,,ii #aaith ,,congress #b;d ,session ,s4 #ejba ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,july #af1 #bjbf,mr4 ,merkley 7for himself1 ,mr4 ,durbin1 and ,mr4 ,blumenthal7 introduced the following bill2 which was read twice and referred to the ,committee on ,health1 ,education1 ,labor1 and ,pensions ,a ,,bill ,to provide consumer protections for students4 #a4 ,short title ,this ,act may be cited as the ,protecting ,students from ,worthless ,degrees ,act4 #b4 ,definitions ,in this ,act3 7#a7 ,federal education assistance funds ,the term ,federal education assistance funds has the meaning given the term in section #dhg7;a77#bd7 of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajid7;a77#bd774 7#b7 ,freely associated ,states ,the term freely associated ,states means the ,republic of the ,marshall ,islands1 the ,federated ,states of ,micronesia1 and the ,republic of ,palau4 7#c7 ,institution of higher education ,the term institution of higher education-- 7,a7 means a postsecondary education institution that receives ,federal education assistance funds2 and 7,b7 includes an institution of higher education1 as defined in section #ajb of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajjb74 7#d7 ,state ,the term ,state includes1 in addition to the several ,states of the ,united ,states1 the ,commonwealth of ,puerto ,rico1 the ,district of ,columbia1 ,guam1 ,american ,samoa1 the ,united ,states ,virgin ,islands1 the ,commonwealth of the ,northern ,mariana ,islands1 and the freely associated ,states4 #c4 ,protections in occupations requiring ,state licensure ,notwithstanding any other provision of law1 an institution of higher education is not eligible to receive ,federal education assistance funds with respect to any program of postsecondary education or training1 including a degree or certificate program and any program offered by distance education or correspondence courses to students located in a ,state other than where the institution is physically located1 that is designed to prepare students for entry into a recognized occupation or profession that requires licensing or other established requirements as a pre-condition for entry into such occupation or profession1 unless1 by not later than #a year after the date of enactment of this ,act-- 7#a7 the successful completion of the program fully qualifies a student1 in the metropolitan statistical area in which the student resides1 in the ,state in which the student resides1 and in any ,state in which the institution indicates1 through advertising or marketing activities or direct contact with potential students1 that a student will be prepared to work in the occupation or profession after successfully completing the program1 to-- 7,a7 take any examination required for entry into the recognized occupation or profession in the metropolitan statistical area and any ,state described in this paragraph1 including satisfying all ,federal1 ,state1 or professionally mandated programmatic and specialized accreditation requirements1 if any2 and 7,b7 be certified or licensed or meet any other academically related pre-conditions that are required for entry into the recognized occupation or profession in any such ,state2 and 7#b7 the institution offering the program provides timely placement for all of the academically related pre-licensure requirements for entry into the recognized occupation or profession1 such as clinical placements1 internships1 or apprenticeships4 #d4 ,protecting students at gainful employment programs and protecting all students and ,federal funds from low-earning programs 7a7 ,defining gainful employment programs 7#a7 ,additional institutions ,section #aja7;b77#a7 of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajja7;b77#a77 is amended by inserting 1 that meets the standards for debt-to-earnings in section #dih;,c1 after gainful employment in a recognized occupation4 7#b7 ,proprietary institution of higher education ,section #ajb7;b77#a77;,a77i7 of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajjb7;b77#a77;,a77i77 is amended by inserting that meets the standards for debt-to-earnings in section #dih;,c after gainful employment in a recognized occupation4 7#c7 ,postsecondary vocational institution ,section #ajb7;c77#a77;,a7 of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajjb7;c77#a77;,a77 is amended by inserting that meets the standards for debt-to-earnings in section #dih;,c after gainful employment in a recognized occupation4 7#d7 ,eligible program ,section #dha7;b77#a77;,a77i7 of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajhh7;b77#a77;,a77i77 is amended by inserting and meets the standards for debt-to-earnings in section #dih;,c after gainful employment in a recognized profession4 7b7 ,debt-to-,earnings ,subpart #c of part ,h of title ,,iv of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajii;c et seq47 is amended by adding at the end the following3 #dih;,c4 ,debt-to-earnings 7a7 ,definitions ,in this section3 7#a7 ,annual debt-to-earnings rate ,the term annual debt-to-earnings rate means1 for a cohort period and eligible program1 the rate that is calculated for the cohort period for students1 as defined by the ,secretary1 who completed the eligible program during such cohort period by dividing the annual loan payment for such cohort period1 as calculated by the ,secretary1 by the median annual earnings for such cohort period4 7#b7 ,annual loan payment ,the term annual loan payment means1 for a cohort period and eligible program1 the annual loan payment for the cohort of students who completed the eligible program during the cohort period1 calculated by the ,secretary by using-- 7,a7 the median loan debt of the cohort2 7,b7 an amortization period of-- 7i7 #aj years1 in the case of an eligible program that leads to an undergraduate certificate or diploma1 a postbaccalaureate certificate1 an associate degree1 or a graduate certificate2 7ii7 #ae years1 in the case of an eligible program that leads to a baccalaureate degree or a master's degree2 or 7iii7 #bj years1 in the case of an eligible program not described in clause 7i7 or 7ii72 and 7,c7 an annual interest rate that is-- 7i7 in the case of an eligible program that is an undergraduate certificate or diploma program1 postbaccalaureate certificate program1 or associate degree program1 the average of the annual statutory interest rates on ,federal ,direct ,unsubsidized ,loans applicable to undergraduate students for the three consecutive award years ending in the final year of the cohort period2 7ii7 in the case of an eligible program that is a graduate certificate program or a master's degree program1 the average of the annual statutory interest rates on ,federal ,direct ,unsubsidized ,loans applicable to graduate students that were in effect during the three consecutive award years ending in the final year of the cohort period2 7iii7 in the case of an eligible program that is a bachelor's degree program1 the average of the annual statutory interest rates on ,federal ,direct ,unsubsidized ,loans applicable to undergraduate students for the six consecutive award years ending in the final year of the cohort period2 and 7iv7 in the case of an eligible program that is a doctoral program or a first professional degree program1 the average of the annual statutory interest rates on ,federal ,direct ,unsubsidized ,loan applicable to graduate students for the six consecutive award years ending in the final year of the cohort period4 7#c7 ,cohort period ,the term cohort period means-- 7,a7 a period of #b award years1 with respect to an eligible program for which the number of students who completed the eligible program in the #b-year period is #cj or more2 and 7,b7 a period of #d award years1 with respect to an eligible program not described in subparagraph 7,a74 7#d7 ,discretionary debt-to-earnings rate ,the term discretionary debt-to-earnings rate means the rate that is calculated for a cohort period and eligible program by calculating the quotient of-- 7,a7 the annual loan payment for such cohort period2 divided by 7,b7 the discretionary earnings for such cohort period4 7#e7 ,discretionary earnings ,the term discretionary earnings means the difference between-- 7,a7 the median annual earnings for a cohort period2 and 7,b7 the amount that is #aej percent of the poverty level for an individual1 as determined by the ,secretary of ,health and ,human ,services for the most recent calendar year for which median annual earnings data has been obtained4 7#f7 ,median annual earnings ,the term median annual earnings means1 for a cohort period and an eligible program1 the midpoint of the annual earnings of students who completed the program-- 7,a7 for a #b-year cohort period-- 7i7 in the fourth and fifth award years prior to the year for which the most recent data are available from the ,federal agency with earnings data1 except as provided in clause 7ii72 and 7ii7 in the seventh and eighth award years prior to the year for which the most recent data are available from such ,federal agency1 for qualifying graduate programs2 and 7,b7 for a #d-year cohort period-- 7i7 in the fourth1 fifth1 sixth1 and seventh award years prior to the year for which the most recent data are available from the ,federal agency with earnings data1 except as provided in clause 7ii72 and 7ii7 in the seventh1 eighth1 ninth1 and tenth award years prior to the year for which the most recent data are available from such ,federal agency1 for qualifying graduate programs4 7#g7 ,median loan debt ,the term median loan debt means1 for a cohort period and an eligible program1 the amount obtained by-- 7,a7 calculating the loan debt1 including private education loans 7as defined in section #adj7;a7 of the ,truth in ,lending ,act 7#ae ,u4,s4,c4 #afej7;a777 for each student who completed the eligible program during such cohort period1 based on the lesser of-- 7i7 the loan debt incurred by each student2 or 7ii7 the total amount for tuition and fees and books1 equipment1 and supplies for each student1 less the amount of institutional grant or scholarship funds provided to that student2 7,b7 removing1 if applicable1 the number of largest loan debts equivalent to the number of students for whom the ,federal agency with earnings data reports it is unable to match to earnings data2 and 7,c7 calculating the median of the remaining loan debts of the cohort of students4 7#h7 ,qualifying graduate program 7,a7 ,in general ,the term qualifying graduate program means an eligible program-- 7i7 for which the ,secretary has identified outlier earnings growth2 and 7ii7 whose students must complete required postgraduation training programs of not less than #c years to obtain licensure in one of the following fields3 7,i7 ,medicine4 7,,ii7 ,osteopathy4 7,,iii7 ,dentistry4 7,,iv7 ,clinical psychology4 7,v7 ,marriage and family counseling4 7,,vi7 ,clinical social work4 7,,vii7 ,clinical counseling4 7,b7 ,outlier earnings growth ,for purposes of subparagraph 7,a77i71 the ,secretary may identify an eligible program as having outlier earnings growth if there is a growth in the median earnings for students who have completed the program that is reflected by a percent change in the median earnings of such students between the median earnings of such students measured #d years after completion of the program and the median earnings of such students measured #aj years after completion of the program1 that is more than #b standard deviations above the average earnings growth for other programs with the same credential level1 measured #d years after completion and #aj years after completion4 7b7 ,standards 7#a7 ,in general ,an eligible program does not meet the standards for debt-to-earnings if1 for #b of any #c consecutive award years1 the applicable cohort of students fails the debt-to-earnings rates1 as described in paragraph 7#b74 7#b7 ,failing ,a cohort of students who completed an eligible program during the cohort period ending on the last day of an award year fails the debt-to-earnings rates for the award year if the cohort has-- 7,a7 a discretionary debt-to-earnings rate for such cohort period equal to or greater than #bj percent2 and 7,b7 an annual debt-to-earnings rate for such cohort period equal to or greater than #h percent4 7c7 ,process 7#a7 ,data match ,in order to ensure compliance with paragraph 7#b71 the ,commissioner of the ,internal ,revenue ,service1 the ,commissioner of the ,social ,security ,administration1 and the head of any other ,federal agency that administers the database of individual-level earnings data shall1 in coordination with the ,secretary1 timely ensure secure1 annual data matches of earnings data with ,department of ,education data to produce the median annual earnings of each eligible program4 7#b7 ,requirements of the ,secretary ,the ,secretary shall-- 7,a7 on an annual calendar year basis-- 7i7 for each eligible program-- 7,i7 calculate for each award year the discretionary debt-to-earnings rate and the annual debt-to-earnings rate for the program2 and 7,,ii7 publish the discretionary debt-to-earnings rate and the annual debt-to-earnings rate for the eligible program for each award year on a website established and maintained by the ,secretary2 7ii7 for each eligible program that is a program of training to prepare students for gainful employment in a recognized occupation or a graduate or professional degree program offered by an institution of higher education described in section #aja7;a71 issue a notice of determination not later than #de days after completing the data match described in paragraph 7#a71 informing the institution that provides the program-- 7,i7 of the final discretionary debt-to-earnings rate and the annual debt-to-earnings rate for the program1 which may not be appealed by the institution unless the institution believes that the ,secretary erred in the calculation of any such measure2 7,,ii7 of the final determination regarding whether the program meets the standards for debt-to-earnings1 as described in subsection 7b72 7,,iii7 whether the program does not meet the standards for debt-to-earnings as described in subsection 7b77#a7 or could not meet such standards in the next year if it fails the debt-to-earnings rates1 as described in subsection 7b77#b71 in such next year2 and 7,,iv7 whether the institution is required to provide warnings to enrolled students and prospective students of the program's failure1 or risk of failure1 to meet the standards1 as determined under subclause 7,,iii72 and 7iii7 for each eligible program that is a program of training to prepare students for gainful employment in a recognized occupation that does not meet the standards for debt-to-earnings as described in subsection 7b77#a71 enforce the consequences under subsection 7d72 and 7,b7 develop processes to verify1 on an annual calendar year basis-- 7i7 that each eligible program that is a program of training to prepare students for gainful employment in a recognized occupation1 or a graduate or professional degree program offered by an institution of higher education described in section #aja7;a71 provides the warning described in subparagraph 7,a77ii77,,iv71 if applicable2 and 7ii7 that each eligible program that is a program of training to prepare students for gainful employment in a recognized occupation that does not meet the standards for debt-to-earnings as described in subsection 7b77#a7 does not receive funds as described in subsection 7d74 7d7 ,consequences of not meeting standards 7#a7 ,no disbursement of funds for enrollment in ineligible programs ,an institution may not disburse program funds under this title to students enrolled in a program of training to prepare students for gainful employment in a recognized occupation that does not meet the standards for debt-to-earnings as described in this section4 7#b7 ,time period to reestablish eligibility ,an institution may not seek to reestablish the eligibility of a program of training to prepare students for gainful employment in a recognized occupation that does not meet the standards for debt-to-earnings as described in this section1 or establish the eligibility of a program of training to prepare students for gainful employment in a recognized occupation that is substantially similar to the program that did not meet such standards1 until the date that is #c years after the date of the notice of determination issued under subsection 7c77#b77;,a77ii7 that the program of training to prepare students for gainful employment in a recognized occupation does not meet the standards4 7e7 ,equal treatment of all programs and professions ,in carrying out this section1 the ,secretary shall apply the requirements equally to all categories of programs and professions and shall not differentiate1 delay implementation1 or adjust any deadline1 with respect to tipped professions or any other category of professions or programs unless explicitly authorized under this section4 7f7 ,regulations ,the ,secretary shall issue regulations to carry out this section not later than #a year after the date of enactment of the ,protecting ,students from ,worthless ,degrees ,act1 except that such regulations shall not be subject to the requirements of sections #dhb and #dib4 4 7c7 ,program participation requirements ,section #dhg of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajid7 is amended-- 7#a7 in subsection 7a71 by adding at the end the following3 7#cj7 ,the institution will-- 7,a7 provide to the ,secretary not later than the first ,december #ca following the date of enactment of the ,protecting ,students from ,worthless ,degrees ,act 7or1 for any institution that does not have an active program participation agreement as of such date1 the first ,december #ca after the institution enters into the agreement71 in accordance with procedures established by the ,secretary1 a certification signed by the most senior executive officer of the institution that the institution and each of the eligible gainful employment programs included on the eligibility and certification approval report of the institution under subpart #c of part ,h meet the requirements of subsection 7i72 7,b7 include with its certification an explanation of how each eligible gainful employment program is not substantially similar to any ineligible or discontinued program described in subsection 7i77#b77;,d72 and 7,c7 update the certification within #aj days if there are any changes in the approvals for an eligible gainful employment program1 or other changes for an eligible gainful employment program that make the existing certification no longer accurate4 2 7#b7 by redesignating subsections 7i7 and 7j7 as subsections 7j7 and 7k71 respectively2 and 7#c7 by inserting after subsection 7h7 the following3 7i7 ,certification requirements for gainful employment programs 7#a7 ,definition of gainful employment program ,in this subsection1 the term gainful employment program means a program of training that-- 7,a7 in order to qualify for assistance under this title1 is required under subsection 7b77#a77;,a77i7 or 7c77#a77;,a7 of section #ajb1 or section #aja7;b77#a71 to satisfy gainful employment requirements1 including debt-to-earnings2 and 7,b7 is offered by an institution eligible to receive assistance under this title4 7#b7 ,in general ,each eligible gainful employment program included on the eligibility and certification approval report of an institution of higher education shall comply with each of the following3 7,a7 ,the gainful employment program is approved by a recognized accrediting agency or is otherwise included in the institution's accreditation by its recognized accrediting agency1 or1 if the institution is a public postsecondary vocational institution1 the program is approved by a recognized ,state agency for the approval of public postsecondary vocational education in lieu of accreditation4 7,b7 ,the gainful employment program is programmatically accredited1 if such accreditation is required by-- 7i7 a ,federal governmental entity2 7ii7 a governmental entity in the ,state in which the institution is located2 or 7iii7 a governmental entity in a ,state in which the institution is not physically located1 if the institution-- 7,i7 offers postsecondary education through distance education or correspondence courses to students located in that ,state2 or 7,,ii7 is otherwise subject to that ,state's jurisdiction1 as determined by that ,state4 7,c7 ,the gainful employment program satisfies the applicable educational prerequisites for professional licensure or certification requirements in the ,state in which the institution is located or a ,state described in subparagraph 7,b77iii71 so that a student who completes the program and seeks employment in any such ,state qualifies to take any licensure or certification examination that is needed for the student to practice or find employment in an occupation that the program prepares students to enter4 7,d7 ,the gainful employment program is not substantially similar to a program offered by the institution that1 in any of the #c years prior to the date of the eligibility and certification approval report-- 7i7 failed the standards for debt-to-earnings in section #dih;,c1 the low earnings outcome measure described in section #ded7;c77#b71 or any subsequent outcome measure that the ,secretary determines serves the best interests of students and taxpayers2 and 7ii7 7,i7 became ineligible for funding2 or 7,,ii7 was voluntarily discontinued by the institution4 7#c7 ,requirements ensuring student awareness ,before an institution offering a gainful employment program enrolls any student who intends to reside1 practice1 or seek employment in a ,state for which the program does not satisfy the applicable educational prerequisites for professional licensure or certification requirements needed for that occupation in that ,state1 the institution shall notify the student that the gainful employment program does not satisfy the prerequisites4 7#d7 ,requirements regarding reestablishment of eligibility ,the institution shall not seek to reestablish the eligibility of a gainful employment program that is ineligible for funding under this subsection or subsection 7a77#cj7 until not less than #c years following the date specified in the notice of determination informing the institution of the program's ineligibility4 4 7d7 ,application of earnings outcomes requirements to undergraduate certificate or diploma programs ,section #ded of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajhg;d7 is amended-- 7#a7 in subsection 7c77#b71 by inserting undergraduate certificate or diploma1 after if the program awards an2 7#b7 in subsection 7c77#c77;,a77iii77,i71 by inserting 1 or undergraduate certificate or diploma1 after in the case of a determination made for an educational program that awards a baccalaureate or lesser degree2 and 7#c7 in subsection 7c77#c77;,b77i71 by inserting 1 or undergraduate certificate or diploma1 after with respect to an educational program that awards a baccalaureate or lesser degree4 7e7 ,applying earning outcomes requirements equally to all professions1 including tipped professions 7#a7 ,in general ,section #ded7;c7 of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajhg;d7c77 is amended by adding at the end the following3 7#h7 ,equal treatment of all programs and professions ,in carrying out this subsection1 the ,secretary shall apply the requirements equally to all categories of programs and professions and shall not differentiate1 delay implementation1 or adjust any deadline1 with respect to tipped professions or any other category of professions or programs unless explicitly authorized in this subsection4 4 7#b7 ,no regulations allowing delay for tipped professions 7,a7 ,in general ,paragraph 7#c7 of section #ffh4djb7;c7 of title #cd1 ,code of ,federal ,regulations1 as amended by the final rule submitted by the ,department of ,education relating to ,accountability in ,higher ,education and ,access ,through ,demand-,driven ,workforce ,pell3 ,student ,tuition and ,transparency ,system 7,,stats7 and ,earnings ,accountability 7#ia ,fed4 ,reg4 #djacf 7,july #a1 #bjbf771 shall have no force or effect4 7,b7 ,effective date ,subparagraph 7,a7 shall take effect on ,july #a1 #bjbg4 #e4 ,state authorization requirements for distance education programs ,section #aja of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajja7 is amended-- 7#a7 in subsection 7a77#b71 by inserting 1 in accordance with subsection 7d7 before the semicolon2 and 7#b7 by adding at the end the following3 7d7 ,state authorization 7#a7 ,in general ,an institution that offers postsecondary education through distance education or correspondence courses shall meet the requirements of subsection 7a77#b7 by being legally authorized within each ,state in which the institution's enrolled students are located1 subject to paragraph 7#b74 7#b7 ,state authorization reciprocity agreements ,an institution described in paragraph 7#a7 that is located in a ,state that participates in a ,state authorization reciprocity agreement with another ,state and that is covered by such ,state authorization reciprocity agreement1 is considered to meet ,state requirements for the institution to be legally offering postsecondary distance education or correspondence courses in the other ,state-- 7,a7 subject to any additional requirements of that ,state2 and 7,b7 if the institution documents1 in the manner required by the ,secretary1 that each ,state in which the institution's enrolled students are located has a ,state process-- 7i7 to review and take appropriate action on complaints from any of such enrolled students concerning the institution1 including enforcing applicable ,state law2 and 7ii7 to make the complaints public4 7#c7 ,state authorization reciprocity agreement defined ,in this subsection1 the term ,state authorization reciprocity agreement means an agreement between #b or more ,states that-- 7,a7 authorizes an institution located and legally authorized in a ,state covered by the agreement to provide postsecondary education through distance education or correspondence courses to students located in other ,states covered by the agreement2 and 7,b7 does not prohibit any ,state in the agreement from enforcing the ,state's own statutes and regulations1 regardless as to whether such statutes and regulations are general and apply to all educational institutions or specifically directed at a subset of educational institutions4 4