| 1 | 1 | | I |
|---|
| 2 | 2 | | 119THCONGRESS |
|---|
| 3 | 3 | | 1 |
|---|
| 4 | 4 | | STSESSION H. R. 713 |
|---|
| 5 | 5 | | To impose a financial penalty on certain institutions of higher education |
|---|
| 6 | 6 | | with high percentages of students who default or make insufficient pay- |
|---|
| 7 | 7 | | ments on Federal student loans, and for other purposes. |
|---|
| 8 | 8 | | IN THE HOUSE OF REPRESENTATIVES |
|---|
| 9 | 9 | | JANUARY23, 2025 |
|---|
| 10 | 10 | | Ms. V |
|---|
| 11 | 11 | | ANDUYNEintroduced the following bill; which was referred to the Com- |
|---|
| 12 | 12 | | mittee on Education and Workforce, and in addition to the Committee |
|---|
| 13 | 13 | | on Ways and Means, for a period to be subsequently determined by the |
|---|
| 14 | 14 | | Speaker, in each case for consideration of such provisions as fall within |
|---|
| 15 | 15 | | the jurisdiction of the committee concerned |
|---|
| 16 | 16 | | A BILL |
|---|
| 17 | 17 | | To impose a financial penalty on certain institutions of high- |
|---|
| 18 | 18 | | er education with high percentages of students who de- |
|---|
| 19 | 19 | | fault or make insufficient payments on Federal student |
|---|
| 20 | 20 | | loans, and for other purposes. |
|---|
| 21 | 21 | | Be it enacted by the Senate and House of Representa-1 |
|---|
| 22 | 22 | | tives of the United States of America in Congress assembled, 2 |
|---|
| 23 | 23 | | SECTION 1. SHORT TITLE. 3 |
|---|
| 24 | 24 | | This Act may be cited as the ‘‘Preventing Financial 4 |
|---|
| 25 | 25 | | Exploitation in Higher Education Act’’. 5 |
|---|
| 26 | 26 | | VerDate Sep 11 2014 23:28 Feb 20, 2025 Jkt 059200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H713.IH H713 |
|---|
| 27 | 27 | | ssavage on LAPJG3WLY3PROD with BILLS 2 |
|---|
| 28 | 28 | | •HR 713 IH |
|---|
| 29 | 29 | | SEC. 2. INSTITUTIONAL ACCOUNTABILITY FOR DE-1 |
|---|
| 30 | 30 | | FAULTED, DELINQUENT, AND UNDERPAID 2 |
|---|
| 31 | 31 | | STUDENT LOANS. 3 |
|---|
| 32 | 32 | | Part D of title IV of the Higher Education Act of 4 |
|---|
| 33 | 33 | | 1965 (20 U.S.C. 1087a et seq.) is amended by inserting 5 |
|---|
| 34 | 34 | | after section 454 the following: 6 |
|---|
| 35 | 35 | | ‘‘SEC. 454A. INSTITUTIONAL ACCOUNTABILITY FOR DE-7 |
|---|
| 36 | 36 | | FAULTED, DELINQUENT, AND UNDERPAID 8 |
|---|
| 37 | 37 | | STUDENT LOANS. 9 |
|---|
| 38 | 38 | | ‘‘(a) I |
|---|
| 39 | 39 | | NGENERAL.—In accordance with subsection 10 |
|---|
| 40 | 40 | | (b), a covered institution of higher education shall pay to 11 |
|---|
| 41 | 41 | | the Secretary— 12 |
|---|
| 42 | 42 | | ‘‘(1) a penalty based on the institution’s cohort 13 |
|---|
| 43 | 43 | | default rate for each fiscal year; 14 |
|---|
| 44 | 44 | | ‘‘(2) a penalty based on the institution’s cohort 15 |
|---|
| 45 | 45 | | delinquency rate for each fiscal year; and 16 |
|---|
| 46 | 46 | | ‘‘(3) a penalty based on the institution’s cohort 17 |
|---|
| 47 | 47 | | underpayment rate for each fiscal year. 18 |
|---|
| 48 | 48 | | ‘‘(b) P |
|---|
| 49 | 49 | | HASE-INOFCOHORTDEFAULTRATEPEN-19 |
|---|
| 50 | 50 | | ALTY.— 20 |
|---|
| 51 | 51 | | ‘‘(1) F |
|---|
| 52 | 52 | | ISCAL YEAR 2025.—A covered institution 21 |
|---|
| 53 | 53 | | of higher education— 22 |
|---|
| 54 | 54 | | ‘‘(A) with a cohort default rate (as cal-23 |
|---|
| 55 | 55 | | culated under section 435(m)) for fiscal year 24 |
|---|
| 56 | 56 | | 2025 that is 11 percent or more, shall pay to 25 |
|---|
| 57 | 57 | | the Secretary a penalty in an amount equal to 26 |
|---|
| 58 | 58 | | VerDate Sep 11 2014 23:28 Feb 20, 2025 Jkt 059200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H713.IH H713 |
|---|
| 59 | 59 | | ssavage on LAPJG3WLY3PROD with BILLS 3 |
|---|
| 60 | 60 | | •HR 713 IH |
|---|
| 61 | 61 | | 30 percent of the total outstanding balance of 1 |
|---|
| 62 | 62 | | principle and interest due on all loans under 2 |
|---|
| 63 | 63 | | this part that are included in the calculation of 3 |
|---|
| 64 | 64 | | such cohort default rate for such fiscal year; 4 |
|---|
| 65 | 65 | | ‘‘(B) with a cohort delinquency rate (as de-5 |
|---|
| 66 | 66 | | termined by the Secretary) for fiscal year 2025 6 |
|---|
| 67 | 67 | | that is 10 percent or more shall pay to the Sec-7 |
|---|
| 68 | 68 | | retary a penalty in an amount equal to 28 per-8 |
|---|
| 69 | 69 | | cent of the total outstanding balance of prin-9 |
|---|
| 70 | 70 | | ciple and interest due on all loans under this 10 |
|---|
| 71 | 71 | | part that are included in the calculation of such 11 |
|---|
| 72 | 72 | | cohort delinquency rate for such fiscal year; and 12 |
|---|
| 73 | 73 | | ‘‘(C) with a cohort underpayment rate (as 13 |
|---|
| 74 | 74 | | determined by the Secretary) for fiscal year 14 |
|---|
| 75 | 75 | | 2025 that is 9 percent or more shall pay to the 15 |
|---|
| 76 | 76 | | Secretary a penalty in an amount equal to 26 16 |
|---|
| 77 | 77 | | percent of the total outstanding balance of prin-17 |
|---|
| 78 | 78 | | ciple and interest due on all loans under this 18 |
|---|
| 79 | 79 | | part that are included in the calculation of such 19 |
|---|
| 80 | 80 | | cohort underpayment rate for such fiscal year. 20 |
|---|
| 81 | 81 | | ‘‘(2) F |
|---|
| 82 | 82 | | ISCAL YEAR 2026.—A covered institution 21 |
|---|
| 83 | 83 | | of higher education— 22 |
|---|
| 84 | 84 | | ‘‘(A) with a cohort default rate (as cal-23 |
|---|
| 85 | 85 | | culated under section 435(m)) for fiscal year 24 |
|---|
| 86 | 86 | | 2026 that is 10 percent or more, shall pay to 25 |
|---|
| 87 | 87 | | VerDate Sep 11 2014 23:28 Feb 20, 2025 Jkt 059200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H713.IH H713 |
|---|
| 88 | 88 | | ssavage on LAPJG3WLY3PROD with BILLS 4 |
|---|
| 89 | 89 | | •HR 713 IH |
|---|
| 90 | 90 | | the Secretary a penalty in an amount equal to 1 |
|---|
| 91 | 91 | | 28 percent of the total outstanding balance of 2 |
|---|
| 92 | 92 | | principle and interest due on all loans under 3 |
|---|
| 93 | 93 | | this part that are included in the calculation of 4 |
|---|
| 94 | 94 | | such cohort default rate for such fiscal year; 5 |
|---|
| 95 | 95 | | ‘‘(B) with a cohort delinquency rate (as de-6 |
|---|
| 96 | 96 | | termined by the Secretary) for fiscal year 2026 7 |
|---|
| 97 | 97 | | that is 9 percent or more, shall pay to the Sec-8 |
|---|
| 98 | 98 | | retary a penalty in an amount equal to 26 per-9 |
|---|
| 99 | 99 | | cent of the total outstanding balance of prin-10 |
|---|
| 100 | 100 | | ciple and interest due on all loans under this 11 |
|---|
| 101 | 101 | | part that are included in the calculation of such 12 |
|---|
| 102 | 102 | | cohort delinquency rate for such fiscal year; and 13 |
|---|
| 103 | 103 | | ‘‘(C) with a cohort underpayment rate (as 14 |
|---|
| 104 | 104 | | determined by the Secretary) for fiscal year 15 |
|---|
| 105 | 105 | | 2026 that is 8 percent or more, shall pay to the 16 |
|---|
| 106 | 106 | | Secretary a penalty in an amount equal to 24 17 |
|---|
| 107 | 107 | | percent of the total outstanding balance of prin-18 |
|---|
| 108 | 108 | | ciple and interest due on all loans under this 19 |
|---|
| 109 | 109 | | part that are included in the calculation of such 20 |
|---|
| 110 | 110 | | cohort underpayment rate for such fiscal year. 21 |
|---|
| 111 | 111 | | ‘‘(3) F |
|---|
| 112 | 112 | | ISCAL YEAR 2027.—A covered institution 22 |
|---|
| 113 | 113 | | of higher education— 23 |
|---|
| 114 | 114 | | ‘‘(A) with a cohort default rate (as cal-24 |
|---|
| 115 | 115 | | culated under section 435(m)) for fiscal year 25 |
|---|
| 116 | 116 | | VerDate Sep 11 2014 23:28 Feb 20, 2025 Jkt 059200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H713.IH H713 |
|---|
| 117 | 117 | | ssavage on LAPJG3WLY3PROD with BILLS 5 |
|---|
| 118 | 118 | | •HR 713 IH |
|---|
| 119 | 119 | | 2027 that is 9 percent or more, shall pay to the 1 |
|---|
| 120 | 120 | | Secretary a penalty in an amount equal to 26 2 |
|---|
| 121 | 121 | | percent of the total outstanding balance of prin-3 |
|---|
| 122 | 122 | | ciple and interest due on all loans under this 4 |
|---|
| 123 | 123 | | part that are included in the calculation of such 5 |
|---|
| 124 | 124 | | cohort default rate for such fiscal year; 6 |
|---|
| 125 | 125 | | ‘‘(B) with a cohort delinquency rate (as de-7 |
|---|
| 126 | 126 | | termined by the Secretary) for fiscal year 2027 8 |
|---|
| 127 | 127 | | that is 8 percent or more, shall pay to the Sec-9 |
|---|
| 128 | 128 | | retary a penalty in an amount equal to 24 per-10 |
|---|
| 129 | 129 | | cent of the total outstanding balance of prin-11 |
|---|
| 130 | 130 | | ciple and interest due on all loans under this 12 |
|---|
| 131 | 131 | | part that are included in the calculation of such 13 |
|---|
| 132 | 132 | | cohort delinquency rate for such fiscal year; and 14 |
|---|
| 133 | 133 | | ‘‘(C) with a cohort underpayment rate (as 15 |
|---|
| 134 | 134 | | determined by the Secretary) for fiscal year 16 |
|---|
| 135 | 135 | | 2027 that is 7 percent or more, shall pay to the 17 |
|---|
| 136 | 136 | | Secretary a penalty in an amount equal to 22 18 |
|---|
| 137 | 137 | | percent of the total outstanding balance of prin-19 |
|---|
| 138 | 138 | | ciple and interest due on all loans under this 20 |
|---|
| 139 | 139 | | part that are included in the calculation of such 21 |
|---|
| 140 | 140 | | cohort underpayment rate for such fiscal year. 22 |
|---|
| 141 | 141 | | ‘‘(4) F |
|---|
| 142 | 142 | | ISCAL YEAR 2028.—A covered institution 23 |
|---|
| 143 | 143 | | of higher education— 24 |
|---|
| 144 | 144 | | VerDate Sep 11 2014 23:28 Feb 20, 2025 Jkt 059200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H713.IH H713 |
|---|
| 145 | 145 | | ssavage on LAPJG3WLY3PROD with BILLS 6 |
|---|
| 146 | 146 | | •HR 713 IH |
|---|
| 147 | 147 | | ‘‘(A) with a cohort default rate (as cal-1 |
|---|
| 148 | 148 | | culated under section 435(m)) for fiscal year 2 |
|---|
| 149 | 149 | | 2028 that is 8 percent or more, shall pay to the 3 |
|---|
| 150 | 150 | | Secretary a penalty in an amount equal to 24 4 |
|---|
| 151 | 151 | | percent of the total outstanding balance of prin-5 |
|---|
| 152 | 152 | | ciple and interest due on all loans under this 6 |
|---|
| 153 | 153 | | part that are included in the calculation of such 7 |
|---|
| 154 | 154 | | cohort default rate for such fiscal year; 8 |
|---|
| 155 | 155 | | ‘‘(B) with a cohort delinquency rate (as de-9 |
|---|
| 156 | 156 | | termined by the Secretary) for fiscal year 2028 10 |
|---|
| 157 | 157 | | that is 7 percent or more, shall pay to the Sec-11 |
|---|
| 158 | 158 | | retary a penalty in an amount equal to 22 per-12 |
|---|
| 159 | 159 | | cent of the total outstanding balance of prin-13 |
|---|
| 160 | 160 | | ciple and interest due on all loans under this 14 |
|---|
| 161 | 161 | | part that are included in the calculation of such 15 |
|---|
| 162 | 162 | | cohort delinquency rate for such fiscal year; and 16 |
|---|
| 163 | 163 | | ‘‘(C) with a cohort underpayment rate (as 17 |
|---|
| 164 | 164 | | determined by the Secretary) for fiscal year 18 |
|---|
| 165 | 165 | | 2028 that is 6 percent or more, shall pay to the 19 |
|---|
| 166 | 166 | | Secretary a penalty in an amount equal to 20 20 |
|---|
| 167 | 167 | | percent of the total outstanding balance of prin-21 |
|---|
| 168 | 168 | | ciple and interest due on all loans under this 22 |
|---|
| 169 | 169 | | part that are included in the calculation of such 23 |
|---|
| 170 | 170 | | cohort underpayment rate for such fiscal year. 24 |
|---|
| 171 | 171 | | VerDate Sep 11 2014 23:28 Feb 20, 2025 Jkt 059200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H713.IH H713 |
|---|
| 172 | 172 | | ssavage on LAPJG3WLY3PROD with BILLS 7 |
|---|
| 173 | 173 | | •HR 713 IH |
|---|
| 174 | 174 | | ‘‘(5) FISCAL YEAR 2029.—A covered institution 1 |
|---|
| 175 | 175 | | of higher education— 2 |
|---|
| 176 | 176 | | ‘‘(A) with a cohort default rate (as cal-3 |
|---|
| 177 | 177 | | culated under section 435(m)) for fiscal year 4 |
|---|
| 178 | 178 | | 2029 that is 7 percent or more, shall pay to the 5 |
|---|
| 179 | 179 | | Secretary a penalty in an amount equal to 22 6 |
|---|
| 180 | 180 | | percent of the total outstanding balance of prin-7 |
|---|
| 181 | 181 | | ciple and interest due on all loans under this 8 |
|---|
| 182 | 182 | | part that are included in the calculation of such 9 |
|---|
| 183 | 183 | | cohort default rate for such fiscal year; 10 |
|---|
| 184 | 184 | | ‘‘(B) with a cohort delinquency rate (as de-11 |
|---|
| 185 | 185 | | termined by the Secretary) for fiscal year 2029 12 |
|---|
| 186 | 186 | | that is 6 percent or more, shall pay to the Sec-13 |
|---|
| 187 | 187 | | retary a penalty in an amount equal to 20 per-14 |
|---|
| 188 | 188 | | cent of the total outstanding balance of prin-15 |
|---|
| 189 | 189 | | ciple and interest due on all loans under this 16 |
|---|
| 190 | 190 | | part that are included in the calculation of such 17 |
|---|
| 191 | 191 | | cohort delinquency rate for such fiscal year; and 18 |
|---|
| 192 | 192 | | ‘‘(C) with a cohort underpayment rate (as 19 |
|---|
| 193 | 193 | | determined by the Secretary) for fiscal year 20 |
|---|
| 194 | 194 | | 2029 that is 5 percent or more, shall pay to the 21 |
|---|
| 195 | 195 | | Secretary a penalty in an amount equal to 18 22 |
|---|
| 196 | 196 | | percent of the total outstanding balance of prin-23 |
|---|
| 197 | 197 | | ciple and interest due on all loans under this 24 |
|---|
| 198 | 198 | | VerDate Sep 11 2014 23:28 Feb 20, 2025 Jkt 059200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H713.IH H713 |
|---|
| 199 | 199 | | ssavage on LAPJG3WLY3PROD with BILLS 8 |
|---|
| 200 | 200 | | •HR 713 IH |
|---|
| 201 | 201 | | part that are included in the calculation of such 1 |
|---|
| 202 | 202 | | cohort underpayment rate for such fiscal year. 2 |
|---|
| 203 | 203 | | ‘‘(6) F |
|---|
| 204 | 204 | | ISCAL YEAR 2030 AND SUBSEQUENT FIS -3 |
|---|
| 205 | 205 | | CAL YEARS.—A covered institution of higher edu-4 |
|---|
| 206 | 206 | | cation— 5 |
|---|
| 207 | 207 | | ‘‘(A) with a cohort default rate (as cal-6 |
|---|
| 208 | 208 | | culated under section 435(m)) for fiscal year 7 |
|---|
| 209 | 209 | | 2030 or any fiscal year thereafter that is 6 per-8 |
|---|
| 210 | 210 | | cent or more, shall pay to the Secretary a pen-9 |
|---|
| 211 | 211 | | alty in an amount equal to 20 percent of the 10 |
|---|
| 212 | 212 | | total outstanding balance of principle and inter-11 |
|---|
| 213 | 213 | | est due on all loans under this part that are in-12 |
|---|
| 214 | 214 | | cluded in the calculation of such cohort default 13 |
|---|
| 215 | 215 | | rate for such fiscal year; 14 |
|---|
| 216 | 216 | | ‘‘(B) with a cohort delinquency rate (as de-15 |
|---|
| 217 | 217 | | termined by the Secretary) for fiscal year 2030 16 |
|---|
| 218 | 218 | | or any fiscal year thereafter that is 5 percent 17 |
|---|
| 219 | 219 | | or more, shall pay to the Secretary a penalty in 18 |
|---|
| 220 | 220 | | an amount equal to 18 percent of the total out-19 |
|---|
| 221 | 221 | | standing balance of principle and interest due 20 |
|---|
| 222 | 222 | | on all loans under this part that are included 21 |
|---|
| 223 | 223 | | in the calculation of such cohort delinquency 22 |
|---|
| 224 | 224 | | rate for such fiscal year; and 23 |
|---|
| 225 | 225 | | ‘‘(C) with a cohort underpayment rate (as 24 |
|---|
| 226 | 226 | | determined by the Secretary) for fiscal year 25 |
|---|
| 227 | 227 | | VerDate Sep 11 2014 23:28 Feb 20, 2025 Jkt 059200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H713.IH H713 |
|---|
| 228 | 228 | | ssavage on LAPJG3WLY3PROD with BILLS 9 |
|---|
| 229 | 229 | | •HR 713 IH |
|---|
| 230 | 230 | | 2030 or any fiscal year thereafter that is 4 per-1 |
|---|
| 231 | 231 | | cent or more, shall pay to the Secretary a pen-2 |
|---|
| 232 | 232 | | alty in an amount equal to 16 percent of the 3 |
|---|
| 233 | 233 | | total outstanding balance of principle and inter-4 |
|---|
| 234 | 234 | | est due on all loans under this part that are in-5 |
|---|
| 235 | 235 | | cluded in the calculation of such cohort under-6 |
|---|
| 236 | 236 | | payment rate for such fiscal year. 7 |
|---|
| 237 | 237 | | ‘‘(c) E |
|---|
| 238 | 238 | | FFECT ON DEFAULTSTATUS OF BOR-8 |
|---|
| 239 | 239 | | ROWER.—The payment of a penalty under this section by 9 |
|---|
| 240 | 240 | | a covered institution of higher education shall have no ef-10 |
|---|
| 241 | 241 | | fect on the rights or obligations of a borrower of a loan 11 |
|---|
| 242 | 242 | | that is included in the calculation of the institution’s co-12 |
|---|
| 243 | 243 | | hort default rate, cohort delinquency rate, or cohort un-13 |
|---|
| 244 | 244 | | derpayment rate for purposes of such penalty. 14 |
|---|
| 245 | 245 | | ‘‘(d) D |
|---|
| 246 | 246 | | EFINITIONS.— 15 |
|---|
| 247 | 247 | | ‘‘(1) C |
|---|
| 248 | 248 | | OHORT DELINQUENCY RATE .—The term 16 |
|---|
| 249 | 249 | | ‘cohort delinquency rate’ means the percentage of 17 |
|---|
| 250 | 250 | | Federal student loan borrowers included in a cohort 18 |
|---|
| 251 | 251 | | under subsection (b) who have failed to make pay-19 |
|---|
| 252 | 252 | | ments on one or more of the Federal student loans 20 |
|---|
| 253 | 253 | | used for attendance at the institution concerned for 21 |
|---|
| 254 | 254 | | between 31 and 360 days (inclusive). 22 |
|---|
| 255 | 255 | | ‘‘(2) C |
|---|
| 256 | 256 | | OHORT UNDERPAYMENT RATE .—The 23 |
|---|
| 257 | 257 | | term ‘cohort underpayment rate’, means the percent-24 |
|---|
| 258 | 258 | | VerDate Sep 11 2014 23:28 Feb 20, 2025 Jkt 059200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H713.IH H713 |
|---|
| 259 | 259 | | ssavage on LAPJG3WLY3PROD with BILLS 10 |
|---|
| 260 | 260 | | •HR 713 IH |
|---|
| 261 | 261 | | age of Federal student loan borrowers included in a 1 |
|---|
| 262 | 262 | | cohort under subsection (b) who— 2 |
|---|
| 263 | 263 | | ‘‘(A) are making regular payments on the 3 |
|---|
| 264 | 264 | | Federal student loans used for attendance at 4 |
|---|
| 265 | 265 | | the institution concerned but for whom the sum 5 |
|---|
| 266 | 266 | | all outstanding balances of such loans exceeds 6 |
|---|
| 267 | 267 | | the sum of the original loan balances; and 7 |
|---|
| 268 | 268 | | ‘‘(B) are neither delinquent nor in default 8 |
|---|
| 269 | 269 | | on such loans. 9 |
|---|
| 270 | 270 | | ‘‘(3) C |
|---|
| 271 | 271 | | OVERED INSTITUTION OF HIGHER EDU -10 |
|---|
| 272 | 272 | | CATION.—The term ‘covered institution of higher 11 |
|---|
| 273 | 273 | | education’ means an institution of higher education 12 |
|---|
| 274 | 274 | | that is the beneficiary of an endowment fund with 13 |
|---|
| 275 | 275 | | total value of $2,500,000,000 or more. 14 |
|---|
| 276 | 276 | | ‘‘(4) E |
|---|
| 277 | 277 | | NDOWMENT FUND .—The term ‘endow-15 |
|---|
| 278 | 278 | | ment fund’ means a fund that— 16 |
|---|
| 279 | 279 | | ‘‘(A) is established by State law, by an in-17 |
|---|
| 280 | 280 | | stitution of higher education, or by a founda-18 |
|---|
| 281 | 281 | | tion that is exempt from Federal income tax-19 |
|---|
| 282 | 282 | | ation; and 20 |
|---|
| 283 | 283 | | ‘‘(B) is maintained for the purpose of gen-21 |
|---|
| 284 | 284 | | erating income for the support of an institution 22 |
|---|
| 285 | 285 | | of higher education. 23 |
|---|
| 286 | 286 | | VerDate Sep 11 2014 23:28 Feb 20, 2025 Jkt 059200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H713.IH H713 |
|---|
| 287 | 287 | | ssavage on LAPJG3WLY3PROD with BILLS 11 |
|---|
| 288 | 288 | | •HR 713 IH |
|---|
| 289 | 289 | | ‘‘(5) FEDERAL STUDENT LOAN .—The term 1 |
|---|
| 290 | 290 | | ‘Federal student loan’ means a loan made under this 2 |
|---|
| 291 | 291 | | part.’’. 3 |
|---|
| 292 | 292 | | SEC. 3. PROGRAM PARTICIPATION AGREEMENTS. 4 |
|---|
| 293 | 293 | | Section 487(a) of the Higher Education Act of 1965 5 |
|---|
| 294 | 294 | | (20 U.S.C. 1094(a)) is amended by adding at the end the 6 |
|---|
| 295 | 295 | | following: 7 |
|---|
| 296 | 296 | | ‘‘(30) The institution will comply with the re-8 |
|---|
| 297 | 297 | | quirements of section 454A.’’. 9 |
|---|
| 298 | 298 | | SEC. 4. INCREASED TAX ON NET INVESTMENT INCOME OF 10 |
|---|
| 299 | 299 | | CERTAIN EDUCATIONAL INSTITUTIONS WITH 11 |
|---|
| 300 | 300 | | LARGE ENDOWMENTS THAT INCREASE TUI-12 |
|---|
| 301 | 301 | | TION. 13 |
|---|
| 302 | 302 | | Section 4968 of the Internal Revenue Code of 1986 14 |
|---|
| 303 | 303 | | is amended by adding at the end the following new sub-15 |
|---|
| 304 | 304 | | section: 16 |
|---|
| 305 | 305 | | ‘‘(e) I |
|---|
| 306 | 306 | | NCREASEDTAX ONCERTAINAPPLICABLE 17 |
|---|
| 307 | 307 | | E |
|---|
| 308 | 308 | | DUCATIONAL INSTITUTIONS THATINCREASETUI-18 |
|---|
| 309 | 309 | | TION.— 19 |
|---|
| 310 | 310 | | ‘‘(1) I |
|---|
| 311 | 311 | | N GENERAL.—In the case of any disquali-20 |
|---|
| 312 | 312 | | fied large applicable educational institution for any 21 |
|---|
| 313 | 313 | | taxable year beginning after December 31, 2025, 22 |
|---|
| 314 | 314 | | subsection (a) shall be applied by substituting ‘25 23 |
|---|
| 315 | 315 | | percent’ for ‘1.4 percent’ for such taxable year. 24 |
|---|
| 316 | 316 | | VerDate Sep 11 2014 23:28 Feb 20, 2025 Jkt 059200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H713.IH H713 |
|---|
| 317 | 317 | | ssavage on LAPJG3WLY3PROD with BILLS 12 |
|---|
| 318 | 318 | | •HR 713 IH |
|---|
| 319 | 319 | | ‘‘(2) DISQUALIFIED LARGE APPLICABLE EDU -1 |
|---|
| 320 | 320 | | CATIONAL INSTITUTION.—For purposes of this sub-2 |
|---|
| 321 | 321 | | section, the term ‘disqualified large applicable edu-3 |
|---|
| 322 | 322 | | cational institution’ means, with respect to any tax-4 |
|---|
| 323 | 323 | | able year, any institution if— 5 |
|---|
| 324 | 324 | | ‘‘(A) such institution is an applicable edu-6 |
|---|
| 325 | 325 | | cational institution for such taxable year, 7 |
|---|
| 326 | 326 | | ‘‘(B) the average tuition charged to full- 8 |
|---|
| 327 | 327 | | time students for semesters during such taxable 9 |
|---|
| 328 | 328 | | year exceeds the inflation adjusted base amount 10 |
|---|
| 329 | 329 | | for such taxable year, and 11 |
|---|
| 330 | 330 | | ‘‘(C) the aggregate fair market value (de-12 |
|---|
| 331 | 331 | | termined as of the end of the preceding taxable 13 |
|---|
| 332 | 332 | | year) of the assets of such institution (other 14 |
|---|
| 333 | 333 | | than those assets which are used directly in car-15 |
|---|
| 334 | 334 | | rying out the institution’s exempt purpose) 16 |
|---|
| 335 | 335 | | equal or exceeds $2,500,000,000. 17 |
|---|
| 336 | 336 | | ‘‘(3) I |
|---|
| 337 | 337 | | NFLATION ADJUSTED BASE AMOUNT .— 18 |
|---|
| 338 | 338 | | For purposes of this subsection— 19 |
|---|
| 339 | 339 | | ‘‘(A) I |
|---|
| 340 | 340 | | N GENERAL.—The term ‘inflation 20 |
|---|
| 341 | 341 | | adjusted base amount’ means, with respect to 21 |
|---|
| 342 | 342 | | any applicable education institution for any tax-22 |
|---|
| 343 | 343 | | able year which begins in any calendar year, the 23 |
|---|
| 344 | 344 | | sum of— 24 |
|---|
| 345 | 345 | | VerDate Sep 11 2014 23:28 Feb 20, 2025 Jkt 059200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\H713.IH H713 |
|---|
| 346 | 346 | | ssavage on LAPJG3WLY3PROD with BILLS 13 |
|---|
| 347 | 347 | | •HR 713 IH |
|---|
| 348 | 348 | | ‘‘(i) the base amount of such institu-1 |
|---|
| 349 | 349 | | tion, plus 2 |
|---|
| 350 | 350 | | ‘‘(ii) the product of— 3 |
|---|
| 351 | 351 | | ‘‘(I) such base amount, multi-4 |
|---|
| 352 | 352 | | plied by 5 |
|---|
| 353 | 353 | | ‘‘(II) the cost-of-living adjust-6 |
|---|
| 354 | 354 | | ment determined under section 1(f)(3) 7 |
|---|
| 355 | 355 | | for the calendar year in which the tax-8 |
|---|
| 356 | 356 | | able year begins, determined by sub-9 |
|---|
| 357 | 357 | | stituting ‘calendar year 2024’ for ‘cal-10 |
|---|
| 358 | 358 | | endar year 2016’ in subparagraph 11 |
|---|
| 359 | 359 | | (A)(ii) thereof. 12 |
|---|
| 360 | 360 | | ‘‘(B) B |
|---|
| 361 | 361 | | ASE AMOUNT.—The term ‘base 13 |
|---|
| 362 | 362 | | amount’ means, with respect any applicable 14 |
|---|
| 363 | 363 | | educational institution, the average tuition 15 |
|---|
| 364 | 364 | | charged to specified students for semesters dur-16 |
|---|
| 365 | 365 | | ing calendar year 2025. 17 |
|---|
| 366 | 366 | | ‘‘(4) A |
|---|
| 367 | 367 | | PPLICATION TO NEW INSTITUTIONS .—In 18 |
|---|
| 368 | 368 | | the case of any applicable educational institution not 19 |
|---|
| 369 | 369 | | in existence at all times during calendar year 20 |
|---|
| 370 | 370 | | 2025— 21 |
|---|
| 371 | 371 | | ‘‘(A) the base amount with respect to such 22 |
|---|
| 372 | 372 | | institution shall be determined with respect to 23 |
|---|
| 373 | 373 | | the first full calendar year for which such insti-24 |
|---|
| 374 | 374 | | tution is in existence, 25 |
|---|
| 375 | 375 | | VerDate Sep 11 2014 23:28 Feb 20, 2025 Jkt 059200 PO 00000 Frm 00013 Fmt 6652 Sfmt 6201 E:\BILLS\H713.IH H713 |
|---|
| 376 | 376 | | ssavage on LAPJG3WLY3PROD with BILLS 14 |
|---|
| 377 | 377 | | •HR 713 IH |
|---|
| 378 | 378 | | ‘‘(B) the inflation adjusted base amount 1 |
|---|
| 379 | 379 | | shall be determined by using the calendar year 2 |
|---|
| 380 | 380 | | preceding such first full calendar year as the 3 |
|---|
| 381 | 381 | | year substituted in paragraph (3)(A)(ii)(II), 4 |
|---|
| 382 | 382 | | and 5 |
|---|
| 383 | 383 | | ‘‘(C) paragraph (1) shall not apply to any 6 |
|---|
| 384 | 384 | | taxable year beginning before the end of such 7 |
|---|
| 385 | 385 | | first full calendar year. 8 |
|---|
| 386 | 386 | | Notwithstanding the preceding sentence, if the aver-9 |
|---|
| 387 | 387 | | age tuition charged by any applicable educational in-10 |
|---|
| 388 | 388 | | stitution to specified students during the first full 11 |
|---|
| 389 | 389 | | calendar year for which such institution is in exist-12 |
|---|
| 390 | 390 | | ence is higher than such average for any of the 3 13 |
|---|
| 391 | 391 | | succeeding calendar years, the base amount and in-14 |
|---|
| 392 | 392 | | flation adjusted base amount with respect to such 15 |
|---|
| 393 | 393 | | institution shall be determined in such manner as 16 |
|---|
| 394 | 394 | | the Secretary may provide.’’. 17 |
|---|
| 395 | 395 | | Æ |
|---|
| 396 | 396 | | VerDate Sep 11 2014 23:28 Feb 20, 2025 Jkt 059200 PO 00000 Frm 00014 Fmt 6652 Sfmt 6301 E:\BILLS\H713.IH H713 |
|---|
| 397 | 397 | | ssavage on LAPJG3WLY3PROD with BILLS |
|---|