POST Act of 2021

II 117TH CONGRESS 1ST SESSION S. 383 To amend the Higher Education Act of 1965 regarding proprietary institutions of higher education in order to protect students and taxpayers. IN THE SENATE OF THE UNITED STATES FEBRUARY 23, 2021 Mr. DURBIN (for himself, Mr. REED, Mr. BLUMENTHAL, Mr. BROWN, Ms. HASSAN, Ms. WARREN, Mr. SCHATZ, Mr. CARPER, Ms. SMITH, and Mr. SANDERS) introduced the following bill; which was read twice and re- ferred to the Committee on Health, Education, Labor, and Pensions A BILL To amend the Higher Education Act of 1965 regarding proprietary institutions of higher education in order to protect students and taxpayers. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Protecting Our Stu- 4 dents and Taxpayers Act of 2021’’ or ‘‘POST Act of 5 2021’’. 6 SEC. 2. 85/15 RULE. 7 (a) IN GENERAL.—Section 102(b) of the Higher 8 Education Act of 1965 (20 U.S.C. 1002(b)) is amended— 9 VerDate Sep 11 2014 01:53 Mar 12, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S383.IS S383 pamtmann on DSKBC07HB2PROD with BILLS 2 •S 383 IS (1) in paragraph (1)— 1 (A) in subparagraph (D), by striking 2 ‘‘and’’ after the semicolon; 3 (B) in subparagraph (E), by striking the 4 period at the end and inserting ‘‘; and’’; and 5 (C) by adding at the end the following: 6 ‘‘(F) meets the requirements of paragraph 7 (2).’’; 8 (2) by redesignating paragraph (2) as para- 9 graph (3); and 10 (3) by inserting after paragraph (1) the fol- 11 lowing: 12 ‘‘(2) REVENUE SOURCES.— 13 ‘‘(A) IN GENERAL.—In order to qualify as 14 a proprietary institution of higher education 15 under this subsection, an institution shall derive 16 not less than 15 percent of the institution’s rev- 17 enues from sources other than Federal edu- 18 cation assistance funds, as calculated in accord- 19 ance with subparagraphs (B) and (C). 20 ‘‘(B) FEDERAL EDUCATION ASSISTANCE 21 FUNDS.—In this paragraph, the term ‘Federal 22 education assistance funds’ means any Federal 23 financial assistance provided, under this Act or 24 any other Federal law, through a grant, con- 25 VerDate Sep 11 2014 01:53 Mar 12, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S383.IS S383 pamtmann on DSKBC07HB2PROD with BILLS 3 •S 383 IS tract, subsidy, loan, guarantee, insurance, or 1 other means to a proprietary institution, includ- 2 ing Federal financial assistance that is dis- 3 bursed or delivered to an institution or on be- 4 half of a student or to a student to be used to 5 attend the institution, except that such term 6 shall not include any monthly housing stipend 7 provided under the Post-9/11 Veterans Edu- 8 cational Assistance Program under chapter 33 9 of title 38, United States Code. 10 ‘‘(C) IMPLEMENTATION OF NON-FEDERAL 11 REVENUE REQUIREMENT.—In making calcula- 12 tions under subparagraph (A), an institution of 13 higher education shall— 14 ‘‘(i) use the cash basis of accounting; 15 ‘‘(ii) consider as revenue only those 16 funds generated by the institution from— 17 ‘‘(I) tuition, fees, and other insti- 18 tutional charges for students enrolled 19 in programs eligible for assistance 20 under title IV; 21 ‘‘(II) activities conducted by the 22 institution that are necessary for the 23 education and training of the institu- 24 tion’s students, if such activities are— 25 VerDate Sep 11 2014 01:53 Mar 12, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S383.IS S383 pamtmann on DSKBC07HB2PROD with BILLS 4 •S 383 IS ‘‘(aa) conducted on campus 1 or at a facility under the control 2 of the institution; 3 ‘‘(bb) performed under the 4 supervision of a member of the 5 institution’s faculty; and 6 ‘‘(cc) required to be per- 7 formed by all students in a spe- 8 cific educational program at the 9 institution; and 10 ‘‘(III) a contractual arrangement 11 with a Federal agency for the purpose 12 of providing job training to low-in- 13 come individuals who are in need of 14 such training; 15 ‘‘(iii) presume that any Federal edu- 16 cation assistance funds that are disbursed 17 or delivered to an institution on behalf of 18 a student or directly to a student will be 19 used to pay the student’s tuition, fees, or 20 other institutional charges, regardless of 21 whether the institution credits such funds 22 to the student’s account or pays such 23 funds directly to the student, except to the 24 extent that the student’s tuition, fees, or 25 VerDate Sep 11 2014 01:53 Mar 12, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S383.IS S383 pamtmann on DSKBC07HB2PROD with BILLS 5 •S 383 IS other institutional charges are satisfied 1 by— 2 ‘‘(I) grant funds provided by an 3 outside source that— 4 ‘‘(aa) has no affiliation with 5 the institution; and 6 ‘‘(bb) shares no employees, 7 executives, or board members 8 with the institution; and 9 ‘‘(II) institutional scholarships 10 described in clause (v); 11 ‘‘(iv) include no loans made by an in- 12 stitution of higher education as revenue to 13 the school, except for payments made by 14 students on such loans; 15 ‘‘(v) include a scholarship provided by 16 the institution— 17 ‘‘(I) only if the scholarship is in 18 the form of monetary aid based upon 19 the academic achievements or finan- 20 cial need of students, disbursed to 21 qualified student recipients during 22 each fiscal year from an established 23 restricted account; and 24 VerDate Sep 11 2014 01:53 Mar 12, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S383.IS S383 pamtmann on DSKBC07HB2PROD with BILLS 6 •S 383 IS ‘‘(II) only to the extent that 1 funds in that account represent des- 2 ignated funds, or income earned on 3 such funds, from an outside source 4 that— 5 ‘‘(aa) has no affiliation with 6 the institution; and 7 ‘‘(bb) shares no employees, 8 executives, or board members 9 with the institution; and 10 ‘‘(vi) exclude from revenues— 11 ‘‘(I) the amount of funds the in- 12 stitution received under part C of title 13 IV, unless the institution used those 14 funds to pay a student’s institutional 15 charges; 16 ‘‘(II) the amount of funds the in- 17 stitution received under subpart 4 of 18 part A of title IV; 19 ‘‘(III) the amount of funds pro- 20 vided by the institution as matching 21 funds for any Federal program; 22 ‘‘(IV) the amount of Federal edu- 23 cation assistance funds provided to 24 the institution to pay institutional 25 VerDate Sep 11 2014 01:53 Mar 12, 2021 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S383.IS S383 pamtmann on DSKBC07HB2PROD with BILLS 7 •S 383 IS charges for a student that were re- 1 funded or returned; and 2 ‘‘(V) the amount charged for 3 books, supplies, and equipment, unless 4 the institution includes that amount 5 as tuition, fees, or other institutional 6 charges. 7 ‘‘(D) REPORT TO CONGRESS.—Not later 8 than July 1, 2021, and by July 1 of each suc- 9 ceeding year, the Secretary shall submit to the 10 authorizing committees a report that contains, 11 for each proprietary institution of higher edu- 12 cation that receives assistance under title IV 13 and as provided in the audited financial state- 14 ments submitted to the Secretary by each insti- 15 tution pursuant to the requirements of section 16 487(c)— 17 ‘‘(i) the amount and percentage of 18 such institution’s revenues received from 19 Federal education assistance funds; and 20 ‘‘(ii) the amount and percentage of 21 such institution’s revenues received from 22 other sources.’’. 23 VerDate Sep 11 2014 01:53 Mar 12, 2021 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S383.IS S383 pamtmann on DSKBC07HB2PROD with BILLS 8 •S 383 IS (b) REPEAL OF EXISTING REQUIREMENTS.—Section 1 487 of the Higher Education Act of 1965 (20 U.S.C. 2 1094) is amended— 3 (1) in subsection (a)— 4 (A) by striking paragraph (24); 5 (B) by redesignating paragraphs (25) 6 through (29) as paragraphs (24) through (28), 7 respectively; 8 (C) in paragraph (24)(A)(ii) (as redesig- 9 nated by subparagraph (B)), by striking ‘‘sub- 10 section (e)’’ and inserting ‘‘subsection (d)’’; and 11 (D) in paragraph (26) (as redesignated by 12 subparagraph (B)), by striking ‘‘subsection (h)’’ 13 and inserting ‘‘subsection (g)’’; 14 (2) by striking subsection (d); 15 (3) by redesignating subsections (e) through (j) 16 as subsections (d) through (i), respectively; 17 (4) in the matter preceding paragraph (1) of 18 subsection (d) (as redesignated by paragraph (3)), 19 by striking ‘‘(a)(25)’’ and inserting ‘‘(a)(24)’’; 20 (5) in subsection (f)(1) (as redesignated by 21 paragraph (3)), by striking ‘‘subsection (e)(2)’’ and 22 inserting ‘‘subsection (d)(2)’’; and 23 (6) in subsection (g)(1) (as redesignated by 24 paragraph (3)), by striking ‘‘subsection (a)(27)’’ in 25 VerDate Sep 11 2014 01:53 Mar 12, 2021 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S383.IS S383 pamtmann on DSKBC07HB2PROD with BILLS 9 •S 383 IS the matter preceding subparagraph (A) and insert- 1 ing ‘‘subsection (a)(26)’’. 2 (c) CONFORMING AMENDMENTS.—The Higher Edu- 3 cation Act of 1965 (20 U.S.C. 1001 et seq.) is amended— 4 (1) in section 152 (20 U.S.C. 1019a)— 5 (A) in subsection (a)(1)(A), by striking 6 ‘‘subsections (a)(27) and (h) of section 487’’ 7 and inserting ‘‘subsections (a)(26) and (g) of 8 section 487’’; and 9 (B) in subsection (b)(1)(B)(i)(I), by strik- 10 ing ‘‘section 487(e)’’ and inserting ‘‘section 11 487(d)’’; 12 (2) in section 153(c)(3) (20 U.S.C. 13 1019b(c)(3)), by striking ‘‘section 487(a)(25)’’ each 14 place the term appears and inserting ‘‘section 15 487(a)(24)’’; 16 (3) in section 496(c)(3)(A) (20 U.S.C. 17 1099b(c)(3)(A)), by striking ‘‘section 487(f)’’ and 18 inserting ‘‘section 487(e)’’; and 19 (4) in section 498(k)(1) (20 U.S.C. 20 1099c(k)(1)), by striking ‘‘section 487(f)’’ and in- 21 serting ‘‘section 487(e)’’. 22 Æ VerDate Sep 11 2014 01:53 Mar 12, 2021 Jkt 019200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6301 E:\BILLS\S383.IS S383 pamtmann on DSKBC07HB2PROD with BILLS