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S 2032 ISCommentsClose CommentsPermalink

112th CONGRESSCommentsClose CommentsPermalink

2d SessionCommentsClose CommentsPermalink

S. 2032CommentsClose CommentsPermalink

To amend the Higher Education Act of 1965 regarding proprietary institutions of higher education in order to protect students and taxpayers.CommentsClose CommentsPermalink

IN THE SENATE OF THE UNITED STATESCommentsClose CommentsPermalink

January 23, 2012CommentsClose CommentsPermalink

Mr. DURBIN (for himself and Mr. HARKIN) introduced the following bill; which was read twice and referred to the Committee on Health, Education, Labor, and PensionsCommentsClose CommentsPermalink

A BILLCommentsClose CommentsPermalink

To amend the Higher Education Act of 1965 regarding proprietary institutions of higher education in order to protect students and taxpayers.CommentsClose CommentsPermalink

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,CommentsClose CommentsPermalink

SECTION 1. SHORT TITLE.

This Act may be cited as the ‘Protecting Our Students and Taxpayers Act’ or ‘POST Act’.CommentsClose CommentsPermalink

SEC. 2. 85/15 RULE.

(a) In General- Section 102(b) of the Higher Education Act of 1965 (20 U.S.C. 1002(b)) is amended--CommentsClose CommentsPermalink





(1) in paragraph (1)--CommentsClose CommentsPermalink





(A) in subparagraph (D), by striking ‘and’ after the semicolon;CommentsClose CommentsPermalink





(B) in subparagraph (E), by striking the period and inserting ‘; and’; andCommentsClose CommentsPermalink





(C) by adding at the end the following:CommentsClose CommentsPermalink





‘(F) meets the requirements of paragraph (2).’;CommentsClose CommentsPermalink





(2) by redesignating paragraph (2) as paragraph (3); andCommentsClose CommentsPermalink





(3) by inserting after paragraph (1) the following:CommentsClose CommentsPermalink





‘(2) REVENUE SOURCES-CommentsClose CommentsPermalink





‘(A) IN GENERAL- In order to qualify as a proprietary institution of higher education under this subsection, an institution shall derive not less than 15 percent of the institution’s revenues from sources other than Federal funds, as calculated in accordance with subparagraphs (B) and (C).CommentsClose CommentsPermalink





‘(B) FEDERAL FUNDS- In this paragraph, the term ‘Federal funds’ means any Federal financial assistance provided, under this Act or any other Federal law, through a grant, contract, subsidy, loan, guarantee, insurance, or other means to a proprietary institution, 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 institution, except that such term shall not include any monthly housing stipend provided under the Post-9/11 Veterans Educational Assistance Program under chapter 33 of title 38, United States Code.CommentsClose CommentsPermalink





‘(C) IMPLEMENTATION OF NON-FEDERAL REVENUE REQUIREMENT- In making calculations under subparagraph (A), an institution of higher education shall--CommentsClose CommentsPermalink





‘(i) use the cash basis of accounting;CommentsClose CommentsPermalink





‘(ii) consider as revenue only those funds generated by the institution from--CommentsClose CommentsPermalink





‘(I) tuition, fees, and other institutional charges for students enrolled in programs eligible for assistance under title IV;CommentsClose CommentsPermalink





‘(II) activities conducted by the institution that are necessary for the education and training of the institution’s students, if such activities are--CommentsClose CommentsPermalink

‘(aa) conducted on campus or at a facility under the control of the institution;CommentsClose CommentsPermalink

‘(bb) performed under the supervision of a member of the institution’s faculty; andCommentsClose CommentsPermalink

‘(cc) required to be performed by all students in a specific educational program at the institution; andCommentsClose CommentsPermalink

‘(III) a contractual arrangement with a Federal agency for the purpose of providing job training to low-income individuals who are in need of such training;CommentsClose CommentsPermalink





‘(iii) presume that any Federal 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 tuition, fees, or other institutional charges, regardless of whether the institution credits such funds to the student’s account or pays such funds directly to the student, except to the extent that the student’s tuition, fees, or other institutional charges are satisfied by--CommentsClose CommentsPermalink





‘(I) grant funds provided by an outside source that--CommentsClose CommentsPermalink

‘(aa) has no affiliation with the institution; andCommentsClose CommentsPermalink

‘(bb) shares no employees with the institution; andCommentsClose CommentsPermalink

‘(II) institutional scholarships described in clause (v);CommentsClose CommentsPermalink





‘(iv) include no loans made by an institution of higher education as revenue to the school, except for payments made by students on such loans;CommentsClose CommentsPermalink





‘(v) include a scholarship provided by the institution--CommentsClose CommentsPermalink





‘(I) only if the scholarship is in the form of monetary aid based upon the academic achievements or financial need of students, disbursed to qualified student recipients during each fiscal year from an established restricted account; andCommentsClose CommentsPermalink





‘(II) only to the extent that funds in that account represent designated funds, or income earned on such funds, from an outside source that--CommentsClose CommentsPermalink

‘(aa) has no affiliation with the institution; andCommentsClose CommentsPermalink

‘(bb) shares no employees with the institution; andCommentsClose CommentsPermalink

‘(vi) exclude from revenues--CommentsClose CommentsPermalink





‘(I) the amount of funds the institution received under part C of title IV, unless the institution used those funds to pay a student’s institutional charges;CommentsClose CommentsPermalink





‘(II) the amount of funds the institution received under subpart 4 of part A of title IV;CommentsClose CommentsPermalink





‘(III) the amount of funds provided by the institution as matching funds for any Federal program;CommentsClose CommentsPermalink





‘(IV) the amount of Federal funds provided to the institution to pay institutional charges for a student that were refunded or returned; andCommentsClose CommentsPermalink





‘(V) the amount charged for books, supplies, and equipment, unless the institution includes that amount as tuition, fees, or other institutional charges.CommentsClose CommentsPermalink





‘(D) REPORT TO CONGRESS- Not later than July 1, 2012, and by July 1 of each succeeding year, the Secretary shall submit to the authorizing committees a report that contains, 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 487(c)--CommentsClose CommentsPermalink





‘(i) the amount and percentage of such institution’s revenues received from Federal funds; andCommentsClose CommentsPermalink





‘(ii) the amount and percentage of such institution’s revenues received from other sources.’.CommentsClose CommentsPermalink





(b) Repeal of Existing Requirements- Section 487 of the Higher Education Act of 1965 (20 U.S.C. 1094) is amended--CommentsClose CommentsPermalink





(1) in subsection (a)--CommentsClose CommentsPermalink





(A) by striking paragraph (24);CommentsClose CommentsPermalink





(B) by redesignating paragraphs (25) through (29) as paragraphs (24) through (28), respectively;CommentsClose CommentsPermalink





(C) in paragraph (24)(A)(ii) (as redesignated by subparagraph (B)), by striking ‘subsection (e)’ and inserting ‘subsection (d)’; andCommentsClose CommentsPermalink





(D) in paragraph (26) (as redesignated by subparagraph (B)), by striking ‘subsection (h)’ and inserting ‘subsection (g)’;CommentsClose CommentsPermalink





(2) by striking subsection (d);CommentsClose CommentsPermalink





(3) by redesignating subsections (e) through (j) as subsections (d) through (i), respectively;CommentsClose CommentsPermalink





(4) in subsection (f)(1) (as redesignated by paragraph (3)), by striking ‘subsection (e)(2)’ and inserting ‘subsection (d)(2)’; andCommentsClose CommentsPermalink





(5) in subsection (g)(1) (as redesignated by paragraph (3)), by striking ‘subsection (a)(27)’ in the matter preceding subparagraph (A) and inserting ‘subsection (a)(26)’.CommentsClose CommentsPermalink





(c) Conforming Amendments- The Higher Education Act of 1965 (20 U.S.C. 1001 et seq.) is amended--CommentsClose CommentsPermalink





(1) in section 152 (20 U.S.C. 1019a)--CommentsClose CommentsPermalink





(A) in subsection (a)(1)(A), by striking ‘subsections (a)(27) and (h) of section 487’ and inserting ‘subsections (a)(26) and (g) of section 487’; andCommentsClose CommentsPermalink





(B) in subsection (b)(1)(B)(i)(I), by striking ‘section 487(e)’ and inserting ‘section 487(d)’;CommentsClose CommentsPermalink





(2) in section 153(c)(3) (20 U.S.C. 1019b(c)(3)), by striking ‘section 487(a)(25)’ each place the term appears and inserting ‘section 487(a)(24)’;CommentsClose CommentsPermalink





(3) in section 496(c)(3)(A) (20 U.S.C. 1099b(c)(3)(A)), by striking ‘section 487(f)’ and inserting ‘section 487(e)’; andCommentsClose CommentsPermalink





(4) in section 498(k)(1) (20 U.S.C. 1099c(k)(1)), by striking ‘section 487(f)’ and inserting ‘section 487(e)’.CommentsClose CommentsPermalink