,,ii #aafth ,,congress #ast ,session ,s4 #hfg ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,march #bf1 #bjai ,ms4 ,hassan 7for herself1 ,mr4 ,durbin1 and ,mr4 ,brown7 introduced the following bill2 which was read twice and referred to the ,committee on ,health1 ,education1 ,labor1 and ,pensions ,a ,,bill ,to protect students of institutions of higher education and the taxpayer investment in institutions of higher education by improving oversight and accountability of institutions of higher education1 particularly for-profit colleges1 improving protections for students and borrowers1 and ensuring the integrity of postsecondary education programs1 and for other purposes4 #a4 ,short title2 table of contents 7a7 ,short title ,this ,act may be cited as the ,preventing ,risky ,operations from ,threatening the ,education and ,career ,trajectories of ,students ,act of #bjai or the ,,protect ,students ,act of #bjai4 7b7 ,table of contents ,the table of contents for this ,act is as follows3 ,sec4 #a4 ,short title2 table of contents4 ,sec4 #b4 ,references4 ,sec4 #c4 ,effective date4 ,sec4 #d4 ,definitions4 ,,title ,i--,for-profit institutions ,sec4 #aja4 ,closing the ,,gi ,bill loophole and restoring the #he_/ae rule for for-profit institutions4 ,sec4 #ajb4 ,process for for-profit institutions to convert to nonprofit or public status4 ,sec4 #ajc4 ,for-,profit ,education ,oversight ,coordination ,committee4 ,,title ,,ii--,student and borrower protections ,sec4 #bja4 ,gainful employment programs4 ,sec4 #bjb4 ,prohibition on institutions limiting student legal action4 ,sec4 #bjc4 ,enforcement unit established in the ,office of ,federal ,student ,aid4 ,sec4 #bjd4 ,establishment and maintenance of complaint resolution and tracking system4 ,sec4 #bje4 ,borrower defense to repayment4 ,,title ,,iii--,ensuring integrity at institutions of higher education ,sec4 #cja4 ,restrictions on sources of funds for recruiting and marketing activities4 ,sec4 #cjb4 ,strengthening the incentive compensation ban4 ,sec4 #cjc4 ,definition of nonprofit institution of higher education4 ,sec4 #cjd4 ,definition of public institution of higher education4 ,sec4 #cje4 ,enhanced civil penalties1 ,state enforcement1 and private right of action4 ,sec4 #cjf4 ,substantial misrepresentation prohibited4 #b4 ,references ,except as otherwise expressly provided1 whenever in this ,act an amendment or repeal is expressed in terms of an amendment to1 or repeal of1 a section or other provision1 the reference shall be considered to be made to a section or other provision of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajja et seq474 #c4 ,effective date ,except as otherwise specified1 this ,act1 and the amendments made by this ,act1 shall take effect beginning on ,july #a1 #bjbj4 #d4 ,definitions 7a7 ,in general ,section #ajc 7#bj ,u4,s4,c4 #ajjc7 is amended-- 7#a7 by redesignating paragraphs 7#ae7 through 7#bb71 7#bc71 and 7#bd7 as paragraphs 7#ag7 through 7#bd71 7#bf71 and 7#bg72 7#b7 by inserting after paragraph 7#ad7 the following3 7#af7 ,revenue sharing arrangements ,the term revenue sharing arrangement means an arrangement between an institution of higher education and a third party contractor under which-- 7,a7 the third party contractor provides1 exclusively or nonexclusively1 educational products or services to prospective students or students attending the institution of higher education2 and 7,b7 the third party contractor or institution of higher education pays a fee or provides other material benefits1 including revenue- or profit-sharing1 to the institution of higher education or third party contractor in connection with the educational products or services provided to prospective students or students attending the institution of higher education4 2 and 7#c7 by inserting after paragraph 7#bd71 as redesignated by paragraph 7#a71 the following3 7#be7 ,third party contractor ,the term third party contractor means any ,state1 person1 or entity that enters into a contract or agreement1 including a revenue sharing arrangement1 with an eligible institution of higher education to act on the institution's behalf1 including any entity that-- 7,a7 sells the names of prospective students 7also known as a lead generator72 or 7,b7 offers services including recruiting1 financial aid packaging1 curriculum development1 facilities management1 hiring and oversight of faculty1 and the provision of student services representatives1 job placement counselors1 or other employees 7also known as an online program manager74 4 7b7 ,renaming proprietary institutions for-,profit institutions 7#a7 ,in general ,section #ajb 7#bj ,u4,s4,c4 #ajjb7 is amended-- 7,a7 in subsection 7a77#a77;,a71 by striking proprietary institution and inserting for-profit institution2 and 7,b7 in subsection 7b7-- 7i7 in the subsection heading1 by striking ,proprietary and inserting ,for-profit2 7ii7 in the matter preceding subparagraph 7,a7 of paragraph 7#a71 by striking proprietary and inserting for-profit2 and 7iii7 in paragraph 7#b71 by striking proprietary each place the term appears and inserting for-profit4 7#b7 ,conforming amendments 7,a7 ,department of ,education ,organization ,act ,the ,department of ,education ,organization ,act 7#bj ,u4,s4,c4 #cdja et seq47 is amended-- 7i7 in section #bai 7#bj ,u4,s4,c4 #cdbf7-- 7,i7 in the section heading1 by striking ,proprietary and inserting ,for-profit2 7,,ii7 by striking ,proprietary each place the term appears and inserting ,for-,profit2 and 7,,iii7 by striking proprietary each place the term appears and inserting for-profit2 and 7ii7 in section #a1 by striking the item relating to section #bai in the table of contents and inserting the following3 #bai4 ,liaison for ,for-,profit ,institutions of ,higher ,education4 4 7,b7 ,higher ,education ,act of #aife ,the ,act 7#bj ,u4,s4,c4 #ajja et seq47 is amended-- 7i7 in each of sections #dce and #ddc7;b77#h71 by striking proprietary each place the term appears and inserting for-profit2 and 7ii7 in section #hjg7;d77#a77;,a77iii71 by striking proprietary and inserting for-profit4 7,c7 ,scientific and ,advanced-,technology ,act of #aiib ,section #c7;j77#b77;,b7 of the ,scientific and ,advanced-,technology ,act of #aiib 7#bj ,u4,s4,c4 #ahfb;i7j77#b77;,b77 is amended by striking proprietary institution and inserting for-profit institution4 7#c7 ,references 7,a7 ,proprietary institution ,any reference to a proprietary institution1 as defined in section #ajb7;b7 of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajjb7 on the day before the date of enactment of this ,act1 in any law1 rule1 regulation1 certificate1 directive1 instruction1 or other official paper in force on the date of enactment of this ,act shall be considered to refer and apply to a for-profit institution1 as defined in section #ajb7;b7 of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajjb7;b771 as amended by this ,act4 7,b7 ,liaison ,any reference to the ,liaison for ,proprietary ,institutions of ,higher ,education in any law1 rule1 regulation1 certificate1 directive1 instruction1 or other official paper in force on the date of enactment of this ,act shall be considered to refer and apply to the ,liaison for ,for-,profit ,institutions of ,higher ,education established under section #bai of the ,department of ,education ,organization ,act 7#bj ,u4,s4,c4 #cdja71 as amended by this ,act4 ,i ,for-profit institutions #aja4 ,closing the ,,gi ,bill loophole and restoring the #he_/ae rule for for-profit institutions 7a7 ,in general ,section #ajb7;b7 7#bj ,u4,s4,c4 #ajjb71 as amended by section #d7;b71 is further amended-- 7#a7 in paragraph 7#a7-- 7,a7 in subparagraph 7,d71 by striking and after the semicolon2 and 7,b7 in subparagraph 7,e71 by striking the period at the end and inserting 2 and2 and 7,c7 by adding at the end the following3 7,f7 meets the requirements of paragraph 7#b74 2 7#b7 by redesignating paragraph 7#b7 as paragraph 7#c72 and 7#c7 by inserting after paragraph 7#a7 the following3 7#b7 ,revenue sources 7,a7 ,in general ,in order to qualify as a for-profit institution of higher education under this subsection1 an institution shall derive not less than #ae percent of the institution's revenues from sources other than ,federal education assistance funds1 as calculated in accordance with subparagraphs 7,b7 and 7,c74 7,b7 ,federal education assistance funds ,in this paragraph1 the term ,federal education assistance funds means any ,federal financial assistance provided1 under this ,act or any other ,federal law1 through a grant1 contract1 subsidy1 loan1 guarantee1 insurance1 or other means to an institution of higher education1 including ,federal financial assistance that is disbursed or delivered to an institution or on behalf of a student or to a student to be used to attend the institution1 except that such term shall not include any monthly housing stipend provided under the ,post-#i_/aa ,veterans ,educational ,assistance ,program under chapter #cc of title #ch1 ,united ,states ,code4 7,c7 ,implementation of non-,federal revenue requirement ,in making calculations under subparagraph 7,a71 an institution of higher education shall-- 7i7 use the cash basis of accounting2 7ii7 consider as revenue only those funds generated by the institution from-- 7,i7 tuition1 fees1 and other institutional charges for students enrolled in programs eligible for assistance under title ,,iv2 7,,ii7 activities conducted by the institution that are necessary for the education and training of the institution's students1 if such activities are-- 7aa7 conducted on campus or at a facility under the control of the institution2 7bb7 performed under the supervision of a member of the institution's faculty2 and 7cc7 required to be performed by all students in a specific educational program at the institution2 and 7,,iii7 a contractual arrangement with a ,federal agency for the purpose of providing job training to low-income individuals who are in need of such training2 7iii7 presume that any ,federal education assistance funds that are disbursed or delivered to an institution on behalf of a student or directly to a student will be used to pay the student's tuition1 fees1 or other institutional charges1 regardless of whether the institution credits such funds to the student's account or pays such funds directly to the student1 except to the extent that the student's tuition1 fees1 or other institutional charges are satisfied by-- 7,i7 grant funds provided by an outside source that-- 7aa7 has no affiliation with the institution2 and 7bb7 shares no employees1 executives1 or board members with the institution2 7,,ii7 funds provided under a contractual arrangement with a ,federal1 ,state1 or local government agency for the purpose of providing job training to low-income individuals who are in need of that training2 or 7,,iii7 institutional scholarships described in clause 7v72 7iv7 include no loans made by an institution of higher education as revenue to the school1 except for payments made by students on such loans2 7v7 include a scholarship provided by the institution-- 7,i7 only if the scholarship is in the form of monetary aid based upon the academic achievements or financial need of students1 disbursed to qualified student recipients during each fiscal year from an established restricted account2 and 7,,ii7 only to the extent that funds in that account represent designated funds1 or income earned on such funds1 from an outside source that-- 7aa7 has no affiliation with the institution2 and 7bb7 shares no employees1 executives1 or board members with the institution2 and 7vi7 exclude from revenues-- 7,i7 the amount of funds the institution received under part ,c of title ,,iv1 unless the institution used those funds to pay a student's institutional charges2 7,,ii7 the amount of funds the institution received under subpart #d of part ,a of title ,,iv2 7,,iii7 the amount of funds provided by the institution as matching funds for any ,federal program2 7,,iv7 the amount of ,federal education assistance funds provided to the institution to pay institutional charges for a student that were refunded or returned2 and 7,v7 the amount charged for books1 supplies1 and equipment1 unless the institution includes that amount as tuition1 fees1 or other institutional charges4 7,d7 ,report to congress ,not later than ,july #a1 #bjbj1 and by ,july #a of each succeeding year1 the ,secretary shall submit to the authorizing committees a report that contains1 for each for-profit institution of higher education that receives assistance under title ,,iv and as provided in the audited financial statements submitted to the ,secretary by each institution pursuant to the requirements of section #dhg7;c7-- 7i7 the amount and percentage of such institution's revenues received from ,federal education assistance funds2 and 7ii7 the amount and percentage of such institution's revenues received from other sources4 4 7b7 ,repeal of existing requirements ,section #dhg 7#bj ,u4,s4,c4 #ajid7 is amended-- 7#a7 in subsection 7a7-- 7,a7 by striking paragraph 7#bd72 7,b7 by redesignating paragraphs 7#be7 through 7#bi7 as paragraphs 7#bd7 through 7#bh71 respectively2 7,c7 in paragraph 7#bd77;,a77ii7 7as redesignated by subparagraph 7,b771 by striking subsection 7e7 and inserting subsection 7d72 and 7,d7 in paragraph 7#bf7 7as redesignated by subparagraph 7,b771 by striking subsection 7h7 and inserting subsection 7g72 7#b7 by striking subsection 7d72 7#c7 by redesignating subsections 7e7 through 7j7 as subsections 7d7 through 7i71 respectively2 7#d7 in subsection 7d7 7as redesignated by paragraph 7#c771 by striking 7a77#be7 and inserting 7a77#bd72 7#e7 in subsection 7f77#a7 7as redesignated by paragraph 7#c771 by striking subsection 7e77#b7 and inserting subsection 7d77#b72 and 7#f7 in subsection 7g77#a7 7as redesignated by paragraph 7#c771 by striking subsection 7a77#bg7 in the matter preceding subparagraph 7,a7 and inserting subsection 7a77#bf74 7c7 ,conforming amendments ,the ,act 7#bj ,u4,s4,c4 #ajja et seq47 is amended-- 7#a7 in section #aeb 7#bj ,u4,s4,c4 #ajai;a7-- 7,a7 in subsection 7a77#a77;,a71 by striking subsections 7a77#bg7 and 7h7 of section #dhg and inserting subsections 7a77#bf7 and 7g7 of section #dhg2 and 7,b7 in subsection 7b77#a77;,b77i77,i71 by striking section #dhg7;e7 and inserting section #dhg7;d72 7#b7 in section #aec7;c77#c7 7#bj ,u4,s4,c4 #ajai;b7c77#c771 by striking section #dhg7;a77#be7 each place the term appears and inserting section #dhg7;a77#bd72 7#c7 in section #dif7;c77#c77;,a7 7#bj ,u4,s4,c4 #ajii;b7c77#c77;,a771 by striking section #dhg7;f7 and inserting section #dhg7;e72 and 7#d7 in section #dih7k77#a7 7#bj ,u4,s4,c4 #ajii;c7k77#a771 by striking section #dhg7;f7 and inserting section #dhg7;e74 #ajb4 ,process for for-profit institutions to convert to nonprofit or public status 7a7 ,conversion process ,part ,b of title ,i 7#bj ,u4,s4,c4 #ajaa et seq47 is further amended by adding at the end the following3 #abd4 ,process for for-profit institutions to convert to nonprofit or public status 7a7 ,determination 7#a7 ,in general ,in any case where the ,secretary determines that a for-profit institution of higher education1 as defined in section #ajb7;b71 meets the applicable requirements of subsection 7b71 the ,secretary shall approve the conversion of the institution of higher education to a nonprofit or public institution of higher education for not more than a #e-year period4 7#b7 ,periodic review ,for each for-profit institution that is converted under this section to a nonprofit or public institution of higher education1 the ,secretary shall-- 7,a7 review the determination not less than once every #e years2 and 7,b7 at the conclusion of a review described in subparagraph 7,a7-- 7i7 in a case where the ,secretary determines the institution continues to meet the requirements of this section1 approve the institution's status as a nonprofit institution of higher education or public institution of higher education for an additional period not to exceed #e years2 and 7ii7 in a case where the ,secretary determines the institution no longer meets the requirements1 classify the institution as a for-profit institution4 7b7 ,requirements ,to be eligible to convert to a nonprofit or public institution of higher education1 a for-profit institution of higher education shall submit an application to the ,secretary that demonstrates that-- 7#a7 the institution1 as of the date of the application1 meets the definition of a nonprofit or public institution of higher education2 7#b7 the institution has not acquired any other institution of higher education 7as defined in section #ajb71 or a significant portion of the assets of such other institution1 for more than the value of such other institution or such assets1 respectively1 as determined in accordance with subsection 7d72 and 7#c7 in the case of an institution that has been acquired by another party1 such institution is not controlled by such party4 7c7 ,transition period ,a for-profit institution of higher education approved for conversion under subsection 7a7 shall be subject to any rules and regulations that apply to for-profit institutions of higher education1 as defined in section #ajb7;b71 for a minimum #e-year period after conversion1 which may be extended by the ,secretary if the ,secretary identifies a reason for concern relating to the institution's converted status4 7d7 ,value ,the term value1 with respect to an acquisition under subsection 7b77#b7-- 7#a7 includes the value of any ongoing relationship 7including any contract1 agreement1 lease1 or other arrangement between the acquiring institution and the acquired institution7 between affiliates1 as defined in section #ahj4ije of title #b1 ,code of ,federal ,regulations1 as in effect on the date of enactment of the ,,protect ,students ,act of #bjai2 and 7#b7 may be demonstrated through-- 7,a7 third-party valuation2 7,b7 independent financing of the acquisition based upon the assets acquired2 or 7,c7 full and open competition in the acquisition1 as such term is defined in section #b4aja7;b7 of title #dh1 ,code of ,federal ,regulations1 as in effect on the date of the enactment of the ,,protect ,students ,act of #bjai1 of services or assets4 7e7 ,publication 7#a7 ,application ,before the ,secretary may approve the conversion of an institution of higher education under subsection 7a71 the ,secretary shall publish the application of the institution in the ,federal ,register with a notice and comment period of not less than #fj days4 7#b7 ,determination ,the ,secretary shall publish each determination on an application for conversion under this section1 and the reasons for such determination1 in the ,federal ,register4 7f7 ,tax exempt status ,in carrying out this section1 the ,secretary may consider the nonprofit corporation status under ,state law or the tax exempt status of an institution of higher education under section #eja7;c77#c7 of the ,internal ,revenue ,code of #aihf1 but shall not use such statuses as the sole determining factor for approval under subsection 7a74 7g7 ,public representation and marketing of nonprofit status ,a for-profit institution of higher education that receives assistance under title ,,iv that is seeking to convert under this section shall not promote or market itself1 in any manner1 as a nonprofit institution of higher education until-- 7#a7 the ,secretary has approved the conversion of the institution to a nonprofit institution under this section2 7#b7 the ,commissioner of ,internal ,revenue has approved the institution as tax exempt for purposes of the ,internal ,revenue ,code of #aihf and the institution is an organization described in clause 7ii7 or 7vi7 of section #agj7;b77#a77;,a7 of such ,code2 and 7#c7 a nationally recognized accrediting agency or association recognized by the ,secretary pursuant to section #dif has approved the nonprofit status of the institution4 4 7b7 ,review and enforcement process 7#a7 ,in general ,section #dhg7;c77#a7 of the ,act 7#bj ,u4,s4,c4 #ajid7;c77#a77 is amended-- 7,a7 by redesignating subparagraphs 7,b7 through 7,i7 as subparagraphs 7,c7 through 7,j71 respectively2 and 7,b7 by inserting after subparagraph 7,a7 the following3 7,b7 7i7 a requirement that an institution of higher education shall use the same qualified1 independent organization or person1 in accordance with standards established by the ,comptroller ,general for the audit of governmental organizations1 programs1 and functions1 and as prescribed in regulations of the ,secretary1 for both the financial and compliance audits required for a given year under subparagraph 7,a72 7ii7 a requirement that the qualified1 independent organization or person chosen to conduct the annual financial and compliance audits under subparagraph 7,a7 shall document1 in the audit1 any transactions or relationships that may conflict with an institution's status as a nonprofit institution of higher education or public institution of higher education2 and 7iii7 in accordance with section #dhi;,a1 in any case where the ,secretary determines1 after providing an institution with reasonable notice and an opportunity for a hearing1 that the institution is classified as a public institution of higher education or a nonprofit institution for purposes of this ,act but is in violation of1 or has failed to carry out1 any requirements relating to such nonprofit or public status in accordance with paragraphs 7#ac7 and 7#ae7 of section #ajc or section #abd1 a process through which the ,secretary may-- 7,i7 limit1 suspend1 or terminate the institution's participation in any program under this title under section #dhi;,a7b77#a72 7,,ii7 impose a civil penalty under section #dhi;,a7c72 or 7,,iii7 take an emergency action under section #dih;,a7d7 against an institution4 2 7#b7 ,conforming amendments ,section #dhg7;i7 7#bj ,u4,s4,c4 #ajid7;i771 as redesignated by section #aja7;b77#c71 is further amended-- 7,a7 by striking subsection 7c77#a77;,d712 and 7,b7 by inserting or subsection 7b77#a7 or 7c7 of section #dhi;,a after of this section4 #ajc4 ,for-,profit ,education ,oversight ,coordination ,committee ,part ,b of title ,i 7#bj ,u4,s4,c4 #ajaa et seq471 as amended by section #ajb1 is further amended by adding at the end the following3 #abe4 ,for-,profit ,education ,oversight ,coordination ,committee 7a7 ,definitions ,in this section3 7#a7 ,executive officer ,the term executive officer1 with respect to a for-profit institution that is a publicly traded corporation1 means-- 7,a7 the president of such corporation2 7,b7 a vice president of such corporation who is in charge of a principal business unit1 division1 or function of such corporation1 such as sales1 administration1 or finance2 or 7,c7 any other officer or person who performs a policy-making function for such corporation4 7#b7 ,federal education assistance funds ,the term ,federal education assistance funds has the meaning given the term in section #ajb7;b77#b77;,b74 7#c7 ,for-profit institution ,the term for-profit institution-- 7,a7 means a for-profit institution of higher education as defined in section #ajb7;b77#b72 and 7,b7 includes a former for-profit institution of higher education that has been approved for conversion under section #abd but is still in the transition period required under section #abd7;c74 7#d7 ,private education loan ,the term private education loan-- 7,a7 means a loan provided by a private educational lender 7as defined in section #adj7;a7 of the ,truth in ,lending ,act 7#ae ,u4,s4,c4 #afej7;a777 that-- 7i7 is not made1 insured1 or guaranteed under title ,,iv2 7ii7 is issued expressly for postsecondary educational expenses to a borrower1 regardless of whether the loan is provided through the educational institution that the subject student attends or directly to the borrower from the private educational lender2 and 7iii7 is not made1 insured1 or guaranteed under title ,,vii or title ,,viii of the ,public ,health ,service ,act 7#db ,u4,s4,c4 #bib et seq4 and #bif et seq472 and 7,b7 does not include an extension of credit under an open end consumer credit plan1 a reverse mortgage transaction1 a residential mortgage transaction1 or any other loan that is secured by real property or a dwelling4 7#e7 ,recruiting and marketing activities ,the term recruiting and marketing activities means the recruiting and marketing activities described in section #abf7;d77#b74 7#f7 ,state approval agency ,the term ,state approval agency means any ,state agency that determines whether an institution of higher education is legally authorized within such ,state to provide a program of education beyond secondary education4 7#g7 ,veterans service organization ,the term veterans service organization means an organization recognized by the ,secretary of ,veterans ,affairs for the representation of veterans under section #eijb of title #ch1 ,united ,states ,code4 7b7 ,establishment of committee 7#a7 ,establishment ,there is established in the executive branch a committee to be known as the ,for-,profit ,education ,oversight ,coordination ,committee 7referred to in this section as the ,committee7 and to be composed of the head 7or the designee of such head7 of each of the following ,federal entities3 7,a7 ,the ,department of ,education4 7,b7 ,the ,bureau of ,consumer ,financial ,protection4 7,c7 ,the ,department of ,justice4 7,d7 ,the ,securities and ,exchange ,commission4 7,e7 ,the ,department of ,defense4 7,f7 ,the ,department of ,veterans ,affairs4 7,g7 ,the ,federal ,trade ,commission4 7,h7 ,the ,department of ,labor4 7,i7 ,the ,internal ,revenue ,service4 7,j7 ,the enforcement unit of the ,performance-,based ,organization established under section #ada7;g74 7,k7 ,at the discretion of the ,chairperson of the ,committee1 any other relevant ,federal agency or department4 7#b7 ,purposes ,the ,committee shall have the following purposes3 7,a7 ,coordinate ,federal oversight of for-profit institutions to-- 7i7 improve enforcement of applicable ,federal laws and regulations2 7ii7 increase accountability of for-profit institutions to students and taxpayers2 and 7iii7 ensure the promotion of quality education programs4 7,b7 ,coordinate ,federal activities to protect students from unfair1 deceptive1 abusive1 unethical1 fraudulent1 or predatory practices1 policies1 or procedures of for-profit institutions4 7,c7 ,encourage information sharing among agencies related to ,federal investigations1 audits1 program reviews1 inquiries1 complaints1 financial statements1 and other information relevant to the oversight of for-profit institutions4 7,d7 ,develop binding memoranda of understanding that the ,federal entities represented on the committee will use regarding the sharing of information to exercise the oversight described in this section4 7,e7 ,increase coordination and cooperation between ,federal and ,state agencies1 including ,state ,attorneys ,general and ,state approval agencies1 with respect to improving oversight and accountability of for-profit institutions4 7,f7 ,develop best practices and consistency among ,federal and ,state agencies in the dissemination of consumer information regarding for-profit institutions to ensure that students1 parents1 and other stakeholders have easy access to such information4 7#c7 ,membership 7,a7 ,designees ,for any designee described in paragraph 7#a71 the head of the member entity shall appoint a high-level official who exercises significant decision-making authority for the oversight or investigatory activities and responsibilities related to for-profit institutions of the respective member entity4 7,b7 ,chairperson ,the ,secretary of ,education or the designee of such ,secretary shall serve as the ,chairperson of the ,committee4 7,c7 ,committee support ,the head of each entity described in paragraph 7#a7 shall ensure appropriate staff and officials of such entity are available to support the ,committee-related work of such entity4 7c7 ,meetings 7#a7 ,committee meetings ,the members of the ,committee shall meet regularly1 but not less than once during each quarter of each fiscal year1 to carry out the purposes described in subsection 7b77#b74 7#b7 ,meetings with ,state agencies and stakeholders ,the ,committee shall meet not less than once each fiscal year1 and shall otherwise interact regularly1 with ,state ,attorneys ,general1 ,state approval agencies1 veterans service organizations1 and consumer advocates to carry out the purposes described in subsection 7b77#b74 7d7 ,director ,the ,chairperson shall appoint a full-time executive director to support the ,committee and may appoint and fix the pay of additional staff as the ,chairperson considers appropriate4 7e7 ,report 7#a7 ,in general ,the ,committee shall submit a report each year to the authorizing committees and any other committee of ,congress that the ,committee determines appropriate4 7#b7 ,public access ,the report described in paragraph 7#a7 shall be made available to the public in a manner that is easily accessible to parents1 students1 and other stakeholders1 in accordance with the best practices developed under subsection 7b77#b77;,f74 7#c7 ,contents 7,a7 ,in general ,the report shall include-- 7i7 an accounting of any action 7as defined in subparagraph 7,c77 taken by the ,federal ,government1 any member entity of the ,committee1 or a ,state-- 7,i7 to enforce ,federal or ,state laws and regulations applicable to for-profit institutions2 7,,ii7 to hold for-profit institutions accountable to students and taxpayers2 and 7,,iii7 to promote quality education programs2 7ii7 a summary of complaints against each for-profit institution received by any member entity of the ,committee2 7iii7 the data described in subparagraph 7,b7 and any other data relevant to for-profit institutions that the ,committee determines appropriate2 and 7iv7 recommendations of the ,committee for such legislative and administrative actions as the ,committee determines are necessary to-- 7,i7 improve enforcement of applicable ,federal laws2 7,,ii7 increase accountability of for-profit institutions to students and taxpayers2 and 7,,iii7 ensure the promotion of quality education programs4 7,b7 ,data 7i7 ,industry-wide and institution-level data ,the report shall include data on all for-profit institutions1 including the following3 7,i7 ,the following data1 in the aggregate for all for-profit institutions and disaggregated for each individual for-profit institution3 7aa7 ,the total amount of ,federal education assistance funds that for-profit institutions received for the previous academic year1 and the percentage of the total amount of ,federal education assistance funds provided to institutions of higher education 7as defined in section #ajb7 for such previous academic year that reflects such total amount of ,federal education assistance funds provided to for-profit institutions for such previous academic year4 7bb7 ,the total amount of ,federal education assistance funds that for-profit institutions received for the previous academic year1 disaggregated by whether the funds were provided-- 7,,aa7 in the form of a loan under title ,,iv2 7,,bb7 in the form of a grant under such title2 7,,cc7 under chapter #cc of title #ch1 ,united ,states ,code2 7,,dd7 for tuition and expenses under section #bjjg of title #aj1 ,united ,states ,code2 7,,ee7 under section #aghd;a of title #aj1 ,united ,states ,code2 and 7,,ff7 in a manner not described in subitems 7,,aa7 through 7,,ee74 7cc7 ,the percentage of the total amount of ,federal education assistance funds provided to institutions of higher education 7as defined in section #ajb7 for such previous academic year for each of the programs described in subitems 7,,aa7 through 7,,ee7 of item 7bb7 that reflects such total amount of ,federal education assistance funds provided to for-profit institutions for such previous academic year for each of such programs4 7dd7 ,expenses by classification1 including separate classifications for-- 7,,aa7 pre-enrollment recruiting and marketing activities2 7,,bb7 student instruction2 and 7,,cc7 student support services4 7ee7 ,net income and other changes in equity4 7ff7 ,executive compensation for the #aj highest-paid for-profit institution executives4 7gg7 ,the average retention and graduation rates for students pursuing a certificate or a degree at for-profit institutions4 7hh7 ,the average cohort default rate 7as defined in section #dce7m774 7ii7 ,with respect to all careers requiring the passage of a licensing examination1 and disaggregated by each such career-- 7,,aa7 the average passage rate of individuals who attended a for-profit institution taking such examination to pursue such a career2 7,,bb7 the average passage rate of all individuals taking such exam to pursue such a career2 and 7,,cc7 the percentage of all individuals taking such exam who attended a for-profit institution4 7jj7 ,information regarding the use of private education loans at for-profit institutions that includes-- 7,,aa7 an estimate of the total number of such loans2 and 7,,bb7 information on the average debt1 default rate1 and interest rate of such loans4 7,,ii7 ,the financial composite scores1 in accordance with section #dih1 for each for-profit institution1 the name and dollar amount of any letters of credit required under subpart ,l of part #ffh of title #cd1 ,code of ,federal ,regulations 7or any successor regulation71 and the name of each institution placed under the heightened cash monitoring payment method1 as established under section #ffh4afb7;d7 of title #cd1 ,code of ,federal ,regulations 7or any successor regulation74 7ii7 ,data on corporations 7,i7 ,in general ,the report shall include data on for-profit institutions that are publicly traded corporations1 consisting of information on-- 7aa7 any pre-tax profit of such for-profit institutions-- 7,,aa7 reported as a total amount and as the average percentage of revenue for all such for-profit institutions2 and 7,,bb7 reported as a total amount and as the average percentage of revenue for each such for-profit institution2 7bb7 spending on pre-enrollment recruiting and marketing activities1 student instruction1 and student support services1 and for each of the #c categories separately reported-- 7,,aa7 as a total amount and the average percentage of revenue for all such for-profit institutions2 and 7,,bb7 for each such for-profit institution2 7cc7 total compensation packages of the executive officers of each such for-profit institution2 7dd7 a list of institutional loan programs offered by each such for-profit institution that includes information on the default and interest rates of such programs2 and 7ee7 the data described in subclauses 7,,ii7 and 7,,iii74 7,,ii7 ,disaggregated by ownership ,the report shall include data on for-profit institutions that are corporations1 disaggregated by corporate or parent entity1 brand name1 and campus1 consisting of-- 7aa7 the total cost of attendance for each program at each such for-profit institution2 7bb7 total enrollment1 disaggregated by-- 7,,aa7 individuals enrolled in programs taken exclusively online2 7,,bb7 individuals enrolled in programs that are exclusively in person2 and 7,,cc7 individuals enrolled in programs that are a mix of online and in person2 7cc7 the retention and graduation rates for students pursuing a degree at such for-profit institutions1 including the number of students who enroll each year and withdraw in less than one year2 7dd7 the percentage of students enrolled in such for-profit institutions who complete a program of such an institution within-- 7,,aa7 the standard period of completion for such program2 and 7,,bb7 a period that is #aej percent of such standard period of completion2 7ee7 the average cohort default rate1 as defined in section #dce7m71 for such for-profit institutions1 and an annual list of cohort default rates 7as so defined7 for all for-profit institutions2 7ff7 the median educational debt incurred by students who complete a program at such a for-profit institution of higher education2 7gg7 the median educational debt incurred by students who start but do not complete a program at such a for-profit institution of higher education2 7hh7 the job placement rate for students who complete a program at such a for-profit institution of higher education and the type of employment obtained by such students2 7ii7 for careers requiring the passage of a licensing examination1 the rate of individuals who attended such a for-profit institution and passed such an examination2 and 7jj7 the number of complaints from students enrolled in such for-profit institutions that have been submitted to any member entity of the ,committee4 7,,iii7 ,department of ,defense and ,veterans ,affairs assistance 7aa7 ,in general ,to the extent practicable1 the report shall provide information on the data described in subclause 7,,ii7 for individuals who pay for the costs of attending a for-profit institution of higher education that is a corporation by using ,federal education assistance provided under-- 7,,aa7 chapter #cc of title #ch1 ,united ,states ,code2 7,,bb7 section #bjjg of title #aj1 ,united ,states ,code2 and 7,,cc7 section #aghd;a of title #aj1 ,united ,states ,code4 7bb7 ,revenue ,the report shall provide information on the revenue of such for-profit institutions that is derived from the ,federal education assistance described in item 7aa74 7iii7 ,comparison data ,the report shall provide information comparing1 in the aggregate and disaggregated by ,state1 each of the data elements described in clause 7ii7 for for-profit institutions that are publicly traded corporations1 for-profit institutions that are not owned or operated by a publicly traded company1 nonprofit institutions1 and public institutions4 7iv7 ,information regarding ownership interests ,the report shall1 for each for-profit institution of higher education that is not a publicly traded corporation1 report the name of any individual1 partnership1 or corporation that holds an ownership interest of #e percent or greater of the for-profit institution of higher education4 7,c7 ,accounting of any action ,for the purposes of subparagraph 7,a77i71 the term any action shall include-- 7i7 a complaint filed by a ,federal or ,state agency in a local1 ,state1 ,federal1 or ,tribal court2 7ii7 an administrative proceeding by a ,federal or ,state agency involving noncompliance of any applicable law or regulation2 7iii7 any other review1 audit1 or administrative process by any ,federal or ,state agency that results in a penalty1 suspension1 or termination from any ,federal or ,state program2 or 7iv7 a negative or adverse action taken by an accrediting agency or association recognized by the ,secretary pursuant to section #dif with respect to an approved institution or program4 7f7 ,for-,profit college warning list for parents and students 7#a7 ,in general ,each academic year1 the ,committee shall publish a list to be known as the ,for-,profit ,college ,warning ,list for ,parents and ,students to be comprised of for-profit institutions-- 7,a7 that have engaged in illegal activity during the previous academic year as determined by a ,federal or ,state court2 7,b7 that have entered into a settlement with a ,federal or ,state entity resulting in a monetary payment2 7,c7 that have had any higher education program limited1 withdrawn1 or suspended by an external entity 7such as a ,federal or ,state entity or an accrediting agency or association recognized by the ,secretary pursuant to section #dif72 and 7,d7 for which the ,committee has sufficient evidence of widespread or systemic unfair1 deceptive1 abusive1 unethical1 fraudulent1 or predatory practices1 policies1 or procedures that pose a threat to the academic success1 financial security1 or general best interest of students4 7#b7 ,determinations ,in making a determination pursuant to paragraph 7#a77;,d71 the ,committee may consider evidence that includes the following3 7,a7 ,any consumer complaint collected by any member entity of the ,committee4 7,b7 ,any complaint filed by a ,federal or ,state entity in a ,federal1 ,state1 local1 or ,tribal court4 7,c7 ,any administrative proceeding by a ,federal or ,state entity involving noncompliance of any applicable law or regulation4 7,d7 ,any other review1 audit1 or administrative process by any ,federal or ,state entity that results in a penalty1 suspension1 or termination from any ,federal or ,state program4 7,e7 ,data or information submitted by a for-profit institution to any accrediting agency or association recognized by the ,secretary pursuant to section #dif or the findings or adverse actions of any such accrediting agency or association4 7,f7 ,information submitted by a for-profit institution to any member entity of the ,committee4 7,g7 ,any other evidence that the ,committee determines relevant in making such determination4 7#c7 ,publication ,not later than ,july #a of each fiscal year1 the ,committee shall publish the list under paragraph 7#a7 prominently and in a manner that is easily accessible to parents1 students1 and other stakeholders1 in accordance with any best practices developed under subsection 7b77#b77;,f74 4 ,,ii ,student and borrower protections #bja4 ,gainful employment programs 7a7 ,in general ,section #ajb 7#bj ,u4,s4,c4 #ajjb71 as amended by sections #d7;b7 and #aja1 is further amended-- 7#a7 in subsection 7b77#a77;,a7-- 7,a7 by striking clause 7ii72 7,b7 by striking 7i7 provides and inserting provides2 and 7,c7 by striking recognized occupation2 or and inserting recognized occupation1 as described in subsection 7e722 7#b7 in subsection 7c77#a77;,a71 by inserting 1 as described in subsection 7e7 after recognized occupation2 and 7#c7 by adding at the end the following3 7e7 ,gainful employment in a recognized occupation 7#a7 ,definitions ,in this subsection3 7,a7 ,debt-to-earnings rates ,the term debt-to-earnings rates means the discretionary income rate and the annual earnings rate1 as determined under the gainful employment rules4 7,b7 ,eligible training program ,the term eligible training program means a program of training that-- 7i7 in order to qualify for assistance under title ,,iv1 is required under subsection 7b77#a77;,a77i7 or 7c77#a77;,a71 or section #aja7;b77#a71 to satisfy the gainful employment requirements of this subsection2 and 7ii7 is offered by an institution eligible to receive assistance under such title4 7,c7 ,gainful employment rules ,the term gainful employment rules means the rules issued under subpart ,q of title #cd1 ,code of ,federal ,regulations1 as published on ,october #ca1 #bjad1 relating to gainful employment in a recognized occupation4 7#b7 ,in general ,an eligible training program prepares students for gainful employment in a recognized occupation if the eligible training program complies with all requirements of the gainful employment rules 7including any modifications made by this subsection71 including-- 7,a7 the provisions relating to the calculation of debt-to-earnings rates for the eligible training program1 using actual annual earnings data of students who completed the eligible training program2 7,b7 the provisions relating to the determination of outcomes for an eligible training program based on the debt-to-earnings rates1 including whether an eligible training program is a passing1 failing1 or zone program2 7,c7 the provisions relating to the associated consequences for an eligible training program that is not passing the debt-to-earnings rates1 including a student warning and ultimate loss of eligibility for assistance under title ,,iv2 7,d7 the requirements relating to disclosure1 reporting1 and certification2 and 7,e7 the calculation of completion rates1 withdrawal rates1 repayment rates1 program cohort default rates1 and median loan debt for the eligible training program4 7#c7 ,annual calculations and verifications ,the ,secretary shall carry out all of the following3 7,a7 ,on an annual calendar year basis 7notwithstanding section #ffh4djc7;c77#e7 of the gainful employment rules7 and for each eligible training program1 calculate for each award year both of the debt-to-earnings rates for the eligible training program1 issue a notice of determination1 and enforce restrictions based on those determinations4 ,in order to carry out the preceding sentence1 the ,secretary shall-- 7i7 create a list of students who completed the eligible training program during the cohort period identified by the ,secretary2 7ii7 provide the list to the institution offering the eligible training program and allow the institution a #de-;day period beginning the day after the date that the ,secretary provides the list to the institution1 to submit any corrections to the list2 7iii7 after resolving any corrections1 provide the institution with the final list and submit the final list of students who completed the eligible training program to the ,social ,security ,administration1 the ,internal ,revenue ,service1 or any other ,federal agency that administers a database that contains earnings information that can be matched to the individuals named in the final list1 and retrieve the mean and median annual earnings of students on the lists1 in aggregate and not in individual form1 within #aj business days after submission2 7iv7 calculate and send the debt-to-earnings rates to the institution offering the eligible training program and allow the institution a #de-;day period1 beginning after the date the ,secretary notifies an institution of the debt-to-earnings rates1 to challenge the accuracy of information used to calculate the eligible training program's median loan debt2 7v7 subject to the resolution of any challenge1 issue a notice of determination informing the institution-- 7,i7 of the final debt-to-earnings rates of each eligible training program to the institution offering the program2 7,,ii7 of the final determination regarding whether the program is a passing1 failing1 or zone program1 or is ineligible1 and the consequences of that determination2 7,,iii7 whether the program could become ineligible based on its final debt-to-earnings rates for the next award year2 7,,iv7 whether the institution is required to provide warnings to enrolled students and prospective students2 and 7,v7 if the program is determined to be a failing or zone program due to the final debt-to-earnings rates1 how the program may make an alternate earnings appeal1 in accordance with paragraph 7#d72 7vi7 with respect to an institution that receives a notification from the ,secretary under clause 7v77,,iii7 and that does not submit an intent to appeal in accordance with paragraph 7#d7 or for which the appeal is denied1 require the institution1 not later than #cj days after receiving the notification of the determination or denial1 to-- 7,i7 issue warnings to enrolled students and prospective students2 and 7,,ii7 update the disclosure template1 as required by the gainful employment rules1 as modified by paragraph 7#e72 and 7vii7 enforce restrictions whereby-- 7,i7 an institution may not disburse program funds under title ,,iv to students enrolled in an ineligible program2 and 7,,ii7 an institution may not seek to reestablish the eligibility of a failing or zone program that it discontinued voluntarily1 reestablish the eligibility of a program that is ineligible under the debt-to-earnings rates1 or establish the eligibility of a program that is substantially similar to the discontinued or ineligible program1 until #c years following the date specified in the notice of determination informing the institution of the program's ineligibility or the date the institution discontinued the failing or zone program2 and 7,b7 develop processes to verify1 on an annual calendar year basis1 that-- 7i7 required warnings under the gainful employment rules are delivered to enrolled students and prospective students and are published on the eligible training program's disclosure template1 in accordance with subparagraph 7,a77vii72 and 7ii7 each eligible training program is publishing the disclosure template on the website of the eligible training program1 as required by the gainful employment rules1 as modified by paragraph 7#e74 7#d7 ,alternate earnings appeals process ,the ,secretary shall establish and enforce an appeals process for any institution of higher education that wish to file an alternate earnings appeal for an eligible training program that is a failing or zone program under the debt-to-earnings rates4 ,the appeals process shall be carried out in accordance with the gainful employment rules1 except that the appeals process shall also-- 7,a7 allow an institution to file an alternate earnings appeal1 in accordance with the gainful employment rules1 to request the recalculation of a gainful employment program's most recent final debt-to-earnings rates issued by the ,secretary1 except that-- 7i7 any institution that elects to submit alternate earnings from an institutional survey shall1 in addition to the other requirements in the gainful employment rules-- 7,i7 include a test for non-response bias2 7,,ii7 allow for an exception to issues of bias due to sample sizes below #aj2 and 7,,iii7 subject the institutional survey instrument and survey responses to an audit by the ,inspector ,general of the ,department2 and 7ii7 the ,inspector ,general of the ,department shall-- 7,i7 audit the institutional survey instrument1 and the survey responses1 submitted by an institution under clause 7i72 and 7,,ii7 furnish data showing the ,inspector ,general verified the accuracy of student survey responses2 and 7,b7 require the ,secretary to accept the alternate earnings estimate from an institutional survey if the test for non-response bias includes a response rate that guarantees that the lower bound of the #ie percent confidence interval of the alternate earnings estimate is at or above the earnings level retrieved from the ,social ,security ,administration1 the ,internal ,revenue ,service1 or any other ,federal agency with a database containing individual-level earnings data4 7#e7 ,gainful employment disclosure requirements ,notwithstanding section #ffh4dab7;a7 of the gainful employment rules1 the ,secretary shall include in the disclosure template all the information listed in paragraphs 7#a7 through 7#af7 of section #ffh4dab7;a7 of the gainful employment rules1 unless the ,secretary-- 7,a7 determines that consumer testing supports the noninclusion of the information listed in any such paragraph2 and 7,b7 publishes the ,secretary's determination1 and the consumer testing supporting the determination1 on the public website of the ,department4 7#f7 ,role of ,social ,security ,administration1 the ,internal ,revenue ,service1 and other ,federal agencies ,the ,commissioner of ,social ,security1 the ,commissioner of ,internal ,revenue1 and the head of any other ,federal agency that administers the database of individual-level earnings data shall1 in coordination with the ,secretary1 timely provide the ,secretary with the earnings information as required in accordance with paragraph 7#c77;,a77iii7 and the gainful employment rules4 4 7b7 ,conforming amendment ,section #aja7;b77#a7 7#bj ,u4,s4,c4 #ajja7;b77#a77 is amended by inserting 1 as described in section #ajb7;e71 after recognized occupation4 7c7 ,effective date ,notwithstanding section #c1 this section shall take effect on the date of enactment of this ,act4 #bjb4 ,prohibition on institutions limiting student legal action 7a7 ,enforcement of arbitration agreements 7#a7 ,in general ,chapter #a of title #i1 ,united ,states ,code1 7relating to the enforcement of arbitration agreements7 shall not apply to an enrollment agreement made between a student and an institution of higher education4 7#b7 ,definition ,in this section1 the term institution of higher education has the meaning given such term in section #ajb of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajjb71 as amended by section #aja of this ,act4 7b7 ,prohibition on limitations on ability of students ,to pursue claims against certain institutions of higher education ,section #dhg7;a7 7#bj ,u4,s4,c4 #ajid7;a771 as amended by section #aja1 is further amended by adding at the end the following3 7#bi7 ,the institution will not require any student to agree to1 and will not enforce1 any limitation or restriction 7including a limitation or restriction on any available choice of applicable law1 a jury trial1 or venue7 on the ability of a student to pursue a claim1 individually or with others1 against an institution in court4 4 7c7 ,effective date ,notwithstanding section #c1 this section shall take effect on the date of enactment of this ,act4 #bjc4 ,enforcement unit established in the ,office of ,federal ,student ,aid ,section #ada 7#bj ,u4,s4,c4 #ajah7 is amended-- 7#a7 by redesignating subsections 7g7 through 7i7 as subsections 7h7 through 7j71 respectively2 and 7#b7 by inserting after subsection 7f7 the following3 7g7 ,enforcement unit 7#a7 ,in general ,the ,chief ,operating ,officer1 in consultation with the ,secretary1 shall establish an enforcement unit within the ,,pbo 7referred to in this section as the enforcement unit74 7#b7 ,appointment 7,a7 ,chief enforcement officer ,the ,chief ,operating ,officer1 in consultation with the ,secretary1 shall appoint a ,chief ,enforcement ,officer as a senior manager1 in accordance with subsection 7e71 to perform the functions described in this subsection4 ,the ,chief ,enforcement ,officer shall report solely and directly to the ,chief ,operating ,officer4 7,b7 ,bonus ,notwithstanding subsection 7e71 the ,chief ,enforcement ,officer may receive a bonus1 separately determined from the methodology which applies to the calculation of bonuses for other senior managers1 based upon the ,chief ,operating ,officer's evaluation of the ,chief ,enforcement ,officer's performance in relation to the goals set forth in a performance agreement related to the specific duties of the enforcement unit4 7#c7 ,duties ,the enforcement unit shall-- 7,a7 receive1 process1 and analyze allegations and complaints regarding the potential violation of ,federal or ,state law 7including civil and criminal law7 or other unfair1 deceptive1 or abusive acts or practices1 by institutions of higher education1 third party servicers that contract with such institutions1 and third party contractors2 7,b7 investigate and coordinate investigations of potential or actual misconduct of institutions of higher education1 third party servicers that contract with such institutions1 and third party contractors2 and 7,c7 enforce compliance with laws governing ,federal student financial assistance programs under title ,,iv1 including through the use of an emergency action in accordance to section #dhi;,a1 the limitation1 suspension1 or termination of the participation of an eligible institution in a program under title ,,iv1 or the imposition of a civil penalty in accordance with section #dhi;,a4 7#d7 ,coordination and staffing ,the enforcement unit shall-- 7,a7 coordinate with relevant ,federal and ,state agencies and oversight bodies1 including the ,for-,profit ,education ,oversight ,coordination ,committee established under section #abe2 and 7,b7 hire staff1 7including by appointing not more than #aj individuals in positions of excepted service1 as described in subsection 7h77#c77 with such expertise as is necessary to conduct investigations1 respond to allegations and complaints1 and enforce compliance with laws governing ,federal student financial assistance programs under title ,,iv4 7#e7 ,divisions 7,a7 ,in ,general ,the enforcement unit shall have separate divisions with the following focus areas3 7i7 ,an investigations division to investigate potential or actual misconduct at institutions of higher education1 third party servicers that contract with such institutions1 and third party contractors4 7ii7 ,a division focused on evaluating the claims of borrowers who assert a defense to repayment of ,federal student loans1 or groups of borrowers who qualify to assert such a defense to repayment1 under section #dee7;h74 7iii7 ,a division focused on oversight of the ,jeanne ,clery ,disclosure of ,campus ,security ,policy and ,campus ,crime ,statistics ,act1 the reporting of crime and fire statistics by institutions of higher education1 and the oversight and enforcement of section #abj 7relating to drug and alcohol abuse prevention74 7iv7 ,a division to administer the ,secretary's authority to fine1 limit1 suspend1 terminate1 or take action against institutions of higher education1 third party servicers that contract with such institutions1 and third party contractors1 participating in the ,federal student financial assistance programs under title ,,iv4 7v7 ,a division that administers a program of compliance monitoring and oversight of institutions of higher education1 third party servicers that contract with such institutions1 and third party contractors1 including systems and procedures to support the eligibility1 certification1 and oversight of program participants1 for all institutions of higher education participating in the ,federal student financial assistance programs under title ,,iv4 7vi7 ,any other division that the ,chief ,enforcement ,officer1 in coordination with the ,chief ,operating ,officer and the ,secretary1 determines is necessary4 7,b7 ,reporting ,the staff of each division described in subparagraph 7,a7 shall report to the ,chief ,enforcement ,officer4 7#f7 ,actions recommended ,the ,chief ,enforcement ,officer may recommend1 as appropriate to the particular circumstance1 that the ,chief ,operating ,officer-- 7,a7 terminate1 suspend1 or limit an institution of higher education1 a third party servicer that contracts with such institution1 or a third party contractor1 from participation in one or more programs under title ,,iv 7in accordance with section #dhi;,a71 or provisionally certify such participation 7in accordance to section #dih7;h772 7,b7 impose a civil penalty in accordance with section #dhi;,a2 7,c7 make a recommendation to the ,secretary about whether to approve or deny the claims of borrowers1 including groups of borrowers1 who assert a defense to repayment in accordance with section #dee7;h72 or 7,d7 carry out any other enforcement activity applicable to the ,department under section #dhi;,a4 7#g7 ,definitions ,in this subsection-- 7,a7 the term institution of higher education has the meaning given that term in section #ajb2 and 7,b7 the term third party servicer has the meaning given that term in section #dha7;c74 4 #bjd4 ,establishment and maintenance of complaint resolution and tracking system ,title ,i 7#bj ,u4,s4,c4 #ajja et seq47 is amended by adding at the end the following new part3 ,f ,complaint tracking system #afa4 ,complaint tracking system 7a7 ,in ,general 7#a7 ,in general ,the ,secretary shall maintain a complaint tracking system that includes a single1 toll-free telephone number and a website to facilitate the centralized collection of1 monitoring of1 and response to complaints and reports 7including evidence1 as available7 of suspicious activity 7such as unfair1 deceptive1 or abusive acts or practices7 regarding-- 7,a7 ,federal student financial aid and the servicing of postsecondary education loans by loan servicers2 7,b7 educational practices and services of institutions of higher education2 and 7,c7 the recruiting and marketing practices of institutions of higher education4 7#b7 ,definitions ,in this section-- 7,a7 the term institution of higher education has the meaning given that term in section #ajb2 and 7,b7 the term recruiting and marketing activities means activities described in section #abf7;d77#b7 7as added by section #cja of the ,preventing ,risky ,operations from ,threatening the ,education and ,career ,trajectories of ,students ,act of #bjai74 7b7 ,complaints ,complaints and reports of suspicious activity submitted to the tracking system by students1 borrowers of student loans1 staff1 or the general public-- 7#a7 may remain anonymous1 if the complainant so chooses2 and 7#b7 may describe problems that are systematic in nature and not associated with a particular student4 7c7 ,establishment of complaint tracking office ,the ,secretary shall establish within the ,department an office whose functions shall include establishing and administering the complaint tracking system1 and widely disseminating information about the complaint tracking system1 established under this subsection4 ,the ,secretary shall-- 7#a7 to the extent necessary1 combine and consolidate the other offices and functions of the ,department to ensure that the office established under this subsection is the single point of contact for students and borrowers with complaints or reports of suspicious activity regarding ,federal student financial aid1 student loan servicers1 educational practices and services of institutions of higher education1 and recruiting and marketing activities of institutions of higher education2 and 7#b7 to the extent practicable1 ensure that the office established under this subsection will work with the ,student ,loan ,ombudsman appointed in accordance with section #ada7;f7 and the ,student ,loan ,ombudsman of the ,bureau of ,consumer ,financial ,protection to assist borrowers of ,federal student loans that submit complaints or reports of suspicious activity to the complaint tracking system4 7d7 ,handling of complaints 7#a7 ,timely response to complaints ,the ,secretary shall establish1 in consultation with the heads of appropriate agencies 7including the ,director of the ,bureau of ,consumer ,financial ,protection71 reasonable procedures to provide a response to complainants not more than #ij days after receiving a complaint in the complaint tracking system1 in writing where appropriate4 ,each response shall include a description of-- 7,a7 the steps that have been taken by the ,secretary in response to the complaint or report of suspicious activity2 7,b7 any responses received by the ,secretary from the institution of higher education or from a servicer2 and 7,c7 any additional actions that the ,secretary has taken1 or plans to take1 in response to the complaint or report of suspicious activity4 7#b7 ,timely response to secretary by institution of higher education or loan servicer ,if the ,secretary determines that it is necessary1 the ,secretary shall notify an institution of higher education or loan servicer that is the subject of a complaint or report of suspicious activity through the complaint tracking system under this subsection regarding the complaint or report and directly address and resolve the complaint or report in the system4 ,not later than #fj days after receiving such notice1 such institution or loan servicer shall provide a response to the ,secretary concerning the complaint or report1 including-- 7,a7 the steps that have been taken by the institution or loan servicer to respond to the complaint or report2 7,b7 all responses received by the institution or loan servicer from the complainant2 and 7,c7 any additional actions that the institution or loan servicer has taken1 or plans to take1 in response to the complaint or report4 7#c7 ,further investigation ,the ,secretary may1 in the event that the complaint is not adequately resolved or addressed by the responses of the institution of higher education or loan servicer under paragraph 7#b71 ask additional questions of such institution or loan servicer or seek additional information from or action by the institution or loan servicer4 7#d7 ,provision of information 7,a7 ,in general ,an institution of higher education or loan servicer shall1 in a timely manner1 comply with a request by the ,secretary for information in the control or possession of such institution or loan servicer concerning a complaint or report of suspicious activity received by the ,secretary under this subsection1 including supporting written documentation1 subject to subparagraph 7,b74 7,b7 ,exceptions ,an institution of higher education or loan servicer shall not be required to make available under this subsection-- 7i7 any nonpublic or confidential information1 including any confidential commercial information2 7ii7 any information collected by the institution for the purpose of preventing fraud or detecting or making any report regarding other unlawful or potentially unlawful conduct2 or 7iii7 any information required to be kept confidential by any other provision of law4 7#e7 ,compliance ,an institution of higher education or loan servicer shall comply with the requirements to provide responses and information1 in accordance with this subsection1 as a condition of receiving funds under title ,,iv or as a condition of the contract with the ,department1 as applicable4 7e7 ,transparency 7#a7 ,collecting and sharing information with ,federal1 ,state1 and nationally recognized accrediting agencies ,in accordance with section #ddd of the ,general ,education ,provisions ,act 7#bj ,u4,s4,c4 #abcb;g7 7commonly referred to as the ,family ,educational ,rights and ,privacy ,act of #aigd7 and other laws1 the ,secretary shall coordinate with the heads of relevant ,federal or ,state agencies or entities1 and nationally recognized accrediting agencies or associations recognized by the ,secretary pursuant to section #dif to-- 7,a7 collect any complaints and reports of suspicious activity described in subsection 7a77#a7 from such agencies1 entities1 or associations2 and 7,b7 route complaints and reports received by the complaint tracking system under this section and complaints and reports collected in accordance with subparagraph 7,a7 to the ,department1 the ,department of ,justice1 the ,department of ,defense1 the ,department of ,veterans ,affairs1 the ,federal ,trade ,commission ,consumer ,sentinel ,network1 the ,bureau of ,consumer ,financial ,protection1 any equivalent ,state agency1 or the relevant nationally recognized accrediting agency or association4 7#b7 ,interaction with existing complaint systems ,to the extent practicable1 all procedures established under this section1 and all coordination carried out under paragraph 7#a71 shall be established and carried out in accordance with the complaint tracking systems established under ,executive ,order #acfjg 7#gg ,fed4 ,reg4 #behfa2 relating to establishing principles of excellence for educational institutions serving servicemembers1 veterans1 spouses1 and other family members74 7#c7 ,public information 7,a7 ,in general ,the ,secretary shall1 on an annual basis1 publish on the website of the ,department information on the complaints and reports of suspicious activity received for each institution of higher education or loan servicer under this subsection1 including-- 7i7 the number of complaints and reports received2 7ii7 the types of complaints and reports received2 and 7iii7 where applicable1 information about the resolution of the complaints and reports4 7,b7 ,data privacy ,in carrying out subparagraph 7,a71 the ,secretary shall-- 7i7 comply with applicable data privacy laws and regulations2 and 7ii7 ensure that personally identifiable information is not shared4 7#d7 ,reports ,each year1 the ,secretary shall prepare and submit to ,congress a report describing-- 7,a7 the types and nature of complaints or reports the ,secretary has received under this section2 7,b7 the extent to which complainants are receiving adequate resolution pursuant to this section2 7,c7 whether particular types of complaints or reports are more common in a given sector of institutions of higher education or with particular loan servicers2 7,d7 any legislative recommendations that the ,secretary determines are necessary to better assist students and families regarding the activities described in subsection 7a77#a72 and 7,e7 the institutions of higher education and loan servicers with the highest volume of complaints and reports1 as determined by the ,secretary4 4 #bje4 ,borrower defense to repayment ,section #dee7;h7 7#bj ,u4,s4,c4 #ajhg;e7 is amended to read as follows3 7h7 ,borrower defenses 7#a7 ,application 7,a7 ,in ,general ,a borrower of a loan under this part or part ,b may submit an application to the ,secretary claiming a defense to repayment of the loan 7as described in paragraph 7#g77 7referred to in this subsection as a borrower defense71 at any time and regardless of the current payment status of the loan4 ,the application shall-- 7i7 certify that the borrower received the proceeds of a loan or loans issued under this part or part ,b to attend an eligible institution of higher education2 7ii7 provide evidence that supports the borrower defense2 7iii7 indicate whether the borrower has made a claim with respect to the information underlying the borrower defense with any third party1 such as the holder of a performance bond or a tuition recovery program1 and1 if so1 the amount of any payment received by the borrower or credited to the borrower's loan obligation2 and 7iv7 provide any other information or supporting documentation reasonably requested by the ,secretary4 7,b7 ,borrower defense for a group 7i7 ,in general 7,i7 ,group defense ,the ,secretary may initiate and carry out a process to determine whether a group of borrowers1 identified by the ,secretary1 has a borrower defense4 7,,ii7 ,identification of group ,the ,secretary may-- 7aa7 identify members of such a group from individually filed applications submitted under subparagraph 7,a72 or 7bb7 if the ,secretary determines that there are common facts and claims that apply to borrowers who have not filed an application under subparagraph 7,a71 identify such members based on information in the possession of the ,secretary4 7,,iii7 ,representative ,in the case of a group identified by the ,secretary under this clause1 the ,secretary shall designate a ,department official to present the group's claim in the process described under paragraph 7#b74 7ii7 ,application for a group ,a ,state attorney general or nonprofit legal assistance organization that represents borrowers may submit an application described in subparagraph 7,a7 on behalf of a group of borrowers whose claims are similar or identical1 without requiring an application from each individual borrower in that group or class4 7iii7 ,notification 7,i7 ,upon initiation of the process under clause 7i7 or receipt of an application under clause 7ii71 the ,secretary shall provide the borrowers who may be members of a group borrower defense claim with a written notice of such initiation or receipt1 as the case may be1 and an option to opt out of the proceeding under this subsection for that group4 7,,ii7 ,upon receipt of an application on behalf of a group of borrowers under clause 7ii71 the ,secretary shall provide the entity submitting that application with a written determination1 not later than #abj days after receipt of the application1 stating-- 7aa7 whether the ,secretary will forgo the review of claims for individual borrowers and instead will review the claims for the group described in that application 7or for a subset of borrowers in that group1 if applicable72 7bb7 if the ,secretary determines not to evaluate the application for that group 7or not to evaluate the application for all the requested members of that group71 the reasons for the determination2 and 7cc7 that the ,secretary may reconsider the determination in item 7bb7 if presented with new evidence that would allow for the consideration of claims for the group described in the application4 7iv7 ,relief ,if the ,secretary approves a group application for relief under this subsection1 all borrowers in the group who have not affirmatively opted out are entitled to relief1 regardless of whether an individual borrower filed an application4 7#b7 ,process 7,a7 ,in ,general ,upon receipt of an application from an individual borrower or upon receipt of an application from a group of borrowers or initiation of a claim on behalf of a group of borrowers1 as described in paragraph 7#a77;,b71 the ,secretary shall carry out the following activities3 7i7 ,with regard to the borrower's payment status 7including each borrower in such group who does not opt out under paragraph 7#a77;,b77iii77,i771 the ,secretary shall-- 7,i7 grant an administrative forbearance without requiring documentation from the borrower1 including a forbearance for any period necessary for the ,secretary to determine the borrower's eligibility for discharge2 7,,ii7 notify the borrower of the option to decline that forbearance and continue making payments on the loan2 7,,iii7 provide the borrower with information about the availability of an income-based repayment plan2 and 7,,iv7 if the borrower's loan is in default-- 7aa7 suspend collection activity on the loan1 including any garnishments or offsets1 until a decision on the borrower's claim is issued2 7bb7 notify the borrower of the suspension of collection activity2 7cc7 notify the borrower that if the ,secretary determines the borrower does not qualify for a discharge of the loan1 collection activity will resume unless the borrower chooses to make payments under any repayment plan1 including income-based repayment described under section #dic;,c2 and 7dd7 notify the borrower that if the ,secretary determines the borrower does not qualify for a discharge of the loan1 and if the borrower makes payments under any repayment plan1 including an income-based repayment1 as described in item 7cc71 the ,secretary shall submit a report to the consumer reporting agencies to which the ,secretary previously made adverse credit reports with regard to the borrower's loan under this part or part ,b to remove the borrower's record of default and the ,secretary shall refund any collection costs paid by the borrower subsequent to the borrower submitting an application under paragraph 7#a71 but prior to the suspension of the collection activity1 as described in item 7aa74 7ii7 ,with regard to the fact-finding process1 the ,secretary shall designate a ,department official 7which shall not be an official designated under paragraph 7#a77;,b77i77,,iii7 and shall be a staff member in the enforcement unit1 in accordance with section #ada7;g77 to-- 7,i7 notify the institution of higher education of the borrower defense application or the initiation of the borrower defense claim2 7,,ii7 determine whether the borrower has established a borrower defense1 which shall include-- 7aa7 consideration of evidence or argument presented by the borrower2 and 7bb7 consideration of additional information1 including-- 7,,aa7 ,department records2 7,,bb7 any response or submission from the institution2 and 7,,cc7 any additional information2 and 7,,iii7 upon the borrower's reasonable request1 identify and provide to the borrower any records the ,secretary is considering as part of the borrower's claim4 7iii7 ,not later than #ah months after the date of receipt of an application under paragraph 7#a77;,a7 or 7#a77;,b77ii71 or the initiation of a claim under paragraph 7#a77;,b77i71 as the case may be1 the ,secretary shall determine if a borrower or group of borrowers has a successful borrower defense claim4 ,if the ,secretary fails to issue a determination by the date that is #ah months after the date of receipt of such application or initiation1 the loan underlying the borrower defense claim shall be automatically discharged4 7,b7 ,institution's response ,an institution shall provide information to the ,secretary1 not later than #cj days after the date of a request by the ,secretary1 and as directed by the ,secretary1 regarding any response or submission that is requested from the ,secretary relating to a borrower defense claim4 7#c7 ,standard of evidence ,a borrower defense claim shall be approved under this subsection1 if the ,secretary finds that a preponderance of the evidence shows that the borrower has established a borrower defense that meets the requirements of this subsection4 7#d7 ,successful borrower defense claim 7,a7 ,borrower relief ,if a borrower is determined to have a borrower defense in accordance with this subsection1 the ,secretary shall-- 7i7 discharge the borrower of the borrower's obligation to repay the loan 7including associated interest1 costs1 and fees that the borrower would otherwise be obligated to pay7 in regards to which there is a borrower defense2 7ii7 notify the borrower of the discharge described in clause 7i7 and the other information described in subparagraph 7,c72 7iii7 retroactively waive any interest that accrued after the borrower submitted an application under this subsection2 7iv7 provide the borrower such further relief as the ,secretary determines is appropriate under the circumstances1 which shall include-- 7,i7 reimbursing the borrower for amounts paid toward the loan voluntarily or through enforced collection2 and 7,,ii7 determining that the borrower is not in default on the loan and is eligible to receive assistance under title ,,iv2 and 7v7 not later than #cj days after the date of such determination1 submit new reports to consumer reporting agencies to which the ,secretary previously made adverse credit reports with regard to the borrower's loan under this part or part ,b4 7,b7 ,amount of loan discharge 7i7 ,in ,general ,there shall be a presumption that on the finding of a successful borrower defense claim1 the full amount of the borrower's loan shall be discharged as described in subparagraph 7,a74 ,if the ,secretary determines that discharge of the full amount of the loan is not appropriate in a particular case1 the ,secretary shall provide the borrower with-- 7,i7 a written explanation as to why partial relief is appropriate2 and 7,,ii7 if the borrower defense is a defense based on ,state law and described in paragraph 7#g77;,b77i7 or is a defense described in paragraph 7#g77;,b77ii7 or 7#g77;,b77iii71 include an assurance that the amount of relief is not less than the amount of relief that would be afforded under ,state law4 7ii7 ,substantial misrepresentation ,notwithstanding clause 7i71 in the case of a determination that a borrower defense based on paragraph 7#g77;,b77iv7 has been established1 the full amount of the borrower's loan shall be discharged4 7iii7 ,limitation ,the total amount of relief granted with respect to a borrower defense regarding a loan under this part or part ,b shall not exceed the amount of the loan under this part or part ,b1 as the case may be1 and any associated interest1 costs1 and fees4 ,such amount will be reduced by the amount of any refund1 reimbursement1 indemnification1 restitution1 compensatory damages1 settlement1 debt forgiveness1 discharge1 cancellation1 compromise1 or any other financial benefit received by1 or on behalf of1 the borrower that was related to the borrower defense and that reduced the borrower's debt for the loan under this part or part ,b4 7iv7 ,relief for a non-,federal loan or out-of-pocket expenses ,any relief provided to a borrower1 such as relief for an education loan that is not a ,federal loan or refunds from a ,state tuition recovery fund for out-of-pocket expenses1 shall not decrease the amount of relief that the borrower shall be entitled to for a loan under this part or part ,b based on a borrower defense4 7v7 ,minimum amount of relief ,a borrower that has a borrower defense based on ,state law and described in paragraph 7#g77;,b77i7 or a defense described in paragraph 7#g77;,b77ii7 or 7#g77;,b77iii7 shall not receive an amount of relief that is less than the relief the borrower would receive under the applicable ,state law4 7,c7 ,notification ,if a borrower defense is successful the ,secretary shall notify the borrower 7or the entity that submitted the application1 in the case of an application described in paragraph 7#a77;,b77ii77 in writing-- 7i7 of the reasons for the approval and the evidence that was relied upon2 7ii7 that the borrower is relieved of the obligation to repay the loan 7or a portion of the loan1 as described in subparagraph 7,b77 and associated costs and fees that the borrower would otherwise be obligated to pay2 7iii7 in the event the ,secretary does not grant a discharge of the full amount of the loan1 an explanation of the reason why partial relief is granted1 and 7if applicable7 an assurance described in subparagraph 7,b77i77,,ii72 7iv7 that the borrower will be reimbursed for some or all of the amounts paid toward the loan voluntarily or through enforced collection1 if applicable2 7v7 of the amount of any portion of the loan that is due and payable to the ,secretary2 7vi7 that if any balance remains on the loan1 the loan will return to the status prior to the borrower's submission of the application1 except that in the case of a loan that was in default prior to such application1 the borrower shall first be removed from default status and given the opportunity to enter repayment1 including income-based repayment described under section #dic;,c1 before the loan will be sent to collections2 7vii7 that if the borrower chooses to make payments1 including payments under income-based repayment as described in clause 7vi71 the ,secretary shall-- 7,i7 submit a report to the consumer reporting agencies to which the ,secretary previously made adverse credit reports with regard to the borrower's loan under this part or part ,b to remove the record of default2 and 7,,ii7 refund any collection costs paid with regard to that loan by the borrower subsequent to the borrower submitting an application under paragraph 7#a72 7viii7 that if only some of the loan will be discharged1 the borrower will have the opportunity for reconsideration of the borrower's claim as described in paragraph 7#f72 7ix7 that the borrower is eligible to receive assistance under title ,,iv1 if applicable2 and 7x7 that reports to consumer reporting agencies to which the ,secretary previously made adverse credit reports with regard to the borrower's loan shall be updated not later than #cj days from the date the determination under this paragraph was made4 7#e7 ,denial of borrower defense claim ,if the ,secretary denies a borrower defense1 the ,secretary shall retroactively waive a portion of interest that accrued during the forbearance period 7as described in subparagraph 7,b77 and notify the borrower-- 7,a7 of the reasons for the denial and the evidence that was relied upon2 7,b7 that the interest accruing on the relevant loan after the first #ab-month period of forbearance that occurred from the time the borrower's application was submitted under this subsection will be retroactively waived2 7,c7 of the amount of any portion of the loan that is due and payable to the ,secretary2 7,d7 whether the ,secretary will reimburse any amounts previously collected prior to the suspension of the collection activity1 as described in paragraph 7#b77;,a77i77,,iv77aa72 7,e7 that if any balance remains on the loan1 the loan will return to the status prior to the borrower's submission of the application1 except that in the case of a loan that was in default prior to such application1 the borrower shall first be removed from default status and given the opportunity to enter repayment1 including income-based repayment described under section #dic;,c1 before the loan will be sent to collections2 and 7,f7 that the borrower shall have the opportunity for reconsideration of the borrower's claim as described in paragraph 7#f74 7#f7 ,reconsideration 7,a7 ,in ,general ,the decision of the ,secretary and any relief that may be granted on the claim shall be considered the final agency action that shall be subject to appeal in district court1 except that-- 7i7 if the borrower defense is denied in full or in part1 the borrower may request that the ,secretary reconsider the borrower defense upon the identification of new evidence in support of the borrower's claim2 and 7ii7 the ,secretary may reopen a borrower defense application at any time to consider evidence that was not considered in making the previous decision on that application4 7,b7 ,prohibition on rescinding relief ,the ,secretary shall not reduce the amount of any relief that was previously granted to a borrower under this section1 or reinstate any amounts owed on a previously discharged loan4 7#g7 ,borrower defense claims and establishing a borrower defense 7,a7 ,claims 7i7 ,in ,general ,notwithstanding any other provision of ,state or ,federal law1 a borrower may claim as a defense to repayment of a loan made under this part or part ,b any borrower defense established under subparagraph 7,b74 ,such a borrower defense claim may include-- 7,i7 a defense to repayment of amounts owed to the ,secretary on a loan under this part or part ,b1 in whole or in part2 and 7,,ii7 a right to recover amounts previously collected by the ,secretary on such loan1 in whole or in part4 7ii7 ,consolidation loan ,in the case of a ,direct ,consolidation ,loan-- 7,i7 the ,secretary shall consider a borrower defense claim to such loan by determining whether a borrower defense described in subparagraph 7,b7 has been established with regard to a loan made under this part or part ,b that was paid off by the ,direct ,consolidation ,loan2 7,,ii7 the ,secretary shall discharge the appropriate portion of the ,direct ,consolidation ,loan if the borrower is determined to have a borrower defense with respect to a loan made under this part or part ,b that was paid off by the ,direct ,consolidation ,loan2 and 7,,iii7 the ,secretary shall return to the borrower any payments made by the borrower or otherwise recovered on the ,direct ,consolidation ,loan or the loans that were paid off by the ,direct ,consolidation ,loan that exceed the amount owed on that portion of the ,direct ,consolidation ,loan that was not discharged1 if-- 7aa7 the borrower is determined to have a borrower defense with respect to a loan made under this part or part ,b that was paid off by the ,direct ,consolidation ,loan2 and 7bb7 the payment was made directly to the ,secretary on the loan4 7iii7 ,,plus ,loan ,in the case of a ,direct ,,plus ,loan made on behalf of a student1 the ,secretary shall consider a borrower defense claim related to the student on whose behalf the ,direct ,,plus ,loan was borrowed4 ,any amounts discharged will be applied to the parent or borrower of the ,direct ,,plus ,loan4 7,b7 ,establishing a borrower defense ,a borrower has established a borrower defense if-- 7i7 the borrower 7whether as an individual or as a member of a group or class7 or a government agency1 has obtained against the institution of higher education a judgment relating to the borrower's claim based on ,state or ,federal law in a court or administrative tribunal of competent jurisdiction2 7ii7 the institution of higher education that the borrower attended using a loan under this part failed to perform the institution's obligations under the terms of a contract with the borrower2 7iii7 the borrower was subject to any act or omission of the institution related to the making of the loan for enrollment at the institution or the provision of educational services for which the loan was provided that would give rise to a cause of action against the institution under applicable ,state law2 7iv7 the institution of higher education1 a third servicer that contracts with such institution1 or third party contractor made a substantial misrepresentation2 or 7v7 the institution has made any other act or omission that the ,secretary1 through regulations1 or any ,federal law1 has established is an act or omission that constitutes a borrower defense under this subsection4 7,c7 ,limitation ,a violation by an institution of a requirement in this ,act 7including implementing regulations7 is not a basis for a borrower defense under this subsection unless the violation would otherwise constitute a basis for a borrower defense1 as described in this paragraph4 7#h7 ,finding of substantial misrepresentation ,an eligible institution is deemed to have engaged in a substantial misrepresentation for purposes of this subsection when an eligible institution1 third party servicer that contracts with such institution1 or third party contractor1 commits a substantial misrepresentation1 as defined in section #dhi;,a4 ,a sworn statement or attestation from the borrower shall be considered as evidence1 and1 in the ,secretary's discretion1 may be sufficient evidence for the ,secretary to find that a substantial misrepresentation was made to a borrower4 ,if the ,secretary determines that an eligible institution1 third party servicer that contracts with such institution1 or third party contractor1 has engaged in a substantial misrepresentation1 the ,secretary shall1 in addition to finding a borrower defense under this section1 take enforcement action against the institution1 third party servicer that contracts with such institution1 or third party contractor1 in accordance with section #dhi;,a4 7#i7 ,action against the institution ,if a borrower is determined to have established a borrower defense in accordance with this subsection1 the ,secretary shall initiate an appropriate proceeding to require the institution whose act or omission resulted in the borrower defense to repay to the ,secretary the amount discharged under paragraph 7#g77;,a7 whether by offset1 claim on a letter of credit1 or other protection provided by the institution4 7#aj7 ,reporting ,not less than once every #c months1 the ,secretary shall publish on a website1 and report to ,congress1 data-- 7,a7 for each institution1 on-- 7i7 the number of claims considered under this subsection2 7ii7 the number of those claims pending and the date of receipt of the application1 or the date of the initiation of the claim by the ,secretary1 of those claims2 and 7iii7 the number of claims under this subsection for which a determination has been made and the results of each such determination2 and 7,b7 in the aggregate1 and disaggregated by ,state1 on-- 7i7 the total number of claims pending under this subsection2 7ii7 the number of those claims that are approved borrower defense claims and total dollar amount of relief2 7iii7 the percentage of those total approved claims receiving partial relief and the median student loan debt remaining for borrowers receiving partial relief2 and 7iv7 the number of those claims that are denied borrower defense claims4 4 ,,iii ,ensuring integrity at institutions of higher education #cja4 ,restrictions on sources of funds for recruiting and marketing activities 7a7 ,repeal ,section #aai of the ,higher ,education ,opportunity ,act 7#bj ,u4,s4,c4 #ajaam7 is repealed4 7b7 ,amendment to the ,higher ,education ,act of #aife ,part ,b of title ,i of the ,act 7#bj ,u4,s4,c4 #ajaa et seq471 as amended by title ,i1 is further amended by adding at the end the following3 #abf4 ,use of ,federal funds2 restrictions on sources of funds for recruiting and marketing activities 7a7 ,prohibition 7#a7 ,in ,general ,no ,federal student aid funding under this ,act received by an institution of higher education may be used to pay any person for influencing or attempting to influence an officer or employee of any agency1 a ,member of ,congress1 an officer or employee of ,congress1 or an employee of a ,member of ,congress in connection with any ,federal action described in paragraph 7#b74 7#b7 ,applicability ,the prohibition in paragraph 7#a7 applies with respect to the following ,federal actions3 7,a7 ,the awarding of any ,federal contract4 7,b7 ,the making of any ,federal grant4 7,c7 ,the making of any ,federal loan4 7,d7 ,the entering into of any ,federal cooperative agreement4 7,e7 ,the extension1 continuation1 renewal1 amendment1 or modification of any ,federal contract1 grant1 loan1 or cooperative agreement4 7b7 ,lobbying and ,earmarks ,no ,federal student aid funding under this ,act may be used to hire a registered lobbyist or pay any person or entity for securing an earmark4 7c7 ,restrictions on sources of funds for recruiting and marketing activities 7#a7 ,in general ,an institution of higher education may not use revenues derived from ,federal education assistance funds for recruiting or marketing activities described in paragraph 7#b74 7#b7 ,covered activities 7,a7 ,in ,general ,except as provided in subparagraph 7,b71 the recruiting and marketing activities subject to paragraph 7#a7 shall include the following3 7i7 ,advertising and promotion activities1 including paid announcements in newspapers1 magazines1 radio1 television1 billboards1 electronic media1 naming rights1 or any other public medium of communication1 including paying for displays or promotions at job fairs1 military installations1 or college recruiting events4 7ii7 ,efforts to identify and attract prospective students1 either directly or through a third party contractor1 including contact concerning a prospective student's potential enrollment or application for grant1 loan1 or work assistance under title ,,iv or participation in preadmission or advising activities1 including-- 7,i7 paying employees responsible for overseeing enrollment and for contacting potential students in-person1 by phone1 by email1 or by other ,internet communications regarding enrollment2 and 7,,ii7 soliciting an individual to provide contact information to an institution of higher education1 including websites established for such purpose and funds paid to third parties for such purpose4 7iii7 ,such other activities as the ,secretary may prescribe1 including paying for promotion or sponsorship of education or military-related associations4 7,b7 ,exceptions ,any activity that is required as a condition of receipt of funds by an institution under title ,,iv1 is specifically authorized under such title1 or is otherwise specified by the ,secretary1 shall not be considered to be a covered activity under this paragraph4 7#c7 ,rule of construction ,nothing in this subsection shall be construed as a limitation on the use by an institution of revenues derived from sources other than ,federal education assistance funds4 7#d7 ,reports ,each institution of higher education1 that derives #fe percent or more of revenues from ,federal education assistance funds shall report annually to the ,secretary and to ,congress and shall include in such report-- 7,a7 the institution's expenditures on advertising1 marketing1 and recruiting2 7,b7 a verification from an independent auditor that the institution is in compliance with the requirements of this subsection2 and 7,c7 a certification from the institution that the institution is in compliance with the requirements of this subsection4 7#e7 ,federal education assistance funds ,in this subsection1 the term ,federal education assistance funds has the meaning given that term in section #ajb7;b77#b77;,b7 7as added by section #aja of the ,preventing ,risky ,operations from ,threatening the ,education and ,career ,trajectories of ,students ,act of #bjai74 7d7 ,certification ,each institution of higher education receiving ,federal funding under this ,act1 as a condition for receiving such funding1 shall annually certify to the ,secretary that the requirements of this section have been met4 7e7 ,actions ,to ,implement and ,enforce ,the ,secretary shall take such actions as are necessary to ensure that the provisions of this section are implemented and enforced4 4 #cjb4 ,strengthening the incentive compensation ban 7a7 ,sense of congress regarding incentive compensation ,it is the sense of ,congress that-- 7#a7 the use of commission-paid sales practices1 also known as incentive compensation1 leads to overly aggressive1 manipulative1 and often misleading tactics in advertising1 recruiting1 and counseling students2 7#b7 such practices are inappropriate at any institution benefitting from ,federal funding and an implied ,federal endorsement through participation in programs under title ,,iv of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajgj et seq472 7#c7 previous investigations by the ,federal ,trade ,commission1 as well as by ,congress1 including the ,permanent ,subcommittee on ,investigations of the ,senate 7referred to as the ,nunn ,commission7 in #aiia and the ,committee on ,health1 ,education1 ,labor1 and ,pensions of the ,senate in #bjab1 found that incentive compensation schemes frequently contribute to high-pressure sales and other predatory abuses at federally supported schools2 7#d7 the ban on incentive compensation under section #dhg7;a77#bj7 of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajid7;a77#bj771 as amended by subsection 7b71 is intended to preclude the use of such abusive practices at any point in the process of recruiting or enrolling students1 or assisting students in securing employment2 and 7#e7 an institution that receives assistance under title ,,iv of such ,act remains responsible for the actions of any entity that performs functions and tasks on the institution's behalf1 and these responsibilities include ensuring that employees1 third party servicers that contract with such institutions1 and third party contractors are not paid for services that would convert these payments into prohibited incentive compensation because of the activities in which the employees1 third party servicers that contract with such institutions1 or third party contractors engage4 7b7 ,amendments ,section #dhg 7#bj ,u4,s4,c4 #ajid7 is amended-- 7#a7 in subsection 7a71 by striking paragraph 7#bj7 and inserting the following3 7#bj7 ,the institution1 any third party servicer that contracts with such institution1 and any third party contractor will comply with the ban on prohibited incentive compensation ban under subsection 7j74 2 and 7#b7 by adding at the end the following3 7j7 ,incentive compensation ban 7#a7 ,definitions ,in this subsection3 7,a7 ,covered activity 7i7 ,in general ,the term covered activity means any of the following activities3 7,i7 ,securing enrollment of students into the institution of higher education1 which includes-- 7aa7 activities that an individual or entity engages in at any point in time during an educational program for the purpose of the admission or matriculation of students for any period of time1 including contact in any form with a prospective student1 such as contact through preadmission or advising activities1 scheduling an appointment to visit the enrollment office or any other office of the institution1 attendance at such an appointment1 or involvement in a prospective student's signing of an enrollment agreement or financial aid application2 and 7bb7 other recruitment and marketing activities4 7,,ii7 ,securing or awarding financial aid to students for attendance at the institution1 including-- 7aa7 any involvement in a prospective student's signing of a financial aid application2 and 7bb7 completing financial aid applications on behalf of a prospective applicant 7including activities authorized by the ,department1 such as the ,,faa ,access tool1 which can be used to enter1 correct1 verify1 or analyze financial aid application data74 7,,iii7 ,improving job placement activities for students attending1 or who have attended1 the institution4 7,,iv7 ,reducing the number of students who default on their student loans4 7ii7 ,exclusion ,the term covered activity does not include-- 7,i7 the provision of student contact information for prospective students1 if any payment for such service is not based on-- 7aa7 any additional conduct or action by the third party servicer that contracts with such institutions or third party contractor or the prospective student1 such as participation in preadmission or advising activities1 scheduling an appointment to visit the enrollment office or any other office of the institution or attendance at such an appointment1 or the signing1 or being involved in the signing1 of a prospective student's enrollment agreement or financial aid application2 or 7bb7 the number of students 7calculated at any point in time of an educational program7 who apply for enrollment1 are awarded financial aid1 or are enrolled for any period of time1 including through completion of an educational program2 or 7,,ii7 student support services not included in the covered activities under clause 7i74 7,b7 ,prohibited incentive compensation 7i7 ,in general ,the term prohibited incentive compensation includes-- 7,i7 any commission1 bonus1 or other incentive payment1 of a sum of money or other item of value1 paid to or given to a person or an entity that is not a fixed salary or wages and that is paid or given for meeting a certain quota or numerical target1 or avoiding penalties for a benchmark set in ,federal law1 relating to covered activities2 7,,ii7 other direct or indirect forms of payment for meeting a certain quota or numerical target1 or avoiding penalties for a benchmark set in ,federal law1 relating to covered activities1 including-- 7aa7 tuition sharing as a measure of compensation when based on a formula that relates the amount payable to the entity to meeting a certain quota or numerical target1 or avoiding penalties for a benchmark set in ,federal law1 as a result of the covered activity of the entity2 7bb7 profit-sharing plans from which distributions are made to individuals based on meeting a certain quota or numerical target1 or avoiding penalties for a benchmark set in ,federal law1 as a result of covered activities by the recipient2 7cc7 salary adjustments that take the form of incentive payments based directly or indirectly on meeting a quota or numerical target4 or avoiding penalties for a benchmark set in ,federal law1 with respect to a covered activity2 7dd7 payments based on meeting a certain quota or numerical target1 or avoiding penalties for a benchmark set in ,federal law1 relating to covered activities2 and 7ee7 bonuses or other payments based on meeting a certain quota or numerical target1 or avoiding penalties for a benchmark set in ,federal law1 relating to covered activities2 7,,iii7 a decrease or removal of a payment or benefit described in subclause 7,i7 or 7,,ii7 7and not excluded under clause 7ii771 if that decrease or removal is based directly or indirectly on meeting a certain quota or numerical target1 or avoiding penalties for a benchmark set in ,federal law1 relating to covered activities2 and 7,,iv7 a change in employment status1 such as a promotion1 demotion1 or termination if based on meeting a certain quota or numerical target1 or avoiding penalties for a benchmark set in ,federal law1 relating to covered activities4 7ii7 ,exclusions ,the following payments or benefits shall not be considered prohibited incentive compensation1 if the payment or benefit is determined in a way that is not related to the role the recipient plays in any covered activity3 7,i7 ,a profit sharing plan1 including a qualified cash or deferred arrangement 7as defined in section #dja7k77#b7 of the ,internal ,revenue ,code of #aihf7 offered to all employees on a basis that is neutral with respect to the role the recipient plays in any covered activity4 7,,ii7 ,an employee benefits plan offered to all employees on a basis that is neutral with respect to the role the recipient plays in any covered activity4 7,,iii7 ,a cost of living adjustment4 7,,iv7 ,a payment to a senior executive with responsibility for the development of policies that affect marketing and recruitment1 enrollment1 financial aid1 or student support services1 including job placement services4 7,c7 ,recruitment and marketing activity ,the term recruitment and marketing activity means-- 7i7 broad information dissemination and disseminating targeted information to individuals2 7ii7 soliciting individuals regarding an institution2 7iii7 advertising a program that disseminates information to potential students2 7iv7 collecting contact information2 7v7 contacting potential applicants for the admission or matriculation of a student into an institution2 7vi7 screening pre-enrollment information to determine whether a prospective student meets the requirements that an institution has established for enrollment in an academic program2 7vii7 aiding individuals in filling out any information relating to an application for admission or matriculation into an institution2 7viii7 determining whether an enrollment application is materially complete1 as long as the enrollment decision remains with the institution2 or 7ix7 any other activity described in section #abf7;d77#b74 7,d7 ,student support services ,the term student support services means any of the following services3 7i7 ,counseling or other nonacademic support activities provided to students that is not a covered activity4 7ii7 ,institutional services provided to students1 such as information technology assistance1 food service1 or housing1 that is not a covered activity4 7iii7 ,other services involved in the administration of support for students that is not a covered activity4 7#b7 ,incentive compensation ban 7,a7 ,in general ,the institution1 any third party servicer that contracts with such institution1 and any third party contractor shall not provide any prohibited incentive compensation to any person or entity4 7,b7 ,applicability ,the ban on prohibited incentive compensation under this subsection applies to any entity or individual engaged in any covered activity1 including-- 7i7 with respect to an entity engaged in any student recruitment or admission activity or in making decisions about the award of financial aid1 any institution or entity that undertakes the recruiting or the admitting of students or that makes decisions about and awards program funds under this title2 and 7ii7 with respect to an individual engaged in any student recruitment or admission activity or in making decisions about the award of financial aid-- 7,i7 any employee who undertakes recruiting or admitting of students or who makes decisions about and awards program funds under this title2 and 7,,ii7 any higher-level employee with responsibility for recruitment or admission of students1 or making decisions about awarding program funds under this title4 7,c7 ,exclusion of certain employees ,the ban on prohibited incentive compensation under this subsection shall not apply to any senior manager or executive level employee who-- 7i7 is involved only in the development of policy related to the manner in which marketing and recruitment1 enrollment1 financial aid1 or student support services will be pursued or provided2 and 7ii7 does not engage in individual student contact or other covered activities4 7,d7 ,individual with multiple adjustments to compensation ,an employee of an institution1 a third party servicer that contracts with such institution1 or a third party contractor1 who receives multiple adjustments to compensation in a calendar year and is engaged in a covered activity shall be considered to be engaged in prohibited incentive compensation if the adjustments create compensation that is based in any part1 directly or indirectly1 upon meeting certain quotas or numerical targets1 or avoiding penalties for a benchmark set in ,federal law1 regarding those covered activities4 7#c7 ,notice of incentive compensation ban 7,a7 ,notice to servicer and contractor ,the institution shall provide notice of the ban on prohibited incentive compensation under this subsection at least once a year to each third party servicer and third party contractor that contracts with the institution4 7,b7 ,notice to employees ,the institution1 and any third party contractor or third party servicer that contracts with such institution1 shall-- 7i7 provide notice of the ban on prohibited incentive compensation under this subsection at least once a year to employees2 and 7ii7 publish a clear statement in all internal recruitment materials1 including guides or manuals1 acknowledging the ban on prohibited incentive compensation under this subsection4 7#d7 ,consequences for incentive compensation violation 7,a7 ,in general ,the ,secretary1 in coordination with the ,office of the ,inspector ,general of the ,department of ,education1 shall develop a written policy for the enforcement of the ban on prohibited incentive compensation under this subsection1 and shall update that policy as needed4 7,b7 ,contents of policy ,the policy developed under subparagraph 7,a7-- 7i7 shall require that compliance review occur on an annual basis2 7ii7 may include automatic triggers for inquiries by the ,department or regular secret shopper or audit-based investigations to ensure that institutions of higher education remain in compliance with the ban2 and 7iii7 shall explain the range of sanctions1 as described in section #dhi;,a1 that the ,secretary may carry out to enforce this subsection4 7,c7 ,report ,the ,department shall publish an annual report1 and shall submit that report to the authorizing committees and the ,for-,profit ,education ,oversight ,coordination ,committee established under section #abe1 which shall include-- 7i7 a description of the status of any investigations conducted under this subsection2 7ii7 the names of institutions found to be not in compliance with this subsection2 7iii7 the sanctions the non-compliant institution of higher education faced2 and 7iv7 in the case of an institution subject to liability for funds under this title pursuant to subparagraph 7,b77iii71 the amount of such liability4 4 #cjc4 ,definition of nonprofit institution of higher education ,section #ajc 7#bj ,u4,s4,c4 #ajjc7 is amended by striking paragraph 7#ac7 and inserting the following3 7#ac7 ,nonprofit 7,a7 ,in general ,the term nonprofit-- 7i7 as applied to a school1 agency1 organization1 or institution1 means a school1 agency1 organization1 or institution controlled1 owned1 and operated by one or more nonprofit corporations or associations1 no part of the net earnings of which inures1 or may lawfully inure1 to the benefit of any private shareholder or individual2 and 7ii7 as applied to an institution of higher education1 means an institution-- 7,i7 that meets the requirements of subparagraph 7,a72 7,,ii7 that is an organization described in section #agj7;b77#a77;,a77ii7 or 7vi7 of the ,internal ,revenue ,code of #aihf2 and 7,,iii7 with respect to which-- 7aa7 no member of the governing board of the institution 7other than any ex officio member serving at the pleasure of the remainder of the governing board and receiving a fixed salary7 receives any substantial direct or indirect economic benefit 7including a lease1 promissory note1 or other contract7 from the institution2 and 7bb7 no person with the power to appoint or remove members of the governing board receives any such substantial direct or indirect economic benefit 7including a lease1 promissory note1 or other contract7 from the institution4 7,b7 ,exclusions 7i7 ,in general ,an institution of higher education shall not be considered a nonprofit institution of higher education1 as defined in this paragraph1 if-- 7,i7 one or more core functions are under the control of1 or subject to significant direction from an entity that is not a public institution of higher education or is not formed as a nonprofit corporation2 or 7,,ii7 a substantial share of the assets of the institution are committed to a joint venture with a person or entity that is not a public institution of higher education and is not a nonprofit corporation1 and the core functions of the venture are conducted by1 under the control of1 or subject to significant direction from that person or entity4 7ii7 ,presumption of significant direction ,there shall be a conclusive presumption that an entity exercises significant direction if one or more of the entity's employees or owners serves as an officer1 member of the board1 or person holding similar authority for the institution of higher education4 4 #cjd4 ,definition of public institution of higher education ,section #ajc 7#bj ,u4,s4,c4 #ajjc71 as amended by section #d1 is further amended-- 7#a7 by inserting after paragraph 7#ad7 the following3 7#ae7 ,public institution of higher education 7,a7 ,in general ,the term public1 when used with respect to an institution of higher education1 means an institution of higher education-- 7i7 7,i7 operated by-- 7aa7 the ,federal ,government2 7bb7 a ,state1 as defined in section #ccjf7;j77#a7 of the ,internal ,revenue ,code of #aihf2 7cc7 a local government1 as defined in section #acic7;a77#e7 of such ,code2 or 7dd7 an ,indian tribal government1 as defined in section #ggja7;a77#dj7 of such ,code2 7,,ii7 for which all obligations of the institution are valid and binding obligations of the ,state1 local government1 or ,indian tribal government2 and 7,,iii7 for which the full faith and credit of such ,state1 local government1 or ,indian tribal government is pledged for the timely payment of such obligations2 or 7ii7 that is an instrumentality of a ,state or local government 7as such terms are defined in subparagraph 7,a774 7,b7 ,instrumentality of a state or local government ,an institution shall be considered an instrumentality of a ,state or local government for purposes of this paragraph if the institution meets all of the following requirements3 7i7 ,the employees of the institution are employees of the ,state or local government4 7ii7 ,any liability of the institution is payable to the same degree as if the liability was a liability of the ,state or local government1 in the ,state or local government jurisdiction where the institution is formed4 7iii7 ,the institution is subject to the same financial oversight and open public records laws as the ,state or local government1 in the ,state or local government jurisdiction where the institution is formed4 4 #cje4 ,enhanced civil penalties1 ,state enforcement1 and private right of action 7a7 ,in general ,part ,g of title ,,iv 7#bj ,u4,s4,c4 #ajhh et seq47 is amended by inserting after section #dhi the following3 #dhi;,a4 ,enhanced civil penalties1 ,state enforcement1 and private right of action 7a7 ,definitions ,in this section3 7#a7 ,misrepresentation ,the term misrepresentation means any false1 erroneous1 or misleading statement an eligible institution of higher education1 a third party servicer that contracts with such institution1 or a third party contractor makes directly or indirectly to a student1 prospective student1 or any member of the public1 or to an accrediting agency or association1 ,state approval agency1 or the ,secretary4 ,a misrepresentation includes-- 7,a7 the making of a statement that has the likelihood or tendency to deceive2 or 7,b7 the omission of any material facts necessary in order to make any statements made1 in light of the circumstances under which they were made1 not false1 deceptive1 unfair1 erroneous1 or misleading4 7#b7 ,officer of an institution of higher education ,the term officer of an institution of higher education including at any nonprofit1 for-profit1 or public institution of higher education1 includes the president1 chief executive officer1 and chief financial officer of an institution of higher education as well as all officers charged with overseeing a principal business unit1 division1 or function1 such as sales1 administration1 or finance4 7#c7 ,prospective student ,the term prospective student means any individual who has contacted an institution of higher education for the purpose of requesting information about enrolling at the institution of higher education or who has been contacted directly or indirectly by the institution of higher education or a third party contractor through advertising about enrolling at the institution4 7#d7 ,state approval agency ,the term ,state approval agency means any ,state agency that determines whether an institution of higher education is legally authorized within such ,state to provide a program of education beyond secondary education4 7#e7 ,substantial misrepresentation ,the term substantial misrepresentation means any misrepresentation on which the person to whom it was made could reasonably be expected to rely1 or has reasonably relied1 to that person's detriment4 7b7 ,limitation1 suspension1 or termination of eligibility status 7#a7 ,in general ,upon determination1 after reasonable notice and opportunity for a hearing1 that an eligible institution1 a third party servicer that contracts with such institution1 or a third party contractor has violated or failed to carry out any provision of this title1 any regulation prescribed under this title1 or any applicable special arrangement1 agreement1 or limitation1 the ,secretary may limit1 suspend1 or terminate the participation of that institution in any program under this title1 or the eligibility of that third party contractor or third party servicer to contract with any institution1 subject to the requirements of paragraph 7#b74 7#b7 ,suspension procedures ,no period of suspension under this section shall exceed #fj days unless the institution and the ,secretary agree to an extension or unless limitation or termination proceedings are initiated by the ,secretary within that period of time4 7#c7 ,substantial misrepresentation ,upon determination1 after reasonable notice and opportunity for a hearing1 that an eligible institution1 a third party servicer that contracts with such institution1 or a third party contractor has engaged in substantial misrepresentation1 including a misrepresentation relating to the nature of an educational program1 financial charges1 the space availability in a program of the institution for which a student is considering enrollment1 admission requirements1 the transferability of credits1 whether one of that institution's programs meets necessary ,state standards to obtain certification or sit for licensing examinations1 the passage rates of students in obtaining certifications or sitting for licensing examinations1 or the employability or earnings of graduates1 the ,secretary may suspend1 limit1 or terminate the eligibility status for any or all programs under this title of any otherwise eligible institution1 or of any third party contractor or third party servicer to contract with any institution1 in accordance with procedures specified in paragraph 7#a71 until the ,secretary finds that such practices have been corrected4 7c7 ,civil penalties 7#a7 ,in ,general ,the ,secretary shall impose a civil penalty upon an eligible institution1 a third party servicer that contracts with such institution1 or a third party contractor1 upon making a determination1 after reasonable notice and opportunity for a hearing1 that an eligible institution1 a third party servicer that contracts with such institution1 or a third party contractor has-- 7,a7 violated or failed to carry out any provision of this title or any regulation prescribed under this title2 or 7,b7 engaged in a substantial misrepresentation1 including a substantial misrepresentation described in subsection 7b77#c74 7#b7 ,amount of civil penalties 7,a7 ,a civil penalty imposed for a violation or failure described under paragraph 7#a77;,a7 shall not exceed #ajj1jjj 7subject to such adjustments for inflation as may be prescribed in regulation7 for each such violation4 7,b7 ,a civil penalty imposed for a violation described under paragraph 7#a77;,b7 shall be in an amount not to exceed the greater of-- 7i7 #ajj1jjj 7subject to such adjustments for inflation as may be prescribed in regulation7 for each such violation2 or 7ii7 7,i7 in the case of an institution1 #a4j percent of the amount of funds the institution received through this title in the most recent award year prior to the determination for each such violation2 and 7,,ii7 in the case of a third party servicer that contracts with such institution or a third party contractor1 the amount of the contract with the institution4 7#c7 ,treatment of multiple institutions ,for the purpose of determining the amount of civil penalties under this subsection1 any violation by a particular institution will accrue against all identification codes used by the ,office of ,postsecondary ,education to designate campuses and institutions affiliated with the institution1 and within the period of participation for the institution as defined in section #ffh4ac7;b7 of title #cd1 ,code of ,federal ,regulations1 or any successor regulation4 7d7 ,emergency action ,the ,secretary may take an emergency action against an institution1 a third party servicer that contracts with such institution1 or a third party contractor1 under which the ,secretary shall1 effective on the date on which a notice and statement of the basis of the action is mailed to the institution1 third party servicer that contracts with such institution1 or third party contractor 7by registered mail1 return receipt requested71 withhold funds from the institution or its students1 or from the third party servicer that contracts with such institution or third party contractor1 and withdraw the institution's authority to obligate funds under this title1 or the authority of the third party servicer that contracts with such institution or third party contractor to act on behalf of an institution under any program under this title1 if the ,secretary-- 7#a7 receives information1 determined by the ,secretary to be reliable1 that the institution1 or third party servicer that contracts with such institution1 or third party contractor is violating any provision of this title1 any regulation prescribed under this title1 or any applicable special arrangement1 agreement1 or limitation2 7#b7 determines that immediate action is necessary to prevent misuse of ,federal funds2 and 7#c7 determines that the likelihood of loss outweighs the importance of the procedures prescribed in subsection 7b7 for limitation1 suspension1 or termination1 except that an emergency action shall not exceed #cj days unless the limitation1 suspension1 or termination proceedings are initiated by the ,secretary against the individual or organization within that period of time1 and except that the ,secretary shall provide the individual or organization an opportunity to show cause1 if it so requests1 that the emergency action is unwarranted4 7e7 ,individual or organization with substantial control ,if an individual who1 or entity that1 exercises substantial control1 as determined by the ,secretary in accordance with the definition of substantial control in subpart #c of part ,h1 over one or more institutions participating in any program under this title1 or1 for purposes of this section over one or more organizations that contract with an institution to administer any aspect of the institution's student assistance program under this title1 is determined to have committed one or more violations of the requirements of any program under this title1 or has been suspended or debarred in accordance with the regulations of the ,secretary1 the ,secretary may use such determination1 suspension1 or debarment as the basis for imposing an emergency action on1 or limiting1 suspending1 or terminating1 in a single proceeding1 the participation of any or all institutions under the substantial control of that individual or entity4 7f7 ,disposition of amounts recovered 7#a7 ,use for student relief fund ,for each fiscal year1 an amount equal to #ajj percent of the amounts recovered or collected under this section shall be deposited into the ,student ,relief ,fund established under subsection 7g74 7#b7 ,report ,the ,secretary shall regularly publish1 on the website of the ,department1 a detailed accounting of the funds in the ,student ,relief ,fund1 including the amount of funds that were collected and deposited into the ,student ,relief ,fund under paragraph 7#a71 and how those funds were used1 pursuant to subsection 7g77#a74 7g7 ,student relief fund 7#a7 ,establishment ,the ,secretary shall establish a ,student ,relief ,fund 7referred to in this subsection as the ,fund7 that shall be used1 subject to the availability of funds1 to provide financial relief to any student that is enrolled in an institution of higher education that-- 7,a7 has failed to comply with an eligibility requirement under section #aja or #ajb or an obligation incurred under the terms of the program participation agreement under section #dhg2 or 7,b7 has been sanctioned under subsection 7b7 or 7c74 7#b7 ,treatment and availability of funds 7,a7 ,funds that are not government funds ,funds obtained by or transferred to the ,fund shall not be construed to be ,government funds1 appropriated monies1 or ,federal education assistance funds1 as defined in section #ajb7;b77#b77;,b7 7as added by section #aja of the ,preventing ,risky ,operations from ,threatening the ,education and ,career ,trajectories of ,students ,act of #bjai74 7,b7 ,amounts not subject to apportionment ,notwithstanding any other provision of law1 amounts in the ,fund shall not be subject to apportionment for purposes of chapter #ae of title #ca1 ,united ,states ,code1 or under any other authority4 7,c7 ,no fiscal year limitation ,sums deposited in the ,fund shall remain in the ,fund and be available for expenditure under this subsection without fiscal year limitation4 7h7 ,state enforcement 7#a7 ,in general 7,a7 ,state cause of action ,a violation described in subparagraph 7,b7 shall be a cause of action enforceable by a ,state1 through the attorney general 7or the equivalent thereof7 of such ,state1 in any district court of the ,united ,states in that ,state or in a ,state court that is located in that ,state and that has jurisdiction over the defendant4 ,the ,state may seek any relief provided under paragraph 7#c7 for such violation1 including a civil penalty under subsection 7c71 or any remedies otherwise available under law4 7,b7 ,violations ,a violation described in this subparagraph is3 7i7 ,a substantial misrepresentation4 7ii7 ,a violation of section #dhg7;a77#bj74 7iii7 ,a violation of the default manipulation regulations promulgated by the ,secretary under section #dce7m77#c74 7iv7 ,a violation of the program integrity regulations promulgated by the ,secretary under this ,act1 including regulations promulgated in section #ajb1 section #dee1 and part ,h4 7v7 ,in accordance with section #dee7;h71 any act or omission of the institution1 third party servicer that contracts with such institution1 or third party contractor1 related to the making of the loan for enrollment at the institution or the provision of educational services for which the loan was provided that would give rise to a cause of action against the institution under applicable ,state law4 7#b7 ,notice required 7,a7 ,in general ,except as provided in subparagraph 7,b71 before initiating any action in a court or other administrative or regulatory proceeding against any institution of higher education1 third party servicer that contracts with such institution1 or third party contractor1 as authorized by paragraph 7#a71 a ,state attorney general or the equivalent thereof shall timely provide to the ,secretary a copy of the complete complaint to be filed and written notice describing such action or proceeding4 7,b7 ,waiver of prior notice ,if prior notice is not practicable under subparagraph 7,a71 the ,state attorney general or equivalent thereof shall provide to the ,secretary a copy of the complete complaint and the notice described in subparagraph 7,a7 immediately upon instituting the action or proceeding4 7,c7 ,contents of notice ,the notification required under this paragraph shall1 at a minimum1 describe-- 7i7 the identity of the parties2 7ii7 the alleged facts underlying the proceeding2 and 7iii7 whether there may be a need to coordinate the prosecution of the proceeding so as not to interfere with any action1 including any rulemaking1 undertaken by the ,secretary or another ,federal agency4 7#c7 ,preservation of ,state authority 7,a7 ,state claims ,nothing in this subsection shall be construed as altering1 limiting1 or affecting the authority of a ,state attorney general or any other regulatory or enforcement agency or authority to bring an action or other regulatory proceeding arising solely under the law in effect in that ,state4 7,b7 ,relief 7i7 ,in general ,except as provided in clause 7ii71 relief under this subsection may include1 without limitation-- 7,i7 rescission or reformation of contracts2 7,,ii7 refund of moneys or return of real property2 7,,iii7 restitution2 7,,iv7 disgorgement or compensation for unjust enrichment2 7,v7 payment of damages or other monetary relief2 7,,vi7 public notification regarding the violation1 including the costs of notification2 or 7,,vii7 limits on the activities or functions of involved persons1 institutions1 third party servicers that contract with institutions1 or third party contractors4 7ii7 ,exclusion ,relief under this subsection shall not include the ability to suspend or terminate the eligibility status of an institution of higher education for programs under this title or withdrawal of the authority of the third party servicer or third party contractor to act on behalf of an institution or contract with an institution4 7i7 ,private ,right of ,action 7#a7 ,in general 7,a7 ,private right of action ,a violation described in subparagraph 7,b7 shall be subject to a private right of action enforceable by a student or former student of an institution of higher education1 on behalf of such individual or such individual and a class1 in an appropriate district court of the ,united ,states or any other court of competent jurisdiction that also has jurisdiction over the defendant4 ,the student or former student may seek any relief provided under subsection 7h77#c77;,b7 for such violation1 or any remedies otherwise available to the individual under law and equity4 7,b7 ,violations ,a violation described in this subparagraph is3 7i7 ,a substantial misrepresentation4 7ii7 ,a violation of section #dhg7;a77#bj74 7iii7 ,a violation of the default manipulation regulations promulgated by the ,secretary under section #dce7m77#c74 7iv7 ,a violation of the program integrity regulations promulgated by the ,secretary under this ,act1 including regulations promulgated in section #ajb1 section #dee1 and part ,h4 7#b7 ,amount of damages 7,a7 ,in general ,any institution of higher education1 third party servicer that contracts with such institution1 or third party contractor1 that commits a substantial misrepresentation may be held liable to a student or former student of that institution in an amount equal to the sum of-- 7i7 any actual damage sustained by such individual as a result of each substantial misrepresentation2 7ii7 any additional damages as the court may allow2 and 7iii7 in the case of any successful action to enforce the foregoing liability1 the costs of the action1 together with a reasonable attorney's fee as determined by the court4 7,b7 ,ability to assess punitive damages 7i7 ,in ,general ,on a finding by the court that the institution of higher education1 third party servicer that contracts with such institution1 or third party contractor1 has committed a violation described in paragraph 7#a77;,b7 with actual or constructive knowledge or reckless disregard for such violation1 the court may assess punitive damages not to exceed threefold the sum of actual damages sustained by the plaintiff or class1 including court costs and a reasonable attorney's fee4 7ii7 ,factors considered by court ,in determining the amount of liability in any action under clause 7i71 the court shall consider1 among other relevant factors-- 7,i7 in any individual action under this subsection1 the frequency and persistence of noncompliance by the institution of higher education1 third party servicer that contracts with such institution1 or third party contractor and the nature of such noncompliance2 or 7,,ii7 in any class action under this subsection1 in addition to the factors listed in clause 7i71 the financial resources of the institution of higher education1 third party servicer that contracts with such institution1 or third party contractor and the number of persons adversely affected4 7#c7 ,jurisdiction ,an action to enforce any liability created by this subsection may be brought in any appropriate ,united ,states district court without regard to the amount in controversy1 or in any other court of competent jurisdiction4 4 7b7 ,conforming amendments ,section #dhg7;c71 as amended by section #ajb7;b71 is further amended-- 7#a7 in paragraph 7#a71 by striking subparagraphs 7,g7 through 7,j72 7#b7 by striking paragraphs 7#b7 and 7#c72 and 7#c7 by redesignating paragraphs 7#d7 through 7#g71 as paragraphs 7#b7 through 7#e71 respectively4 #cjf4 ,substantial misrepresentation prohibited ,section #dhg7;a7 7#bj ,u4,s4,c4 #ajid7;a771 as amended by section #bjb7;b71 is further amended by adding at the end the following3 7#cj7 ,the institution will not make a substantial misrepresentation1 as defined in section #dhi;,a4 4