,,ii #aaith ,,congress #ast ,session ,s4 #bajg ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,june #ah1 #bjbe ,mr4 ,durbin 7for himself1 ,mr4 ,blumenthal1 ,ms4 ,hirono1 ,mr4 ,king1 ,mr4 ,merkley1 ,ms4 ,smith1 ,mr4 ,reed1 and ,ms4 ,warren7 introduced the following bill2 which was read twice and referred to the ,committee on ,health1 ,education1 ,labor1 and ,pensions ,a ,,bill ,to amend the ,higher ,education ,act of #aife regarding proprietary institutions of higher education in order to protect students and taxpayers4 #a4 ,short title ,this ,act may be cited as the ,protecting ,our ,students and ,taxpayers ,act of #bjbe or ,,post ,act of #bjbe4 #b4 #he_/ae rule 7a7 ,in general ,section #ajb7;b7 of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajjb7;b77 is amended-- 7#a7 in paragraph 7#a7-- 7,a7 in subparagraph 7,d71 by striking and after the semicolon2 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 ,definitions ,in this paragraph3 7i7 ,alternative financing arrangement ,the term alternative financing agreement means a financing agreement between-- 7,i7 a student of an institution2 and 7,,ii7 7aa7 the institution2 7bb7 any entity or individual-- 7,,aa7 in the institution's ownership tree2 or 7,,bb7 with any common ownership of the institution and the entity providing the funds2 or 7cc7 7,,aa7 an entity that has any other relationship or agreement with the institution2 or 7,,bb7 an entity with common ownership with an entity described in subitem 7,,aa74 7ii7 ,federal education assistance funds ,the term ,federal education assistance funds means ,federal funds that are disbursed or delivered to or on behalf of a student to be used to attend such institution1 as calculated under subparagraph 7,c74 7,b7 #he_/ae rule ,in order to qualify as a proprietary 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,a7 and 7,c74 7,c7 ,implementation of non-,federal revenue requirement ,in making calculations under subparagraph 7,b71 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 7cc7 required to be performed by all students in a specific educational program at the institution2 and 7dd7 related directly to services performed by students2 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 and 7,,iv7 funds paid by a student1 or on behalf of a student by a party unrelated to the institution1 its owners1 or affiliates1 for an education or training program that is not eligible for assistance under title ,,iv1 as long as-- 7aa7 such noneligible program does not include any courses offered in an eligible program of the proprietary institution2 7bb7 such noneligible program is provided by the institution1 and taught by an instructor of the institution1 at-- 7,,aa7 its main campus or one of its additional locations1 as approved by the appropriate accrediting agency or association2 7,,bb7 another school facility approved by the appropriate ,state agency or accrediting agency or association2 or 7,,cc7 an employer facility2 and 7cc7 such noneligible program is not a program where the institution is merely providing facilities for test preparation courses1 acting as a proctor1 or overseeing a course of self-study2 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 and 7,,ii7 institutional scholarships described in clause 7vi72 7iv7 include no loans made by an institution of higher education as revenue to the school1 except for payments made by current or former students to the institution during the fiscal year for which the determination is being made on such loans that are-- 7,i7 used to satisfy tuition1 fees1 and other institutional charges2 7,,ii7 bona fide1 as evidenced by standalone repayment agreements between the students and the institution that are enforceable promissory notes2 7,,iii7 issued at intervals related to the institution's enrollment periods2 7,,iv7 subject to regular loan repayments and collections by the institution2 and 7,v7 separate from the enrollment contracts signed by the students2 7v7 include funds from an income share agreement1 or any other alternative financing agreement1 with a student only if-- 7,i7 the institution clearly identifies the student's institutional charges1 and such charges are the same or less than the stated rate for institutional charges2 7,,ii7 the agreement clearly identifies the maximum time and maximum amount a student would be required to pay1 including the implied or imputed interest rate and any fees and revenue generated for a related third party1 the institution1 or an entity described in subparagraph 7,a77i77,,ii71 for that maximum time period2 and 7,,iii7 all payments under the agreement are applied with a portion allocated to the return of capital and a portion allocated to profit1 with revenue1 interest1 and fees not included in the calculation2 7vi7 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 7vii7 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 ,regaining eligibility ,notwithstanding subparagraph 7,b71 a proprietary institution of higher education that fails to meet the requirements of such subparagraph for a fiscal year shall be ineligible for purposes of this paragraph for a period of not less than #b institutional fiscal years4 ,to regain eligibility under this paragraph1 the proprietary institution shall demonstrate compliance with all eligibility and certification requirements under section #dih for a minimum of #b institutional fiscal years after the institutional fiscal year in which the institution became ineligible4 7,e7 ,report to congress ,not later than the third full award year 7as defined in section #dha7;a77#a77 that begins after the date of enactment of the ,protecting ,our ,students and ,taxpayers ,act of #bjbe1 and by ,july #a of each succeeding year1 the ,secretary shall submit to the authorizing committees a report that contains1 for each proprietary 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 of the ,higher ,education ,act of #aife 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 the matter preceding paragraph 7#a7 of 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 ,higher ,education ,act of #aife 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 #c4 ,effective date 7a7 ,in general ,the amendments made by this ,act shall take effect on the second full award year that begins after the date of enactment of this ,act4 7b7 ,award year ,in this section1 the term award year has the meaning given the term in section #dha7;a77#a7 of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajhh7;a77#a774