Students Not Profits Act of 2019

I 116TH CONGRESS 1ST SESSION H. R. 4724 To amend the Higher Education Act of 1965 to make for-profit institutions ineligible for Federal student aid and to protect the integrity of nonprofit institutions of higher education. IN THE HOUSE OF REPRESENTATIVES OCTOBER 17, 2019 Ms. JAYAPAL (for herself, Ms. BARRAGA´N, Mr. BLUMENAUER, Mr. GARCI´A of Illinois, Ms. GARCIA of Texas, Ms. OMAR, Ms. PRESSLEY, and Ms. TLAIB) 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 make for- profit institutions ineligible for Federal student aid and to protect the integrity of nonprofit institutions of higher education. 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 ‘‘Students Not Profits 4 Act of 2019’’. 5 VerDate Sep 11 2014 21:13 Oct 27, 2019 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H4724.IH H4724 pamtmann on DSKBC07HB2PROD with BILLS 2 •HR 4724 IH SEC. 2. DEFINITION OF INSTITUTION OF HIGHER EDU- 1 CATION. 2 The Higher Education Act of 1965 (20 U.S.C. 1001 3 et seq.) is amended— 4 (1) in section 101— 5 (A) in subsection (a), in the matter pre- 6 ceding paragraph (1), by striking ‘‘other than 7 title IV,’’; 8 (B) in subsection (b)— 9 (i) in the matter preceding paragraph 10 (1), by striking ‘‘other than title IV,’’; 11 (ii) in paragraph (1), by striking 12 ‘‘and’’ after the semicolon; 13 (iii) in paragraph (2)(B), by striking 14 the period at the end and inserting a semi- 15 colon; and 16 (iv) by adding at the end the fol- 17 lowing: 18 ‘‘(3) a public, nonprofit postsecondary voca- 19 tional institution; and 20 ‘‘(4) only for the purposes of part D of title IV, 21 an institution outside the United States that is com- 22 parable to an institution of higher education, as de- 23 fined in subsection (a), and that has been approved 24 by the Secretary for the purpose of part D of title 25 VerDate Sep 11 2014 21:13 Oct 27, 2019 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H4724.IH H4724 pamtmann on DSKBC07HB2PROD with BILLS 3 •HR 4724 IH IV, consistent with the requirements of section 1 452(d).’’; 2 (C) in subsection (c), by striking ‘‘and sec- 3 tion 102’’; and 4 (D) by adding at the end the following: 5 ‘‘(d) REQUIREMENTS OF COURSES OF STUDY AND 6 ENROLLMENT.—An institution shall be considered to meet 7 the definition of an institution of higher education in sub- 8 section (a) or (b) only if such institution— 9 ‘‘(1) limits enrollment of students in distance 10 education courses offered by the institution to not 11 more than 50 percent of all students enrolled in the 12 institution, unless the institution is a public or non- 13 profit technical institution or career and technical 14 education school, as described in section 3(3)(C) of 15 the Carl D. Perkins Career and Technical Education 16 Act of 2006; 17 ‘‘(2) limits enrollment of students who are in- 18 carcerated to not more than 25 percent of all stu- 19 dents enrolled in the institution; 20 ‘‘(3) limits enrollment of students who do not 21 have a secondary school diploma or its recognized 22 equivalent to not more than 50 percent of all stu- 23 dents enrolled in the institution; and 24 VerDate Sep 11 2014 21:13 Oct 27, 2019 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H4724.IH H4724 pamtmann on DSKBC07HB2PROD with BILLS 4 •HR 4724 IH ‘‘(4) if the institution offers an education or 1 training program that leads to a certificate, or other 2 nondegree recognized credential and funds available 3 under title IV for students are used for enrollment 4 in such education or program, ensures that such 5 education or program prepares students for gainful 6 employment in a recognized occupation. 7 ‘‘(e) LIMITATIONS BASED ON MANAGEMENT.—An in- 8 stitution shall not be considered to meet the definition of 9 an institution of higher education in subsection (a) or (b) 10 if such institution— 11 ‘‘(1) the institution, or an affiliate of the insti- 12 tution that has the power, by contract or ownership 13 interest, to direct or cause the direction of the man- 14 agement or policies of the institution, has filed for 15 bankruptcy; or 16 ‘‘(2) the institution, the institution’s owner, the 17 institution’s chief executive officer, or any other ex- 18 ecutive officer of the institution— 19 ‘‘(A) has been convicted of, or has pled 20 nolo contendere or guilty to, a crime involving 21 the acquisition, use, or expenditure of funds 22 under title IV; 23 ‘‘(B) has been determined to have com- 24 mitted fraud, substantial misrepresentation, or 25 VerDate Sep 11 2014 21:13 Oct 27, 2019 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H4724.IH H4724 pamtmann on DSKBC07HB2PROD with BILLS 5 •HR 4724 IH false certification involving funds under title IV; 1 or 2 ‘‘(C) has been previously employed at an 3 institution receiving funds under title IV that 4 closed. 5 ‘‘(f) CERTIFICATION.—The Secretary shall certify an 6 institution’s qualification as an institution of higher edu- 7 cation in accordance with the requirements of subpart 3 8 of part H of title IV. 9 ‘‘(g) LOSS OF ELIGIBILITY.—An institution of higher 10 education shall not be considered to meet the definition 11 of an institution of higher education in subsection (a) or 12 (b) if such institution is removed from eligibility for funds 13 under title IV as a result of an action pursuant to part 14 H of title IV. 15 ‘‘(h) POSTSECONDARY VOCATIONAL INSTITUTION.— 16 ‘‘(1) PRINCIPAL CRITERIA.—For the purpose of 17 this section, the term ‘postsecondary vocational insti- 18 tution’ means a school that— 19 ‘‘(A) provides an eligible program of train- 20 ing to prepare students for gainful employment 21 in a recognized occupation; 22 ‘‘(B) meets the requirements of paragraphs 23 (1), (2), (4), and (5) of subsection (a); and 24 VerDate Sep 11 2014 21:13 Oct 27, 2019 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H4724.IH H4724 pamtmann on DSKBC07HB2PROD with BILLS 6 •HR 4724 IH ‘‘(C) has been in existence for at least 2 1 years. 2 ‘‘(2) ADDITIONAL INSTITUTIONS.—The term 3 ‘postsecondary vocational institution’ also includes 4 an educational institution in any State that, in lieu 5 of the requirement in subsection (a)(1), admits as 6 regular students individuals— 7 ‘‘(A) who are beyond the age of compul- 8 sory school attendance in the State in which the 9 institution is located; or 10 ‘‘(B) who will be dually or concurrently en- 11 rolled in the institution and a secondary school. 12 ‘‘(i) INSTITUTION OUTSIDE THE UNITED STATES.— 13 ‘‘(1) IN GENERAL.—For the purpose of quali- 14 fying as an institution under subsection (b)(4), the 15 Secretary shall establish criteria by regulation for 16 the approval of institutions outside the United 17 States and for the determination that such institu- 18 tions are comparable to an institution of higher edu- 19 cation, as defined in subsection 101(a) (except that 20 a graduate medical school, nursing school, or a vet- 21 erinary school, located outside the United States 22 shall not be required to meet the requirements of 23 subsection (a)(4)). Such criteria shall include a re- 24 quirement that a student attending such school out- 25 VerDate Sep 11 2014 21:13 Oct 27, 2019 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H4724.IH H4724 pamtmann on DSKBC07HB2PROD with BILLS 7 •HR 4724 IH side the United States is ineligible for loans made 1 under part D of title IV unless— 2 ‘‘(A) in the case of a graduate medical 3 school located outside the United States— 4 ‘‘(i) at least 60 percent of those en- 5 rolled in, and at least 60 percent of the 6 graduates of, the graduate medical school 7 outside the United States were not persons 8 described in section 484(a)(5) in the year 9 preceding the year for which a student is 10 seeking a loan under part D of title IV; 11 and 12 ‘‘(ii) at least 75 percent of the individ- 13 uals who were students or graduates of the 14 graduate medical school outside the United 15 States or Canada (both nationals of the 16 United States and others) taking the ex- 17 aminations administered by the Edu- 18 cational Commission for Foreign Medical 19 Graduates received a passing score in the 20 year preceding the year for which a stu- 21 dent is seeking a loan under part D of title 22 IV; 23 ‘‘(B) in the case of a veterinary school lo- 24 cated outside the United States that does not 25 VerDate Sep 11 2014 21:13 Oct 27, 2019 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H4724.IH H4724 pamtmann on DSKBC07HB2PROD with BILLS 8 •HR 4724 IH meet the requirements of subsection (a)(4), the 1 institution’s students complete their clinical 2 training at an approved veterinary school lo- 3 cated in the United States; or 4 ‘‘(C) in the case of a nursing school lo- 5 cated outside of the United States— 6 ‘‘(i) the nursing school has an agree- 7 ment with a hospital, or accredited school 8 of nursing (as such terms are defined in 9 section 801 of the Public Health Service 10 Act (42 U.S.C. 296)), located in the 11 United States that requires the students of 12 the nursing school to complete the stu- 13 dents’ clinical training at such hospital or 14 accredited school of nursing; 15 ‘‘(ii) the nursing school has an agree- 16 ment with an accredited school of nursing 17 located in the United States providing that 18 the students graduating from the nursing 19 school located outside of the United States 20 also receive a degree from the accredited 21 school of nursing located in the United 22 States; 23 ‘‘(iii) the nursing school certifies only 24 Federal Direct Stafford Loans under sec- 25 VerDate Sep 11 2014 21:13 Oct 27, 2019 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H4724.IH H4724 pamtmann on DSKBC07HB2PROD with BILLS 9 •HR 4724 IH tion 455(a)(2)(A), Federal Direct Unsub- 1 sidized Stafford Loans under section 2 455(a)(2)(D), or Federal Direct PLUS 3 Loans under section 455(a)(2)(B) for stu- 4 dents attending the institution; 5 ‘‘(iv) the nursing school reimburses 6 the Secretary for the cost of any loan de- 7 faults for current and former students in- 8 cluded in the calculation of the institu- 9 tion’s cohort default rate during the pre- 10 vious fiscal year; and 11 ‘‘(v) not less than 75 percent of the 12 individuals who were students or graduates 13 of the nursing school, and who took the 14 National Council Licensure Examination 15 for Registered Nurses in the year pre- 16 ceding the year for which the institution is 17 certifying a Federal Direct Stafford Loan 18 under section 455(a)(2)(A), a Federal Di- 19 rect Unsubsidized Stafford Loan under 20 section 455(a)(2)(D), or a Federal Direct 21 PLUS Loan under section 455(a)(2)(B), 22 received a passing score on such examina- 23 tion. 24 VerDate Sep 11 2014 21:13 Oct 27, 2019 Jkt 099200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H4724.IH H4724 pamtmann on DSKBC07HB2PROD with BILLS 10 •HR 4724 IH ‘‘(2) FAILURE TO RELEASE INFORMATION.— 1 The failure of an institution outside the United 2 States to provide, release, or authorize release to the 3 Secretary of such information as may be required by 4 paragraph (1) shall render such institution ineligible 5 for the purpose of part D of title IV. 6 ‘‘(3) SPECIAL RULE.—If, pursuant to this sub- 7 section, an institution loses eligibility to participate 8 in the programs under title IV, then a student en- 9 rolled in such institution may, notwithstanding such 10 loss of eligibility, continue to be eligible to receive a 11 loan under part D of title IV while attending such 12 institution for the academic year succeeding the aca- 13 demic year in which such loss of eligibility oc- 14 curred.’’; 15 (2) by striking section 102; and 16 (3) by redesignating section 103 as section 102. 17 SEC. 3. REPEAL OF EXISTING REFERENCES TO PROPRI- 18 ETARY INSTITUTIONS. 19 Section 487 of the Higher Education Act of 1965 (20 20 U.S.C. 1094) is amended— 21 (1) in subsection (a)— 22 (A) by striking paragraph (24); 23 VerDate Sep 11 2014 21:13 Oct 27, 2019 Jkt 099200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H4724.IH H4724 pamtmann on DSKBC07HB2PROD with BILLS 11 •HR 4724 IH (B) by redesignating paragraphs (25) 1 through (29) as paragraphs (24) through (28), 2 respectively; 3 (C) in paragraph (24)(A)(ii) (as redesig- 4 nated by subparagraph (B)), by striking ‘‘sub- 5 section (e)’’ and inserting ‘‘subsection (d)’’; and 6 (D) in paragraph (26) (as redesignated by 7 subparagraph (B)), by striking ‘‘subsection (h)’’ 8 and inserting ‘‘subsection (g)’’; 9 (2) by striking subsection (d); 10 (3) by redesignating subsections (e) through (j) 11 as subsections (d) through (i), respectively; 12 (4) in subsection (f)(1) (as redesignated by 13 paragraph (3)), by striking ‘‘subsection (e)(2)’’ and 14 inserting ‘‘subsection (d)(2)’’; and 15 (5) in subsection (g)(1) (as redesignated by 16 paragraph (3)), by striking ‘‘subsection (a)(27)’’ in 17 the matter preceding subparagraph (A) and insert- 18 ing ‘‘subsection (a)(26)’’. 19 SEC. 4. CONFORMING AMENDMENTS. 20 The Higher Education Act of 1965 (20 U.S.C. 1001 21 et seq.) is amended— 22 (1) in section 102, as redesignated by sub- 23 section (a)(3), in paragraph (5)(B), by striking ‘‘(as 24 such term is defined in section 102)’’; 25 VerDate Sep 11 2014 21:13 Oct 27, 2019 Jkt 099200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H4724.IH H4724 pamtmann on DSKBC07HB2PROD with BILLS 12 •HR 4724 IH (2) in section 114— 1 (A) in subsection (a), by striking ‘‘(as de- 2 fined in section 102)’’; and 3 (B) in subsection (b)(2)(B), by striking 4 ‘‘(as defined in section 102)’’; 5 (3) in section 133(b)— 6 (A) by striking paragraph (5); and 7 (B) by redesignating paragraphs (6) 8 through (9) as paragraphs (5) through (8), re- 9 spectively; 10 (4) in section 151(2), by striking ‘‘, as such 11 term in defined in section 102,’’; 12 (5) in section 152— 13 (A) in subsection (a)(1)(A), by striking 14 ‘‘subsections (a)(27) and (h) of section 487’’ 15 and inserting ‘‘subsections (a)(26) and (g) of 16 section 487’’; and 17 (B) in subsection (b)(1)(B)(i)(I), by strik- 18 ing ‘‘section 487(e)’’ and inserting ‘‘section 19 487(d)’’; 20 (6) in section 153(c)(3), by striking ‘‘section 21 487(a)(25)’’ each place the term appears and insert- 22 ing ‘‘section 487(a)(24)’’; 23 (7) in section 420L(1), by striking ‘‘, as defined 24 in section 102,’’; 25 VerDate Sep 11 2014 21:13 Oct 27, 2019 Jkt 099200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\H4724.IH H4724 pamtmann on DSKBC07HB2PROD with BILLS 13 •HR 4724 IH (8) in section 435(a)(1), by striking ‘‘, as de- 1 fined in secti [Text truncated for display. 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