For-Profit Fraud Act

I 116TH CONGRESS 1ST SESSION H. R. 3112 To revise the 90–10 rule under the Higher Education Act of 1965, and for other purposes. IN THE HOUSE OF REPRESENTATIVES JUNE 5, 2019 Ms. WATERS introduced the following bill; which was referred to the Com- mittee on Education and Labor, and in addition to the Committees on Armed Services, and Veterans’ Affairs, for a period to be subsequently determined by the Speaker, in each case for consideration of such provi- sions as fall within the jurisdiction of the committee concerned A BILL To revise the 90–10 rule under the Higher Education Act of 1965, and for other purposes. 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 ‘‘For-Profit Fraud Act’’. 4 SEC. 2. 85/15 RULE. 5 Section 487 of the Higher Education Act of 1965 (20 6 U.S.C. 1094) is amended— 7 (1) in subsection (a)(24)— 8 VerDate Sep 11 2014 04:15 Jun 12, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H3112.IH H3112 kjohnson on DSK79L0C42 with BILLS 2 •HR 3112 IH (A) by striking ‘‘In the case’’ and insert- 1 ing: 2 ‘‘(A) In the case’’; 3 (B) by striking ‘‘not less than ten percent 4 of such institution’s revenues from sources 5 other than funds provided under this title’’ and 6 inserting ‘‘not less than 15 percent of such in- 7 stitution’s revenues from sources other than 8 Federal funds’’; and 9 (C) by adding at the end the following: 10 ‘‘(B) FEDERAL FUNDS.—In this paragraph, the 11 term ‘Federal funds’ means any Federal funds pro- 12 vided, under this Act or any other Federal law, 13 through a grant, contract, subsidy, loan, guarantee, 14 insurance, or other means to a proprietary institu- 15 tion, including Federal funds disbursed or delivered 16 to an institution or on behalf of a student or to a 17 student to be used to attend the institution, except 18 that such term shall not include any monthly hous- 19 ing stipend provided under the Post-9/11 Edu- 20 cational Assistance Program under chapter 33 of 21 title 38, United States Code.’’; and 22 (2) in subsection (d)— 23 (A) in the heading, by amending the head- 24 ing to read as follows: ‘‘IMPLEMENTATION OF 25 VerDate Sep 11 2014 04:15 Jun 12, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H3112.IH H3112 kjohnson on DSK79L0C42 with BILLS 3 •HR 3112 IH REVENUE REQUIREMENTS FOR NON-FEDERAL 1 EDUCATION ASSISTANCE FUNDS’’; and 2 (B) in paragraph (2)(A), by inserting at 3 the end the following: ‘‘The Secretary of Edu- 4 cation shall notify the Secretary of Defense and 5 the Secretary of Veterans Affairs when, by rea- 6 son of failing to meet a requirement of sub- 7 section (a)(24), a proprietary institution of 8 higher education becomes ineligible to partici- 9 pate in the programs authorized by this title, 10 and when the institution regains such eligi- 11 bility.’’; 12 SEC. 3. INELIGIBILITY OF CERTAIN PROPRIETARY INSTITU- 13 TIONS OF HIGHER EDUCATION TO PARTICI- 14 PATE IN DEPARTMENT OF DEFENSE OR DE- 15 PARTMENT OF VETERANS AFFAIRS PRO- 16 GRAMS OF EDUCATIONAL ASSISTANCE. 17 (a) DEPARTMENT OF DEFENSE.— 18 (1) IN GENERAL.—Chapter 101 of title 10, 19 United States Code, is amended by inserting after 20 section 2008 the following new section: 21 VerDate Sep 11 2014 04:15 Jun 12, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H3112.IH H3112 kjohnson on DSK79L0C42 with BILLS 4 •HR 3112 IH ‘‘§ 2008a. Ineligibility of certain proprietary institu- 1 tions of higher education to participate 2 in Department of Defense programs of 3 educational assistance 4 ‘‘Upon notice from the Secretary of Education under 5 section 487(d)(2)(A) of the Higher Education Act of 1965 6 (20 U.S.C. 1094(d)(2)(A)) that a proprietary institution 7 of higher education is ineligible to participate in the pro- 8 grams authorized by title IV of such Act (20 U.S.C. 1070 9 et seq.), the Secretary of Defense shall ensure that no edu- 10 cational assistance provided by the Secretary under this 11 title or any other provision of law is available or used for 12 education at the institution for the period of institutional 13 fiscal years during which the institution remains ineligible 14 to participate in the programs authorized by title IV of 15 the Higher Education Act of 1965 (20 U.S.C. 1070 et 16 seq.).’’. 17 (2) CLERICAL AMENDMENT.—The table of sec- 18 tions at the beginning of chapter 101 of such title 19 is amended by inserting after the item relating to 20 section 2008 the following new item: 21 ‘‘2008a. Ineligibility of certain proprietary institutions of higher education to participate in Department of Defense programs of educational assistance.’’. (b) DEPARTMENT OF VETERANS AFFAIRS.— 22 VerDate Sep 11 2014 04:15 Jun 12, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H3112.IH H3112 kjohnson on DSK79L0C42 with BILLS 5 •HR 3112 IH (1) IN GENERAL.—Subchapter II of chapter 36 1 of title 38, United States Code, is amended by in- 2 serting after section 3681 the following new section: 3 ‘‘§ 3681A. Ineligibility of certain proprietary institu- 4 tions of higher education to participate 5 in Department of Veterans Affairs pro- 6 grams of educational assistance 7 ‘‘(a) IN GENERAL.—Upon notice from the Secretary 8 of Education under section 487(d)(2)(A) of the Higher 9 Education Act of 1965 (20 U.S.C. 1094(d)(2)(A)) that 10 a proprietary institution of higher education is ineligible 11 to participate in the programs authorized by title IV of 12 such Act (20 U.S.C. 1070 et seq.), the Secretary of Vet- 13 erans Affairs shall ensure that no educational assistance 14 provided by the Secretary under this title or any other 15 provision of law is available or used for education at the 16 institution for the period of institutional fiscal years dur- 17 ing which the institution remains ineligible to participate 18 in the programs authorized by title IV of the Higher Edu- 19 cation Act of 1965 (20 U.S.C. 1070 et seq.).’’. 20 (2) CLERICAL AMENDMENT.—The table of sec- 21 tions at the beginning of chapter 36 of such title is 22 amended by inserting after the item relating to sec- 23 tion 3681 the following new item: 24 VerDate Sep 11 2014 04:15 Jun 12, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H3112.IH H3112 kjohnson on DSK79L0C42 with BILLS 6 •HR 3112 IH ‘‘3681A. Ineligibility of certain proprietary institutions of higher education to participate in Department of Veterans Affairs programs of educational assistance.’’. Æ VerDate Sep 11 2014 04:15 Jun 12, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6301 E:\BILLS\H3112.IH H3112 kjohnson on DSK79L0C42 with BILLS