Sec. 3. Pilot program to promote innovation in higher education

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The purpose of this section is to authorize an evidence-based grant program to promote greater experimentation among institutions of higher education to increase the level of student attainment of postsecondary and graduate certificates and degrees through innovative programs designed to decrease the cost and time required to complete postsecondary and graduate programs while improving the quality and effectiveness of postsecondary education programs, providing accelerated degree or certificate programs, and increasing on-time graduation rates.

In this section, the term institution of higher education has the meaning given the term in section 102 of the Higher Education Act of 1965 (20 U.S.C. 1002). The Secretary shall, for a 5-year award term, award grants to not more than 15 institutions of higher education, through a competitive process described in this section, to enable the institutions to carry out programs designed to graduate students with certificates or degrees at significantly lower costs for students and within shorter time periods than traditional programs while improving the quality and effectiveness of the programs.

Only those institutions of higher education that are in good standing with the administration of their student assistance programs under title IV of the Higher Education Act of 1965 ( 20 U.S.C. 1070 et seq. ) shall be eligible to receive grants under subparagraph (A). Grant payments shall be awarded with an initial distribution of 20 percent of the total grant amount, followed by a distribution of 10 percent of the total grant amount prior to the second, third, and fourth years of the program, and the remaining 50 percent of the total grant amount after the program receives its final satisfactory annual evaluation by the Secretary in accordance with subsection (f)(1).

The programs described under paragraph

(1)shall include those that— utilize online instruction, including distance education (as defined in section 103 of the Higher Education Act of 1965 ( 20 U.S.C. 1003 )), or online interaction components, or online instruction integrated with classroom or in-person instruction; utilize direct assessment programs, as described in section 481(b)(4) of the Higher Education Act of 1965 ( 20 U.S.C. 1088(b)(4) ), either within a comprehensive direct assessment program or integrated within another type of academic program; utilize integration of experiential learning and design of customized programs of study, to promote completion or alignment with medium- and long-term employment needs; allow students to be dually or concurrently enrolled in the postsecondary program and a secondary school, or a postsecondary program and a graduate program; or utilize any other innovative, evidence-based method of postsecondary education that provides cost-effective, high-quality methods for instruction, student learning, and use of available technology-based resources, including hybrid models incorporating elements of the program types set forth in subparagraphs (A), (B), (C), and (D), and adaptive learning technologies. An institution of higher education that desires to receive a grant under this section shall submit an application to the Secretary at such time and in such manner as the Secretary may require. An application submitted under paragraph

(1)shall include— a description of the institution’s quality assurances for the programs to be offered; a description of the statutory and regulatory requirements for which a waiver is sought under subsection

(e)and the reasons for which the waiver is sought; a description of the programs to be offered; a description of the students eligible for the programs offered, including any eligibility limitations; an assurance that the institution will fully cooperate with the ongoing evaluations of the programs provided for in this section; a description of how the proposed program will improve the quality of its postsecondary certificates or degrees, reduce tuition and other costs to students, and reduce enrollment time; a description of the data (or any other evidence) that indicate that the programs to be offered will likely lead to the outcomes described in subparagraph (F); a complete listing of the institution’s performance goals and measures regarding assessments of the quality of its postsecondary certificates or degrees, amount of tuition and costs charged to students, and the amount of enrollment time needed by students to complete the postsecondary certificates or degrees; and any other information as the Secretary may require. The Secretary shall award grants under this section to institutions of higher education for new or existing programs. In awarding grants under this section, the Secretary shall give priority to an institution of higher education that the Secretary determines— is financially responsible, as described in section 498(c)(1) of the Higher Education Act of 1965 ( 20 U.S.C. 1099c(c)(1) ); has a proven record of graduating students from the other programs of the institution; has a proven record of graduates from the other programs of the institution securing full-time employment; simultaneously addresses income-related inequalities in remedial education, college access, persistence rates, and graduation rates; has support services in place, such as counseling, coaching, mentoring, and outreach, that are designed to assist all students in obtaining information and making decisions regarding financial aid, and degree or certificate likelihood of persistence and completion; will serve low-income students, adult students aged 25 years and older, and part-time students; will support programs that are replicable at a range of institutions of higher education if they are demonstrated to be successful; and has presented the strongest evidence in support of their likely outcomes, as required under subsection (c)(2)(G). In awarding grants under this section, the Secretary shall ensure the participation of diverse student populations, including rural and urban populations, and of a diverse range of institutions. The Secretary shall make available to the public and to the authorizing committees a list of the institutions of higher education awarded a grant under this section, including a listing of the specific statutory and regulatory requirements being waived for each institution and a description of the programs and courses to be offered. Except as provided under paragraph (2), with respect to institutions of higher education awarded grants under this section, the Secretary may waive— subsection

(a)or

(b)of section 481 of the Higher Education Act of 1965 ( 20 U.S.C. 1088(a) and (b)), as such subsections relate to requirements for a minimum number of weeks of instruction; subparagraph

(A)or

(B)of section 102(a)(3) of such Act ( 20 U.S.C. 1002(a)(3)(A) and (B)); one or more of the regulations promulgated to carry out part F or G of title IV of such Act (20 U.S.C. 1087kk et seq. and 1088 et seq.), which inhibit the operation of innovative education programs; and any other requirement under title IV of such Act ( 20 U.S.C. 1070 et seq. ) that will bias the results of the program, including a requirement related to the award process and disbursement of student financial aid (such as innovative delivery systems for modular or compressed courses or other innovative systems), or other management procedures or processes as determined in the negotiated rulemaking process under section 492 of such Act (20 U.S.C. 1098a), or regulations prescribed under such title. The Secretary shall not waive, pursuant to paragraph (1), any provision under the Higher Education Act of 1965 ( 20 U.S.C. 1001 et seq. ) or a regulation promulgated to carry out such Act with respect to award rules (other than an award rule related to an experiment in modular or compressed schedules), grant and loan maximum award amounts, and need analysis requirements, unless the waiver of such provision is authorized by another provision under such Act. The Secretary shall establish an evaluation and accountability process for the programs authorized under this section and shall administer such process on an annual basis. Such evaluations shall include— the extent to which the institution of higher education has met the goals set forth in its application to the Secretary, including the quality of education provided by participating programs; the number and types of students participating in the programs offered, including the progress of participating students toward recognized certificates or degrees; issues related to student financial assistance; the extent to which any statutory or regulatory requirements present difficulties for students or institutions in the participating programs; and an analysis of the program’s progress with each of its objectives, including the number and rate of completion of participating students toward recognized certificates or degrees, prices charged to students, time required to complete the participating programs, on-time completion rates of participating students, and indicators of program quality. The Secretary shall review policies and identify those policies that present impediments to the development and use of innovative programs and other nontraditional methods of expanding success and access to education. The Secretary shall establish measures to assess the quality of the education provided by participating programs under this section, including a minimum standard of quality that participating programs shall meet. The Secretary shall provide reports to the authorizing committees on an annual basis regarding— the programs authorized under this section; and the number and types of students receiving assistance under this section for instruction leading to a recognized degree or certificate, including the progress of such students toward recognized certificates and the degree to which participation in such programs leading to such certificates increased. In conducting the program authorized under this section, the Secretary shall, on a continuing basis— ensure compliance of institutions of higher education with the requirements of this section (other than the sections and regulations that are waived under subsection (e)); provide technical assistance; monitor fluctuations in the student population enrolled in the participating program; and assess whether each participating program is improving the quality of postsecondary credentials and meeting the quality control measures set by the Secretary. If a program funded under this section terminates on its accord at any point during which the program is receiving funds under this section, or if the Secretary determines that the program does not meet the minimum standard of quality as required under subsection (f)(3)— the institution of higher education administering the program shall provide immediate notice to students enrolled in the program and shall prepare a teach-out plan, as described in section 487(f) of the Higher Education Act of 1965 (20 U.S.C. 1094(f)); and the Secretary shall— ensure that— no additional program funds are distributed to the program; and the institution of higher education administering the program is in compliance with the notice and teach-out requirements under subparagraph (A); and assess a fine to an institution of higher education administering the program that is not in compliance with the notice and teach-out requirements under subparagraph (A). An institution of higher education administering a participating program under this section shall provide notice to all students before they enroll in the participating program that such program is receiving grant funds under this section and may be terminated, as described in paragraph (1). The Secretary shall direct an independent third-party evaluator to review all participating programs and conduct a final evaluation in order to determine the evidence of the effectiveness of each program in achieving its objectives with regard to the quality of the education provided, reducing the cost of the degree or certificate program, and shortening the amount of time needed to complete the degree or certificate program. The independent third-party evaluator shall establish evaluation methodology in carrying out the final evaluation under paragraph (1). The independent third-party evaluator shall publicize the final evaluation and submit such evaluation to the authorizing committees. Not more than 1 percent of the total amount appropriated to carry out this section may be used to carry out this subsection. There is authorized to be appropriated to carry out this section— $260,000,000 for fiscal year 2015; and such sums as may be necessary for each succeeding fiscal year.

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