Sec. 4. Higher education accountability

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The purpose of this section is to establish minimum institutional accountability standards that will be required of all institutions of higher education that receive funds or whose students receive funds pursuant to title IV of the Higher Education Act of 1965 ( 20 U.S.C. 1070 et seq. ) programs. The standards shall focus on affordability, accessibility for low- and middle-income students, and value. In this section: The term institution of higher education means an institution of higher education described in section 102 of the Higher Education Act of 1965 ( 20 U.S.C. 1002 ), except as provided in subparagraphs

(B)and (C). The term institution of higher education does not include institutions that solely offer graduate or professional degree programs of study. To the extent an institution offers undergraduate programs of study and graduate or professional degree programs of study, for purposes of this section, the term institution of higher education with respect to such institutions shall only include the undergraduate programs of study. Not later than 90 days after the date of enactment of this Act, there shall be established a Commission on Higher Education Accountability Standards (referred to in this section as the Commission ) to make recommendations on a set of minimum accountability standards and the measures for assessing compliance with such standards for institutions of higher education that shall focus on affordability, access for low- and middle-income students, and value. Members of the Commission shall be appointed as follows: 5 members shall be appointed by the Majority Leader of the Senate, with the concurrence of the Minority Leader of the Senate on 2 of such members. 5 members shall be appointed by the Majority Leader of the House of Representatives, with the concurrence of the Minority Leader of the House of Representatives on 2 of such members. 5 members shall be appointed by the Secretary, including at least 1 member from the National Center for Education Statistics and 1 member from the Federal Student Aid Office of the Department of Education. In the event that any member of the Commission has not been appointed during the 90-day period after the date of enactment of this Act, the Secretary shall appoint the remaining member in order to establish the Commission. Members of the Commission shall be appointed on the basis of the individuals’— experience, integrity, impartiality, and good judgment; and except with respect to the undergraduate students, technical qualifications and professional standing. Members appointed under subparagraph

(A)shall be comprised of the following relevant stakeholders: 2 undergraduate student leaders from different types of institutions of higher education. 2 members of national or regional student advocacy organizations with a track record of engagement and expertise on issues related to college costs and student debt. 1 consumer advocate or consumer protection expert with demonstrated knowledge of consumer protection issues related to undergraduate students. 2 representatives of faculty groups or associations with expertise related to higher education finance or governance. 1 State government official with demonstrated knowledge of State budgeting and higher education funding. 3 administrative officers from various types of institutions of higher education, including at least 1 from a minority-serving institution. 1 higher education researcher. 1 State postsecondary education data system director. 1 member from the National Center for Education Statistics. 1 member from the Federal Student Aid Office of the Department of Education. The Commission shall make recommendations on a set of minimum accountability standards that institutions of higher education must meet with respect to affordability, accessibility, and value in order to receive funds or that the students of such institutions may receive funds pursuant to title IV of the Higher Education Act of 1965 ( 20 U.S.C. 1070 et seq. ) programs. The Commission shall also recommend measures and acceptable levels of performance on those measures to assess compliance with the minimum accountability standards. If the Commission cannot issue its recommendations by consensus, it shall issue its recommendations based on the views of a majority of the Commission. The Commission shall include, at a minimum, the following measures as part of the minimum accountability standards it shall recommend: The average or mean cost of tuition and other costs required for attendance after all institutional, Federal, and State grant aid is taken into account. The percentage of the total number of enrolled students who are recipients of a Federal Pell Grant under subpart 1 of part A of title IV of the Higher Education Act of 1965 ( 20 U.S.C. 1070a et seq. ). Student loan repayment rates. The Commission shall make recommendations on additional measures to comprise the minimum accountability standards, including the following: The Commission shall make recommendations on additional higher education affordability measures, including the appropriateness of the following: The cost of tuition relative to the cost to the institution of educating a student and the institution’s administrative costs. The percentage of institutional aid that is awarded on the basis of need, as opposed to merit. Annual increases in tuition after taking into account all public subsidies. The Commission shall make recommendations on higher education accessibility measures, including the appropriateness of the following: Enrollment of low- and middle-income, underrepresented minorities, and adult students aged 25 and older. Whether institutional policies on credit transfers meet industry standards by type of receiving institution. The Commission shall make recommendations on measures of higher education value, including the appropriateness of the following: Student progress toward completion of a postsecondary degree or certificate. Student completion of a postsecondary degree or certificate, including for transfer and part-time students, or where applicable, transfer rates to 4-year degree programs. Student retention rates. Full-time employment and graduate degree enrollment rates after graduation. The Commission shall take into account the differences in missions of institutions of higher education and ensure that institutions are held to standards that are appropriate for their mission. Not later than 6 months after the date of the appointment of the final member of the Commission, the Commission shall hold public field hearings in all regions of the United States. The Commission shall hold not fewer than 8 hearings. Not later than 1 year after the date of the appointment of the final member of the Commission, the Commission shall prepare a report on the recommendations under paragraph

(3)and submit the report to the Secretary and the authorizing committees. The report shall include the following: Recommendations for minimum accountability standards and the measures for assessing compliance with those standards for every institution of higher education that receives funds or whose students receive funds pursuant to title IV of the Higher Education Act of 1965 ( 20 U.S.C. 1070 et seq. ) programs. The standards shall focus on affordability, access for low- and middle-income students, and value. The Commission shall recommend standards that are in accordance with the types of information that institutions of higher education are authorized to collect and report under the Higher Education Act of 1965 ( 20 U.S.C. 1001 et seq. ). Recommendations for applying the standards to institutions of higher education with different academic missions. Recommendations for periodic reevaluation of the standards and their efficacy by the Secretary. Recommendations for sharing institutions’ performance with respect to the standards with prospective students and conducting complementary consumer education for students. Recommendations for the criteria the Secretary should use to reward institutions of higher education that meet and exceed the minimum accountability standards. Recommendations to Congress on reforms to statutory or regulatory limitations on the collection and availability of data that would improve the Secretary’s ability to assess institutions’ compliance with minimum standards of affordability, accessibility, and value. The Commission may secure directly from any Federal department or agency such information as the Commission considers necessary to carry out its duties under this section. The Commission may request the head of any State or local department or agency to furnish such information to the Commission. Not later than 1 year after receiving the report under paragraph (5), the Secretary shall publish a final rule on institutional accountability standards. The standards shall be determined by the Secretary after giving due consideration to the recommended standards provided by the Commission. The Secretary shall set forth in writing the reasons for any deviation from the Commission’s recommendations for any standard or measure and shall submit the written statement to the authorizing committees. In carrying out subparagraph (A), the Secretary shall include the measures described in subsection (b)(3)(B) that the Commission is required to include as part of its minimum accountability standards. The Secretary shall annually assess compliance with the institutional accountability standards. On September 30 of the year following the publication of the final rule as required under paragraph

(7)and every year thereafter, the Secretary shall publish a list of each institution of higher education that participates in title IV of the Higher Education Act of 1965 (20 U.S.C. 1070 et seq.) and the institution's level of compliance with the accountability standards. The list shall be made easily accessible to the public. The Secretary shall establish procedures to implement this subsection, including procedures for effectively applying this subsection. The Commission shall terminate 60 days after the date on which the Commission submits the report under paragraph (5). An institution of higher education that participates in title IV of the Higher Education Act of 1965 ( 20 U.S.C. 1070 et seq. ) programs and that does not meet the institutional accountability standards adopted under subsection (b)— shall be deemed to be in probationary status; and shall work with the Secretary to develop a plan for how the institution will achieve compliance not later than 5 years after the date of the determination of noncompliance. For each year following a determination that an institution of higher education does not meet the institutional accountability standards adopted under subsection (b), the institution shall demonstrate to the Secretary continuous improvement in following its plan to achieve compliance. If an institution of higher education does not show continuous improvement 2 years after a determination that it does not meet the institutional accountability standards adopted under subsection (b), the institution shall pay to the Secretary an amount equal to 10 percent of the total amount of funds made available under title IV of the Higher Education Act of 1965 (20 U.S.C. 1070 et seq.) to students in attendance with an undergraduate enrollment status at the institution during the prior academic year, to be deposited into the fund described in subparagraph (C). If an institution of higher education does not show continuous improvement 3 years after a determination that it does not meet the institutional accountability standards adopted under subsection (b), the institution shall pay to the Secretary an amount equal to 20 percent of the total amount of funds made available under title IV of the Higher Education Act of 1965 (20 U.S.C. 1070 et seq.) to students in attendance with an undergraduate enrollment status at the institution during the prior academic year, to be deposited into the fund described in subparagraph (C). If an institution of higher education does not show continuous improvement 4 years after a determination that it does not meet the institutional accountability standards adopted under subsection (b), the institution shall pay to the Secretary an amount equal to 30 percent of the total amount of funds made available under title IV of the Higher Education Act of 1965 (20 U.S.C. 1070 et seq.) to students in attendance with an undergraduate enrollment status at the institution during the prior academic year, to be deposited into the fund described in subparagraph (C). The Secretary may waive a requirement of an institution of higher education paying the amount owed pursuant to subparagraph

(A)if the Secretary determines such a waiver is necessary to avoid extreme hardship for the students enrolled at such institution. The Secretary may allow an institution of higher education that owes an amount under subparagraph

(A)to enter into a payment plan to pay such amount. There shall be established a special fund in which amounts refunded by an institution of higher education under this paragraph shall be placed to be used pursuant to subsection (d). If an institution of higher education fails to achieve compliance by not later than the date that is 5 years after the date of the determination that the institution does not meet the institutional accountability standards, the institution— shall not be eligible to receive funds under title IV of the Higher Education Act of 1965 (20 U.S.C. 1070 et seq.) for the academic year following the date that is 5 years after the date of the determination; shall be required to submit a teach-out plan, as described in section 487(f) of the Higher Education Act of 1965 ( 20 U.S.C. 1094(f) ); and shall be eligible to receive funds under such title IV when the institution is able to demonstrate compliance with the institutional accountability standards. From amounts available in the fund established pursuant to subsection (c)(3)(C), the Secretary shall award grants, on a competitive basis, to institutions of higher education that meet or exceed the institutional accountability standards adopted under subsection (b). In determining the criteria for awarding grants, the Secretary shall give due consideration to the recommendations of the Commission. An institution of higher education awarded a grant under paragraph

(1)shall use the grant funds for need-based aid to students who are eligible for Federal Pell Grants under subpart 1 of part A of title IV of the Higher Education Act of 1965 ( 20 U.S.C. 1070a et seq. ).

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Sec. 4

Higher education accountability

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