Sec. 1109. American Dream Accounts

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This section may be cited as the . American Dream Accounts Act In this section: The term American Dream Account means a personal online account for low-income students that monitors higher education readiness and includes a college savings account. The term appropriate committees of Congress means the Committee on Health, Education, Labor, and Pensions, the Committee on Appropriations, and the Committee on Finance of the Senate, and the Committee on Education and the Workforce, the Committee on Appropriations, and the Committee on Ways and Means of the House of Representatives, as well as any other Committee of the Senate or House of Representatives that the Secretary determines appropriate.

The term charter school has the meaning given such term in section 5210 of the Elementary and Secondary Education Act of 1965 ( 20 U.S.C. 7221i ). The term college savings account means a savings account that— provides some tax-preferred accumulation; is widely available (such as Qualified Tuition Programs under section 529 of the Internal Revenue Code of 1986 or Coverdell Education Savings Accounts under section 530 of the Internal Revenue Code of 1986); and contains funds that may be used only for the costs associated with attending an institution of higher education, including— tuition and fees; room and board; textbooks; supplies and equipment; and Internet access.

The term dual enrollment program means a program of study— provided by an institution of higher education through which a student who has not graduated from secondary school with a regular high school diploma is able to earn secondary school credit and postsecondary credit that is accepted as credit towards a postsecondary degree or credential at no cost to the participant or the participant’s family; and that shall consist of not less than 2 postsecondary credit-bearing courses and support and academic services that help a student persist and complete such courses.

The term early college high school program means a formal partnership between at least 1 local educational agency and at least 1 institution of higher education that allows students to simultaneously complete, as part of an organized course of study, requirements towards earning a regular high school diploma and earning not less than 12 transferable postsecondary credits that are accepted as credit towards a postsecondary degree or credential at no cost to the participant or the participant’s family.

The term eligible entity means— a State educational agency; a local educational agency, including a charter school that operates as its own local educational agency; a charter management organization or charter school authorizer; an institution of higher education; a nonprofit organization; an entity with demonstrated experience in educational savings or in assisting low-income students to prepare for, and attend, an institution of higher education; or a consortium of 2 or more of the entities described in subparagraphs

(A)through (F). The term institution of higher education has the meaning given the term in section 101(a) of the Higher Education Act of 1965 (20 U.S.C. 1001(a)). The term local educational agency has the meaning given such term in section 9101 of the Elementary and Secondary Education Act of 1965 ( 20 U.S.C. 7801 ). The term low-income student means a student who is eligible to receive a free or reduced price lunch under the Richard B. Russell National School Lunch Act ( 42 U.S.C. 1751 et seq. ). The term parent has the meaning given such term in section 9101 of the Elementary and Secondary Education Act of 1965 ( 20 U.S.C. 7801 ). The term Secretary has the meaning given such term in section 9101 of the Elementary and Secondary Education Act of 1965 ( 20 U.S.C. 7801 ). The term State educational agency has the meaning given such term in section 9101 of the Elementary and Secondary Education Act of 1965 ( 20 U.S.C. 7801 ). The Secretary is authorized to award grants, on a competitive basis, to eligible entities to enable such eligible entities to establish and administer American Dream Accounts for a group of low-income students. From the amounts appropriated each fiscal year to carry out this section, the Secretary shall reserve not more than 5 percent of such amount to carry out the evaluation activities described in subsection (f)(1). A grant awarded under this section shall be for a period of not more than 3 years. The Secretary may extend such grant for an additional 2-year period if the Secretary determines that the eligible entity has demonstrated significant progress, based on the factors described in subsection (d)(2)(K). Each eligible entity desiring a grant under this section shall submit an application to the Secretary at such time, in such manner, and containing such information as the Secretary may require. At a minimum, the application described in paragraph

(1)shall include the following: A description of the characteristics of a group of not less than 30 low-income public school students who— are, at the time of the application, attending a grade not higher than grade 9; and will, under the grant, receive an American Dream Account. A description of how the eligible entity will engage, and provide support (such as tutoring and mentoring for students, and training for teachers and other stakeholders) either online or in person, to— the students in the group described in subparagraph (A); the family members and teachers of such students; and other stakeholders such as school administrators and school counselors. An identification of partners who will assist the eligible entity in establishing and sustaining American Dream Accounts. A description of what experience the eligible entity or the partners of the eligible entity have in managing college savings accounts, preparing low-income students for postsecondary education, managing online systems, and teaching financial literacy. A demonstration that the eligible entity has sufficient resources to provide an initial deposit into the college savings account portion of each American Dream Account. A description of how the eligible entity will help increase the value of the college savings account portion of each American Dream Account, such as by providing matching funds or incentives for academic achievement. A description of how the eligible entity will notify each participating student in the group described in subparagraph (A), on a semiannual basis, of the current balance and status of the college savings account portion of the American Dream Account of the student. A plan that describes how the eligible entity will monitor participating students in the group described in subparagraph

(A)to ensure that the American Dream Account of each student will be maintained if a student in such group changes schools before graduating from secondary school. A plan that describes how the American Dream Accounts will be managed for not less than 1 year after a majority of the students in the group described in subparagraph

(A)graduate from secondary school. A description of how the eligible entity will encourage students in the group described in subparagraph

(A)who fail to graduate from secondary school to continue their education. A description of how the eligible entity will evaluate the grant program, including by collecting, as applicable, the following data about the students in the group described in subparagraph

(A)during the grant period, or until the time of graduation from a secondary school, whichever comes first, and, if sufficient grant funds are available, after the grant period: Attendance rates. Progress reports. Grades and course selections. The student graduation rate, as defined in section 1111(b)(2)(C)(vi) of the Elementary and Secondary Education Act of 1965 ( 20 U.S.C. 6311(b)(2)(C)(vi) ). Rates of student completion of the Free Application for Federal Student Aid described in section 483 of the Higher Education Act of 1965 ( 20 U.S.C. 1090 ). Rates of enrollment in an institution of higher education. Rates of completion at an institution of higher education. A description of what will happen to the funds in the college savings account portion of the American Dream Accounts that are dedicated to participating students described in subparagraph

(A)who have not matriculated at an institution of higher education at the time of the conclusion of the period of American Dream Account management described in subparagraph (I), including how the eligible entity will give students this information. A description of how the eligible entity will ensure that funds in the college savings account portion of the American Dream Accounts will not make families ineligible for public assistance. A description of how the eligible entity will ensure that participating students described in subparagraph

(A)will have access to the Internet. In awarding grants under this section, the Secretary shall give priority to applications from eligible entities that— are described in subsection (b)(7)(G); serve the largest number of low-income students; in the case of an eligible entity described in subparagraph

(A)or

(B)of subsection (b)(7), provide opportunities for participating students described in paragraph (2)(A) to participate in a dual enrollment program or early college high school program at no cost to the student; or as of the time of application, have been awarded a grant under chapter 2 of subpart 2 of part A of title IV of the Higher Education Opportunity Act ( 20 U.S.C. 1070a–21 et seq. ) (commonly referred to as the GEAR UP program ). An eligible entity that receives a grant under this section shall use such grant funds to establish an American Dream Account for each participating student described in subsection (d)(2)(A), that will be used to— open a college savings account for such student; monitor the progress of such student online, which— shall include monitoring student data relating to— grades and course selections; progress reports; and attendance and disciplinary records; and may also include monitoring student data relating to a broad range of information, provided by teachers and family members, related to postsecondary education readiness, access, and completion; provide opportunities for such students, either online or in person, to learn about financial literacy, including by assisting such students in financial planning for enrollment in an institution of higher education; and provide opportunities for such students, either online or in person, to identify skills or interests, including career interests. Subject to subparagraphs

(C)and (D), and in accordance with applicable Federal laws and regulations relating to privacy of information and the privacy of children, an eligible entity that receives a grant under this section shall allow vested stakeholders, as described in subparagraph (B), to have secure access, through an Internet website, to each American Dream Account. The vested stakeholders that an eligible entity shall permit to access an American Dream Account are individuals (such as the student's teachers, school counselors, school administrators, or other individuals) that are designated, in accordance with section 444 of the General Education Provisions Act ( 20 U.S.C. 1232g , commonly known as the Family Educational Rights and Privacy Act of 1974 ), by the parent of a participating student in whose name such American Dream Account is held, as having permission to access the account. A student's parent may withdraw such designation from an individual at any time. An eligible entity that receives a grant under this section shall not be required to give vested stakeholders, as described in subparagraph (B), access to the college savings account portion of a student's American Dream Account. Notwithstanding subparagraphs (A), (B), and (C), if a participating student is age 18 or older, an eligible entity that receives a grant under this section shall not provide access to such participating student's American Dream Account without the student's consent, in accordance with section 444 of the General Education Provisions Act ( 20 U.S.C. 1232g , commonly known as the Family Educational Rights and Privacy Act of 1974 ). Student data collected pursuant to paragraph (1)(B)(i) shall be entered into an American Dream Account only by a school administrator or the designee of such administrator. An eligible entity that receives a grant under this section shall not use any student-level information or data for the purpose of soliciting, advertising, or marketing any financial or non-financial consumer product or service that is offered by such eligible entity, or on behalf of any other person. An eligible entity shall not use grant funds provided under this section to provide the initial deposit into a college savings account portion of a student's American Dream Account. Not later than 1 year after the Secretary has disbursed grants under this section, and annually thereafter until each grant disbursed under subsection

(c)has ended, the Secretary shall prepare and submit a report to the appropriate committees of Congress, which shall include an evaluation of the effectiveness of the grant program established under this section. The report described in paragraph

(1)shall— list the grants that have been awarded under subsection (c)(1); include the number of students who have an American Dream Account established through a grant awarded under subsection (c)(1); provide data (including the interest accrued on college savings accounts that are part of an American Dream Account) in the aggregate, regarding students who have an American Dream Account established through a grant awarded under subsection (c)(1), as compared to similarly situated students who do not have an American Dream Account; identify best practices developed by the eligible entities receiving grants under this section; identify any issues related to student privacy and stakeholder accessibility to American Dream Accounts; provide feedback from participating students and the parents of such students about the grant program, including— the impact of the program; aspects of the program that are successful; aspects of the program that are not successful; and any other data required by the Secretary; and provide recommendations for expanding the American Dream Accounts program. Notwithstanding any other provision of law, any funds that are in the college savings account portion of a student's American Dream Account shall not affect such student's eligibility to receive Federal student financial aid, including any Federal student financial aid under the Higher Education Act of 1965 ( 20 U.S.C. 1001 et seq. ), and shall not be considered in determining the amount of any such Federal student aid. To carry out this section, there are authorized to be appropriated such sums as may be necessary for fiscal year 2015 and each of the 4 succeeding fiscal years.

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