,i  #aah? ,,congress  #b;d ,session  ,h4
 ,r4 #ghca  ,,9 ,,! ,,h\se ,,(          
,,repres5tatives  ,m>* #bf1 #bjbd,ms4   
,van ,duyne introduc$ ! foll[+ bill2 :i*
 0 ref]r$ to ! ,committee on ,education 
& ! ,work=ce1 & 9 addition to !         
,committee on ,ways & ,means1 = a p]iod 
to be subsequ5tly det]m9$ by ! ,speak]1 
9 ea* case = consid]ation ( su*         
provisions z fall )9 ! jurisdiction ( ! 
committee conc]n$  ,a ,,bill  ,to impose
 a f9ancial p5alty on c]ta9 in/itutions 
( high] education ) high p]c5tages (    
/ud5ts :o default or make insuffici5t   
paym5ts on ,f$]al /ud5t loans1 & = o!r  
purposes4  #a4 ,%ort title ,?is ,act may
 be cit$ z ! ,prev5t+ ,f9ancial         
,exploitation 9 ,high] ,education ,act4 
#b4 ,in/itutional acc\ntability =       
default$1 del9qu5t1 & und]paid /ud5t    
loans ,"p ,d ( title ,,iv ( ! ,high]    
,education ,act ( #aife 7#bj ,u4,s4,c4  
#ajhg;a et seq47 is am5d$ by ins]t+ aft]
 section #ded ! foll[+3  #ded;,a4       
,in/itutional acc\ntability = default$1 

del9qu5t1 & und]paid /ud5t loans  7a7 ,9
 g5]al ,9 accordance ) subsection 7b71 a
 cov]$ in/itution ( high] education %all
 pay to ! ,secret>y-- 7#a7 a p5alty bas$
 on ! in/itution's cohort default rate =
 ea* fiscal ye>2  7#b7 a p5alty bas$ on 
! in/itution's cohort del9qu5cy rate =  
ea* fiscal ye>2 &  7#c7 a p5alty bas$ on
 ! in/itution's cohort und]paym5t rate =
 ea* fiscal ye>4  7b7 ,phase-,9 ( cohort
 default rate p5alty  7#a7 ,fiscal ye>  
#bjbd ,a cov]$ in/itution ( high]       
education-- 7,a7 ) a cohort default rate
 7z calculat$ "u section #dce7m77 =     
fiscal ye> #bjbd t is #aa p]c5t or m1   
%all pay to ! ,secret>y a p5alty 9 an   
am\nt equal to #cj p]c5t ( ! total      
out/&+ balance ( pr9ciple & int]e/ due  
on all loans "u ?is "p t are includ$ 9 !
 calculation ( su* cohort default rate =
 su* fiscal ye>2  7,b7 ) a cohort       
del9qu5cy rate 7z det]m9$ by !          
,secret>y7 = fiscal ye> #bjbd t is #aj  
p]c5t or m %all pay to ! ,secret>y a    
p5alty 9 an am\nt equal to #bh p]c5t ( !

 total out/&+ balance ( pr9ciple &      
int]e/ due on all loans "u ?is "p t are 
includ$ 9 ! calculation ( su* cohort    
del9qu5cy rate = su* fiscal ye>2 &  7,c7
 ) a cohort und]paym5t rate 7z det]m9$  
by ! ,secret>y7 = fiscal ye> #bjbd t is 
#i p]c5t or m %all pay to ! ,secret>y a 
p5alty 9 an am\nt equal to #bf p]c5t ( !
 total out/&+ balance ( pr9ciple &      
int]e/ due on all loans "u ?is "p t are 
includ$ 9 ! calculation ( su* cohort    
und]paym5t rate = su* fiscal ye>4  7#b7 
,fiscal ye> #bjbe ,a cov]$ in/itution ( 
high] education-- 7,a7 ) a cohort       
default rate 7z calculat$ "u section    
#dce7m77 = fiscal ye> #bjbe t is #aj    
p]c5t or m1 %all pay to ! ,secret>y a   
p5alty 9 an am\nt equal to #bh p]c5t ( !
 total out/&+ balance ( pr9ciple &      
int]e/ due on all loans "u ?is "p t are 
includ$ 9 ! calculation ( su* cohort    
default rate = su* fiscal ye>2  7,b7 ) a
 cohort del9qu5cy rate 7z det]m9$ by !  
,secret>y7 = fiscal ye> #bjbe t is #i   
p]c5t or m1 %all pay to ! ,secret>y a   

p5alty 9 an am\nt equal to #bf p]c5t ( !
 total out/&+ balance ( pr9ciple &      
int]e/ due on all loans "u ?is "p t are 
includ$ 9 ! calculation ( su* cohort    
del9qu5cy rate = su* fiscal ye>2 &  7,c7
 ) a cohort und]paym5t rate 7z det]m9$  
by ! ,secret>y7 = fiscal ye> #bjbe t is 
#h p]c5t or m1 %all pay to ! ,secret>y a
 p5alty 9 an am\nt equal to #bd p]c5t ( 
! total out/&+ balance ( pr9ciple &     
int]e/ due on all loans "u ?is "p t are 
includ$ 9 ! calculation ( su* cohort    
und]paym5t rate = su* fiscal ye>4  7#c7 
,fiscal ye> #bjbf ,a cov]$ in/itution ( 
high] education-- 7,a7 ) a cohort       
default rate 7z calculat$ "u section    
#dce7m77 = fiscal ye> #bjbf t is #i     
p]c5t or m1 %all pay to ! ,secret>y a   
p5alty 9 an am\nt equal to #bf p]c5t ( !
 total out/&+ balance ( pr9ciple &      
int]e/ due on all loans "u ?is "p t are 
includ$ 9 ! calculation ( su* cohort    
default rate = su* fiscal ye>2  7,b7 ) a
 cohort del9qu5cy rate 7z det]m9$ by !  
,secret>y7 = fiscal ye> #bjbf t is #h   

p]c5t or m1 %all pay to ! ,secret>y a   
p5alty 9 an am\nt equal to #bd p]c5t ( !
 total out/&+ balance ( pr9ciple &      
int]e/ due on all loans "u ?is "p t are 
includ$ 9 ! calculation ( su* cohort    
del9qu5cy rate = su* fiscal ye>2 &  7,c7
 ) a cohort und]paym5t rate 7z det]m9$  
by ! ,secret>y7 = fiscal ye> #bjbf t is 
#g p]c5t or m1 %all pay to ! ,secret>y a
 p5alty 9 an am\nt equal to #bb p]c5t ( 
! total out/&+ balance ( pr9ciple &     
int]e/ due on all loans "u ?is "p t are 
includ$ 9 ! calculation ( su* cohort    
und]paym5t rate = su* fiscal ye>4  7#d7 
,fiscal ye> #bjbg ,a cov]$ in/itution ( 
high] education-- 7,a7 ) a cohort       
default rate 7z calculat$ "u section    
#dce7m77 = fiscal ye> #bjbg t is #h     
p]c5t or m1 %all pay to ! ,secret>y a   
p5alty 9 an am\nt equal to #bd p]c5t ( !
 total out/&+ balance ( pr9ciple &      
int]e/ due on all loans "u ?is "p t are 
includ$ 9 ! calculation ( su* cohort    
default rate = su* fiscal ye>2  7,b7 ) a
 cohort del9qu5cy rate 7z det]m9$ by !  

,secret>y7 = fiscal ye> #bjbg t is #g   
p]c5t or m1 %all pay to ! ,secret>y a   
p5alty 9 an am\nt equal to #bb p]c5t ( !
 total out/&+ balance ( pr9ciple &      
int]e/ due on all loans "u ?is "p t are 
includ$ 9 ! calculation ( su* cohort    
del9qu5cy rate = su* fiscal ye>2 &  7,c7
 ) a cohort und]paym5t rate 7z det]m9$  
by ! ,secret>y7 = fiscal ye> #bjbg t is 
#f p]c5t or m1 %all pay to ! ,secret>y a
 p5alty 9 an am\nt equal to #bj p]c5t ( 
! total out/&+ balance ( pr9ciple &     
int]e/ due on all loans "u ?is "p t are 
includ$ 9 ! calculation ( su* cohort    
und]paym5t rate = su* fiscal ye>4  7#e7 
,fiscal ye> #bjbh ,a cov]$ in/itution ( 
high] education-- 7,a7 ) a cohort       
default rate 7z calculat$ "u section    
#dce7m77 = fiscal ye> #bjbh t is #g     
p]c5t or m1 %all pay to ! ,secret>y a   
p5alty 9 an am\nt equal to #bb p]c5t ( !
 total out/&+ balance ( pr9ciple &      
int]e/ due on all loans "u ?is "p t are 
includ$ 9 ! calculation ( su* cohort    
default rate = su* fiscal ye>2  7,b7 ) a

 cohort del9qu5cy rate 7z det]m9$ by !  
,secret>y7 = fiscal ye> #bjbh t is #f   
p]c5t or m1 %all pay to ! ,secret>y a   
p5alty 9 an am\nt equal to #bj p]c5t ( !
 total out/&+ balance ( pr9ciple &      
int]e/ due on all loans "u ?is "p t are 
includ$ 9 ! calculation ( su* cohort    
del9qu5cy rate = su* fiscal ye>2 &  7,c7
 ) a cohort und]paym5t rate 7z det]m9$  
by ! ,secret>y7 = fiscal ye> #bjbh t is 
#e p]c5t or m1 %all pay to ! ,secret>y a
 p5alty 9 an am\nt equal to #ah p]c5t ( 
! total out/&+ balance ( pr9ciple &     
int]e/ due on all loans "u ?is "p t are 
includ$ 9 ! calculation ( su* cohort    
und]paym5t rate = su* fiscal ye>4  7#f7 
,fiscal ye> #bjbi & subsequ5t fiscal    
ye>s ,a cov]$ in/itution ( high]        
education-- 7,a7 ) a cohort default rate
 7z calculat$ "u section #dce7m77 =     
fiscal ye> #bjbi or any fiscal ye>      
!reaft] t is #f p]c5t or m1 %all pay to 
! ,secret>y a p5alty 9 an am\nt equal to
 #bj p]c5t ( ! total out/&+ balance (   
pr9ciple & int]e/ due on all loans "u   

?is "p t are includ$ 9 ! calculation (  
su* cohort default rate = su* fiscal    
ye>2  7,b7 ) a cohort del9qu5cy rate 7z 
det]m9$ by ! ,secret>y7 = fiscal ye>    
#bjbi or any fiscal ye> !reaft] t is #e 
p]c5t or m1 %all pay to ! ,secret>y a   
p5alty 9 an am\nt equal to #ah p]c5t ( !
 total out/&+ balance ( pr9ciple &      
int]e/ due on all loans "u ?is "p t are 
includ$ 9 ! calculation ( su* cohort    
del9qu5cy rate = su* fiscal ye>2 &  7,c7
 ) a cohort und]paym5t rate 7z det]m9$  
by ! ,secret>y7 = fiscal ye> #bjbi or   
any fiscal ye> !reaft] t is #d p]c5t or 
m1 %all pay to ! ,secret>y a p5alty 9 an
 am\nt equal to #af p]c5t ( ! total     
out/&+ balance ( pr9ciple & int]e/ due  
on all loans "u ?is "p t are includ$ 9 !
 calculation ( su* cohort und]paym5t    
rate = su* fiscal ye>4  7c7 ,effect on  
default /atus ( borr[] ,! paym5t ( a    
p5alty "u ?is section by a cov]$        
in/itution ( high] education %all h no  
effect on ! rights or obligations ( a   
borr[] ( a loan t is includ$ 9 !        

calculation ( ! in/itution's cohort     
default rate1 cohort del9qu5cy rate1 or 
cohort und]paym5t rate = purposes ( su* 
p5alty4  7d7 ,def9itions  7#a7 ,cohort  
del9qu5cy rate ,! t]m cohort del9qu5cy  
rate means ! p]c5tage ( ,f$]al /ud5t    
loan borr[]s includ$ 9 a cohort "u      
subsection 7b7 :o h fail$ to make       
paym5ts on "o or m ( ! ,f$]al /ud5t     
loans us$ = att5dance at ! in/itution   
conc]n$ = betwe5 #ca & #cfj days        
7inclusive74  7#b7 ,cohort und]paym5t   
rate ,! t]m cohort und]paym5t rate1     
means ! p]c5tage ( ,f$]al /ud5t loan    
borr[]s includ$ 9 a cohort "u subsection
 7b7 :o-- 7,a7 are mak+ regul> paym5ts  
on ! ,f$]al /ud5t loans us$ = att5dance 
at ! in/itution conc]n$ b = :om ! sum   
all out/&+ balances ( su* loans exce$s !
 sum ( ! orig9al loan balances2 &  7,b7 
are nei!r del9qu5t nor 9 default on su* 
loans4  7#c7 ,cov]$ in/itution ( high]  
education ,! t]m cov]$ in/itution (     
high] education means an in/itution (   
high] education t is ! b5efici>y ( an   

end[m5t fund ) total value (            
#b1ejj1jjj1jjj or m4  7#d7 ,end[m5t fund
 ,! t]m end[m5t fund means a fund t--   
7,a7 is e/abli%$ by ,/ate law1 by an    
in/itution ( high] education1 or by a   
f\ndation t is exempt f ,f$]al income   
taxation2 &  7,b7 is ma9ta9$ = ! purpose
 ( g5]at+ income = ! support ( an       
in/itution ( high] education4  7#e7     
,f$]al /ud5t loan ,! t]m ,f$]al /ud5t   
loan means a loan made "u ?is "p4  4    
#c4 ,program p>ticipation agreem5ts     
,section #dhg7;a7 ( ! ,high] ,education 
,act ( #aife 7#bj ,u4,s4,c4 #ajid7;a77  
is am5d$ by add+ at ! end ! foll[+3     
7#cj7 ,! in/itution w comply ) !        
requirem5ts ( section #ded;,a4  4  #d4  
,increas$ tax on net inve/m5t income (  
c]ta9 educational in/itutions ) l>ge    
end[m5ts t increase tuition ,section    
#difh ( ! ,int]nal ,rev5ue ,code ( #aihf
 is am5d$ by add+ at ! end ! foll[+ new 
subsection3  7e7 ,increas$ tax on c]ta9 
applicable educational in/itutions t    
increase tuition  7#a7 ,9 g5]al ,9 !    

case ( any disqualifi$ l>ge applicable  
educational in/itution = any taxable ye>
 beg9n+ aft] ,decemb] #ca1 #bjbd1       
subsection 7a7 %all be appli$ by        
sub/itut+ #be p]c5t = #a4d p]c5t = su*  
taxable ye>4  7#b7 ,disqualifi$ l>ge    
applicable educational in/itution ,=    
purposes ( ?is subsection1 ! t]m        
disqualifi$ l>ge applicable educational 
in/itution means1 ) respect to any      
taxable ye>1 any in/itution if-- 7,a7   
su* in/itution is an applicable         
educational in/itution = su* taxable    
ye>1  7,b7 ! av]age tuition *>g$ to     
full-"t /ud5ts = seme/]s dur+ su*       
taxable ye> exce$s ! inflation adju/$   
base am\nt = su* taxable ye>1 &  7,c7 ! 
aggregate fair m>ket value 7det]m9$ z ( 
! end ( ! prec$+ taxable ye>7 ( ! assets
 ( su* in/itution 7o!r ?an ^? assets :i*
 are us$ directly 9 c>ry+ out !         
in/itution's exempt purpose7 equal or   
exce$s #b1ejj1jjj1jjj4  7#c7 ,inflation 
adju/$ base am\nt ,= purposes ( ?is     
subsection-- 7,a7 ,9 g5]al ,! t]m       

inflation adju/$ base am\nt means1 )    
respect to any applicable education     
in/itution = any taxable ye> :i* beg9s 9
 any cal5d> ye>1 ! sum (-- 7i7 ! base   
am\nt ( su* in/itution1 plus  7ii7 !    
product (-- 7,i7 su* base am\nt1        
multipli$ by  7,,ii7 ! co/-(-liv+       
adju/m5t det]m9$ "u section #a7;f77#c7 =
 ! cal5d> ye> 9 :i* ! taxable ye> beg9s1
 det]m9$ by sub/itut+ cal5d> ye> #bjbc =
 cal5d> ye> #bjaf 9 subp>agraph 7,a77ii7
 !re(4  7,b7 ,base am\nt ,! t]m base    
am\nt means1 ) respect any applicable   
educational in/itution1 ! av]age tuition
 *>g$ to specifi$ /ud5ts = seme/]s dur+ 
cal5d> ye> #bjbd4  7#d7 ,application to 
new in/itutions ,9 ! case ( any         
applicable educational in/itution n 9   
exi/5ce at all times dur+ cal5d> ye>    
#bjbd-- 7,a7 ! base am\nt ) respect to  
su* in/itution %all be det]m9$ ) respect
 to ! fir/ full cal5d> ye> = :i* su*    
in/itution is 9 exi/5ce1  7,b7 !        
inflation adju/$ base am\nt %all be     
det]m9$ by us+ ! cal5d> ye> prec$+ su*  

fir/ full cal5d> ye> z ! ye> sub/itut$ 9
 p>agraph 7#c77;,a77ii77,,ii71 &  7,c7  
p>agraph 7#a7 %all n apply to any       
taxable ye> beg9n+ be=e ! end ( su* fir/
 full cal5d> ye>4  ,not)/&+ ! prec$+    
s5t5ce1 if ! av]age tuition *>g$ by any 
applicable educational in/itution to    
specifi$ /ud5ts dur+ ! fir/ full cal5d> 
ye> = :i* su* in/itution is 9 exi/5ce is
 high] ?an su* av]age = any ( ! #c      
succe$+ cal5d> ye>s1 ! base am\nt &     
inflation adju/$ base am\nt ) respect to
 su* in/itution %all be det]m9$ 9 su*   
mann] z ! ,secret>y may provide4  4