a cause of action against the 
 institution under applicable State law without 
 regard to any statute of limitations.
 ``
            (C) Determination whether detriment warrants 
 discharge.--In determining whether the nature and 
 degree of detriment warrants a borrower defense 
 discharge, the Secretary shall consider the totality of 
 the circumstances, including the nature and degree of 
 detriment shown by previous recipients of borrower 
 defense discharge, and drawing all inferences and 
 presumptions warranted by the evidence under the 
 circumstances.
 ``

    (4) Effect of discharge.--To effectuate a borrower 
 defense discharge of a covered loan in repayment, the Secretary 
 shall carry out the following:
 ``
        (A) Discharge all amounts owed to the Secretary, 
 including interest and fees, on the covered loan, 
 subject to the limitation in paragraph

    (5) . In the case 
 of a covered loan that is a Federal Direct 
 Consolidation Loan or a Federal Consolidation Loan 
 under 

section 428C comprised only in part of repayment 
 obligations incurred to cover the cost of attendance at 
 the institution whose acts or omissions are the basis 
 of the discharge, the Secretary may discharge less than 
 the total amount of the covered loan when loan account 
 records clearly establish the portion of the covered 
 loan not subject to the defense to repayment.
 ``
        (B) Reimburse all payments previously made to the 
 Secretary on the covered loan, subject to the 
 limitation in paragraph

    (5) .
 ``
            (C) For borrowers in default, determine that the 
 borrower is not in default on the covered loan and 
 therefore not ineligible to receive assistance under 
 this title on the basis of default on the covered loan.
 ``
            (D) Update or delete adverse reports the 
 Secretary previously made to consumer reporting 
 agencies regarding the covered loan.
 ``
        (E) Remove the discharged covered loan and any 
 grant made under this title related to the student's 
 attendance at the institution whose acts are omissions 
 are the basis of the discharge from the borrower's loan 
 history for purposes of calculating eligibility for 
 further grants and loans under this title.
 ``

    (5) Limitation on discharge and reimbursement.--The 
 Secretary may reduce the amount of discharge and reimbursement 
 provided for in paragraph

    (4) if the borrower received a money 
 payment from the institution or related entity in compensation 
 for the acts or omissions forming the basis of the borrower 
 defense. In deciding whether a reduction is warranted, and in 
 what amount, the Secretary shall consider the extent to which 
 the payment received by the borrower compensated for non-
 economic damages, out-of-pocket expenses, or payments 
 previously made directly to the institution, and whether the 
 borrower has non-Federal student loans as a result of attending 
 the institution. The Secretary may not reduce the amount of 
 discharge and reimbursement provided for in a covered loan in 
 paragraph

    (4) because the borrower received funds from a State 
 tuition recovery fund.
 ``

    (6) Finality.--A borrower defense discharge is final upon 
 the Secretary's notification to the borrower. The Secretary may 
 not thereafter revoke or reduce the amount of discharge or 
 reimbursement, absent a finding of fraud on the part of the 
 borrower.
 ``

    (7) Group process.--Where substantial misrepresentations 
 are widespread, the Secretary shall seek to assess the 
 eligibility of all potentially affected borrowers as a group or 
 in multiple groups to expedite the process. If such discharges 
 are approved, the Secretary shall discharge the covered loans 
 of all eligible borrowers in the group, in accordance with the 
 processes in this section and without requiring application 
 materials, to the extent practicable.
 ``

    (8) Regulations.--The Secretary may promulgate 
 regulations or otherwise prescribe procedures in relation to 
 borrower defense discharge, consistent with the provisions of 
 this section. Nothing in this section modifies or displaces 
 existing powers, authorities, and obligations of the Secretary, 
 including obligations imposed under chapter 5 of title 5, 
 United States Code (commonly known as the `Administrative 
 Procedures Act').''.

    (b) Substantial Misrepresentation.--

Section 481 (20 U.S.C. 1088) is 
amended by adding at the end the following:
 ``

    (g) Substantial Misrepresentation.--In this title, the term 
`substantial misrepresentation', when used with respect to an 
institution of higher education, includes--
 ``

    (1) any statement about the nature of the institution's 
 educational program, its financial charges, or the 
 employability or earnings of its graduates that is false, 
 erroneous, or has the likelihood or tendency to mislead under 
 the circumstances, on which the person to whom it was made 
 could reasonably be expected to rely, or has reasonably relied, 
 to that person's detriment; and
 ``

    (2) any omission of fact, such as the concealment, 
 suppression, or absence of material information about the 
 nature of the institution's educational program, its financial 
 charges, the employability or earnings of its graduates, the 
 availability of enrollment openings in the student's desired 
 program, the factors that would prevent an applicant from 
 meeting the legal or other requirements to be employed, 
 licensed, or certified in the field for which the training is 
 provided which a reasonable person would have considered in 
 making a decision to attend, or to continue attending, the 
 institution or to take out a covered loan.''.

SEC. 103. CLOSED SCHOOL DISCHARGE.

 

Section 437
            (c) (1) (20 U.S.C. 1087
            (c) (1) ) is amended to read as 
follows:
 ``

    (1) In general.--
 ``
        (A) In general.--If a borrower who received, on 
 or after January 1, 1986, a loan made, insured, or 
 guaranteed under this part and the student borrower, or 
 the student on whose behalf a parent borrowed, is 
 unable to complete the program in which such student is 
 enrolled due to the closure of the institution or if 
 such student's eligibility to borrow under this part 
 was falsely certified by the eligible institution or 
 was falsely certified as a result of a crime of 
 identity theft, or if the institution failed to make a 
 refund of loan proceeds which the institution owed to 
 such student's lender, then the Secretary shall 
 discharge the borrower's liability on the loan 
 (including interest and collection fees) by repaying 
 the amount owed on the loan.
 ``
        (B) Additional discharge.--
 ``
            (i) In general.--In addition to the 
 authorization of discharge under subparagraph
        (A) , the Secretary shall discharge a borrower's 
 (including an endorser's) liability on a 
 Federal Direct Loan made under part D if--
 ``
            (I) the institution at which the 
 borrower who took the loan (or on whose 
 behalf it was taken or endorsed) was 
 enrolled, ceased to provide educational 
 instruction as a whole, or ceased to 
 provide instruction in the programs in 
 which more than 50 percent of the 
 students were enrolled; or
 ``
            (II) the borrower who took the 
 loan (or on whose behalf it was taken 
 or endorsed) was enrolled in an 
 institution at any time within the 
 period not earlier than 180 days before 
 the date of the closure of the 
 institution.
 ``
            (ii) Extension of 180 days.--The 
 Secretary may extend the 180 day period 
 described in clause
            (i) 
            (II) in cases where 
 exceptional circumstances are demonstrated, 
 including if--
 ``
            (I) the institution was placed on 
 probation or order to show cause or 
 approval was withdrawn or terminated by 
 an accrediting agency or association or 
 an institution's institutional 
 accreditor, or a State authorizing or 
 licensing authority;
 ``
            (II) the institution was placed 
 on Heightened Cash Monitoring status by 
 the Department or was placed on 
 Provisional Program Participation 
 Approval status, or the institution's 
 participation in a program under this 
 title was terminated by the Department;
 ``
            (III) the institution was found 
 to have violated Federal or State law 
 related to enrolling or providing 
 education services to students by a 
 Federal or State Government agency, or 
 is the subject of a Federal or State 
 court judgment that the institution 
 violated laws related to enrolling or 
 providing education services to 
 students;
 ``
            (IV) the teach-out plan (as 
 required under 

section 487

    (f) ) of the 
 borrower's educational program exceeds 
 the 180 day period described in clause
            (i) 
            (II) ;
 ``
            (V) the institution responsible 
 for the teach-out of the borrower's 
 educational program fails to perform 
 the material terms of the teach-out 
 plan (as required under 

section 487

    (f) ), such that the borrower does 
 not have a reasonable opportunity to 
 complete the borrower's program of 
 study; and
 ``
            (VI) the institution permanently 
 closed all or most of its in-person 
 locations while maintaining online 
 programs or permanently closed many 
 programs.
 ``
            (C) No application requirement.--A borrower who 
 took a loan (or on whose behalf it was taken or 
 endorsed) that is eligible for discharge under this 
 paragraph due to institutional closure is entitled to 
 discharge without an application or statement from the 
 borrower 1 year after the institution's closure date if 
 the student did not complete the program at the 
 institution.
 ``
            (D) Pursing claims.--After discharging liability 
 on a loan under this paragraph, the Secretary shall 
 pursue any claim available to a borrower against the 
 institution and its affiliates and principals or settle 
 the loan obligation pursuant to the financial 
 responsibility authority under subpart 3 of part H.''.

SEC. 104. PROHIBITION ON INSTITUTIONS LIMITING STUDENT LEGAL ACTION.

    (a) Enforcement of Arbitration Agreements.--

    (1) In general.--Chapter 1 of title 9, United States Code, 
 (relating to the enforcement of arbitration agreements) shall 
 not apply to an enrollment agreement made between a student and 
 an institution of higher education.

    (2) === Definition. ===
-In this section, the term ``institution of 
 higher education'' has the meaning given such term in 

section 102 of the Higher Education Act of 1965 (20 U.S.C. 1002).

    (b) Prohibition on Limitations on Ability of Students To Pursue 
Claims Against Certain Institutions of Higher Education.--

Section 487

    (a) (20 U.S.C. 1094

    (a) ) is amended by adding at the end the 
following:
 ``

    (30) The institution--
 ``
        (A) will not require any student to agree to, and 
 will not enforce, any limitation or restriction 
 (including a limitation or restriction on any available 
 choice of applicable law, a jury trial, or venue) on 
 the ability of a student to pursue a claim, 
 individually or with others, against an institution in 
 court; and
 ``
        (B) will provide written notification to students 
 enrolled at the institution that any limitation or 
 restriction on the ability of a student to pursue a 
 claim, individually or with others, against an 
 institution in court contained in any enrollment or 
 other agreement with a student will not be enforced.''.
            (c) Private Right of Action.--

    (1) In general.--
        (A) Private right of action.--A violation described 
 in subparagraph
        (B) shall be subject to a private right 
 of action enforceable by a student or former student of 
 an institution of higher education, on behalf of such 
 individual or such individual and a class, in an 
 appropriate district court of the United States or any 
 other court of competent jurisdiction that also has 
 jurisdiction over the defendant. The student or former 
 student may seek any relief provided under 

section 455

    (h) for such violation, or any remedies otherwise 
 available to the individual under law and equity.
        (B) Violations.--A violation described in this 
 subparagraph is any of the following:
            (i) A substantial misrepresentation, 
 including a substantial omission of fact.
            (ii) A violation of 

section 487

    (a)

    (20) of 
 the Higher Education Act of 1965 (20 U.S.C. 
 1094

    (a)

    (20) ).
            (iii) A violation of the default rate 
 regulations promulgated by the Secretary under 
 

section 435
            (m) (3) of the Higher Education Act 
 of 1965 (20 U.S.C. 1085
            (m) (3) ).
            (iv) A violation of the program integrity 
 regulations promulgated by the Secretary under 
 the Higher Education Act of 1965 (20 U.S.C. 
 1001 et seq.), including regulations 
 promulgated to carry out 

section 102, 

section 455, and part H of such Act.

    (2) Amount of damages.--
        (A) In general.--Any institution of higher 
 education, third party servicer that contracts with 
 such institution, or third party contractor that 
 commits a substantial misrepresentation may be held 
 liable to a student or former student of that 
 institution in an amount equal to the sum of--
            (i) any actual damage sustained by such 
 individual as a result of each substantial 
 misrepresentation;
            (ii) any additional damages as the court 
 may allow; and
            (iii) in the case of any successful action 
 to enforce the foregoing liability, the costs 
 of the action, together with a reasonable 
 attorney's fee as determined by the court.
        (B) Ability to assess punitive damages.--
            (i) In general.--On a finding by the court 
 that an institution of higher education, third 
 party servicer that contracts with such 
 institution, or third party contractor has 
 committed a violation described in paragraph

    (1)
        (B) with actual or constructive knowledge or 
 reckless disregard for such violation, the 
 court may assess punitive damages not to exceed 
 threefold the sum of actual damages sustained 
 by the plaintiff or class, including court 
 costs and a reasonable attorney's fee.
            (ii) Factors considered by the court.--In 
 determining the amount of liability in any 
 action under clause
            (i) , the court shall 
 consider, among other relevant factors--
            (I) in any individual action under 
 this subsection, the frequency and 
 persistence of noncompliance by the 
 institution of higher education, third 
 party servicer that contracts with such 
 institution, or third party contractor 
 and the nature of such noncompliance; 
 or
            (II) in any class action under this 
 subsection, in addition to the factors 
 listed in subclause
            (I) , the financial 
 resources of the institution of higher 
 education, third party servicer that 
 contracts with such institution, or 
 third party contractor and the number 
 of persons adversely affected.

    (3) Jurisdiction.--An action to enforce any liability 
 created by this subsection may be brought in any appropriate 
 United States district court without regard to the amount in 
 controversy, or in any other court of competent jurisdiction.
            (d) Prohibition on Transcript Withholding.--

Section 487

    (a) (20 
U.S.C. 1094

    (a) ), as amended by subsection

    (b) , is further amended by 
adding at the end the following:
 ``

    (31) The institution--
 ``
        (A) will not withhold official transcripts 
 related to a balance owed by the student to the 
 institution; and
 ``
        (B) will provide an official transcript to a 
 student upon request by the student.''.

SEC. 105. INCENTIVE COMPENSATION.

    (a) Incentive Compensation.--

    (1) Revocation.--Example 2-B of Question 2 of the 
 Department of Education Dear Colleague Letter GEN-11-05 (March 
 17, 2011) is revoked.

    (2) Prohibition.--The Department of Education may not issue 
 a regulation or subregulatory guidance that would establish an 
 exception to the prohibition provided in 

section 487

    (a)

    (20) of 
 the Higher Education Act of 1965 (20 U.S.C. 1094

    (a)

    (20) ).

    (b) Institutional Compliance With the Incentive Compensation Ban.--

Section 487

    (a)

    (20) (20 U.S.C. 1094

    (a)

    (20) ) is amended--

    (1) by striking ``The institution'' and inserting ``
        (A) The 
 institution''; and

    (2) by adding at the end the following:
 ``
        (B) Not later than 1 year after the date of enactment of 
 the Preventing Risky Operations from Threatening the Education 
 and Career Trajectories of Students Act of 2025, the 
 institution shall attest to the Secretary that the institution 
 is in compliance with subparagraph
        (A) notwithstanding the 
 guidance provided in Department of Education Example 2-B of 
 Question 2 of Dear Colleague Letter GEN-11-05 (March 17, 2011), 
 in such form as required by the Secretary. If the institution 
 is not in compliance as of the date of enactment of the 
 Preventing Risky Operations from Threatening the Education and 
 Career Trajectories of Students Act of 2025, the Secretary 
 shall revoke the institution's program participation agreement 
 under this section.
 ``
            (C) Following the attestation required under subparagraph
        (B) , the institution shall annually provide verification from 
 an independent auditor that the institution is in compliance 
 with subparagraph
        (A) .''.

 TITLE II--ENSURING INTEGRITY AT INSTITUTIONS OF HIGHER EDUCATION AND 
 INSTITUTIONAL CONTRACTORS

SEC. 201. UPDATING FEDERAL OVERSIGHT OF THIRD-PARTY SERVICERS.

 

Section 481
            (c) (1) (20 U.S.C. 1088
            (c) (1) ) is amended by inserting 
``, including related to the delivery of funds under this title, 
recruitment or retention of students, compliance with cohort default 
rate (as defined in 

section 435
            (m) ) requirements, the development and 
delivery of instructional content, and other applicable activities as 
described by the Secretary'' after ``title''.

SEC. 202. JOB PLACEMENT RATES.

    (a) 

=== Definition. ===
-

Section 481 (20 U.S.C. 1088), as amended by 

section 102

    (b) , is further amended by adding at the end the following:
 ``

    (h) Job Placement Rates.--The Secretary shall establish a single 
definition of `job placement rate' for purposes of this Act that 
ensures consistent determinations across institutions and accrediting 
agencies regarding when students are placed in a job, to improve 
accuracy and minimize the opportunity for misleading or deceptive 
information.''.

    (b) Program Participation Agreement.--

Section 487

    (a)

    (8) (20 U.S.C. 
1094

    (a)

    (8) ) is amended to read as follows:
 ``

    (8) In the case of an institution that advertises or 
 discloses job placement rates to prospective students or that 
 is required to provide regular reporting of job placement rates 
 to an accrediting agency, State authorizer, or other regulator, 
 the institution will utilize the definition provided under 
 

section 481

    (h) , and shall make available to prospective 
 students, at or before the time of application--
 ``
        (A) the most recent available data concerning 
 employment statistics, graduation statistics, the 
 methodology used by the institution to calculate the 
 job placement rate, and any other information necessary 
 to substantiate the truthfulness of the advertisements 
 or disclosures, 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.''.
            (c) Accrediting Agency Recognition.--

Section 496

    (a)

    (5)
        (A) (20 
U.S.C. 1099b

    (a)

    (5)
        (A) ) is amended by inserting ``, as defined pursuant 
to 

section 481

    (h) '' before the semicolon.
            (d) Nonapplicability of Rulemaking Requirements.--The amendments 
made under this section shall not be subject to the requirements 
provided under 

section 492 (20 U.S.C. 1098a).

SEC. 203. ALLOCATION OF TUITION AND FEE REVENUE BY TITLE IV 
 INSTITUTIONS.

 

Section 498
            (c) (20 U.S.C. 1099c
            (c) ) is amended by inserting at the 
end the following:
 ``

    (7) Requirement to Spend Revenue.--
 ``
        (A) In general.--
 ``
            (i) Beginning in academic year 2026-2027 and in 
 each academic year thereafter through 2031-2032, each 
 institution of higher education, in order to be 
 eligible to participate in programs under this title, 
 shall spend an amount equal to not less than 30 percent 
 of their tuition and fee revenue (net of allowances and 
 discounts) on instruction.
 ``
            (ii) Beginning in academic year 2027-2028 and in 
 each academic year thereafter through 2030-2031, the 
 Secretary shall assess the data described in 
 subparagraph
        (B) and issue a report that identifies the 
 following:
 ``
            (I) The total amount of spending on 
 instruction for each institution.
 ``
            (II) The total amount of spending on 
 student services for each institution, 
 excluding advertising, recruiting, marketing, 
 compensation of executives or officers, 
 lobbying, and other pre-enrollment expenses, 
 consistent with 

section 132
            (l) .
 ``
            (III) Tuition and fee revenue (net of 
 allowances and discounts) for each institution.
 ``
            (IV) The median increase in total 
 spending on student services and instruction 
 combined relative to spending on instruction 
 relative to tuition and fee revenue (net of 
 allowances and discounts).
 ``
            (V) Other relevant information the 
 Secretary determines appropriate to include.
 ``
            (iii) In academic year 2031-2032, the Secretary 
 shall issue a regulation that establishes a minimum 
 threshold percentage for institutional spending on 
 instruction and student services combined that shall 
 be--
 ``
            (I) not less than 30 percent; and
 ``
            (II) consistent with the median increase 
 in total spending, as identified under clause
            (ii) 
            (IV) averaged across academic years 2028-
 2029, 2029-2030, and 2030-2031.
 ``
            (iv) Beginning in academic year 2031-2032 and in 
 each academic year thereafter, each institution of 
 higher education, in order to be eligible to 
 participate in programs under this title, shall spend 
 an amount equal to not less than the threshold 
 percentage established under clause
            (iii) of their 
 tuition and fee revenue (net of allowances and 
 discounts) on instruction and student services 
 combined.
 ``
        (B) Reporting from institutions.--The Secretary shall use 
 data from reports received and definitions established under 
 

section 132
            (l) to carry out this paragraph.
 ``
            (C) Warnings.--The Secretary shall--
 ``
            (i) establish through regulation appropriate 
 thresholds for an institution of higher education that 
 meets the spending requirements under clauses
            (i) and
            (iv) of subparagraph
        (A) , but which is at risk of 
 missing such thresholds; and
 ``
            (ii) require each institution of higher education 
 that is at risk of missing such thresholds to provide 
 warnings to prospective students and enrolled students 
 of the institution regarding the low instructional 
 spending.
 ``
            (D) Regulations.--The Secretary shall issue such 
 regulations as determined necessary by the Secretary to ensure 
 compliance with the requirements of this paragraph, taking into 
 consideration cost and convenience.''.

SEC. 204. PAST PERFORMANCE.

 

Section 487

    (a)

    (16) (20 U.S.C. 1094

    (a)

    (16) ) is amended by inserting 
at the end the following:
 ``
            (C) The institution will not knowingly employ an 
 individual who was an owner, director, officer, or employee who 
 exercised substantial control over an institution that owes a 
 liability.
 ``
            (D) The institution will not knowingly--
 ``
            (i) employ an individual who was--
 ``
            (I) an owner, director, officer, or 
 employee of an institution that has--
 ``

    (aa) been found to have engaged 
 in fraud, misuse of funds, or any 
 material violation of law; or
 ``

    (bb) had its participation in 
 programs under this title terminated, 
 its certification revoked, or its 
 application for certification or 
 recertification for participation in 
 such programs denied; or
 ``
            (II) a 10 percent-or-higher equity owner, 
 director, officer, principal, or executive of, 
 or contractor affiliated with, another 
 institution in any year in which the other 
 institution incurred a loss of Federal funds, 
 as determined by the Secretary, in excess of 5 
 percent of the other institution's annual funds 
 under this title; or
 ``
            (ii) contract with any institution, third-party 
 servicer, individual, agency, or organization that has, 
 or whose owners, officers, or employees have--
 ``
            (I) been found to have engaged in fraud, 
 misuse of funds, or any material violation of 
 law;
 ``
            (II) had its participation in programs 
 under this title terminated, its certification 
 revoked, or its application for certification 
 or recertification for participation in such 
 programs denied; or
 ``
            (III) been a 10 percent-or-higher equity 
 owner, director, officer, principal, executive 
 of, or contractor affiliated with, another 
 institution in any year in which the other 
 institution incurred a loss of Federal funds, 
 as determined by the Secretary, in excess of 5 
 percent of the other institution's annual funds 
 under this title.''.

SEC. 205. RECOUPMENT.

    (a) Clarifying the Authority To Recoup Liabilities From Title IV 
Institutions.--

Section 487
            (c) (1) (20 U.S.C. 1094
            (c) (1) ) is amended by 
striking subparagraph
        (F) and inserting the following:
 ``
        (F) the limitation, suspension, or termination of 
 the participation in any program under this title of an 
 eligible institution, the recoupment of liabilities 
 established pursuant to 

section 493E, 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.''.

    (b) Recoupment of Liabilities.--Part G of title IV (20 U.S.C. 1088 
et seq.) is amended by adding at the end the following:

``

SEC. 493E. RECOUPMENT.

 ``

    (a) In General.--The Secretary shall assess liabilities and seek 
to recoup funds provided under this title from an institution of higher 
education as a result of student loan discharges, findings from program 
reviews or compliance audits, or due to other forms of misconduct or 
noncompliance.
 ``

    (b) Waiver Authority.--The Secretary may waive some or all of the 
liabilities described in subsection

    (a) based on the individual 
circumstances of the institution.''.
            (c) Owner Signatures.--

Section 498

    (b) of the Higher Education Act 
of 1965 (20 U.S.C. 1099c

    (b) ) is amended--

    (1) in paragraph

    (4) , by striking ``and'' after the 
 semicolon;

    (2) in paragraph

    (5) , by striking the period at the end and 
 inserting ``; and''; and

    (3) by adding at the end the following:
 ``

    (6) requires both an authorized representative of the 
 institution and, if applicable, an authorized representative of 
 any entity with ownership and substantial control over the 
 institution to sign the program participation agreement, as 
 described under 

section 487, for the institution, which shall 
 ensure that the institution and its owner, if applicable, agree 
 to repay any liabilities assessed against the institution by 
 the Secretary.''.

 TITLE III--IMPROVING OVERSIGHT

SEC. 301. ENFORCEMENT IN THE OFFICE OF FEDERAL STUDENT AID.

    (a) Enforcement Unit Established in the Office of Federal Student 
Aid.--

Section 141 (20 U.S.C. 1018) is amended--

    (1) by redesignating subsections

    (g) through
            (i) as 
 subsections

    (h) through

    (j) , respectively; and

    (2) by inserting after subsection

    (f) the following:
 ``

    (g) Enforcement Unit.--
 ``

    (1) In general.--The Chief Operating Officer, in 
 consultation with the Secretary, shall establish an enforcement 
 unit within the PBO (referred to in this section as the 
 `enforcement unit').
 ``

    (2) Appointment.--
 ``
        (A) Chief enforcement officer.--The Chief 
 Operating Officer, in consultation with the Secretary, 
 shall appoint a Chief Enforcement Officer as a senior 
 manager, in accordance with subsection

    (e) , to perform 
 the functions described in this subsection. The Chief 
 Enforcement Officer shall report solely and directly to 
 the Chief Operating Officer.
 ``
        (B) Bonus.--Notwithstanding subsection

    (e) , the 
 Chief Enforcement Officer may receive a bonus, 
 separately determined from the methodology which 
 applies to the calculation of bonuses for other senior 
 managers, based upon the Chief Operating Officer's 
 evaluation of the Chief Enforcement Officer's 
 performance in relation to the goals set forth in a 
 performance agreement related to the specific duties of 
 the enforcement unit.
 ``

    (3) Duties.--The enforcement unit shall--
 ``
        (A) receive, process, and analyze allegations and 
 complaints regarding the potential violation of Federal 
 or State law (including civil and criminal law) or 
 other unfair, deceptive, or abusive acts or practices, 
 by institutions of higher education, third-party 
 servicers that contract with such institutions, and 
 loan servicers;
 ``
        (B) investigate and coordinate investigations of 
 potential or actual misconduct of institutions of 
 higher education, third-party servicers that contract 
 with such institutions, and loan servicers, including 
 engaging in a regular program of secret shopping at 
 online and campus-based institutions of higher 
 education;
 ``
            (C) develop and implement a written policy for 
 the enforcement of the ban on prohibited incentive 
 compensation not less than annually, which may include 
 automatic triggers for inquiries by the Department or 
 regular `secret shopper' or audit-based investigations, 
 and shall update such policy as needed; and
 ``
            (D) enforce compliance with laws governing 
 Federal student financial assistance programs under 
 title IV, including through the use of an emergency 
 action in accordance to 

section 487
            (c) (1)
            (I) , the 
 limitation, suspension, or termination of the 
 participation of an eligible institution in a program 
 under title IV, or the imposition of a civil penalty in 
 accordance with 

section 487
            (c) (3)
        (B) .
 ``

    (4) Coordination and staffing.--The enforcement unit 
 shall--
 ``
        (A) coordinate with relevant Federal and State 
 agencies and oversight bodies, including the For-Profit 
 Education Oversight Coordination Committee established 
 under 

section 124; and
 ``
        (B) hire staff, (including by appointing not more 
 than 10 individuals in positions of excepted service, 
 as described in subsection

    (h)

    (3) ) with such expertise 
 as is necessary to conduct investigations, respond to 
 allegations and complaints, and enforce compliance with 
 laws governing Federal student financial assistance 
 programs under title IV.
 ``

    (5) Divisions.--
 ``
        (A) In general.--The enforcement unit shall have 
 separate divisions with the following focus areas:
 ``
            (i) An investigations division to 
 investigate potential or actual misconduct at 
 institutions of higher education, third-party 
 servicers that contract with such institutions, 
 and loan servicers.
 ``
            (ii) A division focused on evaluating the 
 claims of borrowers who assert a defense to 
 repayment of Federal student loans, or groups 
 of borrowers who qualify to assert such a 
 defense to repayment, under 

section 455

    (h) .
 ``
            (iii) A division focused on oversight of 
 the Jeanne Clery Disclosure of Campus Security 
 Policy and Campus Crime Statistics Act, the 
 reporting of crime and fire statistics by 
 institutions of higher education, and the 
 oversight and enforcement of 

section 120 
 (relating to drug and alcohol abuse 
 prevention).
 ``
            (iv) A division to administer the 
 Secretary's authority to fine, limit, suspend, 
 terminate, or take action against institutions 
 of higher education, and third-party servicers 
 that contract with such institutions, 
 participating in the Federal student financial 
 assistance programs under title IV.
 ``
            (v) A division that administers a program 
 of compliance monitoring and oversight of 
 institutions of higher education, and third-
 party servicers that contract with such 
 institutions, including systems and procedures 
 to support the eligibility, certification, and 
 oversight of program participants, for all 
 institutions of higher education participating 
 in the Federal student financial assistance 
 programs under title IV.
 ``
            (vi) Any other division that the Chief 
 Enforcement Officer, in coordination with the 
 Chief Operating Officer and the Secretary, 
 determines is necessary.
 ``
        (B) Reporting.--The staff of each division 
 described in subparagraph
        (A) shall report to the Chief 
 Enforcement Officer.
 ``

    (6) Actions recommended.--The Chief Enforcement Officer 
 may recommend, as appropriate to the particular circumstance, 
 that the Chief Operating Officer--
 ``
        (A) terminate, suspend, or limit an institution 
 of higher education or a third-party servicer that 
 contracts with such institution from participation in 1 
 or more programs under title IV (in accordance with 
 

section 487), or provisionally certify such 
 participation (in accordance with 

section 498

    (h) );
 ``
        (B) impose a civil penalty in accordance with 
 

section 487
            (c) (3)
        (B) ;
 ``
            (C) for a student loan servicer, obtain all 
 relief, including any penalties and suspension or 
 termination of the agreement, provided in the loan 
 servicer agreement to the contract of the servicer; or
 ``
            (D) make a recommendation to the Secretary about 
 whether to approve or deny the claims of borrowers, 
 including groups of borrowers, who assert a defense to 
 repayment in accordance with 

section 455

    (h) .''.

    (b) Extend Subpoena Power To Assist With Investigations.--

Section 490A

    (a) (20 U.S.C. 1097a

    (a) ) is amended to read as follows:
 ``

    (a) Authority.--To assist the Secretary in the conduct of 
investigations of possible violations of the provisions of this title, 
the Secretary is authorized to--
 ``

    (1) require by subpoena the production of information, 
 documents, reports, answers, records, accounts, papers, and 
 other documentary evidence pertaining to participation in any 
 program under this title, the production of which may be 
 required from any place in a State; and
 ``

    (2) require by subpoena oral testimony by any person, 
 including any legal entity, concerning information pertaining 
 to participation in any title IV program, the appearance for 
 which may be required at any place in a State.''.
            (c) Program Reviews.--

Section 498A of the Higher Education Act of 
1965 (20 U.S.C. 1099c-1) is amended--

    (1) in subsection

    (a) --
        (A) in the matter preceding paragraph

    (1) , by 
 striking ``and financial responsibility'' and inserting 
 ``, financial responsibility, and other eligibility-
 related''; and
        (B) in paragraph

    (2) --
            (i) by redesignating subparagraphs
        (A) through
        (F) as subparagraphs
        (B) through
        (G) , 
 respectively;
            (ii) by inserting before subparagraph
        (B) , 
 as so redesignated, the following:
 ``
        (A) identified as `high-risk' institutions based 
 on a risk-review process developed by the Department 
 that shall include risk factors, including--
 ``
            (i) significant changes in enrollment;
 ``
            (ii) high volumes of student complaints 
 or borrower defense claims;
 ``
            (iii) indicators of issues related to 
 financial capability;
 ``
            (iv) low completion rates;
 ``
            (v) indications of misleading or 
 deceptive practices, aggressive recruiting, or 
 substantial misrepresentation;
 ``
            (vi) significant completion gaps between 
 students of different demographic groups; or
 ``
            (vii) other indicators of risk to 
 students or taxpayers;''; and
            (iii) in subparagraph
        (G) , as so 
 redesignated, by striking ``or financial 
 responsibility'' and inserting ``, financial 
 responsibility, or other eligibility-related'';

    (2) in subsection
            (d) , by striking ``criminal investigative 
 training'' and inserting ``criminal and civil investigative 
 training (including training in identifying misrepresentations 
 in marketing and recruitment materials)'';

    (3) by redesignating subsection

    (e) as subsection

    (f) ; and

    (4) by inserting after subsection
            (d) the following:
 ``

    (e) Program Reviews.--Program reviews shall, at minimum, include 
a review of all--
 ``

    (1) recruiting and marketing materials, including scripts 
 and training materials provided to institution and third-party 
 servicer staff involved in recruiting, admissions, or financial 
 aid;
 ``

    (2) consumer complaints held by the institution and 
 consumer agencies, borrower defense claims, the institution's 
 response to such complaints or claims, and any related 
 investigative materials;
 ``

    (3) actions against the institution by State or Federal 
 regulators or enforcement agencies, including State authorizing 
 agencies and State attorneys general, or through qui tam 
 actions; and
 ``

    (4) actions against the institution by accreditors.''.
            (d) Enhanced Civil Penalties.--

Section 487
            (c) (3)
        (B) of the Higher 
Education Act (20 U.S.C. 1094
            (c) (3)
        (B) ) is amended--

    (1) in clause
            (i) --
        (A) by inserting ``or its third-party servicer'' 
 after ``eligible institution''; and
        (B) by striking ``$25,000 for each violation or 
 misrepresentation'' and inserting ``$100,000 for each 
 violation or misrepresentation, or--
 ``
            (I) in the case of an 
 institution, 1.0 percent of the amount 
 of funds the institution received 
 through this title in the most recent 
 award year prior to the determination 
 for each such violation; and
 ``
            (II) in the case of a third-party 
 servicer that contracts with such 
 institution, the amount of the contract 
 with the institution.'';

    (2) by redesignating clause
            (ii) as clause
            (iii) ;

    (3) by inserting after clause
            (i) the following:
 ``
            (ii) The Secretary may consider each time a substantial 
 misrepresentation is viewed or experienced, including static or 
 standing misrepresentations, as a separate violation or 
 misrepresentation.''; and

    (4) by adding at the end the following:
 ``
            (iv) For the purpose of determining the amount of civil 
 penalties under this subsection, any violation by a particular 
 institution will accrue against all institutions or affiliates 
 with common ownership.''.

SEC. 302. FOR-PROFIT EDUCATION OVERSIGHT COORDINATION COMMITTEE.

 Part B of title I (20 U.S.C. 1011 et seq.) is amended by adding at 
the end the following:

``

SEC. 124. FOR-PROFIT EDUCATION OVERSIGHT COORDINATION COMMITTEE.

 ``

    (a) Establishment of Committee.--
 ``

    (1) In general.--There is established in the executive 
 branch a committee to be known as the `For-Profit Education 
 Oversight Coordination Committee' (referred to in this section 
 as the `Committee') and to be composed of the head (or the 
 designee of such head) of each of the following Federal 
 entities:
 ``
        (A) The Department of Education.
 ``
        (B) The Bureau of Consumer Financial Protection.
 ``
            (C) The Department of Justice.
 ``
            (D) The Securities and Exchange Commission.
 ``
        (E) The Department of Defense.
 ``
        (F) The Department of Veterans Affairs.
 ``
        (G) The Federal Trade Commission.
 ``
        (H) The Department of Labor.
 ``
            (I) The Internal Revenue Service.
 ``
        (J) The enforcement unit of the Performance-Based 
 Organization established under 

section 141

    (g) .
 ``
        (K) At the discretion of the Chairperson of the 
 Committee, any other relevant Federal agency or 
 department.
 ``

    (2) === Purposes ===
-The Committee shall have the following 
 purposes:
 ``
        (A) Coordinate Federal oversight of for-profit 
 institutions of higher education to--
 ``
            (i) improve enforcement of applicable 
 Federal laws;
 ``
            (ii) increase accountability of for-
 profit institutions of higher education to 
 students and taxpayers; and
 ``
            (iii) ensure the promotion of quality 
 education programs.
 ``
        (B) Coordinate Federal activities to protect 
 students from unfair, deceptive, abusive, unethical, 
 fraudulent, or predatory practices, policies, or 
 procedures of for-profit institutions of higher 
 education.
 ``
            (C) Encourage information sharing among agencies 
 related to Federal investigations, audits, program 
 reviews, inquiries, complaints, financial statements, 
 and other information relevant to the oversight of for-
 profit institutions of higher education.
 ``
            (D) Develop binding memoranda of understanding 
 that the Federal entities represented on the Committee 
 will use regarding the sharing of information to 
 exercise the oversight described in this section.
 ``
        (E) Increase coordination and cooperation between 
 Federal and State agencies (including State authorizing 
 agencies, State attorneys general, and State approving 
 agencies designated under 

section 3671 of title 38, 
 United States Code) with respect to improving oversight 
 and accountability of for-profit institutions of higher 
 education.
 ``
        (F) Develop best practices and consistency among 
 Federal and State agencies in the dissemination of 
 consumer information regarding for-profit institutions 
 of higher education to ensure that students, parents, 
 and other stakeholders have easy access to such 
 information.
 ``

    (3) Chairperson.--The Secretary of Education or the 
 designee of the Secretary shall serve as the Chairperson of the 
 Committee.
 ``

    (b) Meetings.--
 ``

    (1) 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 subsection

    (a)

    (2) .
 ``

    (2) Meetings with state agencies and stakeholders.--The 
 Committee shall meet not less than once each fiscal year, and 
 shall otherwise interact regularly, with State authorizing 
 agencies, State attorneys general, State approving agencies 
 designated under 

section 3671 of title 38, United States Code, 
 veterans service organizations, and consumer advocates to carry 
 out the purposes described in subsection

    (a)

    (2) .
 ``
            (c) Director.--The Chairperson shall appoint a full-time 
executive director to support the Committee and may appoint and fix the 
pay of additional staff as the Chairperson considers appropriate.''.

SEC. 303. ESTABLISHMENT AND MAINTENANCE OF COMPLAINT RESOLUTION AND 
 TRACKING SYSTEM.

    (a) Complaint Tracking System.--Title I (20 U.S.C. 1001 et seq.) is 
amended by adding at the end the following:

 ``PART F--COMPLAINT TRACKING SYSTEM

``

SEC. 161. COMPLAINT TRACKING SYSTEM.

 ``

    (a) 

=== Definitions. ===
-In this section:
 ``

    (1) Complainant.--The term `complainant' means an 
 individual making a complaint, or report of suspicious 
 activity, through the complaint tracking system.
 ``

    (2) Complaint tracking system.--The term `complaint 
 tracking system' means the tracking system established under 
 subsection

    (b) .
 ``

    (3) Third-party servicer.--The term `third-party 
 servicer' has the meaning given the term in 

section 481
            (c) .
 ``

    (b) In General.--The Secretary shall--
 ``

    (1) establish and operate, in coordination with the 
 Student Loan Ombudsman, a complaint tracking system that 
 includes a single, toll-free telephone number and a website to 
 facilitate the centralized collection of, monitoring of, and 
 response to complaints or reports of suspicious activity 
 regarding--
 ``
        (A) Federal student financial aid and the 
 servicing of postsecondary education loans by loan 
 servicers;
 ``
        (B) educational practices and services of 
 institutions of higher education or third-party 
 servicers; and
 ``
            (C) the recruiting and marketing practices of 
 institutions of higher education or third-party 
 servicers; and
 ``

    (2) ensure that--
 ``
        (A) complaints or reports submitted by students, 
 borrowers of student loans, staff of loan servicers, 
 institutions of higher education, or third-party 
 servicers, or the general public--
 ``
            (i) may remain anonymous if the 
 complainant so chooses, including by providing 
 complainants with an option for the individual 
 complaint to not be reported to the loan 
 servicer, institution, or third-party servicer, 
 as the case may be; and
 ``
            (ii) may describe problems that are 
 systematic in nature and not associated with a 
 particular student or institution;
 ``
        (B) complaints and reports are provided to the 
 loan servicers, institutions of higher education, or 
 third-party servicers that are the subject of such 
 complaints or reports;
 ``
            (C) such loan servicer, institution of higher 
 education, or third-party servicer provides a timely 
 response to the complainant; and
 ``
            (D) the complaint tracking system has the 
 capacity to retrieve, search, and categorize complaints 
 or reports for purposes of identifying problematic 
 trends and systemic practices.
 ``
            (c) Handling of Complaints or Reports.--
 ``

    (1) In general.--The Secretary shall establish, in 
 consultation with the heads of appropriate agencies (including 
 the Director of the Bureau of Consumer Financial Protection), 
 reasonable procedures to provide a timely response to 
 individuals who file a complaint or report of suspicious 
 activity in the complaint tracking system.
 ``

    (2) Timely response to complaints.--The Secretary shall 
 provide a response to a complainant not more than 90 days after 
 receiving the complaint, or report of suspicious activity, 
 through the system, in writing where appropriate. Each response 
 shall include a description of--
 ``
        (A) the steps that have been taken by the 
 Secretary in response to the complaint or report;
 ``
        (B) any responses received by the Secretary from 
 the loan servicer, institution of higher education, or 
 third-party servicer; and
 ``
            (C) any additional actions that the Secretary has 
 taken, or plans to take, in response to the complaint 
 or report.
 ``

    (3) Timely response to secretary by institution of higher 
 education or servicer.--
 ``
        (A) Notice.--If the Secretary determines that it 
 is necessary, the Secretary shall--
 ``
            (i) notify a loan servicer, institution 
 of higher education, or third-party servicer 
 that is the subject of a complaint, or report 
 of suspicious activity, through the complaint 
 tracking system regarding the complaint or 
 report; and
 ``
            (ii) directly address and resolve the 
 complaint or report in the system.
 ``
        (B) Institution or servicer response.--Not later 
 than 60 days after receiving a notice under 
 subparagraph
        (A) , a loan servicer, institution of 
 higher education, or third-party servicer shall provide 
 a response to the Secretary concerning the complaint or 
 report, including--
 ``
            (i) the steps that have been taken by the 
 loan servicer, institution, or third-party 
 servicer to respond to the complaint or report;
 ``
            (ii) all responses received by the loan 
 servicer, institution, or third-party servicer 
 from the complainant; and
 ``
            (iii) any additional actions that the 
 loan servicer, institution, or third-party 
 servicer has taken, or plans to take, in 
 response to the complaint or report.
 ``
            (C) Further investigation.--In the event that a 
 complaint or report received by the complaint tracking 
 system is not adequately resolved or addressed by the 
 responses of the loan servicer, institution of higher 
 education, or third-party servicer under subparagraph
        (B) , the Secretary may--
 ``
            (i) ask additional questions of such loan 
 servicer, institution, or third-party servicer; 
 or
 ``
            (ii) seek additional information from or 
 action by the loan servicer, institution, or 
 third-party servicer.
 ``

    (4) Provision of information.--
 ``
        (A) In general.--A loan servicer, institution of 
 higher education, or third-party servicer shall, in a 
 timely manner, comply with a request by the Secretary 
 for information in the control or possession of such 
 loan servicer, institution, or third-party servicer, 
 respectively, concerning a complaint or report of 
 suspicious activity received by the Secretary under the 
 complaint tracking system, including supporting written 
 documentation, subject to subparagraph
        (B) .
 ``
        (B) Exceptions.--A loan servicer, institution of 
 higher education, or third-party servicer shall not be 
 required to make available under this paragraph--
 ``
            (i) any nonpublic or confidential 
 information, including any confidential 
 commercial information;
 ``
            (ii) any information collected by the 
 loan servicer, institution, or third-party 
 servicer for the purpose of preventing fraud or 
 detecting or making any report regarding other 
 unlawful or potentially unlawful conduct; or
 ``
            (iii) any information required to be kept 
 confidential by any other provision of law.
 ``

    (5) Compliance.--A loan servicer, institution of higher 
 education, or third party servicer shall comply with the 
 requirements to provide responses and information, in 
 accordance with this subsection, as a condition of receiving 
 funds under title IV or as a condition of the contract with the 
 Department, as applicable.
 ``
            (d) Transparency.--
 ``

    (1) Data publication.--The Secretary shall, on an annual 
 basis, publish data on the website of the Department that shall 
 include, for each loan servicer, institution, and third-party 
 servicer--
 ``
        (A) the number of complaints and reports 
 received;
 ``
        (B) the types of complaints and reports received;
 ``
            (C) information about the resolution of the 
 complaints and reports; and
 ``
            (D) if the complainant consents, the narrative 
 content of the complaint or report.
 ``

    (2) Report.--Each year, the Secretary shall prepare and 
 submit to the authorizing committees a report describing--
 ``
        (A) the types and nature of complaints or reports 
 the Secretary has received under the complaint tracking 
 system;
 ``
        (B) the extent to which complainants are 
 receiving adequate resolution pursuant to this section;
 ``
            (C) whether particular types of complaints or 
 reports are more common in a given sector of 
 institutions of higher education or with particular 
 loan servicers or third-party servicers;
 ``
            (D) any concerning trends or systemic practices 
 identified;
 ``
        (E) any legislative recommendations that the 
 Secretary determines are necessary to better assist 
 students and families regarding the activities 
 described in subsection
            (c) (1) ; and
 ``
        (F) the loan servicers, institutions of higher 
 education, and third-party servicers with the highest 
 volume of complaints and reports, as determined by the 
 Secretary.''.

    (b) Program Participation Agreement Requirement.--

Section 487

    (a) (20 U.S.C. 1094

    (a) ) is amended by adding at the end the following:
 ``

    (32) The institution will comply with any requirement 
 under 

section 161, or any other requirement by the Department, 
 to provide information or responses with respect to a complaint 
 or report of suspicious activity about the institution.''.

SEC. 304. REFORMS TO ELIGIBILITY AND CERTIFICATION PROCEDURES.

    (a) Eligibility and Certification Procedures.--

Section 498 (20 
U.S.C. 1099c) is amended--

    (1) in subsection

    (a) --
        (A) by striking ``For purposes'' and inserting the 
 following:
 ``

    (1) In general.--For purposes'';
        (B) by striking ``status, and'' and inserting 
 ``status,'';
            (C) by inserting ``, and the institution's 
 compliance with all other eligibility requirements in 
 accordance with paragraph

    (2) ,'' after ``an institution 
 of higher education''; and
            (D) by adding at the end the following:
 ``

    (2) Compliance.--
 ``
        (A) In general.--In making a determination of 
 institutional eligibility under this section, the 
 Secretary shall--
 ``
            (i) require that an institution 
 demonstrate compliance with each provision 
 required under this title in order to receive a 
 full, non-provisional certification of 
 eligibility for purposes of this section;
 ``
            (ii) reflect that an institution is not 
 entitled to continued participation in programs 
 under this title absent a demonstration of full 
 compliance; and
 ``
            (iii) determine that an institution is 
 not eligible for participation in programs 
 under this title if it is not in full 
 compliance with 

section 487

    (a)

    (16) .''; and

    (2) in subsection

    (f) --
        (A) by striking ``The Secretary shall ensure'' and 
 inserting the following:
 ``

    (1) In general.--The Secretary shall ensure''; and
        (B) by striking ``The personnel'' and inserting the 
 following: ``The Secretary shall not automatically 
 certify or recertify an institution for participation 
 in a program under this title as a result of delay in 
 conducting a full review of the institution's 
 application.
 ``

    (2) Site visits.--The personnel''.

    (b) Provisional Certification of High-Risk Institutions.--

Section 498 (20 U.S.C. 1099c) is amended--

    (1) in subsection

    (h) --
        (A) in paragraph

    (1)
        (B) --
            (i) in clause
            (ii) , by striking ``or'' 
 after the semicolon;
            (ii) in clause
            (iii) , by striking the 
 period at the end and inserting a semicolon; 
 and
            (iii) by adding at the end the following:
 ``
            (iv) the institution has violated any 
 requirement of this title;
 ``
            (v) the institution has violated the 
 terms of its program participation agreement 
 under 

section 487; or
 ``
            (vi) the Secretary determines that the 
 institution's continued participation in 
 programs under this title poses a significant 
 risk to students and taxpayers.'';
        (B) by redesignating paragraphs

    (2) and

    (3) as 
 paragraphs

    (3) and

    (4) , respectively; and
            (C) by inserting after paragraph

    (1) the following:
 ``

    (2) Additional conditions.--The Secretary shall require a 
 provisionally certified institution to comply with such 
 additional conditions as the Secretary determines necessary or 
 appropriate based on the circumstances of the institution, as 
 specified in the institution's program participation agreement 
 under 

section 487.'';

    (2) by redesignating subsections
            (i) ,

    (j) , and

    (k) as 
 subsections

    (j) ,

    (k) , and
            (l) , respectively; and

    (3) by inserting after subsection

    (h) the following:
 ``
            (i) Termination Action.--If an institution that is provisionally 
certified under subsection

    (h) is unable to meet its responsibilities 
under its program participation agreement or is in violation of any 
requirement established under this title (including if the institution 
has engaged in substantial misrepresentations), or if a final 
administrative finding or judicial judgment determines that the 
institution violated a State or Federal consumer protection law or 
regulation, the Secretary may terminate the institution's participation 
in the programs under this title.''.
            (c) Program Participation Agreement Claims.--

    (1) False claims.--

Section 487
            (c) (20 U.S.C. 1094
            (c) ) is 
 amended by adding at the end the following:
 ``

    (8) False Claims.--
 ``
        (A) In general.--An institution that submits a 
 misrepresentation or false claim on an application for funds 
 under this title, or knowingly (as defined in 

section 3729 of 
 title 31, United States Code) fails to comply with the 
 requirements of the program participation agreement under this 
 section, shall be subject to sections 3729 through 3733 of such 
 title.
 ``
        (B) Amount of damages.--For purposes of 

section 3729

    (a) of title 31, United States Code, the amount of damages that the 
 Government sustains because of the act of the institution 
 described in subparagraph
        (A) shall be the total amount of 
 funds distributed to the institution for loans made to students 
 under part D during the period beginning on the date of the 
 submission of the application or the failure to comply (as the 
 case may be) and ending on the date on which a final decision 
 finding a violation of 

section 3729 of such Code is made.''.

    (2) Certification of compliance.--Paragraph

    (21) of 

section 487

    (a) (20 U.S.C. 1094

    (a)

    (21) ) is amended to read as follows:
 ``

    (21) The institution--
 ``
        (A) acknowledges that the agreement certifies the 
 institution's compliance with all terms of the program 
 participation agreement and all applicable Federal laws 
 and regulations that govern an institution's 
 eligibility to receive funds under this title;
 ``
        (B) agrees that any violation of the terms of a 
 program participation agreement or any other Federal 
 law or regulation described in subparagraph
        (A) constitutes material noncompliance with a condition of 
 payment; and
 ``
            (C) 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.''.

SEC. 305. STATE OVERSIGHT.

    (a) In General.--

Section 101 (20 U.S.C. 1001) is amended--

    (1) in subsection

    (a) --
        (A) by redesignating paragraphs

    (3) ,

    (4) , and

    (5) as paragraphs

    (4) ,

    (5) , and

    (6) , respectively; and
        (B) by inserting after paragraph

    (2) the following:
 ``

    (3) if providing education through distance education or 
 correspondence in a State in which the institution is not 
 located--
 ``
        (A) meets the requirements of such State for 
 offering postsecondary education; or
 ``
        (B) if the institution is authorized by a State 
 pursuant to an interstate reciprocity agreement--
 ``
            (i) the institution must have fewer than 
 200 students in such State enrolled annually;
 ``
            (ii) the agreement must allow States to 
 enforce all non-registration and non-fee laws 
 with respect to out-of-State institutions; and
 ``
            (iii) decisions regarding eligibility to 
 participate in the reciprocity agreement and 
 the standards that apply to participating 
 institutions shall be made exclusively by 
 representatives of member State regulatory 
 agencies or State attorneys general offices;''; 
 and

    (2) in subsection

    (b)

    (1) , by striking ``paragraphs

    (1) ,

    (2) ,

    (4) , and

    (5) of subsection

    (a) '' and inserting 
 ``paragraphs

    (1) ,

    (2) ,

    (3) ,

    (5) , and

    (6) of subsection

    (a) ''.

    (b) Conforming Amendments.--

Section 102 (20 U.S.C. 1002) is 
amended--

    (1) in subsection

    (a)

    (2)
        (A) , by striking ``

section 101

    (a)

    (4) '' each place the term appears and inserting ``

section 101

    (a)

    (5) '';

    (2) in subsection

    (b)

    (1) --
        (A) in subparagraph
        (B) , by striking ``paragraphs

    (1) and

    (2) of 

section 101

    (a) '' and inserting 
 ``paragraphs

    (1) ,

    (2) , and

    (3) of 

section 101

    (a) ''; and
        (B) in subparagraph
            (C) , by striking ``paragraph

    (4) of 

section 101

    (a) '' and inserting ``paragraph

    (5) of 

section 101

    (a) ''; and

    (3) in subsection
            (c) (1)
        (B) , by striking ``requirements of 
 paragraphs

    (1) ,

    (2) ,

    (4) , and

    (5) of 

section 101

    (a) '' and 
 inserting ``requirements of paragraphs

    (1) ,

    (2) ,

    (3) ,

    (5) , and

    (6) of 

section 101

    (a) ''.

SEC. 306. ACCREDITING AGENCY OVERSIGHT.

 

Section 496
            (c) (20 U.S.C. 1099b
            (c) ) is amended--

    (1) in paragraph

    (8) , by striking ``and'' after the 
 semicolon;

    (2) in paragraph

    (9)
        (B) , by striking the period at the end 
 and inserting ``; and''; and

    (3) by adding at the end the following:
 ``

    (10)
        (A) assesses the risk to students of any institution 
 or program, including assessing the risk to students and 
 institutions of any program managed by a third-party servicer, 
 in accordance with factors provided by the Secretary;
 ``
        (B) effectively determines whether each such institution 
 or program warrants additional oversight or action; and
 ``
            (C) provides adequate monitoring of the quality and risk 
 of such institutions or programs.''.

SEC. 307. MANDATORY SPENDING FOR ADMINISTRATIVE COSTS OF OPERATING THE 
 STUDENT AID PROGRAMS.

 Paragraph

    (3) of 

section 458

    (a) (20 U.S.C. 1087h

    (a)

    (3) ) is amended 
to read as follows:
 ``

    (3) Funds for administrative costs.--
 ``
        (A) In general.--Each fiscal year, there shall be 
 available to the Secretary from funds not otherwise 
 appropriated, funds to be obligated for administrative 
 costs under this part, including the costs of the 
 student loan program under this part, except that the 
 total expenditures by the Secretary under this 
 subparagraph shall not exceed 5 percent of the amount 
 of the average outstanding Federal student loan 
 portfolio under this part for the preceding fiscal 
 year.
 ``
        (B) Availability.--Funds made available under 
 subparagraph
        (A) shall remain available until expended. 
 The Secretary is authorized to use funds available 
 under this paragraph for a fiscal year for a subsequent 
 fiscal year.
 ``
            (C) Budget.--No funds may be expended under this 
 paragraph unless the Secretary includes in the annual 
 budget request of the Department to Congress a detailed 
 description of--
 ``
            (i) the specific activities for which the 
 funds made available by this paragraph have 
 been used in the most recent fiscal year;
 ``
            (ii) the activities and costs planned for 
 the fiscal year for which the request is made; 
 and
 ``
            (iii) the projection of activities and 
 costs for the fiscal year immediately following 
 the fiscal year for which administrative 
 expenses under this paragraph are made 
 available.''.

 TITLE IV--IMPROVING ACCESS TO STUDENT AND TAXPAYER INFORMATION

SEC. 401. REPORTING AND DISCLOSURES FROM INSTITUTIONS OF HIGHER 
 EDUCATION.

    (a) Gainful Employment and Financial Value Transparency Disclosures 
and Warnings.--

Section 498C, as added by 

section 101

    (b) , is amended--

    (1) by redesignating subsection

    (e) as subsection

    (f) ; and

    (2) by inserting after subsection
            (d) the following:
 ``

    (e) Disclosures and Warnings.--
 ``

    (1) In general.--For each gainful employment program or 
 graduate or professional degree program of an institution that 
 does not meet the standards described in subsection

    (b) , the 
 institution shall--
 ``
        (A) provide warnings to prospective students and 
 enrolled students of the institution regarding the 
 failing program status in a manner specified by the 
 Secretary; and
 ``
        (B) shall require prospective students to 
 acknowledge receipt of the warning.
 ``

    (f) Disclosure.--An institution of higher education shall provide 
the link to the website described in subsection
            (c) (2)
        (A)
            (ii) to 
prospective and enrolled students in a manner specified by the 
Secretary.''.

    (b) Instructional Spending Data and Disclosures.--

Section 132 (20 
U.S.C. 1015a) is amended--

    (1) by redesignating subsection
            (l) as subsection

    (n) ; and

    (2) by inserting after subsection

    (k) the following:
 ``
            (l) Investments in Instruction and Student Services.--
 ``

    (1) Institutional expenditures.--
 ``
        (A) In general.--The Secretary shall establish 
 definitions for calculating instructional expenditures 
 that shall separately account for the expenditures of 
 an institution of higher education on each of the 
 following:
 ``
            (i) Instruction.
 ``
            (ii) Student services.
 ``
            (iii) Marketing.
 ``
            (iv) Recruitment.
 ``
            (v) Advertising.
 ``
            (vi) Lobbying.
 ``
        (B) Exclusions.--Expenditures on instruction and 
 student services, as defined in accordance with clauses
            (i) and
            (ii) of subparagraph
        (A) , shall not include 
 expenditures on marketing, recruitment, advertising, 
 compensation of executives or officers, or lobbying, or 
 other pre-enrollment expenditures.
 ``

    (2) Reporting.--Each institution of higher education 
 receiving Federal funds under title IV shall report to the 
 Secretary--
 ``
        (A) the total dollar amount of title IV funds 
 received by the institution;
 ``
        (B) the proportion of title IV funds spent on 
 recruitment activities and marketing activities;
 ``
            (C) the proportion of title IV funds spent on 
 instruction and student services; and
 ``
            (D) for each program of education or division of 
 the institution for which the tuition is charged, the 
 price of tuition relative to the institution's 
 allocation of revenues to spending on instruction and 
 student services.
 ``

    (3) Disclosures by the department of education.--The 
 Secretary shall make the disclosures reported under paragraph

    (2) publicly available on the College Navigator website.''.
            (c) Transparency of Online Programs.--

Section 132 (20 U.S.C. 
1015a), as amended by subsection

    (b) , is further amended by inserting 
after subsection
            (l) , as added by subsection

    (b)

    (2) , the following:
 ``
            (m) Improving Transparency for Online and Contracted Programs.--
 ``

    (1) Annual reporting requirements for third-party 
 servicer activities.--Each institution of higher education that 
 receives Federal funds under title IV shall report annually to 
 the Secretary--
 ``
        (A) the name of each third-party servicer with 
 which the institution contracts; and
 ``
        (B) for each such third-party servicer--
 ``
            (i) the names of any programs for which 
 each such third-party servicer is contracted to 
 provide support;
 ``
            (ii) the services each such third-party 
 servicer is contracted to offer for each 
 program;
 ``
            (iii) the number of students enrolled in 
 any program for which the third-party servicer 
 is contracted to provide services;
 ``
            (iv) whether the third-party servicer 
 administers or provides any private or 
 institutional student loan products; and
 ``
            (v) the third-party servicer's total 
 expenditures on advertising, marketing, and 
 recruiting on behalf of the institution.
 ``

    (2) Disclosure requirements.--If an institution of higher 
 education receiving Federal funds under title IV contracts with 
 a third-party servicer to offer one or more programs of 
 education, and such third-party servicer provides recruitment 
 activities, retention activities, or similar activities (as 
 specified by the Secretary) for the program--
 ``
        (A) the institution and third-party servicer 
 shall prominently disclose for each such program of 
 education, in a manner specified by the Secretary and 
 using language developed by the Secretary, the nature 
 of the relationship between the institution and third-
 party servicer--
 ``
            (i) in advertisements;
 ``
            (ii) in marketing materials; and
 ``
            (iii) on the website of the institution; 
 and
 ``
        (B) individuals who are employed by the third-
 party servicer to provide admissions, recruitment, 
 retention, or advising activities shall prominently 
 disclose to prospective or enrolled students that the 
 individuals are employees of that third-party servicer 
 and not the institution, including in any communication 
 about the program of education.
 ``

    (3) Annual reporting requirements for online education.--
 Each institution of higher education receiving Federal funds 
 under title IV shall report annually to the Secretary--
 ``
        (A) the institution's expenditures on activities 
 to secure enrollments for each online, on-campus, and 
 hybrid program, and its total expenditures for all 
 activities of the institution;
 ``
        (B) the status of each student receiving Federal 
 student aid as enrolled online, on-campus, or in a 
 combination of both modalities, sufficient for the 
 Secretary to calculate the total student enrollment, 
 retention and completion rates, student loan borrowing 
 levels, student loan repayment outcomes, and median 
 earnings for each such program; and
 ``
            (C) the annual net price charged for each such 
 program.''.
            (d) Disclosure of Material Facts for Proprietary Institutions.--

Section 498
            (c) (20 U.S.C. 1099c
            (c) ), as amended by 

section 203, is 
further amended by adding at the end the following:
 ``

    (8)
        (A) The Secretary shall require each proprietary institution 
of higher education (as defined in 

section 102
            (c) ) to file promptly 
with the Secretary--
 ``
            (i) all public filings that the institution files with 
 the Securities and Exchange Commission that include references 
 to matters that affect students, including--
 ``
            (I) mergers and acquisitions;
 ``
            (II) changes of ownership;
 ``
            (III) changes of leadership and board membership;
 ``
            (IV) school or campus closings;
 ``
            (V) civil lawsuits;
 ``
            (VI) law enforcement actions, investigations, 
 subpoenas, and demand letters; and
 ``
            (VII) material change in financial status; and
 ``
            (ii) in the case of an institution that is not required 
 to make disclosures to the Securities and Exchange Commission, 
 notifications regarding matters that affect students similar to 
 the filings described in clause
            (i) , in a form and manner 
 determined by the Secretary.
 ``
        (B) The Secretary shall promptly make all information received 
under subparagraph
        (A) available on the website of the Department.''.

SEC. 402. TRANSPARENCY OF OVERSIGHT ACTIVITIES.

    (a) Borrower Defense Claims and Discharges Data.--

Section 455

    (h) (20 U.S.C. 1087e

    (h) ), as amended by 

section 102

    (a) , is further 
amended--

    (1) by redesignating paragraph

    (8) as paragraph

    (9) ; and

    (2) by inserting after paragraph

    (7) the following:
 ``

    (8) Transparency.--The Secretary shall make publicly 
 available, and keep regularly updated, information regarding 
 the number of borrower defense claims filed and discharges 
 granted, disaggregated by institution of attendance, State of 
 residence as of the date of the claim, student loan servicer, 
 and the amount of discharge and reimbursement, based on 
 increments of not less than $10,000.''.

    (b) 90/10 Rule Transparency.--Paragraph

    (3) of 

section 487
            (d) (20 
U.S.C. 1094
            (d) (3) ) is amended--

    (1) by redesignating subparagraphs
        (A) and
        (B) as clauses
            (i) and
            (ii) , respectively, and adjusting the margins 
 appropriately;

    (2) by striking ``The Secretary'' and inserting the 
 following:
 ``
        (A) Public disclosure of failure to meet 
 requirements.--The Secretary''; and

    (3) by adding at the end the following:
 ``
        (B) Public disclosure of 90/10 data.--
 ``
            (i) In general.--The Secretary shall 
 publicly disclose on the website of the 
 Department the data provided by proprietary 
 institutions for purposes of this subsection 
 (referred to in this subparagraph as the `90/10 
 database') in a prompt, comprehensive, and 
 user-friendly manner.
 ``
            (ii) Temporary omissions.--If any data 
 for a proprietary of institution required to be 
 disclosed under clause
            (i) is omitted because 
 of issues unresolved at a given deadline of the 
 Secretary, the Secretary shall--
 ``
            (I) include, in the 90/10 
 database on the College Navigator 
 website, a notice that the information 
 is omitted for such proprietary 
 institution and a clear explanation of 
 the reason for the delay; and
 ``
            (II) timely amend the 90/10 
 database to include the information 
 required to be disclosed for the 
 relevant reporting period.''.
            (c) Change of Ownership and Conversion Transparency.--

Section 498

    (j) (20 U.S.C. 1099c

    (j) ), as redesignated by 

section 304

    (b)

    (2) , is 
further amended by adding at the end the following:
 ``

    (5) The Secretary shall promptly disclose on the website of the 
Department--
 ``
        (A) any application for a change of ownership of an 
 institution or for a conversion of an institution from 
 proprietary to nonprofit status; and
 ``
        (B) any decision by the Secretary regarding approval or 
 disapproval of a change of ownership application, or an 
 application for conversion from proprietary to nonprofit 
 status, and all external communications describing or 
 explaining those decisions.''.
            (d) Transparency in Financial Standing of Institutions.--

Section 498
            (c) (20 U.S.C. 1099c
            (c) ), as amended by 

section 401
            (d) , is further 
amended by adding at the end the following:
 ``

    (9) The Secretary shall promptly post on the Department website, 
for all institutions participating in a program under this title--
 ``
        (A) the annual audited financial statements submitted by 
 each institution under this section and a list of any 
 institutions that have failed to timely submit audited 
 financial statements;
 ``
        (B)
            (i) the terms, amounts, and withdrawals for letters of 
 credit and other sureties required of institutions of higher 
 education under paragraph

    (3) , including by providing updates 
 as new financial guarantees are required and as changes are 
 made to existing agreements; and
 ``
            (ii) all external communications between institutions of 
 higher education and the Department describing or implementing 
 the Secretary's requirements or determinations regarding 
 financial guarantees under paragraph

    (3) ; and
 ``
            (C) 
            (i) each decision of the Secretary as to the 
 imposition or removal of heightened cash monitoring status and 
 other financial protections regarding an institution; and
 ``
            (ii) all external communications between institutions of 
 higher education and the Department describing or implementing 
 such decisions.''.

    (e) Institutional Participation in the Title IV Programs.--

Section 498 (20 U.S.C. 1099c) is amended by adding at the end the following:
 ``
            (m) Transparency.--The Secretary shall post on the Department 
website the full program participation agreement under 

section 487 for 
each institution that enters into such an agreement and shall indicate 
if the institution is on provisional, temporary provisional, or expired 
certification status.''.

    (f) Accrediting Agency Transparency.--

Section 496 (20 U.S.C. 1099b) 
is amended--

    (1) in subsection

    (o) --
        (A) by inserting after ``Regulations.--'' the 
 following:
 ``

    (1) In general.--''; and
        (B) by adding at the end the following:
 ``

    (2) Disclosures.--
 ``
        (A) In general.--The Secretary shall publicly 
 disclose on the Department's website--
 ``
            (i) all of the Department's draft and 
 final accrediting agency or association 
 recognition reports, and monitoring reports and 
 investigations of any accrediting agency or 
 association, under this section; and
 ``
            (ii) the reports and accompanying 
 exhibits that each accreditation agency or 
 association submits to the Department in the 
 course of recognition and re-recognition 
 reviews under this section.
 ``
        (B) Disclosure requirements.--The Secretary shall 
 disclose the information required under subparagraph
        (A) promptly, so that members of the public may 
 thoroughly and timely respond via public comment in the 
 course of Department reviews of accrediting agencies 
 and associations.''; and

    (2) by adding at the end the following:
 ``

    (r) Transparency of Accrediting Agency or Association Actions.--
 ``

    (1) In general.--An accrediting agency or association 
 recognized by the Secretary under this section shall promptly 
 post on the website of the accrediting agency or association 
 and shall submit to the Department, all communications sent 
 from the accrediting agency or association to an institution 
 explaining, or informing an institution of, an action taken by 
 the agency with respect to the institution, including--
 ``
        (A) to impose or remove a status of probation, 
 warning, concern, stipulation, or reporting, or similar 
 status;
 ``
        (B) to impose or revoke a show cause order; or
 ``
            (C) to impose or revoke a limitation, suspension, 
 or termination action.
 ``

    (2) No redaction.--The communication posted and submitted 
 under paragraph

    (1) shall be without redaction, except for 
 personally identifiable information.
 ``

    (3) Disclosure by the secretary.--The Secretary shall 
 promptly publicly disclose on the website of the Department all 
 communications submitted pursuant to paragraph

    (1) .''.
 <all>