Accountability in Student Loan Data Act

I 116TH CONGRESS 1ST SESSION H. R. 4662 To amend the Higher Education Act of 1965 to require that institutions of higher education maintain certain adjusted cohort default rates to participate in programs under title IV of such Act, and for other pur- poses. IN THE HOUSE OF REPRESENTATIVES OCTOBER 11, 2019 Ms. PORTER (for herself and Mr. TAKANO) introduced the following bill; which was referred to the Committee on Education and Labor A BILL To amend the Higher Education Act of 1965 to require that institutions of higher education maintain certain adjusted cohort default rates to participate in programs under title IV of such Act, 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 ‘‘Accountability in Stu- 4 dent Loan Data Act’’. 5 VerDate Sep 11 2014 03:44 Oct 12, 2019 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H4662.IH H4662 kjohnson on DSK79L0C42 with BILLS 2 •HR 4662 IH SEC. 2. PROGRESS PERIOD STATUS. 1 Section 103 of the Higher Education Act of 1965 (20 2 U.S.C. 1003) is amended by adding at the end the fol- 3 lowing: 4 ‘‘(25) PROGRESS PERIOD STATUS.—The term 5 ‘progress period status’ means the status of an insti- 6 tution of higher education that is determined by the 7 Secretary to be in danger of failing to meet title IV 8 eligibility criteria relating to student debt because 9 the institution has an adjusted cohort default rate of 10 not less than 10 percent and not more than 15 per- 11 cent.’’. 12 SEC. 3. CONSUMER INFORMATION. 13 Section 132 of the Higher Education Act of 1965 (20 14 U.S.C. 1015a) is amended in subsection (i)(1)(T), by 15 striking ‘‘rate,’’ and inserting ‘‘rate and adjusted cohort 16 default rate,’’. 17 SEC. 4. FEDERAL PELL GRANTS. 18 Section 401 of the Higher Education Act of 1965 (20 19 U.S.C. 1070a) is amended in subsection (j)— 20 (1) in paragraph (1) by inserting before the pe- 21 riod the following: ‘‘, or if such institution of higher 22 education is subject to an ineligibility determination 23 under section 435(a)(9)’’; and 24 VerDate Sep 11 2014 03:44 Oct 12, 2019 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H4662.IH H4662 kjohnson on DSK79L0C42 with BILLS 3 •HR 4662 IH (2) in paragraph (2) by inserting ‘‘, final ad- 1 justed cohort default rate, or on-time repayment 2 rate’’ before ‘‘determination’’. 3 SEC. 5. DISBURSEMENT OF STUDENT LOANS. 4 Section 428G of the Higher Education Act of 1965 5 (20 U.S.C. 1078–7(a)) is amended— 6 (1) in subsection (a), by adding at the end the 7 following: 8 ‘‘(5) ADJUSTED COHORT DEFAULT RATE.—Be- 9 ginning on the date on which the final adjusted co- 10 hort default rates are published by the Secretary for 11 not less than 3 fiscal years under section 435(m), an 12 institution whose adjusted cohort default rate (as de- 13 termined under section 435(m)) for each of the 3 14 most recent fiscal years for which data are available 15 is less than 5 percent may disburse any loan made, 16 insured, or guaranteed under this part in a single in- 17 stallment for any period of enrollment that is not 18 more than 1 semester, 1 trimester, 1 quarter, or 4 19 months.’’; and 20 (2) in subsection (e), by inserting before the pe- 21 riod the following: ‘‘, or beginning on the date on 22 which the final adjusted cohort default rates are 23 published by the Secretary for fiscal year 2018 24 under section 435(m), an adjusted cohort default 25 VerDate Sep 11 2014 03:44 Oct 12, 2019 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H4662.IH H4662 kjohnson on DSK79L0C42 with BILLS 4 •HR 4662 IH rate (as determined under section 435(m)) of less 1 than 2 percent’’. 2 SEC. 6. COHORT DEFAULT RATES. 3 (a) INELIGIBILITY BASED ON HIGH DEFAULT 4 RATES.— 5 (1) IN GENERAL.—Section 435(a) of the High- 6 er Education Act of 1965 (20 U.S.C. 1085(a)) is 7 amended— 8 (A) in paragraph (7)(A), by adding at the 9 end the following: 10 ‘‘(iii) DEFAULT MANAGEMENT 11 PLAN.—The default management plan re- 12 quired under clause (i) may not include 13 placing students in forbearance as a means 14 of reducing the cohort default rate or the 15 adjusted cohort default rate of the institu- 16 tion.’’; and 17 (B) by adding at the end the following: 18 ‘‘(9) INELIGIBILITY BASED ON HIGH ADJUSTED 19 COHORT DEFAULT RATES.— 20 ‘‘(A) IN GENERAL.—Except as provided in 21 subparagraphs (B) and (D), beginning on the 22 date that is one year after the date on which 23 the final adjusted cohort default rates are pub- 24 lished by the Secretary for not less than 3 fiscal 25 VerDate Sep 11 2014 03:44 Oct 12, 2019 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H4662.IH H4662 kjohnson on DSK79L0C42 with BILLS 5 •HR 4662 IH years, in a case in which one of the following 1 determinations is made with respect to an insti- 2 tution, such institution shall be ineligible to 3 participate in a program under this title for the 4 fiscal year for which the determination is made 5 and for the two succeeding fiscal years: 6 ‘‘(i) The institution’s adjusted cohort 7 default rate is greater than 20 percent for 8 each of the three most recent fiscal years 9 for which the final adjusted cohort default 10 rates are published. 11 ‘‘(ii) With respect to the six most re- 12 cent fiscal years for which the final ad- 13 justed cohort default rates are published— 14 ‘‘(I) the institution’s adjusted co- 15 hort default rate is greater than 15 16 percent for each such fiscal year; and 17 ‘‘(II) the Secretary determines 18 that, during such 6-year period, the 19 institution has not made adequate 20 progress in meeting standards for stu- 21 dent achievement established by the 22 relevant accrediting agency or associa- 23 tion pursuant to section 496(a)(5)(A). 24 VerDate Sep 11 2014 03:44 Oct 12, 2019 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H4662.IH H4662 kjohnson on DSK79L0C42 with BILLS 6 •HR 4662 IH ‘‘(iii) With respect to the eight most 1 recent fiscal years for which the final ad- 2 justed cohort default rates are published— 3 ‘‘(I) the institution’s adjusted co- 4 hort default rate is greater than 10 5 percent for each such fiscal year; and 6 ‘‘(II) the Secretary determines 7 that, during such 8-year period, the 8 institution has not made adequate 9 progress in meeting standards for stu- 10 dent achievement established by the 11 relevant accrediting agency or associa- 12 tion pursuant to section 496(a)(5)(A). 13 ‘‘(B) EXCEPTIONS FOR CERTAIN CAT- 14 EGORIES OF EDUCATIONAL PROGRAMS.—With 15 respect to an institution that loses eligibility to 16 participate in a program under this title in ac- 17 cordance with subparagraph (A)(ii), such insti- 18 tution may request and be granted an exception 19 to such loss of eligibility for a category of edu- 20 cational programs at such institution by dem- 21 onstrating to the Secretary that the adjusted 22 cohort default rate for the category of edu- 23 cational programs is 15 percent or less for each 24 VerDate Sep 11 2014 03:44 Oct 12, 2019 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H4662.IH H4662 kjohnson on DSK79L0C42 with BILLS 7 •HR 4662 IH fiscal year of the 6-year period on which such 1 loss of eligibility for the institution is based. 2 ‘‘(C) DETERMINATION OF THE ADJUSTED 3 COHORT RATE FOR A CATEGORY OF EDU- 4 CATIONAL PROGRAMS.—In determining the ad- 5 justed cohort default rate for a category of edu- 6 cational programs for purposes of this para- 7 graph— 8 ‘‘(i) subsection (m) shall be applied— 9 ‘‘(I) in paragraph (1)— 10 ‘‘(aa) in subparagraph (A), 11 by substituting ‘received for en- 12 rollment in the category of edu- 13 cational programs for which such 14 rate is being determined’ for ‘re- 15 ceived for attendance at the insti- 16 tution’; and 17 ‘‘(bb) in subparagraph 18 (E)(i)(II), by substituting, ‘per- 19 centage of students enrolled in 20 the category of educational pro- 21 grams for which such rate is 22 being determined’ for ‘percentage 23 of students enrolled at the insti- 24 tution’; and 25 VerDate Sep 11 2014 03:44 Oct 12, 2019 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H4662.IH H4662 kjohnson on DSK79L0C42 with BILLS 8 •HR 4662 IH ‘‘(II) as if the following were 1 added at the end of paragraph (2): 2 ‘‘ ‘(E) In the case of a student who has re- 3 ceived a loan for enrollment in more than one 4 category of educational programs, the student 5 (and such student’s subsequent repayment or 6 default) is attributed to the last category of 7 educational programs in which such student 8 was enrolled.’. 9 ‘‘(D) TRANSITION EXCEPTION.— 10 ‘‘(i) IN GENERAL.—A covered institu- 11 tion with an adjusted cohort default rate 12 that is greater than 20 percent for the 13 first fiscal year for which such rates are 14 published by the Secretary may request 15 that any determination of such covered in- 16 stitution’s ineligibility under subparagraph 17 (A) not be based on the adjusted cohort 18 default rate of such covered institution for 19 any or all of the first 3 fiscal years for 20 which such rates are published by the Sec- 21 retary. 22 ‘‘(ii) REQUIREMENT.—To be granted 23 a request under clause (i), a covered insti- 24 tution shall submit to the Secretary a de- 25 VerDate Sep 11 2014 03:44 Oct 12, 2019 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H4662.IH H4662 kjohnson on DSK79L0C42 with BILLS 9 •HR 4662 IH fault management plan as specified in 1 paragraph (7). 2 ‘‘(iii) DEFINITION OF COVERED INSTI- 3 TUTION.—In this subparagraph, the term 4 ‘covered institution’ means— 5 ‘‘(I) a public institution of higher 6 education; 7 ‘‘(II) a part B institution (as de- 8 fined in section 322); or 9 ‘‘(III) a private, nonprofit insti- 10 tution of higher education at which 11 not less than 45 percent of the total 12 student enrollment consists of low-in- 13 come students (as such term is de- 14 fined in section 419N(b)(7)). 15 ‘‘(E) CATEGORY OF EDUCATIONAL PRO- 16 GRAMS DEFINED.—The term ‘category of edu- 17 cational programs’, when used with respect to 18 an institution, means one of the following: 19 ‘‘(i) The educational programs at the 20 institution leading to an undergraduate, 21 non-degree credential. 22 ‘‘(ii) The educational programs at the 23 institution leading to an associate’s degree. 24 VerDate Sep 11 2014 03:44 Oct 12, 2019 Jkt 099200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H4662.IH H4662 kjohnson on DSK79L0C42 with BILLS 10 •HR 4662 IH ‘‘(iii) The educational programs at the 1 institution leading to a bachelor’s degree. 2 ‘‘(iv) The educational programs at the 3 institution leading to a graduate, non-de- 4 gree credential. 5 ‘‘(v) The educational program at the 6 institution leading to a graduate degree. 7 ‘‘(10) APPLICATION OF ADJUSTED COHORT DE- 8 FAULT RATE.—Beginning on the date on which the 9 final adjusted cohort default rates are published by 10 the Secretary for not less than 3 fiscal years— 11 ‘‘(A) paragraph (1) shall be applied by 12 substituting ‘paragraph (9)’ for ‘paragraph (2)’; 13 ‘‘(B) paragraph (3) shall be applied by 14 substituting ‘adjusted cohort default rate, cal- 15 culated in accordance with subsection 16 (m)(1)(D), is greater than 20 percent for any 17 3 consecutive fiscal years’ for ‘cohort default 18 rate, calculated in accordance with subsection 19 (m), is equal to or greater than the threshold 20 percentage specified in paragraph (2)(B)(iv) for 21 any two consecutive fiscal years’; 22 ‘‘(C) paragraph (4) shall be applied— 23 ‘‘(i) in subparagraph (C), by sub- 24 stituting ‘adjusted cohort default rate is 25 VerDate Sep 11 2014 01:25 Oct 19, 2019 Jkt 099200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H4662.IH H4662 kjohnson on DSK79L0C42 with BILLS 11 •HR 4662 IH greater than 15 percent’ for ‘cohort default 1 rate equals or exceeds 20 percent’; and 2 ‘‘(ii) in the matter following subpara- 3 graph (C), by substituting ‘adjusted cohort 4 default rate to reflect the percentage of de- 5 faulted loans in the representative sample 6 that are required to be excluded pursuant 7 to subsection (m)(1)(B)’ for ‘cohort default 8 rate to reflect the percentage of defaulted 9 loans in the representative sample that are 10 required to be excluded pursuant to sub- 11 section (m)(1)(B)’; 12 ‘‘(D) paragraph (5)(A) shall be applied by 13 substituting ‘paragraph (9)’ for ‘paragraph (2)’; 14 and 15 ‘‘(E) paragraph (7) shall be applied— 16 ‘‘(i) in subparagraph (A)(i)— 17 ‘‘(I) in the matter preceding sub- 18 clause (I), by substituting ‘adjusted 19 cohort default rate is greater than 20 20 percent’ for ‘cohort default rate is 21 equal to or greater than the threshold 22 percentage specified in paragraph 23 (2)(B)(iv)’; and 24 VerDate Sep 11 2014 03:44 Oct 12, 2019 Jkt 099200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H4662.IH H4662 kjohnson on DSK79L0C42 with BILLS 12 •HR 4662 IH ‘‘(II) in subclauses (I) and (II), 1 by substituting ‘adjusted cohort de- 2 fault rate’ for ‘cohort default rate’; 3 and 4 ‘‘(ii) in subparagraph (B)(i), by sub- 5 stituting ‘adjusted cohort default rate is 6 greater than 20 percent’ for ‘cohort default 7 rate is equal to or greater than the thresh- 8 old percentage specified in paragraph 9 (2)(B)(iv)’.’’. 10 (2) CONFORMING AMENDMENTS.—Section 11 435(a)(2) of the Higher Education Act of 1965 (20 12 U.S.C. 1085(a)) is amended— 13 (A) in the paragraph heading, by adding at 14 the end the following: ‘‘BEFORE FISCAL YEAR 15 2018’’; and 16 (B) in subparagraph (B)(iv), by striking 17 ‘‘and any succeeding fiscal year’’ and inserting 18 ‘‘through fiscal year 2017’’. 19 (b) ADJUSTED COHORT DEFAULT RATE DEFINED.— 20 Section 435(m)(1) of the Higher Education Act of 1965 21 (20 U.S.C. 1085(m)(1)) is amended by adding at the end 22 the following: 23 ‘‘(D)(i) With respect to a cohort default 24 rate calculated for an institution under this 25 VerDate Sep 11 2014 03:44 Oct 12, 2019 Jkt 099200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\H4662.IH H4662 kjohnson on DSK79L0C42 with BILLS 13 •HR 4662 IH paragraph for fiscal year 2018 and for each 1 succeeding fiscal year, such cohort default rate 2 shall be adjusted as follows: 3 ‘‘(I) In determining the number of 4 current and former students at an institu- 5 tion who enter repayment for such fiscal 6 year— 7 ‘‘(aa) any such student who is in 8 nonmandatory forbearance for such 9 fiscal year for a period of greater than 10 18 months but less than 36 months 11 shall not be counted as entering re- 12 payment for such fiscal year; 13 ‘‘(bb) such a student shall be 14 counted as entering repayment for the 15 first fiscal year for which the student 16 ceases to be in a period of forbearance [Text truncated for display. 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