II
119THCONGRESS
1
STSESSION S. 994
To provide for accountability in higher education.
IN THE SENATE OF THE UNITED STATES
MARCH12, 2025
Mr. D
URBIN(for himself, Ms. WARREN, and Mr. MERKLEY) introduced the
following bill; which was read twice and referred to the Committee on
Health, Education, Labor, and Pensions
A BILL
To provide for accountability in 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 ‘‘Preventing Risky Op-4
erations from Threatening the Education and Career Tra-5
jectories of Students Act of 2025’’ or the ‘‘PROTECT 6
Students Act of 2025’’. 7
SEC. 2. TABLE OF CONTENTS. 8
The table of contents for this Act is as follows: 9
Sec. 1. Short title.
Sec. 2. Table of contents.
Sec. 3. References.
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6211 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 2
•S 994 IS
TITLE I—STUDENT AND TAXPAYER PROTECTIONS
Sec. 101. Gainful employment and financial value transparency.
Sec. 102. Borrower defense and substantial misrepresentations.
Sec. 103. Closed school discharge.
Sec. 104. Prohibition on institutions limiting student legal action.
Sec. 105. Incentive compensation.
TITLE II—ENSURING INTEGRITY AT INSTITUTIONS OF HIGHER
EDUCATION AND INSTITUTIONAL CONTRACTORS
Sec. 201. Updating Federal oversight of third-party servicers.
Sec. 202. Job placement rates.
Sec. 203. Allocation of tuition and fee revenue by title IV institutions.
Sec. 204. Past performance.
Sec. 205. Recoupment.
TITLE III—IMPROVING OVERSIGHT
Sec. 301. Enforcement in the Office of Federal Student Aid.
Sec. 302. For-Profit Education Oversight Coordination Committee.
Sec. 303. Establishment and maintenance of complaint resolution and tracking
system.
Sec. 304. Reforms to eligibility and certification procedures.
Sec. 305. State oversight.
Sec. 306. Accrediting agency oversight.
Sec. 307. Mandatory spending for administrative costs of operating the student
aid programs.
TITLE IV—IMPROVING ACCESS TO STUDENT AND TAXPAYER
INFORMATION
Sec. 401. Reporting and disclosures from institutions of higher education.
Sec. 402. Transparency of oversight activities.
SEC. 3. REFERENCES.
1
Except as otherwise expressly provided in this Act, 2
wherever in this Act an amendment or repeal is expressed 3
in terms of an amendment to, or a repeal of, a section 4
or other provision, the reference shall be considered to be 5
made to that section or other provision of the Higher Edu-6
cation Act of 1965 (20 U.S.C. 1001 et seq.). 7
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 3
•S 994 IS
TITLE I—STUDENT AND 1
TAXPAYER PROTECTIONS 2
SEC. 101. GAINFUL EMPLOYMENT AND FINANCIAL VALUE 3
TRANSPARENCY. 4
(a) D
EFININGGAINFULEMPLOYMENTPROGRAMS.— 5
(1) A
DDITIONAL INSTITUTIONS .—Section 6
101(b) (20 U.S.C. 1001(b)) is amended in para-7
graph (1), by inserting ‘‘, including that meets the 8
standards for debt-to-earnings and earnings pre-9
mium in section 498C,’’ after ‘‘gainful employment 10
in a recognized occupation’’. 11
(2) P
ROPRIETARY INSTITUTION OF HIGHER 12
EDUCATION.—Section 102(b)(1)(A)(i) (20 U.S.C. 13
1002(b)(1)(A)(i)) is amended, by inserting ‘‘, includ-14
ing that meets the standards for debt-to-earnings 15
and earnings premium in section 498C’’ after ‘‘gain-16
ful employment in a recognized occupation’’. 17
(3) P
OSTSECONDARY VOCATIONAL INSTITU -18
TION.—Section 102(c)(1)(A) (20 U.S.C. 19
1002(c)(1)(A)) is amended, by inserting ‘‘, including 20
that meets the standards for debt-to-earnings and 21
earnings premium in section 498C’’ after ‘‘gainful 22
employment in a recognized occupation’’. 23
(4) E
LIGIBLE PROGRAM .—Section 24
481(b)(1)(A)(i) (20 U.S.C. 1088(b)(1)(A)(i)) is 25
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 4
•S 994 IS
amended, by inserting ‘‘, including that meets the 1
standards for debt-to-earnings and earnings pre-2
mium in section 498C’’ after ‘‘gainful employment in 3
a recognized profession’’. 4
(b) D
EBT-TO-EARNINGS ANDEARNINGSPREMIUM.— 5
Subpart 3 of part H of title IV (20 U.S.C. 1099c et seq.) 6
is amended by adding at the end the following: 7
‘‘SEC. 498C. DEBT-TO-EARNINGS AND EARNINGS PREMIUM. 8
‘‘(a) D
EFINITIONS.—In this section: 9
‘‘(1) A
NNUAL DEBT-TO-EARNINGS RATE.—The 10
term ‘annual debt-to-earnings rate’ means the rate 11
that is calculated for a cohort of students by taking 12
the annual loan payment for such cohort, as cal-13
culated by the Secretary, divided by the median an-14
nual earnings for such cohort. 15
‘‘(2) A
NNUAL LOAN PAYMENT .—The term ‘an-16
nual loan payment’ means, for a cohort of students, 17
as defined by the Secretary, who completed an eligi-18
ble program, their total annual payment on loans 19
borrowed to enroll in the institution that offered the 20
eligible program, measured not less than 2 and not 21
more than 4 years after their completion. 22
‘‘(3) D
ISCRETIONARY DEBT -TO-EARNINGS 23
RATE.—The term ‘discretionary debt-to-earnings 24
rate’ means the rate that is calculated for a cohort 25
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 5
•S 994 IS
of students by taking the annual loan payment for 1
such cohort, as calculated by the Secretary, divided 2
by the discretionary earnings for such cohort. 3
‘‘(4) D
ISCRETIONARY EARNINGS .—The term 4
‘discretionary earnings’ means, for a cohort of stu-5
dents, as defined by the Secretary, who completed 6
an eligible program, the median annual earnings 7
minus the amount that is 150 percent of the poverty 8
level for an individual, as determined by the Depart-9
ment of Health and Human Services. 10
‘‘(5) E
ARNINGS PREMIUM.—The term ‘earnings 11
premium’ means the amount by which the median 12
annual earnings exceed the median earnings for 13
working adults with not more than a high school di-14
ploma, as determined using data from the Bureau of 15
the Census— 16
‘‘(A) in the State where the institution 17
that provides the eligible program is located; or 18
‘‘(B) if fewer than half of the students in 19
the eligible program are from the State where 20
the institution that provides the eligible pro-21
gram is located, or if the institution is a foreign 22
institution, nationally. 23
‘‘(6) M
EDIAN ANNUAL EARNINGS .—The term 24
‘median annual earnings’ means, for a cohort of stu-25
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 6
•S 994 IS
dents, as defined by the Secretary, who completed 1
an eligible program, the midpoint of their annual 2
earnings measured not less than 2 and not more 3
than 4 years after their completion. 4
‘‘(b) S
TANDARDS.— 5
‘‘(1) I
N GENERAL.—An eligible program does 6
not meet the standards for debt-to-earnings or earn-7
ings premium if it fails the debt-to-earnings rates or 8
fails the earnings premium, as described in para-9
graph (2), in 2 out of any 3 consecutive years. 10
‘‘(2) F
AILING.—An eligible program— 11
‘‘(A) fails the debt-to-earnings rates if it 12
has— 13
‘‘(i) a discretionary debt-to-earnings 14
rate equal to or greater than 20 percent; 15
and 16
‘‘(ii) an annual debt-to-earnings rate 17
equal to or greater than 8 percent; and 18
‘‘(B) fails the earnings premium if it has 19
an earnings premium of zero or a negative 20
amount. 21
‘‘(c) P
ROCESS.— 22
‘‘(1) D
ATA MATCH.—In order to ensure compli-23
ance with paragraph (2), the Commissioner of the 24
Internal Revenue Service, the Commissioner of the 25
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 7
•S 994 IS
Social Security Administration, and the head of any 1
other Federal agency that administers the database 2
of individual-level earnings data shall, in coordina-3
tion with the Secretary, timely ensure secure, annual 4
data matches of earnings data with Department of 5
Education data to produce the median annual earn-6
ings of each eligible program. 7
‘‘(2) R
EQUIREMENTS OF THE SECRETARY .— 8
The Secretary shall— 9
‘‘(A) on an annual calendar year basis— 10
‘‘(i) for each eligible program— 11
‘‘(I) calculate for each award 12
year the discretionary debt-to-earnings 13
rate, the annual debt-to-earnings rate, 14
and the earnings premium for the 15
program; and 16
‘‘(II) publish the discretionary 17
debt-to-earnings rate, the annual 18
debt-to-earnings rate, and the earn-19
ings premium for the eligible program 20
for each award year on a website es-21
tablished and maintained by the Sec-22
retary; 23
‘‘(ii) for each eligible program that is 24
a program of training to prepare students 25
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 8
•S 994 IS
for gainful employment in a recognized oc-1
cupation or a graduate or professional de-2
gree program offered by an institution of 3
higher education described in section 4
101(a), issue a notice of determination not 5
later than 45 days after completing the 6
data match described in paragraph (1), in-7
forming the institution that provides the 8
program— 9
‘‘(I) of the final discretionary 10
debt-to-earnings rate, the annual 11
debt-to-earnings rate, and the earn-12
ings premium for the program, which 13
may not be appealed by the institution 14
unless the institution believes that the 15
Secretary erred in the calculation of 16
any such measure; 17
‘‘(II) of the final determination 18
regarding whether the program fails 19
the debt-to-earnings rates or fails the 20
earnings premium, as described in 21
subsection (b)(2); 22
‘‘(III) whether the program does 23
not meet the standards for debt-to- 24
earnings or earnings premium as de-25
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 9
•S 994 IS
scribed in subsection (b)(1) or could 1
not meet such standards in the next 2
year if it fails the debt-to-earnings 3
rates or fails the earnings premium, 4
as described in subsection (b)(2), in 5
such next year; and 6
‘‘(IV) whether the institution is 7
required to provide warnings to en-8
rolled students and prospective stu-9
dents of the program’s failure, or risk 10
of failure, to meet the standards, as 11
determined under subclause (III); and 12
‘‘(iii) for each eligible program that is 13
a program of training to prepare students 14
for gainful employment in a recognized oc-15
cupation that does not meet the standards 16
for debt-to-earnings and earnings premium 17
as described in subsection (b)(1), enforce 18
the consequences under subsection (d); and 19
‘‘(B) develop processes to verify, on an an-20
nual calendar year basis— 21
‘‘(i) that each eligible program that is 22
a program of training to prepare students 23
for gainful employment in a recognized oc-24
cupation or a graduate or professional de-25
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 10
•S 994 IS
gree program offered by an institution of 1
higher education described in section 2
101(a), provides the warning described in 3
subparagraph (A)(ii)(IV), if applicable; 4
and 5
‘‘(ii) that each eligible program that is 6
a program of training to prepare students 7
for gainful employment in a recognized oc-8
cupation that does not meet the standards 9
for debt-to-earnings or earnings premium 10
as described in subsection (b)(1), does not 11
receive funds as described in subsection 12
(d). 13
‘‘(d) C
ONSEQUENCES OF NOTMEETINGSTAND-14
ARDS.— 15
‘‘(1) N
O DISBURSEMENT OF FUNDS FOR EN -16
ROLLMENT IN INELIGIBLE PROGRAMS .—An institu-17
tion may not disburse program funds under this title 18
to students enrolled in a program of training to pre-19
pare students for gainful employment in a recog-20
nized occupation that does not meet the standards 21
for debt-to-earnings and earnings premium as de-22
scribed in this section. 23
‘‘(2) T
IME PERIOD TO REESTABLISH ELIGI -24
BILITY.—An institution may not seek to reestablish 25
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 11
•S 994 IS
the eligibility of a program of training to prepare 1
students for gainful employment in a recognized oc-2
cupation that does not meet the standards for debt- 3
to-earnings and earnings premium as described in 4
this section or establish the eligibility of a program 5
of training to prepare students for gainful employ-6
ment in a recognized occupation that is substantially 7
similar to the program that did not meet such stand-8
ards until the date that is 3 years after the date of 9
the notice of determination issued under subsection 10
(c)(2)(A)(ii) that the program of training to prepare 11
students for gainful employment in a recognized oc-12
cupation does not meet the standards. 13
‘‘(e) R
EGULATIONS.—The Secretary shall issue regu-14
lations to carry out this section not later than 1 year after 15
the date of enactment of the Preventing Risky Operations 16
from Threatening the Education and Career Trajectories 17
of Students Act of 2025, except that such regulations shall 18
not be subject to the requirements of sections 482 or 19
492.’’. 20
SEC. 102. BORROWER DEFENSE AND SUBSTANTIAL MIS-21
REPRESENTATIONS. 22
(a) B
ORROWERDEFENSE TOREPAYMENT.—Section 23
455(h) (20 U.S.C. 1087e(h)) is amended to read as fol-24
lows: 25
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 12
•S 994 IS
‘‘(h) BORROWERDEFENSES.— 1
‘‘(1) I
N GENERAL.—Notwithstanding any other 2
provision of State or Federal law, the Secretary shall 3
discharge a covered loan in repayment made to a 4
borrower with a defense to repayment of the loan, as 5
described in this section. 6
‘‘(2) D
EFINITIONS.—In this subsection: 7
‘‘(A) R
EPAYMENT.—The term ‘repayment’ 8
means the period after any in-school deferment 9
or grace period and before a loan is paid in full 10
other than by a consolidation loan made under 11
this title, including, without limitation, a loan 12
in default. 13
‘‘(B) C
OVERED LOAN.—The term ‘covered 14
loan’ means a loan made, insured, or guaran-15
teed under this title that has an outstanding 16
balance comprised in whole or in part by repay-17
ment obligations incurred to cover the cost of 18
attendance at an institution of higher edu-19
cation. 20
‘‘(3) B
ASIS FOR DEFENSE TO REPAYMENT .— 21
‘‘(A) I
N GENERAL.—For purposes of dis-22
charge under this section, a borrower defense to 23
repayment is established when the Secretary 24
concludes by a preponderance of the evidence 25
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 13
•S 994 IS
that a qualifying act, omission, or event oc-1
curred, and the student whose cost of attend-2
ance was paid in whole or in part by the pro-3
ceeds of a covered loan suffered detriment in 4
the nature and degree warranting a borrower 5
defense discharge. 6
‘‘(B) Q
UALIFYING ACTS, OMISSIONS, OR 7
EVENTS.—A qualifying act, omission, or event 8
includes without limitation any of the following: 9
‘‘(i) The institution, one of its rep-10
resentatives, or a third-party servicer of 11
the institution made a substantial mis-12
representation (as described in section 13
481(g)), directly or indirectly, to the bor-14
rower in connection with the borrower’s de-15
cision to attend, or to continue attending, 16
the institution or the borrower’s decision to 17
take out a covered loan. 18
‘‘(ii) The institution failed to perform 19
its obligations under the terms of a con-20
tract with the student and such obligation 21
was undertaken as consideration or in ex-22
change for the borrower’s decision to at-23
tend, or to continue attending, the institu-24
tion, for the borrower’s decision to take 25
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00013 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 14
•S 994 IS
out a covered loan, or for funds disbursed 1
in connection with a covered loan. 2
‘‘(iii) The institution engaged in ag-3
gressive and deceptive recruitment conduct 4
or tactics in connection with the borrower’s 5
decision to attend, or to continue attend-6
ing, the institution or the borrower’s deci-7
sion to take out a covered loan. Aggressive 8
and deceptive recruitment tactics or con-9
duct include actions by the institution, any 10
of its representatives, or any entity, orga-11
nization, or person with whom the institu-12
tion has an agreement to provide edu-13
cational programs, marketing, recruitment, 14
or lead generation services that pressure a 15
student to make enrollment or loan-related 16
decisions, take unreasonable advantage of 17
a student’s lack of knowledge, discourage a 18
student or prospective student from con-19
sulting an advisor prior to making enroll-20
ment or loan-related decisions, use threat-21
ening or abusive language, or repeatedly 22
engage in unsolicited contact. 23
‘‘(iv) The borrower, whether as an in-24
dividual or as a member of a class, or a 25
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00014 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 15
•S 994 IS
governmental agency has obtained against 1
the institution a favorable judgment based 2
on State or Federal law in a court or ad-3
ministrative tribunal of competent jurisdic-4
tion based on the institution’s act or omis-5
sion relating to the making of a covered 6
loan, or the provision of educational serv-7
ices for which the loan was provided, not-8
withstanding any possible appeal. 9
‘‘(v) The Secretary sanctioned or oth-10
erwise took adverse action against the in-11
stitution at which the borrower enrolled, 12
based on the institution’s acts or omissions 13
that could give rise to a borrower defense 14
under clause (i), (ii), or (iii). 15
‘‘(vi) The institution committed any 16
act or omission that relates to the making 17
of the covered loan for enrollment at the 18
institution or the provision of educational 19
services for which the covered loan was 20
provided that would give rise to a cause of 21
action against the institution under appli-22
cable State law without regard to any stat-23
ute of limitations. 24
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00015 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 16
•S 994 IS
‘‘(C) DETERMINATION WHETHER DET -1
RIMENT WARRANTS DISCHARGE .—In deter-2
mining whether the nature and degree of det-3
riment warrants a borrower defense discharge, 4
the Secretary shall consider the totality of the 5
circumstances, including the nature and degree 6
of detriment shown by previous recipients of 7
borrower defense discharge, and drawing all in-8
ferences and presumptions warranted by the 9
evidence under the circumstances. 10
‘‘(4) E
FFECT OF DISCHARGE .—To effectuate a 11
borrower defense discharge of a covered loan in re-12
payment, the Secretary shall carry out the following: 13
‘‘(A) Discharge all amounts owed to the 14
Secretary, including interest and fees, on the 15
covered loan, subject to the limitation in para-16
graph (5). In the case of a covered loan that is 17
a Federal Direct Consolidation Loan or a Fed-18
eral Consolidation Loan under section 428C 19
comprised only in part of repayment obligations 20
incurred to cover the cost of attendance at the 21
institution whose acts or omissions are the basis 22
of the discharge, the Secretary may discharge 23
less than the total amount of the covered loan 24
when loan account records clearly establish the 25
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00016 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 17
•S 994 IS
portion of the covered loan not subject to the 1
defense to repayment. 2
‘‘(B) Reimburse all payments previously 3
made to the Secretary on the covered loan, sub-4
ject to the limitation in paragraph (5). 5
‘‘(C) For borrowers in default, determine 6
that the borrower is not in default on the cov-7
ered loan and therefore not ineligible to receive 8
assistance under this title on the basis of de-9
fault on the covered loan. 10
‘‘(D) Update or delete adverse reports the 11
Secretary previously made to consumer report-12
ing agencies regarding the covered loan. 13
‘‘(E) Remove the discharged covered loan 14
and any grant made under this title related to 15
the student’s attendance at the institution 16
whose acts are omissions are the basis of the 17
discharge from the borrower’s loan history for 18
purposes of calculating eligibility for further 19
grants and loans under this title. 20
‘‘(5) L
IMITATION ON DISCHARGE AND REIM -21
BURSEMENT.—The Secretary may reduce the 22
amount of discharge and reimbursement provided 23
for in paragraph (4) if the borrower received a 24
money payment from the institution or related entity 25
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00017 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 18
•S 994 IS
in compensation for the acts or omissions forming 1
the basis of the borrower defense. In deciding wheth-2
er a reduction is warranted, and in what amount, 3
the Secretary shall consider the extent to which the 4
payment received by the borrower compensated for 5
non-economic damages, out-of-pocket expenses, or 6
payments previously made directly to the institution, 7
and whether the borrower has non-Federal student 8
loans as a result of attending the institution. The 9
Secretary may not reduce the amount of discharge 10
and reimbursement provided for in a covered loan in 11
paragraph (4) because the borrower received funds 12
from a State tuition recovery fund. 13
‘‘(6) F
INALITY.—A borrower defense discharge 14
is final upon the Secretary’s notification to the bor-15
rower. The Secretary may not thereafter revoke or 16
reduce the amount of discharge or reimbursement, 17
absent a finding of fraud on the part of the bor-18
rower. 19
‘‘(7) G
ROUP PROCESS.—Where substantial mis-20
representations are widespread, the Secretary shall 21
seek to assess the eligibility of all potentially af-22
fected borrowers as a group or in multiple groups to 23
expedite the process. If such discharges are ap-24
proved, the Secretary shall discharge the covered 25
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00018 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 19
•S 994 IS
loans of all eligible borrowers in the group, in ac-1
cordance with the processes in this section and with-2
out requiring application materials, to the extent 3
practicable. 4
‘‘(8) R
EGULATIONS.—The Secretary may pro-5
mulgate regulations or otherwise prescribe proce-6
dures in relation to borrower defense discharge, con-7
sistent with the provisions of this section. Nothing in 8
this section modifies or displaces existing powers, 9
authorities, and obligations of the Secretary, includ-10
ing obligations imposed under chapter 5 of title 5, 11
United States Code (commonly known as the ‘Ad-12
ministrative Procedures Act’).’’. 13
(b) S
UBSTANTIAL MISREPRESENTATION.—Section 14
481 (20 U.S.C. 1088) is amended by adding at the end 15
the following: 16
‘‘(g) S
UBSTANTIALMISREPRESENTATION.—In this 17
title, the term ‘substantial misrepresentation’, when used 18
with respect to an institution of higher education, in-19
cludes— 20
‘‘(1) any statement about the nature of the in-21
stitution’s educational program, its financial 22
charges, or the employability or earnings of its grad-23
uates that is false, erroneous, or has the likelihood 24
or tendency to mislead under the circumstances, on 25
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00019 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 20
•S 994 IS
which the person to whom it was made could reason-1
ably be expected to rely, or has reasonably relied, to 2
that person’s detriment; and 3
‘‘(2) any omission of fact, such as the conceal-4
ment, suppression, or absence of material informa-5
tion about the nature of the institution’s educational 6
program, its financial charges, the employability or 7
earnings of its graduates, the availability of enroll-8
ment openings in the student’s desired program, the 9
factors that would prevent an applicant from meet-10
ing the legal or other requirements to be employed, 11
licensed, or certified in the field for which the train-12
ing is provided which a reasonable person would 13
have considered in making a decision to attend, or 14
to continue attending, the institution or to take out 15
a covered loan.’’. 16
SEC. 103. CLOSED SCHOOL DISCHARGE. 17
Section 437(c)(1) (20 U.S.C. 1087(c)(1)) is amended 18
to read as follows: 19
‘‘(1) I
N GENERAL.— 20
‘‘(A) I
N GENERAL.—If a borrower who re-21
ceived, on or after January 1, 1986, a loan 22
made, insured, or guaranteed under this part 23
and the student borrower, or the student on 24
whose behalf a parent borrowed, is unable to 25
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00020 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 21
•S 994 IS
complete the program in which such student is 1
enrolled due to the closure of the institution or 2
if such student’s eligibility to borrow under this 3
part was falsely certified by the eligible institu-4
tion or was falsely certified as a result of a 5
crime of identity theft, or if the institution 6
failed to make a refund of loan proceeds which 7
the institution owed to such student’s lender, 8
then the Secretary shall discharge the bor-9
rower’s liability on the loan (including interest 10
and collection fees) by repaying the amount 11
owed on the loan. 12
‘‘(B) A
DDITIONAL DISCHARGE.— 13
‘‘(i) I
N GENERAL.—In addition to the 14
authorization of discharge under subpara-15
graph (A), the Secretary shall discharge a 16
borrower’s (including an endorser’s) liabil-17
ity on a Federal Direct Loan made under 18
part D if— 19
‘‘(I) the institution at which the 20
borrower who took the loan (or on 21
whose behalf it was taken or en-22
dorsed) was enrolled, ceased to pro-23
vide educational instruction as a 24
whole, or ceased to provide instruction 25
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00021 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 22
•S 994 IS
in the programs in which more than 1
50 percent of the students were en-2
rolled; or 3
‘‘(II) the borrower who took the 4
loan (or on whose behalf it was taken 5
or endorsed) was enrolled in an insti-6
tution at any time within the period 7
not earlier than 180 days before the 8
date of the closure of the institution. 9
‘‘(ii) E
XTENSION OF 180 DAYS .—The 10
Secretary may extend the 180 day period 11
described in clause (i)(II) in cases where 12
exceptional circumstances are dem-13
onstrated, including if— 14
‘‘(I) the institution was placed on 15
probation or order to show cause or 16
approval was withdrawn or terminated 17
by an accrediting agency or associa-18
tion or an institution’s institutional 19
accreditor, or a State authorizing or 20
licensing authority; 21
‘‘(II) the institution was placed 22
on Heightened Cash Monitoring sta-23
tus by the Department or was placed 24
on Provisional Program Participation 25
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00022 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 23
•S 994 IS
Approval status, or the institution’s 1
participation in a program under this 2
title was terminated by the Depart-3
ment; 4
‘‘(III) the institution was found 5
to have violated Federal or State law 6
related to enrolling or providing edu-7
cation services to students by a Fed-8
eral or State Government agency, or 9
is the subject of a Federal or State 10
court judgment that the institution 11
violated laws related to enrolling or 12
providing education services to stu-13
dents; 14
‘‘(IV) the teach-out plan (as re-15
quired under section 487(f)) of the 16
borrower’s educational program ex-17
ceeds the 180 day period described in 18
clause (i)(II); 19
‘‘(V) the institution responsible 20
for the teach-out of the borrower’s 21
educational program fails to perform 22
the material terms of the teach-out 23
plan (as required under section 24
487(f)), such that the borrower does 25
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00023 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 24
•S 994 IS
not have a reasonable opportunity to 1
complete the borrower’s program of 2
study; and 3
‘‘(VI) the institution permanently 4
closed all or most of its in-person lo-5
cations while maintaining online pro-6
grams or permanently closed many 7
programs. 8
‘‘(C) N
O APPLICATION REQUIREMENT .—A 9
borrower who took a loan (or on whose behalf 10
it was taken or endorsed) that is eligible for 11
discharge under this paragraph due to institu-12
tional closure is entitled to discharge without an 13
application or statement from the borrower 1 14
year after the institution’s closure date if the 15
student did not complete the program at the in-16
stitution. 17
‘‘(D) P
URSING CLAIMS.—After discharging 18
liability on a loan under this paragraph, the 19
Secretary shall pursue any claim available to a 20
borrower against the institution and its affili-21
ates and principals or settle the loan obligation 22
pursuant to the financial responsibility author-23
ity under subpart 3 of part H.’’. 24
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00024 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 25
•S 994 IS
SEC. 104. PROHIBITION ON INSTITUTIONS LIMITING STU-1
DENT LEGAL ACTION. 2
(a) E
NFORCEMENT OF ARBITRATION AGREE-3
MENTS.— 4
(1) I
N GENERAL.—Chapter 1 of title 9, United 5
States Code, (relating to the enforcement of arbitra-6
tion agreements) shall not apply to an enrollment 7
agreement made between a student and an institu-8
tion of higher education. 9
(2) D
EFINITION.—In this section, the term ‘‘in-10
stitution of higher education’’ has the meaning given 11
such term in section 102 of the Higher Education 12
Act of 1965 (20 U.S.C. 1002). 13
(b) P
ROHIBITION ONLIMITATIONS ONABILITY OF 14
S
TUDENTSTOPURSUECLAIMSAGAINSTCERTAININSTI-15
TUTIONS OFHIGHEREDUCATION.—Section 487(a) (20 16
U.S.C. 1094(a)) is amended by adding at the end the fol-17
lowing: 18
‘‘(30) The institution— 19
‘‘(A) will not require any student to agree 20
to, and will not enforce, any limitation or re-21
striction (including a limitation or restriction on 22
any available choice of applicable law, a jury 23
trial, or venue) on the ability of a student to 24
pursue a claim, individually or with others, 25
against an institution in court; and 26
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00025 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 26
•S 994 IS
‘‘(B) will provide written notification to 1
students enrolled at the institution that any 2
limitation or restriction on the ability of a stu-3
dent to pursue a claim, individually or with oth-4
ers, against an institution in court contained in 5
any enrollment or other agreement with a stu-6
dent will not be enforced.’’. 7
(c) P
RIVATERIGHT OFACTION.— 8
(1) I
N GENERAL.— 9
(A) P
RIVATE RIGHT OF ACTION .—A viola-10
tion described in subparagraph (B) shall be 11
subject to a private right of action enforceable 12
by a student or former student of an institution 13
of higher education, on behalf of such individual 14
or such individual and a class, in an appro-15
priate district court of the United States or any 16
other court of competent jurisdiction that also 17
has jurisdiction over the defendant. The student 18
or former student may seek any relief provided 19
under section 455(h) for such violation, or any 20
remedies otherwise available to the individual 21
under law and equity. 22
(B) V
IOLATIONS.—A violation described in 23
this subparagraph is any of the following: 24
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00026 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 27
•S 994 IS
(i) A substantial misrepresentation, 1
including a substantial omission of fact. 2
(ii) A violation of section 487(a)(20) 3
of the Higher Education Act of 1965 (20 4
U.S.C. 1094(a)(20)). 5
(iii) A violation of the default rate 6
regulations promulgated by the Secretary 7
under section 435(m)(3) of the Higher 8
Education Act of 1965 (20 U.S.C. 9
1085(m)(3)). 10
(iv) A violation of the program integ-11
rity regulations promulgated by the Sec-12
retary under the Higher Education Act of 13
1965 (20 U.S.C. 1001 et seq.), including 14
regulations promulgated to carry out sec-15
tion 102, section 455, and part H of such 16
Act. 17
(2) A
MOUNT OF DAMAGES .— 18
(A) I
N GENERAL.—Any institution of high-19
er education, third party servicer that contracts 20
with such institution, or third party contractor 21
that commits a substantial misrepresentation 22
may be held liable to a student or former stu-23
dent of that institution in an amount equal to 24
the sum of— 25
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00027 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 28
•S 994 IS
(i) any actual damage sustained by 1
such individual as a result of each substan-2
tial misrepresentation; 3
(ii) any additional damages as the 4
court may allow; and 5
(iii) in the case of any successful ac-6
tion to enforce the foregoing liability, the 7
costs of the action, together with a reason-8
able attorney’s fee as determined by the 9
court. 10
(B) A
BILITY TO ASSESS PUNITIVE DAM -11
AGES.— 12
(i) I
N GENERAL.—On a finding by the 13
court that an institution of higher edu-14
cation, third party servicer that contracts 15
with such institution, or third party con-16
tractor has committed a violation described 17
in paragraph (1)(B) with actual or con-18
structive knowledge or reckless disregard 19
for such violation, the court may assess 20
punitive damages not to exceed threefold 21
the sum of actual damages sustained by 22
the plaintiff or class, including court costs 23
and a reasonable attorney’s fee. 24
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00028 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 29
•S 994 IS
(ii) FACTORS CONSIDERED BY THE 1
COURT.—In determining the amount of li-2
ability in any action under clause (i), the 3
court shall consider, among other relevant 4
factors— 5
(I) in any individual action under 6
this subsection, the frequency and 7
persistence of noncompliance by the 8
institution of higher education, third 9
party servicer that contracts with 10
such institution, or third party con-11
tractor and the nature of such non-12
compliance; or 13
(II) in any class action under 14
this subsection, in addition to the fac-15
tors listed in subclause (I), the finan-16
cial resources of the institution of 17
higher education, third party servicer 18
that contracts with such institution, 19
or third party contractor and the 20
number of persons adversely affected. 21
(3) J
URISDICTION.—An action to enforce any 22
liability created by this subsection may be brought 23
in any appropriate United States district court with-24
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00029 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 30
•S 994 IS
out regard to the amount in controversy, or in any 1
other court of competent jurisdiction. 2
(d) P
ROHIBITION ONTRANSCRIPTWITHHOLDING.— 3
Section 487(a) (20 U.S.C. 1094(a)), as amended by sub-4
section (b), is further amended by adding at the end the 5
following: 6
‘‘(31) The institution— 7
‘‘(A) will not withhold official transcripts 8
related to a balance owed by the student to the 9
institution; and 10
‘‘(B) will provide an official transcript to a 11
student upon request by the student.’’. 12
SEC. 105. INCENTIVE COMPENSATION. 13
(a) I
NCENTIVECOMPENSATION.— 14
(1) R
EVOCATION.—Example 2–B of Question 2 15
of the Department of Education Dear Colleague 16
Letter GEN–11–05 (March 17, 2011) is revoked. 17
(2) P
ROHIBITION.—The Department of Edu-18
cation may not issue a regulation or subregulatory 19
guidance that would establish an exception to the 20
prohibition provided in section 487(a)(20) of the 21
Higher Education Act of 1965 (20 U.S.C. 22
1094(a)(20)). 23
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00030 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 31
•S 994 IS
(b) INSTITUTIONALCOMPLIANCEWITH THEINCEN-1
TIVECOMPENSATION BAN.—Section 487(a)(20) (20 2
U.S.C. 1094(a)(20)) is amended— 3
(1) by striking ‘‘The institution’’ and inserting 4
‘‘(A) The institution’’; and 5
(2) by adding at the end the following: 6
‘‘(B) Not later than 1 year after the date of en-7
actment of the Preventing Risky Operations from 8
Threatening the Education and Career Trajectories 9
of Students Act of 2025, the institution shall attest 10
to the Secretary that the institution is in compliance 11
with subparagraph (A) notwithstanding the guidance 12
provided in Department of Education Example 2–B 13
of Question 2 of Dear Colleague Letter GEN–11–05 14
(March 17, 2011), in such form as required by the 15
Secretary. If the institution is not in compliance as 16
of the date of enactment of the Preventing Risky 17
Operations from Threatening the Education and Ca-18
reer Trajectories of Students Act of 2025, the Sec-19
retary shall revoke the institution’s program partici-20
pation agreement under this section. 21
‘‘(C) Following the attestation required under 22
subparagraph (B), the institution shall annually pro-23
vide verification from an independent auditor that 24
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00031 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 32
•S 994 IS
the institution is in compliance with subparagraph 1
(A).’’. 2
TITLE II—ENSURING INTEGRITY 3
AT INSTITUTIONS OF HIGHER 4
EDUCATION AND INSTITU-5
TIONAL CONTRACTORS 6
SEC. 201. UPDATING FEDERAL OVERSIGHT OF THIRD- 7
PARTY SERVICERS. 8
Section 481(c)(1) (20 U.S.C. 1088(c)(1)) is amended 9
by inserting ‘‘, including related to the delivery of funds 10
under this title, recruitment or retention of students, com-11
pliance with cohort default rate (as defined in section 12
435(m)) requirements, the development and delivery of in-13
structional content, and other applicable activities as de-14
scribed by the Secretary’’ after ‘‘title’’. 15
SEC. 202. JOB PLACEMENT RATES. 16
(a) D
EFINITION.—Section 481 (20 U.S.C. 1088), as 17
amended by section 102(b), is further amended by adding 18
at the end the following: 19
‘‘(h) J
OBPLACEMENTRATES.—The Secretary shall 20
establish a single definition of ‘job placement rate’ for pur-21
poses of this Act that ensures consistent determinations 22
across institutions and accrediting agencies regarding 23
when students are placed in a job, to improve accuracy 24
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00032 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 33
•S 994 IS
and minimize the opportunity for misleading or deceptive 1
information.’’. 2
(b) P
ROGRAMPARTICIPATIONAGREEMENT.—Section 3
487(a)(8) (20 U.S.C. 1094(a)(8)) is amended to read as 4
follows: 5
‘‘(8) In the case of an institution that adver-6
tises or discloses job placement rates to prospective 7
students or that is required to provide regular re-8
porting of job placement rates to an accrediting 9
agency, State authorizer, or other regulator, the in-10
stitution will utilize the definition provided under 11
section 481(h), and shall make available to prospec-12
tive students, at or before the time of application— 13
‘‘(A) the most recent available data con-14
cerning employment statistics, graduation sta-15
tistics, the methodology used by the institution 16
to calculate the job placement rate, and any 17
other information necessary to substantiate the 18
truthfulness of the advertisements or disclo-19
sures, and 20
‘‘(B) relevant State licensing requirements 21
of the State in which such institution is located 22
for any job for which the course of instruction 23
is designed to prepare such prospective stu-24
dents.’’. 25
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00033 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 34
•S 994 IS
(c) ACCREDITINGAGENCYRECOGNITION.—Section 1
496(a)(5)(A) (20 U.S.C. 1099b(a)(5)(A)) is amended by 2
inserting ‘‘, as defined pursuant to section 481(h)’’ before 3
the semicolon. 4
(d) N
ONAPPLICABILITY OF RULEMAKINGREQUIRE-5
MENTS.—The amendments made under this section shall 6
not be subject to the requirements provided under section 7
492 (20 U.S.C. 1098a). 8
SEC. 203. ALLOCATION OF TUITION AND FEE REVENUE BY 9
TITLE IV INSTITUTIONS. 10
Section 498(c) (20 U.S.C. 1099c(c)) is amended by 11
inserting at the end the following: 12
‘‘(7) R
EQUIREMENT TOSPENDREVENUE.— 13
‘‘(A) I
N GENERAL.— 14
‘‘(i) Beginning in academic year 2026– 15
2027 and in each academic year thereafter 16
through 2031–2032, each institution of higher 17
education, in order to be eligible to participate 18
in programs under this title, shall spend an 19
amount equal to not less than 30 percent of 20
their tuition and fee revenue (net of allowances 21
and discounts) on instruction. 22
‘‘(ii) Beginning in academic year 2027– 23
2028 and in each academic year thereafter 24
through 2030–2031, the Secretary shall assess 25
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00034 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 35
•S 994 IS
the data described in subparagraph (B) and 1
issue a report that identifies the following: 2
‘‘(I) The total amount of spending on 3
instruction for each institution. 4
‘‘(II) The total amount of spending on 5
student services for each institution, ex-6
cluding advertising, recruiting, marketing, 7
compensation of executives or officers, lob-8
bying, and other pre-enrollment expenses, 9
consistent with section 132(l). 10
‘‘(III) Tuition and fee revenue (net of 11
allowances and discounts) for each institu-12
tion. 13
‘‘(IV) The median increase in total 14
spending on student services and instruc-15
tion combined relative to spending on in-16
struction relative to tuition and fee revenue 17
(net of allowances and discounts). 18
‘‘(V) Other relevant information the 19
Secretary determines appropriate to in-20
clude. 21
‘‘(iii) In academic year 2031–2032, the 22
Secretary shall issue a regulation that estab-23
lishes a minimum threshold percentage for in-24
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00035 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 36
•S 994 IS
stitutional spending on instruction and student 1
services combined that shall be— 2
‘‘(I) not less than 30 percent; and 3
‘‘(II) consistent with the median in-4
crease in total spending, as identified 5
under clause (ii)(IV) averaged across aca-6
demic years 2028–2029, 2029–2030, and 7
2030–2031. 8
‘‘(iv) Beginning in academic year 2031– 9
2032 and in each academic year thereafter, 10
each institution of higher education, in order to 11
be eligible to participate in programs under this 12
title, shall spend an amount equal to not less 13
than the threshold percentage established under 14
clause (iii) of their tuition and fee revenue (net 15
of allowances and discounts) on instruction and 16
student services combined. 17
‘‘(B) R
EPORTING FROM INSTITUTIONS .—The 18
Secretary shall use data from reports received and 19
definitions established under section 132(l) to carry 20
out this paragraph. 21
‘‘(C) W
ARNINGS.—The Secretary shall— 22
‘‘(i) establish through regulation appro-23
priate thresholds for an institution of higher 24
education that meets the spending requirements 25
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00036 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 37
•S 994 IS
under clauses (i) and (iv) of subparagraph (A), 1
but which is at risk of missing such thresholds; 2
and 3
‘‘(ii) require each institution of higher edu-4
cation that is at risk of missing such thresholds 5
to provide warnings to prospective students and 6
enrolled students of the institution regarding 7
the low instructional spending. 8
‘‘(D) R
EGULATIONS.—The Secretary shall issue 9
such regulations as determined necessary by the Sec-10
retary to ensure compliance with the requirements of 11
this paragraph, taking into consideration cost and 12
convenience.’’. 13
SEC. 204. PAST PERFORMANCE. 14
Section 487(a)(16) (20 U.S.C. 1094(a)(16)) is 15
amended by inserting at the end the following: 16
‘‘(C) The institution will not knowingly employ 17
an individual who was an owner, director, officer, or 18
employee who exercised substantial control over an 19
institution that owes a liability. 20
‘‘(D) The institution will not knowingly— 21
‘‘(i) employ an individual who was— 22
‘‘(I) an owner, director, officer, or em-23
ployee of an institution that has— 24
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00037 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 38
•S 994 IS
‘‘(aa) been found to have en-1
gaged in fraud, misuse of funds, or 2
any material violation of law; or 3
‘‘(bb) had its participation in 4
programs under this title terminated, 5
its certification revoked, or its applica-6
tion for certification or recertification 7
for participation in such programs de-8
nied; or 9
‘‘(II) a 10 percent-or-higher equity 10
owner, director, officer, principal, or execu-11
tive of, or contractor affiliated with, an-12
other institution in any year in which the 13
other institution incurred a loss of Federal 14
funds, as determined by the Secretary, in 15
excess of 5 percent of the other institu-16
tion’s annual funds under this title; or 17
‘‘(ii) contract with any institution, third- 18
party servicer, individual, agency, or organiza-19
tion that has, or whose owners, officers, or em-20
ployees have— 21
‘‘(I) been found to have engaged in 22
fraud, misuse of funds, or any material 23
violation of law; 24
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00038 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 39
•S 994 IS
‘‘(II) had its participation in pro-1
grams under this title terminated, its cer-2
tification revoked, or its application for 3
certification or recertification for participa-4
tion in such programs denied; or 5
‘‘(III) been a 10 percent-or-higher eq-6
uity owner, director, officer, principal, ex-7
ecutive of, or contractor affiliated with, an-8
other institution in any year in which the 9
other institution incurred a loss of Federal 10
funds, as determined by the Secretary, in 11
excess of 5 percent of the other institu-12
tion’s annual funds under this title.’’. 13
SEC. 205. RECOUPMENT. 14
(a) C
LARIFYING THE AUTHORITYTORECOUPLI-15
ABILITIESFROMTITLEIV INSTITUTIONS.—Section 16
487(c)(1) (20 U.S.C. 1094(c)(1)) is amended by striking 17
subparagraph (F) and inserting the following: 18
‘‘(F) the limitation, suspension, or termi-19
nation of the participation in any program 20
under this title of an eligible institution, the 21
recoupment of liabilities established pursuant to 22
section 493E, or the imposition of a civil pen-23
alty under paragraph (3)(B) whenever the Sec-24
retary has determined, after reasonable notice 25
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00039 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 40
•S 994 IS
and opportunity for hearing, that such institu-1
tion has violated or failed to carry out any pro-2
vision of this title, any regulation prescribed 3
under this title, or any applicable special ar-4
rangement, agreement, or limitation, except 5
that no period of suspension under this section 6
shall exceed 60 days unless the institution and 7
the Secretary agree to an extension or unless 8
limitation or termination proceedings are initi-9
ated by the Secretary within that period of 10
time.’’. 11
(b) R
ECOUPMENT OF LIABILITIES.—Part G of title 12
IV (20 U.S.C. 1088 et seq.) is amended by adding at the 13
end the following: 14
‘‘SEC. 493E. RECOUPMENT. 15
‘‘(a) I
NGENERAL.—The Secretary shall assess liabil-16
ities and seek to recoup funds provided under this title 17
from an institution of higher education as a result of stu-18
dent loan discharges, findings from program reviews or 19
compliance audits, or due to other forms of misconduct 20
or noncompliance. 21
‘‘(b) W
AIVERAUTHORITY.—The Secretary may 22
waive some or all of the liabilities described in subsection 23
(a) based on the individual circumstances of the institu-24
tion.’’. 25
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00040 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 41
•S 994 IS
(c) OWNERSIGNATURES.—Section 498(b) of the 1
Higher Education Act of 1965 (20 U.S.C. 1099c(b)) is 2
amended— 3
(1) in paragraph (4), by striking ‘‘and’’ after 4
the semicolon; 5
(2) in paragraph (5), by striking the period at 6
the end and inserting ‘‘; and’’; and 7
(3) by adding at the end the following: 8
‘‘(6) requires both an authorized representative 9
of the institution and, if applicable, an authorized 10
representative of any entity with ownership and sub-11
stantial control over the institution to sign the pro-12
gram participation agreement, as described under 13
section 487, for the institution, which shall ensure 14
that the institution and its owner, if applicable, 15
agree to repay any liabilities assessed against the in-16
stitution by the Secretary.’’. 17
TITLE III—IMPROVING 18
OVERSIGHT 19
SEC. 301. ENFORCEMENT IN THE OFFICE OF FEDERAL STU-20
DENT AID. 21
(a) E
NFORCEMENT UNITESTABLISHED IN THE OF-22
FICE OFFEDERALSTUDENTAID.—Section 141 (20 23
U.S.C. 1018) is amended— 24
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00041 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 42
•S 994 IS
(1) by redesignating subsections (g) through (i) 1
as subsections (h) through (j), respectively; and 2
(2) by inserting after subsection (f) the fol-3
lowing: 4
‘‘(g) E
NFORCEMENTUNIT.— 5
‘‘(1) I
N GENERAL.—The Chief Operating Offi-6
cer, in consultation with the Secretary, shall estab-7
lish an enforcement unit within the PBO (referred 8
to in this section as the ‘enforcement unit’). 9
‘‘(2) A
PPOINTMENT.— 10
‘‘(A) C
HIEF ENFORCEMENT OFFICER .— 11
The Chief Operating Officer, in consultation 12
with the Secretary, shall appoint a Chief En-13
forcement Officer as a senior manager, in ac-14
cordance with subsection (e), to perform the 15
functions described in this subsection. The 16
Chief Enforcement Officer shall report solely 17
and directly to the Chief Operating Officer. 18
‘‘(B) B
ONUS.—Notwithstanding subsection 19
(e), the Chief Enforcement Officer may receive 20
a bonus, separately determined from the meth-21
odology which applies to the calculation of bo-22
nuses for other senior managers, based upon 23
the Chief Operating Officer’s evaluation of the 24
Chief Enforcement Officer’s performance in re-25
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00042 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 43
•S 994 IS
lation to the goals set forth in a performance 1
agreement related to the specific duties of the 2
enforcement unit. 3
‘‘(3) D
UTIES.—The enforcement unit shall— 4
‘‘(A) receive, process, and analyze allega-5
tions and complaints regarding the potential 6
violation of Federal or State law (including civil 7
and criminal law) or other unfair, deceptive, or 8
abusive acts or practices, by institutions of 9
higher education, third-party servicers that con-10
tract with such institutions, and loan servicers; 11
‘‘(B) investigate and coordinate investiga-12
tions of potential or actual misconduct of insti-13
tutions of higher education, third-party 14
servicers that contract with such institutions, 15
and loan servicers, including engaging in a reg-16
ular program of secret shopping at online and 17
campus-based institutions of higher education; 18
‘‘(C) develop and implement a written pol-19
icy for the enforcement of the ban on prohibited 20
incentive compensation not less than annually, 21
which may include automatic triggers for in-22
quiries by the Department or regular ‘secret 23
shopper’ or audit-based investigations, and shall 24
update such policy as needed; and 25
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00043 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 44
•S 994 IS
‘‘(D) enforce compliance with laws gov-1
erning Federal student financial assistance pro-2
grams under title IV, including through the use 3
of an emergency action in accordance to section 4
487(c)(1)(I), the limitation, suspension, or ter-5
mination of the participation of an eligible insti-6
tution in a program under title IV, or the impo-7
sition of a civil penalty in accordance with sec-8
tion 487(c)(3)(B). 9
‘‘(4) C
OORDINATION AND STAFFING .—The en-10
forcement unit shall— 11
‘‘(A) coordinate with relevant Federal and 12
State agencies and oversight bodies, including 13
the For-Profit Education Oversight Coordina-14
tion Committee established under section 124; 15
and 16
‘‘(B) hire staff, (including by appointing 17
not more than 10 individuals in positions of ex-18
cepted service, as described in subsection 19
(h)(3)) with such expertise as is necessary to 20
conduct investigations, respond to allegations 21
and complaints, and enforce compliance with 22
laws governing Federal student financial assist-23
ance programs under title IV. 24
‘‘(5) D
IVISIONS.— 25
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00044 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 45
•S 994 IS
‘‘(A) IN GENERAL.—The enforcement unit 1
shall have separate divisions with the following 2
focus areas: 3
‘‘(i) An investigations division to in-4
vestigate potential or actual misconduct at 5
institutions of higher education, third- 6
party servicers that contract with such in-7
stitutions, and loan servicers. 8
‘‘(ii) A division focused on evaluating 9
the claims of borrowers who assert a de-10
fense to repayment of Federal student 11
loans, or groups of borrowers who qualify 12
to assert such a defense to repayment, 13
under section 455(h). 14
‘‘(iii) A division focused on oversight 15
of the Jeanne Clery Disclosure of Campus 16
Security Policy and Campus Crime Statis-17
tics Act, the reporting of crime and fire 18
statistics by institutions of higher edu-19
cation, and the oversight and enforcement 20
of section 120 (relating to drug and alco-21
hol abuse prevention). 22
‘‘(iv) A division to administer the Sec-23
retary’s authority to fine, limit, suspend, 24
terminate, or take action against institu-25
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00045 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 46
•S 994 IS
tions of higher education, and third-party 1
servicers that contract with such institu-2
tions, participating in the Federal student 3
financial assistance programs under title 4
IV. 5
‘‘(v) A division that administers a pro-6
gram of compliance monitoring and over-7
sight of institutions of higher education, 8
and third-party servicers that contract with 9
such institutions, including systems and 10
procedures to support the eligibility, cer-11
tification, and oversight of program par-12
ticipants, for all institutions of higher edu-13
cation participating in the Federal student 14
financial assistance programs under title 15
IV. 16
‘‘(vi) Any other division that the Chief 17
Enforcement Officer, in coordination with 18
the Chief Operating Officer and the Sec-19
retary, determines is necessary. 20
‘‘(B) R
EPORTING.—The staff of each divi-21
sion described in subparagraph (A) shall report 22
to the Chief Enforcement Officer. 23
‘‘(6) A
CTIONS RECOMMENDED .—The Chief En-24
forcement Officer may recommend, as appropriate to 25
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00046 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 47
•S 994 IS
the particular circumstance, that the Chief Oper-1
ating Officer— 2
‘‘(A) terminate, suspend, or limit an insti-3
tution of higher education or a third-party 4
servicer that contracts with such institution 5
from participation in 1 or more programs under 6
title IV (in accordance with section 487), or 7
provisionally certify such participation (in ac-8
cordance with section 498(h)); 9
‘‘(B) impose a civil penalty in accordance 10
with section 487(c)(3)(B); 11
‘‘(C) for a student loan servicer, obtain all 12
relief, including any penalties and suspension or 13
termination of the agreement, provided in the 14
loan servicer agreement to the contract of the 15
servicer; or 16
‘‘(D) make a recommendation to the Sec-17
retary about whether to approve or deny the 18
claims of borrowers, including groups of bor-19
rowers, who assert a defense to repayment in 20
accordance with section 455(h).’’. 21
(b) E
XTENDSUBPOENAPOWERTOASSISTWITHIN-22
VESTIGATIONS.—Section 490A(a) (20 U.S.C. 1097a(a)) is 23
amended to read as follows: 24
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00047 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 48
•S 994 IS
‘‘(a) AUTHORITY.—To assist the Secretary in the 1
conduct of investigations of possible violations of the provi-2
sions of this title, the Secretary is authorized to— 3
‘‘(1) require by subpoena the production of in-4
formation, documents, reports, answers, records, ac-5
counts, papers, and other documentary evidence per-6
taining to participation in any program under this 7
title, the production of which may be required from 8
any place in a State; and 9
‘‘(2) require by subpoena oral testimony by any 10
person, including any legal entity, concerning infor-11
mation pertaining to participation in any title IV 12
program, the appearance for which may be required 13
at any place in a State.’’. 14
(c) P
ROGRAMREVIEWS.—Section 498A of the High-15
er Education Act of 1965 (20 U.S.C. 1099c–1) is amend-16
ed— 17
(1) in subsection (a)— 18
(A) in the matter preceding paragraph (1), 19
by striking ‘‘and financial responsibility’’ and 20
inserting ‘‘, financial responsibility, and other 21
eligibility-related’’; and 22
(B) in paragraph (2)— 23
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00048 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 49
•S 994 IS
(i) by redesignating subparagraphs 1
(A) through (F) as subparagraphs (B) 2
through (G), respectively; 3
(ii) by inserting before subparagraph 4
(B), as so redesignated, the following: 5
‘‘(A) identified as ‘high-risk’ institutions 6
based on a risk-review process developed by the 7
Department that shall include risk factors, in-8
cluding— 9
‘‘(i) significant changes in enrollment; 10
‘‘(ii) high volumes of student com-11
plaints or borrower defense claims; 12
‘‘(iii) indicators of issues related to fi-13
nancial capability; 14
‘‘(iv) low completion rates; 15
‘‘(v) indications of misleading or de-16
ceptive practices, aggressive recruiting, or 17
substantial misrepresentation; 18
‘‘(vi) significant completion gaps be-19
tween students of different demographic 20
groups; or 21
‘‘(vii) other indicators of risk to stu-22
dents or taxpayers;’’; and 23
(iii) in subparagraph (G), as so redes-24
ignated, by striking ‘‘or financial responsi-25
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00049 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 50
•S 994 IS
bility’’ and inserting ‘‘, financial responsi-1
bility, or other eligibility-related’’; 2
(2) in subsection (d), by striking ‘‘criminal in-3
vestigative training’’ and inserting ‘‘criminal and 4
civil investigative training (including training in 5
identifying misrepresentations in marketing and re-6
cruitment materials)’’; 7
(3) by redesignating subsection (e) as sub-8
section (f); and 9
(4) by inserting after subsection (d) the fol-10
lowing: 11
‘‘(e) P
ROGRAMREVIEWS.—Program reviews shall, at 12
minimum, include a review of all— 13
‘‘(1) recruiting and marketing materials, includ-14
ing scripts and training materials provided to insti-15
tution and third-party servicer staff involved in re-16
cruiting, admissions, or financial aid; 17
‘‘(2) consumer complaints held by the institu-18
tion and consumer agencies, borrower defense 19
claims, the institution’s response to such complaints 20
or claims, and any related investigative materials; 21
‘‘(3) actions against the institution by State or 22
Federal regulators or enforcement agencies, includ-23
ing State authorizing agencies and State attorneys 24
general, or through qui tam actions; and 25
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00050 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 51
•S 994 IS
‘‘(4) actions against the institution by 1
accreditors.’’. 2
(d) E
NHANCED CIVILPENALTIES.—Section 3
487(c)(3)(B) of the Higher Education Act (20 U.S.C. 4
1094(c)(3)(B)) is amended— 5
(1) in clause (i)— 6
(A) by inserting ‘‘or its third-party 7
servicer’’ after ‘‘eligible institution’’; and 8
(B) by striking ‘‘$25,000 for each violation 9
or misrepresentation’’ and inserting ‘‘$100,000 10
for each violation or misrepresentation, or— 11
‘‘(I) in the case of an institution, 12
1.0 percent of the amount of funds 13
the institution received through this 14
title in the most recent award year 15
prior to the determination for each 16
such violation; and 17
‘‘(II) in the case of a third-party 18
servicer that contracts with such insti-19
tution, the amount of the contract 20
with the institution.’’; 21
(2) by redesignating clause (ii) as clause (iii); 22
(3) by inserting after clause (i) the following: 23
‘‘(ii) The Secretary may consider each time a 24
substantial misrepresentation is viewed or experi-25
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00051 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 52
•S 994 IS
enced, including static or standing misrepresenta-1
tions, as a separate violation or misrepresentation.’’; 2
and 3
(4) by adding at the end the following: 4
‘‘(iv) For the purpose of determining the 5
amount of civil penalties under this subsection, any 6
violation by a particular institution will accrue 7
against all institutions or affiliates with common 8
ownership.’’. 9
SEC. 302. FOR-PROFIT EDUCATION OVERSIGHT COORDINA-10
TION COMMITTEE. 11
Part B of title I (20 U.S.C. 1011 et seq.) is amended 12
by adding at the end the following: 13
‘‘SEC. 124. FOR-PROFIT EDUCATION OVERSIGHT COORDINA-14
TION COMMITTEE. 15
‘‘(a) E
STABLISHMENT OF COMMITTEE.— 16
‘‘(1) I
N GENERAL.—There is established in the 17
executive branch a committee to be known as the 18
‘For-Profit Education Oversight Coordination Com-19
mittee’ (referred to in this section as the ‘Com-20
mittee’) and to be composed of the head (or the des-21
ignee of such head) of each of the following Federal 22
entities: 23
‘‘(A) The Department of Education. 24
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00052 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 53
•S 994 IS
‘‘(B) The Bureau of Consumer Financial 1
Protection. 2
‘‘(C) The Department of Justice. 3
‘‘(D) The Securities and Exchange Com-4
mission. 5
‘‘(E) The Department of Defense. 6
‘‘(F) The Department of Veterans Affairs. 7
‘‘(G) The Federal Trade Commission. 8
‘‘(H) The Department of Labor. 9
‘‘(I) The Internal Revenue Service. 10
‘‘(J) The enforcement unit of the Perform-11
ance-Based Organization established under sec-12
tion 141(g). 13
‘‘(K) At the discretion of the Chairperson 14
of the Committee, any other relevant Federal 15
agency or department. 16
‘‘(2) P
URPOSES.—The Committee shall have 17
the following purposes: 18
‘‘(A) Coordinate Federal oversight of for- 19
profit institutions of higher education to— 20
‘‘(i) improve enforcement of applicable 21
Federal laws; 22
‘‘(ii) increase accountability of for- 23
profit institutions of higher education to 24
students and taxpayers; and 25
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00053 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 54
•S 994 IS
‘‘(iii) ensure the promotion of quality 1
education programs. 2
‘‘(B) Coordinate Federal activities to pro-3
tect students from unfair, deceptive, abusive, 4
unethical, fraudulent, or predatory practices, 5
policies, or procedures of for-profit institutions 6
of higher education. 7
‘‘(C) Encourage information sharing 8
among agencies related to Federal investiga-9
tions, audits, program reviews, inquiries, com-10
plaints, financial statements, and other infor-11
mation relevant to the oversight of for-profit in-12
stitutions of higher education. 13
‘‘(D) Develop binding memoranda of un-14
derstanding that the Federal entities rep-15
resented on the Committee will use regarding 16
the sharing of information to exercise the over-17
sight described in this section. 18
‘‘(E) Increase coordination and cooperation 19
between Federal and State agencies (including 20
State authorizing agencies, State attorneys gen-21
eral, and State approving agencies designated 22
under section 3671 of title 38, United States 23
Code) with respect to improving oversight and 24
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00054 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 55
•S 994 IS
accountability of for-profit institutions of higher 1
education. 2
‘‘(F) Develop best practices and consist-3
ency among Federal and State agencies in the 4
dissemination of consumer information regard-5
ing for-profit institutions of higher education to 6
ensure that students, parents, and other stake-7
holders have easy access to such information. 8
‘‘(3) C
HAIRPERSON.—The Secretary of Edu-9
cation or the designee of the Secretary shall serve as 10
the Chairperson of the Committee. 11
‘‘(b) M
EETINGS.— 12
‘‘(1) C
OMMITTEE MEETINGS .—The members of 13
the Committee shall meet regularly, but not less 14
than once during each quarter of each fiscal year, to 15
carry out the purposes described in subsection 16
(a)(2). 17
‘‘(2) M
EETINGS WITH STATE AGENCIES AND 18
STAKEHOLDERS.—The Committee shall meet not 19
less than once each fiscal year, and shall otherwise 20
interact regularly, with State authorizing agencies, 21
State attorneys general, State approving agencies 22
designated under section 3671 of title 38, United 23
States Code, veterans service organizations, and con-24
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00055 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 56
•S 994 IS
sumer advocates to carry out the purposes described 1
in subsection (a)(2). 2
‘‘(c) D
IRECTOR.—The Chairperson shall appoint a 3
full-time executive director to support the Committee and 4
may appoint and fix the pay of additional staff as the 5
Chairperson considers appropriate.’’. 6
SEC. 303. ESTABLISHMENT AND MAINTENANCE OF COM-7
PLAINT RESOLUTION AND TRACKING SYS-8
TEM. 9
(a) C
OMPLAINTTRACKINGSYSTEM.—Title I (20 10
U.S.C. 1001 et seq.) is amended by adding at the end 11
the following: 12
‘‘PART F—COMPLAINT TRACKING SYSTEM 13
‘‘SEC. 161. COMPLAINT TRACKING SYSTEM. 14
‘‘(a) D
EFINITIONS.—In this section: 15
‘‘(1) C
OMPLAINANT.—The term ‘complainant’ 16
means an individual making a complaint, or report 17
of suspicious activity, through the complaint track-18
ing system. 19
‘‘(2) C
OMPLAINT TRACKING SYSTEM .—The 20
term ‘complaint tracking system’ means the tracking 21
system established under subsection (b). 22
‘‘(3) T
HIRD-PARTY SERVICER .—The term 23
‘third-party servicer’ has the meaning given the term 24
in section 481(c). 25
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00056 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 57
•S 994 IS
‘‘(b) INGENERAL.—The Secretary shall— 1
‘‘(1) establish and operate, in coordination with 2
the Student Loan Ombudsman, a complaint tracking 3
system that includes a single, toll-free telephone 4
number and a website to facilitate the centralized 5
collection of, monitoring of, and response to com-6
plaints or reports of suspicious activity regarding— 7
‘‘(A) Federal student financial aid and the 8
servicing of postsecondary education loans by 9
loan servicers; 10
‘‘(B) educational practices and services of 11
institutions of higher education or third-party 12
servicers; and 13
‘‘(C) the recruiting and marketing prac-14
tices of institutions of higher education or 15
third-party servicers; and 16
‘‘(2) ensure that— 17
‘‘(A) complaints or reports submitted by 18
students, borrowers of student loans, staff of 19
loan servicers, institutions of higher education, 20
or third-party servicers, or the general public— 21
‘‘(i) may remain anonymous if the 22
complainant so chooses, including by pro-23
viding complainants with an option for the 24
individual complaint to not be reported to 25
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00057 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 58
•S 994 IS
the loan servicer, institution, or third-party 1
servicer, as the case may be; and 2
‘‘(ii) may describe problems that are 3
systematic in nature and not associated 4
with a particular student or institution; 5
‘‘(B) complaints and reports are provided 6
to the loan servicers, institutions of higher edu-7
cation, or third-party servicers that are the sub-8
ject of such complaints or reports; 9
‘‘(C) such loan servicer, institution of high-10
er education, or third-party servicer provides a 11
timely response to the complainant; and 12
‘‘(D) the complaint tracking system has 13
the capacity to retrieve, search, and categorize 14
complaints or reports for purposes of identi-15
fying problematic trends and systemic practices. 16
‘‘(c) H
ANDLING OFCOMPLAINTS ORREPORTS.— 17
‘‘(1) I
N GENERAL.—The Secretary shall estab-18
lish, in consultation with the heads of appropriate 19
agencies (including the Director of the Bureau of 20
Consumer Financial Protection), reasonable proce-21
dures to provide a timely response to individuals who 22
file a complaint or report of suspicious activity in 23
the complaint tracking system. 24
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00058 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 59
•S 994 IS
‘‘(2) TIMELY RESPONSE TO COMPLAINTS .—The 1
Secretary shall provide a response to a complainant 2
not more than 90 days after receiving the complaint, 3
or report of suspicious activity, through the system, 4
in writing where appropriate. Each response shall 5
include a description of— 6
‘‘(A) the steps that have been taken by the 7
Secretary in response to the complaint or re-8
port; 9
‘‘(B) any responses received by the Sec-10
retary from the loan servicer, institution of 11
higher education, or third-party servicer; and 12
‘‘(C) any additional actions that the Sec-13
retary has taken, or plans to take, in response 14
to the complaint or report. 15
‘‘(3) T
IMELY RESPONSE TO SECRETARY BY IN -16
STITUTION OF HIGHER EDUCATION OR SERVICER .— 17
‘‘(A) N
OTICE.—If the Secretary deter-18
mines that it is necessary, the Secretary shall— 19
‘‘(i) notify a loan servicer, institution 20
of higher education, or third-party servicer 21
that is the subject of a complaint, or re-22
port of suspicious activity, through the 23
complaint tracking system regarding the 24
complaint or report; and 25
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00059 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 60
•S 994 IS
‘‘(ii) directly address and resolve the 1
complaint or report in the system. 2
‘‘(B) I
NSTITUTION OR SERVICER RE -3
SPONSE.—Not later than 60 days after receiv-4
ing a notice under subparagraph (A), a loan 5
servicer, institution of higher education, or 6
third-party servicer shall provide a response to 7
the Secretary concerning the complaint or re-8
port, including— 9
‘‘(i) the steps that have been taken by 10
the loan servicer, institution, or third-party 11
servicer to respond to the complaint or re-12
port; 13
‘‘(ii) all responses received by the loan 14
servicer, institution, or third-party servicer 15
from the complainant; and 16
‘‘(iii) any additional actions that the 17
loan servicer, institution, or third-party 18
servicer has taken, or plans to take, in re-19
sponse to the complaint or report. 20
‘‘(C) F
URTHER INVESTIGATION .—In the 21
event that a complaint or report received by the 22
complaint tracking system is not adequately re-23
solved or addressed by the responses of the loan 24
servicer, institution of higher education, or 25
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00060 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 61
•S 994 IS
third-party servicer under subparagraph (B), 1
the Secretary may— 2
‘‘(i) ask additional questions of such 3
loan servicer, institution, or third-party 4
servicer; or 5
‘‘(ii) seek additional information from 6
or action by the loan servicer, institution, 7
or third-party servicer. 8
‘‘(4) P
ROVISION OF INFORMATION .— 9
‘‘(A) I
N GENERAL.—A loan servicer, insti-10
tution of higher education, or third-party 11
servicer shall, in a timely manner, comply with 12
a request by the Secretary for information in 13
the control or possession of such loan servicer, 14
institution, or third-party servicer, respectively, 15
concerning a complaint or report of suspicious 16
activity received by the Secretary under the 17
complaint tracking system, including supporting 18
written documentation, subject to subparagraph 19
(B). 20
‘‘(B) E
XCEPTIONS.—A loan servicer, insti-21
tution of higher education, or third-party 22
servicer shall not be required to make available 23
under this paragraph— 24
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00061 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 62
•S 994 IS
‘‘(i) any nonpublic or confidential in-1
formation, including any confidential com-2
mercial information; 3
‘‘(ii) any information collected by the 4
loan servicer, institution, or third-party 5
servicer for the purpose of preventing 6
fraud or detecting or making any report 7
regarding other unlawful or potentially un-8
lawful conduct; or 9
‘‘(iii) any information required to be 10
kept confidential by any other provision of 11
law. 12
‘‘(5) C
OMPLIANCE.—A loan servicer, institution 13
of higher education, or third party servicer shall 14
comply with the requirements to provide responses 15
and information, in accordance with this subsection, 16
as a condition of receiving funds under title IV or 17
as a condition of the contract with the Department, 18
as applicable. 19
‘‘(d) T
RANSPARENCY.— 20
‘‘(1) D
ATA PUBLICATION.—The Secretary shall, 21
on an annual basis, publish data on the website of 22
the Department that shall include, for each loan 23
servicer, institution, and third-party servicer— 24
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00062 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 63
•S 994 IS
‘‘(A) the number of complaints and reports 1
received; 2
‘‘(B) the types of complaints and reports 3
received; 4
‘‘(C) information about the resolution of 5
the complaints and reports; and 6
‘‘(D) if the complainant consents, the nar-7
rative content of the complaint or report. 8
‘‘(2) R
EPORT.—Each year, the Secretary shall 9
prepare and submit to the authorizing committees a 10
report describing— 11
‘‘(A) the types and nature of complaints or 12
reports the Secretary has received under the 13
complaint tracking system; 14
‘‘(B) the extent to which complainants are 15
receiving adequate resolution pursuant to this 16
section; 17
‘‘(C) whether particular types of com-18
plaints or reports are more common in a given 19
sector of institutions of higher education or 20
with particular loan servicers or third-party 21
servicers; 22
‘‘(D) any concerning trends or systemic 23
practices identified; 24
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00063 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 64
•S 994 IS
‘‘(E) any legislative recommendations that 1
the Secretary determines are necessary to bet-2
ter assist students and families regarding the 3
activities described in subsection (c)(1); and 4
‘‘(F) the loan servicers, institutions of 5
higher education, and third-party servicers with 6
the highest volume of complaints and reports, 7
as determined by the Secretary.’’. 8
(b) P
ROGRAMPARTICIPATIONAGREEMENT RE-9
QUIREMENT.—Section 487(a) (20 U.S.C. 1094(a)) is 10
amended by adding at the end the following: 11
‘‘(32) The institution will comply with any re-12
quirement under section 161, or any other require-13
ment by the Department, to provide information or 14
responses with respect to a complaint or report of 15
suspicious activity about the institution.’’. 16
SEC. 304. REFORMS TO ELIGIBILITY AND CERTIFICATION 17
PROCEDURES. 18
(a) E
LIGIBILITY AND CERTIFICATION PROCE-19
DURES.—Section 498 (20 U.S.C. 1099c) is amended— 20
(1) in subsection (a)— 21
(A) by striking ‘‘For purposes’’ and insert-22
ing the following: 23
‘‘(1) I
N GENERAL.—For purposes’’; 24
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00064 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 65
•S 994 IS
(B) by striking ‘‘status, and’’ and inserting 1
‘‘status,’’; 2
(C) by inserting ‘‘, and the institution’s 3
compliance with all other eligibility require-4
ments in accordance with paragraph (2),’’ after 5
‘‘an institution of higher education’’; and 6
(D) by adding at the end the following: 7
‘‘(2) C
OMPLIANCE.— 8
‘‘(A) I
N GENERAL.—In making a deter-9
mination of institutional eligibility under this 10
section, the Secretary shall— 11
‘‘(i) require that an institution dem-12
onstrate compliance with each provision re-13
quired under this title in order to receive 14
a full, non-provisional certification of eligi-15
bility for purposes of this section; 16
‘‘(ii) reflect that an institution is not 17
entitled to continued participation in pro-18
grams under this title absent a demonstra-19
tion of full compliance; and 20
‘‘(iii) determine that an institution is 21
not eligible for participation in programs 22
under this title if it is not in full compli-23
ance with section 487(a)(16).’’; and 24
(2) in subsection (f)— 25
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00065 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 66
•S 994 IS
(A) by striking ‘‘The Secretary shall en-1
sure’’ and inserting the following: 2
‘‘(1) I
N GENERAL.—The Secretary shall en-3
sure’’; and 4
(B) by striking ‘‘The personnel’’ and in-5
serting the following: ‘‘The Secretary shall not 6
automatically certify or recertify an institution 7
for participation in a program under this title 8
as a result of delay in conducting a full review 9
of the institution’s application. 10
‘‘(2) S
ITE VISITS.—The personnel’’. 11
(b) P
ROVISIONALCERTIFICATION OFHIGH-RISKIN-12
STITUTIONS.—Section 498 (20 U.S.C. 1099c) is amend-13
ed— 14
(1) in subsection (h)— 15
(A) in paragraph (1)(B)— 16
(i) in clause (ii), by striking ‘‘or’’ 17
after the semicolon; 18
(ii) in clause (iii), by striking the pe-19
riod at the end and inserting a semicolon; 20
and 21
(iii) by adding at the end the fol-22
lowing: 23
‘‘(iv) the institution has violated any 24
requirement of this title; 25
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00066 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 67
•S 994 IS
‘‘(v) the institution has violated the 1
terms of its program participation agree-2
ment under section 487; or 3
‘‘(vi) the Secretary determines that 4
the institution’s continued participation in 5
programs under this title poses a signifi-6
cant risk to students and taxpayers.’’; 7
(B) by redesignating paragraphs (2) and 8
(3) as paragraphs (3) and (4), respectively; and 9
(C) by inserting after paragraph (1) the 10
following: 11
‘‘(2) A
DDITIONAL CONDITIONS.—The Secretary 12
shall require a provisionally certified institution to 13
comply with such additional conditions as the Sec-14
retary determines necessary or appropriate based on 15
the circumstances of the institution, as specified in 16
the institution’s program participation agreement 17
under section 487.’’; 18
(2) by redesignating subsections (i), (j), and (k) 19
as subsections (j), (k), and (l), respectively; and 20
(3) by inserting after subsection (h) the fol-21
lowing: 22
‘‘(i) T
ERMINATIONACTION.—If an institution that is 23
provisionally certified under subsection (h) is unable to 24
meet its responsibilities under its program participation 25
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00067 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 68
•S 994 IS
agreement or is in violation of any requirement established 1
under this title (including if the institution has engaged 2
in substantial misrepresentations), or if a final adminis-3
trative finding or judicial judgment determines that the 4
institution violated a State or Federal consumer protection 5
law or regulation, the Secretary may terminate the institu-6
tion’s participation in the programs under this title.’’. 7
(c) P
ROGRAM PARTICIPATION AGREEMENT 8
C
LAIMS.— 9
(1) F
ALSE CLAIMS.—Section 487(c) (20 U.S.C. 10
1094(c)) is amended by adding at the end the fol-11
lowing: 12
‘‘(8) F
ALSECLAIMS.— 13
‘‘(A) I
N GENERAL.—An institution that submits 14
a misrepresentation or false claim on an application 15
for funds under this title, or knowingly (as defined 16
in section 3729 of title 31, United States Code) fails 17
to comply with the requirements of the program par-18
ticipation agreement under this section, shall be sub-19
ject to sections 3729 through 3733 of such title. 20
‘‘(B) A
MOUNT OF DAMAGES .—For purposes of 21
section 3729(a) of title 31, United States Code, the 22
amount of damages that the Government sustains 23
because of the act of the institution described in 24
subparagraph (A) shall be the total amount of funds 25
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00068 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 69
•S 994 IS
distributed to the institution for loans made to stu-1
dents under part D during the period beginning on 2
the date of the submission of the application or the 3
failure to comply (as the case may be) and ending 4
on the date on which a final decision finding a viola-5
tion of section 3729 of such Code is made.’’. 6
(2) C
ERTIFICATION OF COMPLIANCE .—Para-7
graph (21) of section 487(a) (20 U.S.C. 8
1094(a)(21)) is amended to read as follows: 9
‘‘(21) The institution— 10
‘‘(A) acknowledges that the agreement cer-11
tifies the institution’s compliance with all terms 12
of the program participation agreement and all 13
applicable Federal laws and regulations that 14
govern an institution’s eligibility to receive 15
funds under this title; 16
‘‘(B) agrees that any violation of the terms 17
of a program participation agreement or any 18
other Federal law or regulation described in 19
subparagraph (A) constitutes material non-20
compliance with a condition of payment; and 21
‘‘(C) will meet the requirements estab-22
lished by the Secretary and accrediting agencies 23
or associations, and will provide evidence to the 24
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00069 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 70
•S 994 IS
Secretary that the institution has the authority 1
to operate within a State.’’. 2
SEC. 305. STATE OVERSIGHT. 3
(a) I
NGENERAL.—Section 101 (20 U.S.C. 1001) is 4
amended— 5
(1) in subsection (a)— 6
(A) by redesignating paragraphs (3), (4), 7
and (5) as paragraphs (4), (5), and (6), respec-8
tively; and 9
(B) by inserting after paragraph (2) the 10
following: 11
‘‘(3) if providing education through distance 12
education or correspondence in a State in which the 13
institution is not located— 14
‘‘(A) meets the requirements of such State 15
for offering postsecondary education; or 16
‘‘(B) if the institution is authorized by a 17
State pursuant to an interstate reciprocity 18
agreement— 19
‘‘(i) the institution must have fewer 20
than 200 students in such State enrolled 21
annually; 22
‘‘(ii) the agreement must allow States 23
to enforce all non-registration and non-fee 24
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00070 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 71
•S 994 IS
laws with respect to out-of-State institu-1
tions; and 2
‘‘(iii) decisions regarding eligibility to 3
participate in the reciprocity agreement 4
and the standards that apply to partici-5
pating institutions shall be made exclu-6
sively by representatives of member State 7
regulatory agencies or State attorneys gen-8
eral offices;’’; and 9
(2) in subsection (b)(1), by striking ‘‘para-10
graphs (1), (2), (4), and (5) of subsection (a)’’ and 11
inserting ‘‘paragraphs (1), (2), (3), (5), and (6) of 12
subsection (a)’’. 13
(b) C
ONFORMINGAMENDMENTS.—Section 102 (20 14
U.S.C. 1002) is amended— 15
(1) in subsection (a)(2)(A), by striking ‘‘section 16
101(a)(4)’’ each place the term appears and insert-17
ing ‘‘section 101(a)(5)’’; 18
(2) in subsection (b)(1)— 19
(A) in subparagraph (B), by striking 20
‘‘paragraphs (1) and (2) of section 101(a)’’ and 21
inserting ‘‘paragraphs (1), (2), and (3) of sec-22
tion 101(a)’’; and 23
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00071 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 72
•S 994 IS
(B) in subparagraph (C), by striking 1
‘‘paragraph (4) of section 101(a)’’ and inserting 2
‘‘paragraph (5) of section 101(a)’’; and 3
(3) in subsection (c)(1)(B), by striking ‘‘re-4
quirements of paragraphs (1), (2), (4), and (5) of 5
section 101(a)’’ and inserting ‘‘requirements of 6
paragraphs (1), (2), (3), (5), and (6) of section 7
101(a)’’. 8
SEC. 306. ACCREDITING AGENCY OVERSIGHT. 9
Section 496(c) ((20 U.S.C. 1099b(c)) is amended— 10
(1) in paragraph (8), by striking ‘‘and’’ after 11
the semicolon; 12
(2) in paragraph (9)(B), by striking the period 13
at the end and inserting ‘‘; and’’; and 14
(3) by adding at the end the following: 15
‘‘(10)(A) assesses the risk to students of any 16
institution or program, including assessing the risk 17
to students and institutions of any program man-18
aged by a third-party servicer, in accordance with 19
factors provided by the Secretary; 20
‘‘(B) effectively determines whether each such 21
institution or program warrants additional oversight 22
or action; and 23
‘‘(C) provides adequate monitoring of the qual-24
ity and risk of such institutions or programs.’’. 25
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00072 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 73
•S 994 IS
SEC. 307. MANDATORY SPENDING FOR ADMINISTRATIVE 1
COSTS OF OPERATING THE STUDENT AID 2
PROGRAMS. 3
Paragraph (3) of section 458(a) (20 U.S.C. 4
1087h(a)(3)) is amended to read as follows: 5
‘‘(3) F
UNDS FOR ADMINISTRATIVE COSTS .— 6
‘‘(A) I
N GENERAL.—Each fiscal year, there 7
shall be available to the Secretary from funds 8
not otherwise appropriated, funds to be obli-9
gated for administrative costs under this part, 10
including the costs of the student loan program 11
under this part, except that the total expendi-12
tures by the Secretary under this subparagraph 13
shall not exceed 5 percent of the amount of the 14
average outstanding Federal student loan port-15
folio under this part for the preceding fiscal 16
year. 17
‘‘(B) A
VAILABILITY.—Funds made avail-18
able under subparagraph (A) shall remain avail-19
able until expended. The Secretary is author-20
ized to use funds available under this para-21
graph for a fiscal year for a subsequent fiscal 22
year. 23
‘‘(C) B
UDGET.—No funds may be ex-24
pended under this paragraph unless the Sec-25
retary includes in the annual budget request of 26
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00073 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 74
•S 994 IS
the Department to Congress a detailed descrip-1
tion of— 2
‘‘(i) the specific activities for which 3
the funds made available by this paragraph 4
have been used in the most recent fiscal 5
year; 6
‘‘(ii) the activities and costs planned 7
for the fiscal year for which the request is 8
made; and 9
‘‘(iii) the projection of activities and 10
costs for the fiscal year immediately fol-11
lowing the fiscal year for which adminis-12
trative expenses under this paragraph are 13
made available.’’. 14
TITLE IV—IMPROVING ACCESS 15
TO STUDENT AND TAXPAYER 16
INFORMATION 17
SEC. 401. REPORTING AND DISCLOSURES FROM INSTITU-18
TIONS OF HIGHER EDUCATION. 19
(a) G
AINFULEMPLOYMENT AND FINANCIALVALUE 20
T
RANSPARENCYDISCLOSURES ANDWARNINGS.—Section 21
498C, as added by section 101(b), is amended— 22
(1) by redesignating subsection (e) as sub-23
section (f); and 24
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00074 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 75
•S 994 IS
(2) by inserting after subsection (d) the fol-1
lowing: 2
‘‘(e) D
ISCLOSURES ANDWARNINGS.— 3
‘‘(1) I
N GENERAL.—For each gainful employ-4
ment program or graduate or professional degree 5
program of an institution that does not meet the 6
standards described in subsection (b), the institution 7
shall— 8
‘‘(A) provide warnings to prospective stu-9
dents and enrolled students of the institution 10
regarding the failing program status in a man-11
ner specified by the Secretary; and 12
‘‘(B) shall require prospective students to 13
acknowledge receipt of the warning. 14
‘‘(f) D
ISCLOSURE.—An institution of higher edu-15
cation shall provide the link to the website described in 16
subsection (c)(2)(A)(ii) to prospective and enrolled stu-17
dents in a manner specified by the Secretary.’’. 18
(b) I
NSTRUCTIONALSPENDINGDATA ANDDISCLO-19
SURES.—Section 132 (20 U.S.C. 1015a) is amended— 20
(1) by redesignating subsection (l) as subsection 21
(n); and 22
(2) by inserting after subsection (k) the fol-23
lowing: 24
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00075 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 76
•S 994 IS
‘‘(l) INVESTMENTS IN INSTRUCTION AND STUDENT 1
S
ERVICES.— 2
‘‘(1) I
NSTITUTIONAL EXPENDITURES .— 3
‘‘(A) I
N GENERAL.—The Secretary shall 4
establish definitions for calculating instructional 5
expenditures that shall separately account for 6
the expenditures of an institution of higher edu-7
cation on each of the following: 8
‘‘(i) Instruction. 9
‘‘(ii) Student services. 10
‘‘(iii) Marketing. 11
‘‘(iv) Recruitment. 12
‘‘(v) Advertising. 13
‘‘(vi) Lobbying. 14
‘‘(B) E
XCLUSIONS.—Expenditures on in-15
struction and student services, as defined in ac-16
cordance with clauses (i) and (ii) of subpara-17
graph (A), shall not include expenditures on 18
marketing, recruitment, advertising, compensa-19
tion of executives or officers, or lobbying, or 20
other pre-enrollment expenditures. 21
‘‘(2) R
EPORTING.—Each institution of higher 22
education receiving Federal funds under title IV 23
shall report to the Secretary— 24
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00076 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 77
•S 994 IS
‘‘(A) the total dollar amount of title IV 1
funds received by the institution; 2
‘‘(B) the proportion of title IV funds spent 3
on recruitment activities and marketing activi-4
ties; 5
‘‘(C) the proportion of title IV funds spent 6
on instruction and student services; and 7
‘‘(D) for each program of education or di-8
vision of the institution for which the tuition is 9
charged, the price of tuition relative to the in-10
stitution’s allocation of revenues to spending on 11
instruction and student services. 12
‘‘(3) D
ISCLOSURES BY THE DEPARTMENT OF 13
EDUCATION.—The Secretary shall make the disclo-14
sures reported under paragraph (2) publicly avail-15
able on the College Navigator website.’’. 16
(c) T
RANSPARENCY OFONLINEPROGRAMS.—Section 17
132 (20 U.S.C. 1015a), as amended by subsection (b), is 18
further amended by inserting after subsection (l), as 19
added by subsection (b)(2), the following: 20
‘‘(m) I
MPROVINGTRANSPARENCY FOR ONLINE AND 21
C
ONTRACTEDPROGRAMS.— 22
‘‘(1) A
NNUAL REPORTING REQUIREMENTS FOR 23
THIRD-PARTY SERVICER ACTIVITIES .—Each institu-24
tion of higher education that receives Federal funds 25
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00077 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 78
•S 994 IS
under title IV shall report annually to the Sec-1
retary— 2
‘‘(A) the name of each third-party servicer 3
with which the institution contracts; and 4
‘‘(B) for each such third-party servicer— 5
‘‘(i) the names of any programs for 6
which each such third-party servicer is con-7
tracted to provide support; 8
‘‘(ii) the services each such third- 9
party servicer is contracted to offer for 10
each program; 11
‘‘(iii) the number of students enrolled 12
in any program for which the third-party 13
servicer is contracted to provide services; 14
‘‘(iv) whether the third-party servicer 15
administers or provides any private or in-16
stitutional student loan products; and 17
‘‘(v) the third-party servicer’s total ex-18
penditures on advertising, marketing, and 19
recruiting on behalf of the institution. 20
‘‘(2) D
ISCLOSURE REQUIREMENTS .—If an insti-21
tution of higher education receiving Federal funds 22
under title IV contracts with a third-party servicer 23
to offer one or more programs of education, and 24
such third-party servicer provides recruitment activi-25
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00078 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 79
•S 994 IS
ties, retention activities, or similar activities (as 1
specified by the Secretary) for the program— 2
‘‘(A) the institution and third-party 3
servicer shall prominently disclose for each such 4
program of education, in a manner specified by 5
the Secretary and using language developed by 6
the Secretary, the nature of the relationship be-7
tween the institution and third-party servicer— 8
‘‘(i) in advertisements; 9
‘‘(ii) in marketing materials; and 10
‘‘(iii) on the website of the institution; 11
and 12
‘‘(B) individuals who are employed by the 13
third-party servicer to provide admissions, re-14
cruitment, retention, or advising activities shall 15
prominently disclose to prospective or enrolled 16
students that the individuals are employees of 17
that third-party servicer and not the institution, 18
including in any communication about the pro-19
gram of education. 20
‘‘(3) A
NNUAL REPORTING REQUIREMENTS FOR 21
ONLINE EDUCATION .—Each institution of higher 22
education receiving Federal funds under title IV 23
shall report annually to the Secretary— 24
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00079 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 80
•S 994 IS
‘‘(A) the institution’s expenditures on ac-1
tivities to secure enrollments for each online, 2
on-campus, and hybrid program, and its total 3
expenditures for all activities of the institution; 4
‘‘(B) the status of each student receiving 5
Federal student aid as enrolled online, on-cam-6
pus, or in a combination of both modalities, suf-7
ficient for the Secretary to calculate the total 8
student enrollment, retention and completion 9
rates, student loan borrowing levels, student 10
loan repayment outcomes, and median earnings 11
for each such program; and 12
‘‘(C) the annual net price charged for each 13
such program.’’. 14
(d) D
ISCLOSURE OFMATERIALFACTS FORPROPRI-15
ETARYINSTITUTIONS.—Section 498(c) (20 U.S.C. 16
1099c(c)), as amended by section 203, is further amended 17
by adding at the end the following: 18
‘‘(8)(A) The Secretary shall require each proprietary 19
institution of higher education (as defined in section 20
102(c)) to file promptly with the Secretary— 21
‘‘(i) all public filings that the institution files 22
with the Securities and Exchange Commission that 23
include references to matters that affect students, 24
including— 25
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00080 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 81
•S 994 IS
‘‘(I) mergers and acquisitions; 1
‘‘(II) changes of ownership; 2
‘‘(III) changes of leadership and board 3
membership; 4
‘‘(IV) school or campus closings; 5
‘‘(V) civil lawsuits; 6
‘‘(VI) law enforcement actions, investiga-7
tions, subpoenas, and demand letters; and 8
‘‘(VII) material change in financial status; 9
and 10
‘‘(ii) in the case of an institution that is not re-11
quired to make disclosures to the Securities and Ex-12
change Commission, notifications regarding matters 13
that affect students similar to the filings described 14
in clause (i), in a form and manner determined by 15
the Secretary. 16
‘‘(B) The Secretary shall promptly make all informa-17
tion received under subparagraph (A) available on the 18
website of the Department.’’. 19
SEC. 402. TRANSPARENCY OF OVERSIGHT ACTIVITIES. 20
(a) B
ORROWERDEFENSECLAIMS ANDDISCHARGES 21
D
ATA.—Section 455(h) (20 U.S.C. 1087e(h)), as amend-22
ed by section 102(a), is further amended— 23
(1) by redesignating paragraph (8) as para-24
graph (9); and 25
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00081 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 82
•S 994 IS
(2) by inserting after paragraph (7) the fol-1
lowing: 2
‘‘(8) T
RANSPARENCY.—The Secretary shall 3
make publicly available, and keep regularly updated, 4
information regarding the number of borrower de-5
fense claims filed and discharges granted, 6
disaggregated by institution of attendance, State of 7
residence as of the date of the claim, student loan 8
servicer, and the amount of discharge and reim-9
bursement, based on increments of not less than 10
$10,000.’’. 11
(b) 90/10 R
ULETRANSPARENCY.—Paragraph (3) of 12
section 487(d) (20 U.S.C. 1094(d)(3)) is amended— 13
(1) by redesignating subparagraphs (A) and 14
(B) as clauses (i) and (ii), respectively, and adjust-15
ing the margins appropriately; 16
(2) by striking ‘‘The Secretary’’ and inserting 17
the following: 18
‘‘(A) P
UBLIC DISCLOSURE OF FAILURE TO 19
MEET REQUIREMENTS .—The Secretary’’; and 20
(3) by adding at the end the following: 21
‘‘(B) P
UBLIC DISCLOSURE OF 90 /10 22
DATA.— 23
‘‘(i) I
N GENERAL.—The Secretary 24
shall publicly disclose on the website of the 25
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00082 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 83
•S 994 IS
Department the data provided by propri-1
etary institutions for purposes of this sub-2
section (referred to in this subparagraph 3
as the ‘90/10 database’) in a prompt, com-4
prehensive, and user-friendly manner. 5
‘‘(ii) T
EMPORARY OMISSIONS .—If any 6
data for a proprietary of institution re-7
quired to be disclosed under clause (i) is 8
omitted because of issues unresolved at a 9
given deadline of the Secretary, the Sec-10
retary shall— 11
‘‘(I) include, in the 90/10 data-12
base on the College Navigator website, 13
a notice that the information is omit-14
ted for such proprietary institution 15
and a clear explanation of the reason 16
for the delay; and 17
‘‘(II) timely amend the 90/10 18
database to include the information 19
required to be disclosed for the rel-20
evant reporting period.’’. 21
(c) C
HANGE OF OWNERSHIP AND CONVERSION 22
T
RANSPARENCY.—Section 498(j) (20 U.S.C. 1099c(j)), as 23
redesignated by section 304(b)(2), is further amended by 24
adding at the end the following: 25
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00083 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 84
•S 994 IS
‘‘(5) The Secretary shall promptly disclose on the 1
website of the Department— 2
‘‘(A) any application for a change of ownership 3
of an institution or for a conversion of an institution 4
from proprietary to nonprofit status; and 5
‘‘(B) any decision by the Secretary regarding 6
approval or disapproval of a change of ownership ap-7
plication, or an application for conversion from pro-8
prietary to nonprofit status, and all external commu-9
nications describing or explaining those decisions.’’. 10
(d) T
RANSPARENCY INFINANCIALSTANDING OFIN-11
STITUTIONS.—Section 498(c) (20 U.S.C. 1099c(c)), as 12
amended by section 401(d), is further amended by adding 13
at the end the following: 14
‘‘(9) The Secretary shall promptly post on the De-15
partment website, for all institutions participating in a 16
program under this title— 17
‘‘(A) the annual audited financial statements 18
submitted by each institution under this section and 19
a list of any institutions that have failed to timely 20
submit audited financial statements; 21
‘‘(B)(i) the terms, amounts, and withdrawals 22
for letters of credit and other sureties required of in-23
stitutions of higher education under paragraph (3), 24
including by providing updates as new financial 25
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00084 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 85
•S 994 IS
guarantees are required and as changes are made to 1
existing agreements; and 2
‘‘(ii) all external communications between insti-3
tutions of higher education and the Department de-4
scribing or implementing the Secretary’s require-5
ments or determinations regarding financial guaran-6
tees under paragraph (3); and 7
‘‘(C)(i) each decision of the Secretary as to the 8
imposition or removal of heightened cash monitoring 9
status and other financial protections regarding an 10
institution; and 11
‘‘(ii) all external communications between insti-12
tutions of higher education and the Department de-13
scribing or implementing such decisions.’’. 14
(e) I
NSTITUTIONALPARTICIPATION IN THETITLEIV 15
P
ROGRAMS.—Section 498 (20 U.S.C. 1099c) is amended 16
by adding at the end the following: 17
‘‘(m) T
RANSPARENCY.—The Secretary shall post on 18
the Department website the full program participation 19
agreement under section 487 for each institution that en-20
ters into such an agreement and shall indicate if the insti-21
tution is on provisional, temporary provisional, or expired 22
certification status.’’. 23
(f) A
CCREDITINGAGENCYTRANSPARENCY.—Section 24
496 (20 U.S.C. 1099b) is amended— 25
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00085 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 86
•S 994 IS
(1) in subsection (o)— 1
(A) by inserting after ‘‘R
EGULATIONS.—’’ 2
the following: 3
‘‘(1) I
N GENERAL.—’’; and 4
(B) by adding at the end the following: 5
‘‘(2) D
ISCLOSURES.— 6
‘‘(A) I
N GENERAL.—The Secretary shall 7
publicly disclose on the Department’s website— 8
‘‘(i) all of the Department’s draft and 9
final accrediting agency or association rec-10
ognition reports, and monitoring reports 11
and investigations of any accrediting agen-12
cy or association, under this section; and 13
‘‘(ii) the reports and accompanying 14
exhibits that each accreditation agency or 15
association submits to the Department in 16
the course of recognition and re-recogni-17
tion reviews under this section. 18
‘‘(B) D
ISCLOSURE REQUIREMENTS .—The 19
Secretary shall disclose the information re-20
quired under subparagraph (A) promptly, so 21
that members of the public may thoroughly and 22
timely respond via public comment in the 23
course of Department reviews of accrediting 24
agencies and associations.’’; and 25
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00086 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 87
•S 994 IS
(2) by adding at the end the following: 1
‘‘(r) T
RANSPARENCY OF ACCREDITINGAGENCY OR 2
A
SSOCIATIONACTIONS.— 3
‘‘(1) I
N GENERAL.—An accrediting agency or 4
association recognized by the Secretary under this 5
section shall promptly post on the website of the ac-6
crediting agency or association and shall submit to 7
the Department, all communications sent from the 8
accrediting agency or association to an institution 9
explaining, or informing an institution of, an action 10
taken by the agency with respect to the institution, 11
including— 12
‘‘(A) to impose or remove a status of pro-13
bation, warning, concern, stipulation, or report-14
ing, or similar status; 15
‘‘(B) to impose or revoke a show cause 16
order; or 17
‘‘(C) to impose or revoke a limitation, sus-18
pension, or termination action. 19
‘‘(2) N
O REDACTION.—The communication 20
posted and submitted under paragraph (1) shall be 21
without redaction, except for personally identifiable 22
information. 23
‘‘(3) D
ISCLOSURE BY THE SECRETARY .—The 24
Secretary shall promptly publicly disclose on the 25
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00087 Fmt 6652 Sfmt 6201 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS 88
•S 994 IS
website of the Department all communications sub-1
mitted pursuant to paragraph (1).’’. 2
Æ
VerDate Sep 11 2014 02:39 Mar 27, 2025 Jkt 059200 PO 00000 Frm 00088 Fmt 6652 Sfmt 6301 E:\BILLS\S994.IS S994
ssavage on LAPJG3WLY3PROD with BILLS