PSA Act of 2019

I 116TH CONGRESS 1ST SESSION H. R. 4497 To amend the Higher Education Act of 1965 to make improvements to the Federal Student Aid Office, and for other purposes. IN THE HOUSE OF REPRESENTATIVES SEPTEMBER 25, 2019 Ms. SHALALA (for herself, Ms. PRESSLEY, Ms. TLAIB, Ms. JACKSON LEE, Ms. MOORE, and Ms. HAALAND) introduced the following bill; which was re- ferred to the Committee on Education and Labor A BILL To amend the Higher Education Act of 1965 to make im- provements to the Federal Student Aid Office, 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 ‘‘Protecting Student Aid 4 Act of 2019’’ or the ‘‘PSA Act of 2019’’. 5 SEC. 2. IMPROVEMENTS TO THE FEDERAL STUDENT AID 6 OFFICE. 7 Section 141 of the Higher Education Act of 1965 (20 8 U.S.C. 1018) is amended— 9 VerDate Sep 11 2014 03:04 Oct 01, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H4497.IH H4497 kjohnson on DSK79L0C42 with BILLS 2 •HR 4497 IH (1) by redesignating subsection (i) as subsection 1 (k); and 2 (2) by inserting after subsection (h) the fol- 3 lowing: 4 ‘‘(i) ENFORCEMENT UNIT.— 5 ‘‘(1) IN GENERAL.—Not later than 180 days 6 after the date of enactment of the PSA Act of 2019, 7 the Secretary shall establish within the PBO an en- 8 forcement unit (referred to in this section as the 9 ‘Unit’) to review and investigate violations of this 10 Act and recommend enforcement actions in accord- 11 ance with paragraph (3). 12 ‘‘(2) CHIEF ENFORCEMENT OFFICER.— 13 ‘‘(A) APPOINTMENT.—The Secretary shall 14 appoint an official to be known as the ‘Chief 15 Enforcement Officer’ who shall serve as the 16 head of the Unit. The Secretary shall appoint 17 an individual to serve as the Chief Enforcement 18 Officer solely on the basis of such individual’s 19 integrity and expertise in law and investigations 20 and without regard to such individual’s political 21 affiliation. 22 ‘‘(B) AUTHORITY.—The Chief Enforce- 23 ment Officer shall report directly to the Sec- 24 retary without being required to report through 25 VerDate Sep 11 2014 03:04 Oct 01, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H4497.IH H4497 kjohnson on DSK79L0C42 with BILLS 3 •HR 4497 IH any other official of the Department of Edu- 1 cation. 2 ‘‘(C) TERM.—The Chief Enforcement Offi- 3 cer shall be appointed for a term of 6 years and 4 may be reappointed for additional terms of 6 5 years at the discretion of the Secretary. 6 ‘‘(D) REMOVAL.— 7 ‘‘(i) IN GENERAL.—The Chief En- 8 forcement Officer may not be removed dur- 9 ing the Officer’s term except for cause. 10 ‘‘(ii) NOTICE TO CONGRESS.—If the 11 Secretary removes the Chief Enforcement 12 Officer before the expiration of the Offi- 13 cer’s term, the Secretary shall submit to 14 the authorizing committees a report that 15 explains the reasons for such removal. The 16 report shall be submitted to the author- 17 izing committees not later than 30 days 18 after the date on which the removal takes 19 effect. 20 ‘‘(3) DUTIES.—The Chief Enforcement Officer 21 shall have the following duties: 22 ‘‘(A) Receive, process, and analyze allega- 23 tions that a covered entity has violated Federal 24 VerDate Sep 11 2014 03:04 Oct 01, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H4497.IH H4497 kjohnson on DSK79L0C42 with BILLS 4 •HR 4497 IH law or has engaged in unfair, deceptive, or abu- 1 sive practices. 2 ‘‘(B) Review and investigate such allega- 3 tions. 4 ‘‘(C) After reviewing and investigating an 5 allegation under subparagraph (B), in consulta- 6 tion with the Chief Operating Officer— 7 ‘‘(i) if the covered entity subject to 8 such allegation is an entity described in 9 clause (i) or (iii) of paragraph (8)(A), 10 make recommendations with respect to 11 such covered entity, including— 12 ‘‘(I) whether such covered entity 13 should be limited, suspended, or ter- 14 minated from participation in one or 15 more programs under title IV; 16 ‘‘(II) whether such covered entity 17 should be subject to an emergency ac- 18 tion under section 487(c)(1)(G); or 19 ‘‘(III) a combination of any of 20 the actions described in clauses (II) 21 and (III); 22 ‘‘(ii) if the covered entity subject to 23 such allegation is an entity described in 24 clause (ii) of paragraph (8)(A), make rec- 25 VerDate Sep 11 2014 03:04 Oct 01, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H4497.IH H4497 kjohnson on DSK79L0C42 with BILLS 5 •HR 4497 IH ommendations with respect to such covered 1 entity, including whether such covered en- 2 tity should be limited, suspended, or termi- 3 nated from administering or providing 4 services with respect to one or more pro- 5 grams under title IV; and 6 ‘‘(iii) provide the Secretary with such 7 recommendations. 8 ‘‘(4) SECRETARIAL REVIEW AND ACTION.— 9 After receiving notice of a determination of the Chief 10 Enforcement Officer under paragraph (4)(C), the 11 Secretary shall decide whether or not to pursue en- 12 forcement action against the entity concerned. In a 13 case in which the Chief Enforcement Officer rec- 14 ommends enforcement action against an entity, but 15 the Secretary decides not to pursue such enforce- 16 ment action, the Secretary shall notify the Chief En- 17 forcement Officer, in writing, of the rationale for 18 such decision. 19 ‘‘(5) COORDINATION AND STAFFING.—The 20 Chief Enforcement Officer shall— 21 ‘‘(A) coordinate with relevant Federal and 22 State agencies and oversight bodies; and 23 ‘‘(B) hire staff with the expertise necessary 24 to conduct investigations, respond to allegations 25 VerDate Sep 11 2014 03:04 Oct 01, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H4497.IH H4497 kjohnson on DSK79L0C42 with BILLS 6 •HR 4497 IH against covered entities, and enforce compliance 1 with laws governing Federal student financial 2 assistance programs under title IV. 3 ‘‘(6) INFORMATION SHARING.—The Chief En- 4 forcement Officer shall develop and implement a 5 process for sharing relevant information about alle- 6 gations against covered entities with— 7 ‘‘(A) the Student Loan Ombudsman ap- 8 pointed under subsection (f); 9 ‘‘(B) personnel of the Department respon- 10 sible for processing borrower defense claims 11 submitted under section 455(h); 12 ‘‘(C) other relevant Federal agencies; 13 ‘‘(D) States, including State law enforce- 14 ment and regulatory agencies; and 15 ‘‘(E) recognized accrediting agencies or as- 16 sociations. 17 ‘‘(7) REPORT TO CONGRESS.—On an annual 18 basis, the Chief Enforcement Officer shall submit to 19 the authorizing committees a report that includes— 20 ‘‘(A) the number of allegations about cov- 21 ered entities received by the Unit in the year 22 covered by the report; 23 ‘‘(B) the number of such allegations inves- 24 tigated by the Unit; 25 VerDate Sep 11 2014 20:12 Oct 02, 2019 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H4497.IH H4497 kjohnson on DSK79L0C42 with BILLS 7 •HR 4497 IH ‘‘(C) the number of such allegations that 1 were referred to the Secretary under paragraph 2 (4)(C) and a summary of any action taken by 3 the Secretary with respect to such allegations; 4 ‘‘(D) the number of such allegations that 5 were referred to other Federal agencies and the 6 names of the agencies to which the allegations 7 were referred; and 8 ‘‘(E) the number of such allegations that 9 remain under review or investigation as of the 10 date of the report. 11 ‘‘(8) DEFINITIONS.—In this subsection: 12 ‘‘(A) COVERED ENTITY DEFINED.—In this 13 subsection, the term ‘covered entity’ means— 14 ‘‘(i) an institution of higher education 15 (as defined in section 102) that partici- 16 pates in the Federal student financial as- 17 sistance programs authorized under title 18 IV; 19 ‘‘(ii) a contractor that contracts with 20 the PBO to provide services relating to 21 such programs, or a subcontractor of such 22 contractor; or 23 ‘‘(iii) a third party servicer. 24 VerDate Sep 11 2014 20:12 Oct 02, 2019 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H4497.IH H4497 kjohnson on DSK79L0C42 with BILLS 8 •HR 4497 IH ‘‘(B) THIRD PARTY SERVICER.—The term 1 ‘third party servicer’ has the meaning given 2 that term in section 481(c).’’. 3 SEC. 3. DEFINITION OF THIRD PARTY SERVICER. 4 Section 481(c) of the Higher Education Act of 1965 5 (20 U.S.C. 1088(c)) is amended— 6 (1) in the matter preceding paragraph (1), by 7 striking ‘‘contract’’ and inserting ‘‘contract or other 8 agreement, including a revenue sharing arrange- 9 ment,’’; and 10 (2) in paragraph (1), by striking ‘‘, through ei- 11 ther manual or automated processing, any aspect of 12 such institution’s student assistance programs’’ and 13 inserting ‘‘services on behalf of the institution re- 14 ceiving student assistance funds’’. 15 Æ VerDate Sep 11 2014 03:04 Oct 01, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6301 E:\BILLS\H4497.IH H4497 kjohnson on DSK79L0C42 with BILLS