,,ii #aafth ,,congress #ast ,session ,s4 #aebe ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,may #af1 #bjai,mrs4 ,shaheen 7for herself and ,mr4 ,young7 introduced the following bill2 which was read twice and referred to the ,committee on ,health1 ,education1 ,labor1 and ,pensions ,a ,,bill ,to amend the ,higher ,education ,act of #aife to provide for institutional ineligibility based on low cohort repayment rates and to require risk-sharing payments of institutions of higher education4 #a4 ,short title ,this ,act may be cited as the ,student ,protection and ,success ,act 4 #b4 ,institutional ineligibility based on low cohort repayment rate 7a7 ,in general ,section #dee of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajhg;e7 is amended by adding at the end the following3 7r7 ,ineligibility due to low cohort repayment rate 7#a7 ,in general ,beginning with fiscal year #bjbb and each succeeding fiscal year1 an institution that has a cohort repayment rate that is equal to or less than #ae percent shall not be eligible to participate in a program under this part for such fiscal year and for the #b succeeding fiscal years4 7#b7 ,appeals 7,a7 ,in general ,an institution may appeal the loss of eligibility under this subsection to the ,secretary within #cj days of receiving notification from the ,secretary of the loss of eligibility under this subsection4 7,b7 ,continued participation ,during an appeal under subparagraph 7,a71 the ,secretary may permit the institution to continue to participate in a program under this part if the institution demonstrates to the satisfaction of the ,secretary that the ,secretary's calculation of its cohort repayment rate is not accurate1 and that recalculation would increase its cohort repayment rate to be more than #ae percent4 7,c7 ,required payment ,if an institution continues to participate in a program under this part1 and the institution's appeal of the loss of eligibility is unsuccessful1 the institution shall be required to pay to the ,secretary an amount equal to the amount of loans made by the ,secretary under this part to borrowers attending1 or planning to attend1 that institution during the pendency of such appeal and the interest1 special allowance1 reinsurance1 and any related payments made by the ,secretary 7or which the ,secretary is obligated to make7 with respect to such loans4 7#c7 ,cohort repayment rate 7,a7 ,in general ,in this subsection1 the term cohort repayment rate means1 for any fiscal year beginning with fiscal year #bjbb-- 7i7 in the case in which #cj or more borrowers at the institution enter repayment on ,federal ,direct ,stafford ,loans1 ,federal ,direct ,unsubsidized ,stafford ,loans1 ,federal ,direct ,,plus ,loans1 or ,federal ,direct ,consolidation ,loans1 received for attendance at the institution1 the percentage of those borrowers who are not in default and who make at least a one dollar reduction on their initial student loan principal balance before the end of the second fiscal year following the fiscal year in which the borrowers entered repayment1 except as provided in subparagraph 7,b72 and 7ii7 in the case in which less than #cj borrowers at the institution enter repayment on ,federal ,direct ,stafford ,loans1 ,federal ,direct ,unsubsidized ,stafford ,loans1 ,federal ,direct ,,plus ,loans1 or ,federal ,direct ,consolidation ,loans1 received for attendance at the institution1 the percentage of those borrowers plus all of the borrowers at the institution who entered repayment on such loans 7or on the portion of a loan made under section #dbh;,c that is used to repay any such loans7 in the #c fiscal years preceding the fiscal year for which the determination is made1 who are not in default and who make at least a one dollar reduction on their initial student loan principal balance before the end of the second fiscal year following the year in which the borrowers entered repayment1 except as provided in subparagraph 7,b74 7,b7 ,exception ,the cohort repayment rate calculation under subparagraph 7,a7 shall not include in the calculation a borrower who is-- 7i7 in deferment on repayment of a loan described in subparagraph 7,a7 due to study in an approved graduate fellowship program or in an approved rehabilitation training program for the disabled2 7ii7 in deferment on repayment of a loan described in subparagraph 7,a7 during a period of at least half-time enrollment in college or a career school2 7iii7 in deferment on repayment of a loan described in subparagraph 7,a7 during a period of service qualifying for loan discharge or cancellation under part ,e2 7iv7 in deferment on repayment of a loan described in subparagraph 7,a7 due to active duty military service of the borrower during a war1 military operation1 or national emergency2 7v7 in deferment on repayment of a loan described in subparagraph 7,a7 during the #ac months following the conclusion of qualifying active duty military service by the borrower1 or until the borrower returns to enrollment on at least a half-time basis1 whichever is earlier1 if the borrower is a member of the ,national ,guard or other reserve component of the ,armed ,forces and was called or ordered to active duty while enrolled at least half-time at an eligible school or within #f months of having been enrolled at least half-time2 7vi7 in mandatory forbearance on repayment of a loan described in subparagraph 7,a7 for the full fiscal year2 or 7vii7 serving as a volunteer under the ,peace ,corps ,act 7#bb ,u4,s4,c4 #beja et seq47 or the ,domestic ,volunteer ,service ,act of #aigc 7#db ,u4,s4,c4 #diej et seq474 7,c7 ,publication of repayment rates ,the ,secretary shall publish the cohort repayment rates for institutions determined under this subsection4 7#d7 ,notification ,beginning with the first fiscal year for which data are available after the date of enactment of the ,student ,protection and ,success ,act and each succeeding fiscal year until fiscal year #bjbb1 the ,secretary shall notify each institution that has a cohort repayment rate that is equal to or less than #ae percent that the institution risks losing eligibility to participate in a program under this part4 4 7b7 ,ineligibility in other programs 7#a7 ,pell grants ,section #dja7;j7 of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajgj;a7j77 is amended-- 7,a7 in the heading1 by striking based on default rates2 7,b7 in paragraph 7#a71 by inserting until fiscal year #bjbb after succeeding fiscal year2 7,c7 in paragraph 7#b71 by inserting or cohort repayment rate determination after default rate determination2 and 7,d7 by adding at the end the following3 7#c7 ,ineligibility based on low cohort repayment rates ,no institution of higher education shall be an eligible institution for purposes of this subpart if such institution of higher education is ineligible to participate in a program under part ,d due to a low cohort repayment rate1 as determined under section #dee7r74 4 7#b7 ,student loan insurance program ,section #dce7;a7 of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajhe7;a77 is amended-- 7,a7 in paragraph 7#b7-- 7i7 in the heading1 by striking based on high default rates2 7ii7 in subparagraph 7,a71 by striking ,an institution and inserting ,until fiscal year #bjbb1 an institution2 and 7iii7 by adding at the end the following3 7,e7 ,no institution of higher education shall be an eligible institution for purposes of this part if such institution of higher education is ineligible to participate in a program under part ,d due to a low cohort repayment rate1 as determined under section #dee7r74 2 and 7,b7 in paragraph 7#f77;,a71 by inserting and until fiscal year #bjbb1 after ,july #a1 #aiii14 7#c7 ,federal ,perkins ,loans ,section #dfb of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajhg;bb7 is amended-- 7,a7 in subsection 7a7-- 7i7 in paragraph 7#a71 by inserting or the institution is ineligible to participate in a program under part ,d due to a low cohort repayment rate1 as determined under section #dee7r7 after subsection 7f72 and 7ii7 in paragraph 7#b77;,d71 by inserting or the institution is ineligible to participate in a program under part ,d due to a low cohort repayment rate1 as determined under section #dee7r7 after subsection 7f72 7,b7 in subsection 7b7-- 7i7 in paragraph 7#b71 by inserting or the institution is ineligible to participate in a program under part ,d due to a low cohort repayment rate1 as determined under section #dee7r7 after subsection 7f72 and 7ii7 in paragraph 7#c71 by inserting or the institution is ineligible to participate in a program under part ,d due to a low cohort repayment rate1 as determined under section #dee7r7 after subsection 7f72 7,c7 in subsection 7e7-- 7i7 in paragraph 7#b71 by inserting until fiscal year #bjbb1 after succeeding fiscal year2 and 7ii7 in paragraph 7#c7-- 7,i7 in subparagraph 7,a71 by inserting until fiscal year #bjbb1 after any succeeding fiscal year2 and 7,,ii7 by adding at the end the following3 7,f7 ,low cohort repayment rates ,an institution that is ineligible to participate in a program under part ,d due to a low cohort repayment rate1 as determined under section #dee7r71 shall not be eligible to participate in a program under this part4 2 and 7,d7 in subsection 7f77#b71 by inserting until fiscal year #bjbb1 after subsequent years4 #c4 ,college opportunity bonus program ,subpart #a of part ,a of title ,,iv of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajgj;a et seq47 is amended by adding at the end the following3 #dja;,b4 ,college opportunity bonus program 7a7 ,program authority 7#a7 ,in general ,beginning with fiscal year #bjbb and each succeeding fiscal year1 the ,secretary shall award grants to eligible institutions of higher education that are distributed under a formula determined by the ,secretary under subsection 7d74 7#b7 ,eligible institution ,in this section1 the term eligible institution of higher education means an institution of higher education that has a cohort repayment rate 7as defined in section #dee7r77#c77 that is greater than #be percent4 7b7 ,grants ,the ,secretary shall award grants to eligible institutions of higher education that the ,secretary determines have a strong record of making college more affordable and increasing college access and success for low-income and moderate-income students4 7c7 ,uses of funds ,each eligible institution of higher education that receives a grant under this section may use the grant funds to support reforms to further increase college access and success for low- and moderate-income students1 by making key investments and adopting best practices1 including by considering best practices reported under section #e of the ,student ,protection and ,success ,act1 and by-- 7#a7 awarding additional need-based financial aid to students enrolled at the institution who are eligible to receive a ,federal ,pell ,grant2 7#b7 enhancing academic and student support services2 and 7#c7 establishing or expanding accelerated learning opportunities4 7d7 ,amount of grant funds 7#a7 ,in general ,each eligible institution of higher education that receives a grant under this section shall receive annual grant funds based on a formula determined by the ,secretary that equally considers-- 7,a7 the number and percentage of students enrolled at the institution who are eligible to receive a ,federal ,pell ,grant2 7,b7 the cohort repayment rate 7as defined in section #dee7r77#c77 of students enrolled at the institution who are eligible to receive a ,federal ,pell ,grant2 and 7,c7 the institution's student service expenditures as a percentage of the institution's student service resources4 7#b7 ,cap ,each eligible institution of higher education that receives a grant under this section shall receive grant funds for a fiscal year in an amount that is not more than #b4e percent of the amount equal to the eligible institution's total annual revenues and investment returns less auxiliary enterprise revenues and hospital revenues1 as defined in the ,,ipeds ,finance ,survey1 for the most recent fiscal year upon which the eligible institution's audited financial reports are available4 7e7 ,supplement not supplant ,funds made available under this section shall be used to supplement1 and not supplant-- 7#a7 other ,state funds that ,states would otherwise expend to carry out activities under this section to improve college affordability and graduate additional low- and moderate-income students2 and 7#b7 institutional funds that eligible institutions of higher education receiving a grant under this section would otherwise expend to carry out activities under this section to improve college affordability and graduate additional low- and moderate-income students4 7f7 ,funding ,the grant program under this section shall be funded only with risk-sharing payments received by the ,secretary under section #ded7;d74 4 #d4 ,risk-sharing payments ,section #ded of the ,higher ,education ,act of #aifd 7#bj ,u4,s4,c4 #ajhg;d7 is amended-- 7#a7 in subsection 7a7-- 7,a7 in paragraph 7#e71 by striking and2 7,b7 in paragraph 7#f71 by striking the period at the end and inserting 2 and2 and 7,c7 by adding at the end the following3 7#g7 provide that the institution accepts the institutional risk-sharing requirements under subsection 7d71 if applicable4 2 and 7#b7 by adding at the end the following3 7d7 ,institutional risk-,sharing based on cohort nonrepayment loan balances 7#a7 ,in general ,beginning with fiscal year #bjbb and each succeeding fiscal year1 each institution of higher education participating in the direct student loan program under this part shall remit to the ,secretary1 at such times as the ,secretary may specify1 a risk-sharing payment based on the cohort nonrepayment loan balance of the institution1 as determined under paragraph 7#b74 7#b7 ,determination of risk-sharing payments 7,a7 ,determination of cohort loan balance ,the cohort loan balance of an institution for a fiscal year equals the total principal amount of all loans made under this part to attend such institution for the cohort of borrowers who entered repayment1 deferment1 or forbearance on such loans in the third preceding fiscal year for which the determination is made4 7,b7 ,determination of cohort nonrepayment loan balance 7i7 ,in general ,the cohort nonrepayment loan balance of an institution for a fiscal year equals1 from the total amount of the loans described in subparagraph 7,a71 the total loan balance of those borrowers who have not made at least a #a dollar reduction in their principal balance in the #c consecutive fiscal years since their loans entered repayment1 deferment1 or forbearance4 7ii7 ,exception ,the cohort nonrepayment loan balance calculation under clause 7i7 shall not take into consideration a borrower who was-- 7,i7 in deferment on repayment of a loan described in subparagraph 7,a7 in the #c consecutive fiscal years described in clause 7i7 due to study in an approved graduate fellowship program or in an approved rehabilitation training program for the disabled2 7,,ii7 in deferment on repayment of a loan described in subparagraph 7,a7 in the #c consecutive fiscal years described in clause 7i7 during which time the borrower was in a period of at least half-time enrollment in college or a career school2 7,,iii7 in deferment on repayment of a loan described in subparagraph 7,a7 in the #c consecutive fiscal years described in clause 7i7 during which time the borrower was in a period of service qualifying for loan discharge or cancellation under part ,e2 7,,iv7 in deferment on repayment of a loan described in subparagraph 7,a7 in the #c consecutive fiscal years described in clause 7i7 during which time the borrower was on active duty military service during a war1 military operation1 or national emergency2 7,v7 in mandatory forbearance on repayment of a loan described in subparagraph 7,a7 for the full fiscal year2 or 7,,vi7 serving as a volunteer under the ,peace ,corps ,act 7#bb ,u4,s4,c4 #beja et seq47 or the ,domestic ,volunteer ,service ,act of #aigc 7#db ,u4,s4,c4 #diej et seq471 during the #c consecutive fiscal years described in clause 7i74 7,c7 ,determination of payment 7i7 ,in general 7,i7 ,in general ,except as provided in subclause 7,,ii71 the risk-sharing payment of an institution for a fiscal year equals #b percent of the amount determined under clause 7ii74 7,,ii7 ,cap ,the risk-sharing payment of an institution for a fiscal year shall not be more than #b4e percent of the amount equal to the institution's total annual revenues and investment returns less auxiliary enterprise revenues and hospital revenues1 as defined in the ,,ipeds ,finance ,survey1 for the most recent fiscal year upon which the institution's audited financial reports are available4 7ii7 ,amount based on cohort nonrepayment loan balance and unemployment rate 7,i7 ,in general ,the amount under this clause is determined by subtracting the amount determined under subclause 7,,ii7 from the cohort nonrepayment loan balance determined under subparagraph 7,b74 7,,ii7 ,amount based on unemployment rate ,the amount under this subclause is determined by multiplying the average national unemployment rate1 as defined by the ,bureau of ,labor ,statistics1 for the #c previous fiscal years from the date of the determination by the cohort loan balance determined under subparagraph 7,a74 7#c7 ,notification ,beginning with the first fiscal year for which data are available after the date of enactment of the ,student ,protection and ,success ,act and each succeeding fiscal year until fiscal year #bjbb1 the ,secretary shall notify each institution of higher education participating in the direct student loan program under this part of what the risk-sharing payment based on the cohort nonrepayment loan balance of the institution1 as determined under paragraph 7#b71 would be for such institution if such provision were in effect4 4 #e4 ,report ,not later than #f months after the date of enactment of the ,student ,protection and ,success ,act1 the ,secretary of ,education shall submit to ,congress a report-- 7#a7 on best practices for institutions of higher education to improve repayment rates2 and 7#b7 that makes recommendations on how institutions of higher education can improve repayment rates1 with a particular emphasis on institutions that serve a high proportion of low-income students4 #f4 ,student service expenditures and resources ,section #aec7;a77#a77;,i7 of the ,education ,sciences ,reform ,act of #bjjb 7#bj ,u4,s4,c4 #iedc7;a77#a77;,i77 is amended to read as follows3 7,i7 the financing and management of education1 including data on revenues and expenditures1 and information regarding-- 7i7 student service expenditures1 that-- 7,i7 includes instruction1 information technology1 and other activities whose primary purpose is to contribute to students' emotional and physical well-being and to their intellectual1 cultural1 and social development inside and outside the context of the formal instructional program2 and 7,,ii7 does not include expenditures on marketing1 recruitment1 or intercollegiate athletic programs2 7ii7 student service resources1 which is a measure of an institution's resources that could reasonably be allocated towards student service expenditures1 including net tuition revenues1 ,state and local appropriations1 endowment income1 and revenues related to student housing and food services less expenditures on student housing1 food services1 and the operations and maintenance of a plant2 and 7iii7 recruitment and marketing expenditures2 4