Debt-Free College Act of 2023

II 118TH CONGRESS 1ST SESSION S. 1848 To establish State-Federal partnerships to provide students the opportunity to attain higher education at in-State public institutions of higher edu- cation without debt, to provide Federal Pell Grant eligibility to DREAM- er students, and for other purposes. IN THE SENATE OF THE UNITED STATES JUNE 7, 2023 Mr. SCHATZ (for himself, Mr. DURBIN, Mr. PADILLA, Mr. WELCH, Mr. MERKLEY, Ms. BALDWIN, and Mr. BOOKER) introduced the following bill; which was read twice and referred to the Committee on Health, Edu- cation, Labor, and Pensions A BILL To establish State-Federal partnerships to provide students the opportunity to attain higher education at in-State public institutions of higher education without debt, to provide Federal Pell Grant eligibility to DREAMer stu- dents, 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 ‘‘Debt-Free College Act 4 of 2023’’. 5 VerDate Sep 11 2014 23:35 Jun 27, 2023 Jkt 039200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S1848.IS S1848 kjohnson on DSK79L0C42PROD with BILLS 2 •S 1848 IS SEC. 2. DEBT-FREE COLLEGE PARTNERSHIP. 1 Title IV of the Higher Education Act of 1965 (20 2 U.S.C. 1070 et seq.) is amended by adding at the end 3 the following: 4 ‘‘PART J—DEBT-FREE COLLEGE PARTNERSHIP 5 ‘‘SEC. 499A–1. PURPOSE. 6 ‘‘The purpose of this part is to establish State-Fed- 7 eral partnerships that will— 8 ‘‘(1) increase investment in public higher edu- 9 cation; and 10 ‘‘(2) provide students the opportunity to attain 11 higher education at in-State public institutions of 12 higher education without debt (‘debt-free college’). 13 ‘‘SEC. 499A–2. DEFINITIONS. 14 ‘‘In this part: 15 ‘‘(1) COST OF ATTENDANCE.—The term ‘cost of 16 attendance’ has the meaning given the term in sec- 17 tion 472. 18 ‘‘(2) DEBT-FREE COLLEGE COMMITMENT.—The 19 term ‘debt-free college commitment’ means a com- 20 mitment by a State participating in the State-Fed- 21 eral partnership under this part to cover the unmet 22 financial need for all eligible students. 23 ‘‘(3) ELIGIBLE STUDENT.—The term ‘eligible 24 student’ means an individual who— 25 VerDate Sep 11 2014 23:35 Jun 27, 2023 Jkt 039200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S1848.IS S1848 kjohnson on DSK79L0C42PROD with BILLS 3 •S 1848 IS ‘‘(A) is enrolled, or is eligible to enroll, in 1 a public institution of higher education in the 2 State in which the individual resides; and 3 ‘‘(B) completes a Free Application for 4 Federal Student Aid or demonstrates eligibility 5 for a Federal Pell Grant through institutional 6 financial aid eligibility forms. 7 ‘‘(4) HEADCOUNT.—The term ‘headcount’ 8 means the unduplicated number of students enrolled 9 over a 12-month period, which shall be defined and 10 calculated in the manner determined most appro- 11 priate by the Secretary. 12 ‘‘(5) NET STATE OPERATING SUPPORT.—The 13 term ‘net State operating support’ means an amount 14 that is equal to the amount of State funds and local 15 government appropriations used to support public 16 higher education annual operating expenses and fi- 17 nancial aid programs in the State, calculated in ac- 18 cordance with subparagraphs (A) and (B). 19 ‘‘(A) CALCULATION.—A State’s net State 20 operating support shall, for a fiscal year, be an 21 amount that is equal to the difference resulting 22 from the gross amount of State funds appro- 23 priated and disbursed by the State and ex- 24 pended by the recipient institutions in the fiscal 25 VerDate Sep 11 2014 23:35 Jun 27, 2023 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S1848.IS S1848 kjohnson on DSK79L0C42PROD with BILLS 4 •S 1848 IS year for public higher education operating ex- 1 penses in the State, minus— 2 ‘‘(i) such appropriations that are re- 3 turned to the State; 4 ‘‘(ii) State-appropriated funds derived 5 from Federal sources, including funds pro- 6 vided under this part; 7 ‘‘(iii) local government funds not ap- 8 propriated for operating support for public 9 higher education; 10 ‘‘(iv) amounts that are portions of 11 multi-year appropriations to be distributed 12 over multiple years that are not to be 13 spent for the year for which the calculation 14 is being made; 15 ‘‘(v) tuition charges remitted to the 16 State to offset State appropriations; 17 ‘‘(vi) State funding for students in 18 non-credit continuing or adult education 19 courses and non-credit extension courses; 20 ‘‘(vii) sums appropriated to private 21 nonprofit institutions of higher education, 22 or to proprietary institutions of higher 23 education, for capital outlay or operating 24 expenses; and 25 VerDate Sep 11 2014 23:35 Jun 27, 2023 Jkt 039200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S1848.IS S1848 kjohnson on DSK79L0C42PROD with BILLS 5 •S 1848 IS ‘‘(viii) any other funds excluded under 1 subparagraph (B). 2 ‘‘(B) EXCLUSIONS.—Net State operating 3 support does not include funds for— 4 ‘‘(i) student aid programs that provide 5 grants to students attending out-of-State 6 institutions of higher education, propri- 7 etary institutions of higher education, and 8 institutions of higher education not accred- 9 ited by an agency or association recognized 10 by the Secretary pursuant to section 496; 11 ‘‘(ii) capital outlays; 12 ‘‘(iii) deferred maintenance; 13 ‘‘(iv) financial aid to students award- 14 ed predominantly on the basis of merit; 15 ‘‘(v) hospitals, athletics, or other aux- 16 iliary enterprises; 17 ‘‘(vi) research and development; or 18 ‘‘(vii) any other funds that the Sec- 19 retary determines shall not be included in 20 the calculation of net State operating sup- 21 port for higher education for such State. 22 ‘‘(6) NET STATE OPERATING SUPPORT PER 23 STUDENT.—The term ‘net State operating support 24 per student’ means, for a fiscal year— 25 VerDate Sep 11 2014 23:35 Jun 27, 2023 Jkt 039200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S1848.IS S1848 kjohnson on DSK79L0C42PROD with BILLS 6 •S 1848 IS ‘‘(A) the net State operating support for 1 the previous fiscal year; divided by 2 ‘‘(B) the headcount for the previous fiscal 3 year. 4 ‘‘(7) PARTNERSHIP OFFICE.—The term ‘Part- 5 nership Office’ means the Office created under sec- 6 tion 499A–4(a). 7 ‘‘(8) PUBLIC INSTITUTION OF HIGHER EDU- 8 CATION.—The term ‘public institution of higher edu- 9 cation’ means an educational institution in any State 10 that— 11 ‘‘(A) admits as regular students only per- 12 sons having a certificate of graduation from a 13 school providing secondary education, or the 14 recognized equivalent of such a certificate, or 15 persons who are eligible students; 16 ‘‘(B) is legally authorized within such 17 State to provide a program of education beyond 18 secondary education; 19 ‘‘(C) provides an educational program for 20 which the institution awards a bachelor’s degree 21 or provides not less than a 2-year program that 22 is acceptable for full credit toward such a de- 23 gree, or awards a degree that is acceptable for 24 admission to a graduate or professional degree 25 VerDate Sep 11 2014 23:35 Jun 27, 2023 Jkt 039200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S1848.IS S1848 kjohnson on DSK79L0C42PROD with BILLS 7 •S 1848 IS program, subject to review and approval by the 1 Secretary; 2 ‘‘(D) has the full faith and credit of the 3 State; and 4 ‘‘(E) is accredited by a nationally recog- 5 nized accrediting agency or association, or if 6 not so accredited, is an institution that has 7 been granted preaccreditation status by such an 8 agency or association that has been recognized 9 by the Secretary for the granting of 10 preaccreditation status, and the Secretary has 11 determined that there is satisfactory assurance 12 that the institution will meet the accreditation 13 standards of such an agency or association 14 within a reasonable time. 15 ‘‘(9) RELEVANT COMMITTEES OF CONGRESS.— 16 The term ‘relevant committees of Congress’ means 17 the Committee on Health, Education, Labor, and 18 Pensions and the Committee on Appropriations of 19 the Senate and the Committee on Education and the 20 Workforce and the Committee on Appropriations of 21 the House of Representatives. 22 ‘‘(10) STUDENT SUCCESS PROGRAM.—The term 23 ‘student success program’ means a program or serv- 24 ice at an institution of higher education that is dedi- 25 VerDate Sep 11 2014 23:35 Jun 27, 2023 Jkt 039200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S1848.IS S1848 kjohnson on DSK79L0C42PROD with BILLS 8 •S 1848 IS cated to addressing barriers to degree attainment, 1 particularly for low-income students, for the purpose 2 of increasing the percentage of students completing 3 programs of study in their entirety and attaining re- 4 lated degrees. 5 ‘‘(11) UNMET NEED.—The term ‘unmet need’ 6 means the difference between a student’s cost of at- 7 tendance to attend an in-State public institution of 8 higher education and the student’s student aid index 9 plus any Federal, State, or local sources of grant 10 aid. 11 ‘‘SEC. 499A–3. ESTABLISHMENT OF A STATE-FEDERAL PART- 12 NERSHIP GRANT PROGRAM. 13 ‘‘(a) GRANTS AUTHORIZED.—The Secretary shall 14 award grants to States to establish State-Federal partner- 15 ships with a goal of providing debt-free college for all eligi- 16 ble students at in-State public institutions of higher edu- 17 cation. 18 ‘‘(b) APPLICATION.—A State that desires to partici- 19 pate in the State-Federal partnership under this part shall 20 submit an application to the Secretary at such time, in 21 such manner, and accompanied by such information as the 22 Secretary may require. 23 ‘‘(c) AMOUNT OF GRANTS.— 24 VerDate Sep 11 2014 23:35 Jun 27, 2023 Jkt 039200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S1848.IS S1848 kjohnson on DSK79L0C42PROD with BILLS 9 •S 1848 IS ‘‘(1) IN GENERAL.—The Secretary shall award 1 a grant to a State that submits an application under 2 subsection (b) for a fiscal year in an amount that is 3 equal to State’s net State operating support. 4 ‘‘(2) RATABLE REDUCTION.—If the amount ap- 5 propriated to carry out this part for a fiscal year is 6 insufficient to award each State the State’s full 7 grant amount pursuant to paragraph (1), the Sec- 8 retary shall establish procedures for ratably reducing 9 each State’s award amount for such fiscal year. 10 ‘‘(d) AMOUNTS NOT EXPENDED.—Any amount of a 11 grant awarded under this part that is not expended on 12 allowable expenditures by the end of the fiscal year for 13 which the grant was awarded shall be applied to the fol- 14 lowing year’s grant award amount, if the State remains 15 eligible to receive a grant under this part for such fol- 16 lowing year. If such State is not eligible to receive a grant 17 under this part for such following year, the State shall 18 return the unexpended balance amount to the Federal 19 Government. 20 ‘‘SEC. 499A–4. STATE-FEDERAL PARTNERSHIP RESPON- 21 SIBILITIES. 22 ‘‘(a) FEDERAL ACTIVITIES.— 23 ‘‘(1) IN GENERAL.—The Secretary shall create 24 an office in the Department of Education to admin- 25 VerDate Sep 11 2014 23:35 Jun 27, 2023 Jkt 039200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S1848.IS S1848 kjohnson on DSK79L0C42PROD with BILLS 10 •S 1848 IS ister the State-Federal partnerships established 1 under this part. Such Partnership Office shall be re- 2 sponsible for— 3 ‘‘(A) administering grant awards; 4 ‘‘(B) monitoring compliance with partner- 5 ship requirements; 6 ‘‘(C) providing technical assistance to 7 States in applying for participation in, and im- 8 plementing, a partnership; and 9 ‘‘(D) providing information to students in 10 participating States. 11 ‘‘(2) EVALUATIONS.—The Partnership Office 12 shall develop metrics of evaluation and perform an 13 annual evaluation of each State participating in a 14 State-Federal partnership under this part. The eval- 15 uation shall assess the State’s success in meeting the 16 partnership’s goals, including— 17 ‘‘(A) providing debt-free college for all eli- 18 gible students; 19 ‘‘(B) increasing State investment in higher 20 education; 21 ‘‘(C) maintaining access to in-State public 22 institutions of higher education for low-income 23 and underserved students; 24 VerDate Sep 11 2014 23:35 Jun 27, 2023 Jkt 039200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S1848.IS S1848 kjohnson on DSK79L0C42PROD with BILLS 11 •S 1848 IS ‘‘(D) maintaining and improving rates of 1 student success and academic quality; 2 ‘‘(E) maintaining or reducing the cost of 3 public higher education and the price charged 4 to students; and 5 ‘‘(F) investing in improving capacity, ac- 6 cess, quality, and student achievement of in- 7 State public institutions of higher education. 8 ‘‘(3) ANNUAL REPORT.—The Partnership Of- 9 fice shall submit an annual report to the relevant 10 committees of Congress and include information 11 gained from the annual evaluation under paragraph 12 (2). 13 ‘‘(4) WEBSITE.—The Partnership Office shall 14 create a public, consumer-oriented website with in- 15 formation about State-Federal partnerships estab- 16 lished under this part, including information from 17 the annual evaluation under paragraph (2). 18 ‘‘(b) STATE ACTIVITIES.— 19 ‘‘(1) IN GENERAL.—A State that receives a 20 grant under this part to establish a State-Federal 21 partnership shall— 22 ‘‘(A) distribute the grant funds according 23 to the allowable uses of funds described in sec- 24 tion 499A–5 in a manner designed to best 25 VerDate Sep 11 2014 23:35 Jun 27, 2023 Jkt 039200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S1848.IS S1848 kjohnson on DSK79L0C42PROD with BILLS 12 •S 1848 IS achieve the partnership’s goal of providing debt- 1 free college for all eligible students at in-State 2 public institutions of higher education; 3 ‘‘(B) maintain access at each in-State pub- 4 lic institution of higher education for low-in- 5 come and underserved students; 6 ‘‘(C) cap tuition and fees at public institu- 7 tions of higher education in the State at levels 8 as of the date of enactment of the Debt-Free 9 College Act of 2023, with a yearly increase al- 10 lowed based on the Consumer Price Index (as 11 determined by the Secretary); 12 ‘‘(D) commit to working with in-State pub- 13 lic institutions of higher education to reduce 14 tuition and fees as the net State operating sup- 15 port increases; 16 ‘‘(E) maintain State need-based financial 17 aid programs in effect on the date of enactment 18 of the Debt-Free College Act of 2023 or use 19 State funds for such programs to further the 20 debt-free commitment made under the State- 21 Federal partnership; 22 ‘‘(F) maintain or increase levels of net 23 [Text truncated for display. 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