Sec. 489. Program participation agreements
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/bill/113/s/2954/is/section-489A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
It is the sense of the Senate that— incentive compensation is an inappropriate mechanism in the delivery of higher education for institutions of higher education wishing to participate in programs under title IV of the Higher Education Act of 1965 (20 U.S.C. 1001 et seq.); and the ban on incentive compensation under section 487(a)(20) of the Higher Education Act of 1965 ( 20 U.S.C. 1094(a)(20) ), as amended by subsection (b), is intended to preclude its use by institutions wishing to participate in such programs, at any point in the recruitment, enrollment, education, or employment placement of students.
Section 487 ( 20 U.S.C. 1094 ) is amended— in subsection (a)— in paragraph (19), by inserting housing facilities, after libraries, ; and by striking paragraph
(20)and inserting the following: The institution or any third party acting on the institution’s behalf, including an institution affiliate or service provider to the institution, will not provide any commission, bonus, or other incentive payment to any person or entity at any phase of the academic process based directly or indirectly on success in— securing enrollments or securing or awarding financial aid; performance in educational coursework; graduation; job placement; or any other academic facet of a student’s enrollment in an institution of higher education. The requirements of subparagraph
(A)shall not apply to the recruitment of foreign students residing in foreign countries who are not eligible to receive Federal student assistance. The institution affirmatively acknowledges that the provision of incentive compensation to employees of institutions, institution affiliates, or service providers retained by the institution at any point in the recruitment, enrollment, education, or employment placement of students is a prohibited activity under subparagraph (A)(i). The institution will provide, upon hiring an employee or contracting with a service provider, and not less than once per calendar year, official notice, on a form developed by the Secretary, to employees and service providers (and employees of service providers) contracted by the institution of the statutory and regulatory requirements pursuant to this section. The institution will not enter into any contract with a third party acting on its behalf, including institution affiliates or service providers, that contains a revenue-sharing component premised in full or in any part on any practice described in subparagraph (A)(i). ; by striking paragraph
(24)and inserting the following: The institution certifies that the institution— has designated an appropriate staff person, who may also be a coordinator for other programs, as a single point of contact to assist homeless children and youths (as such term is defined in section 725 of the McKinney-Vento Homeless Assistance Act ( 42 U.S.C. 11434a )) and foster care children and youth in accessing and completing postsecondary education; posts public notice about student financial assistance and other assistance available to homeless children and youths and foster care children and youth, including their eligibility as independent students under subparagraphs
(B)and
(H)of sections 480(d)(1); has developed a plan for how homeless children and youths and foster care children and youth can access housing resources during and between academic terms, through means that may include access to on-campus housing during school breaks and a list of housing resources in the community that provide short-term housing; and has included in the institution's application for admission questions (to be answered voluntarily) regarding the applicant's status as a homeless child or youth or foster care child or youth, which the applicant can voluntarily choose to answer for the limited purpose of being provided information about financial aid or any other available assistance. ; in paragraph (25)(A)(ii), by striking subsection
(e)and inserting subsection
(d); in paragraph (27), by striking subsection
(h)and inserting subsection
(g); by striking paragraph
(28)and inserting the following: The institution shall— upon the request of a private educational lender, acting in connection with an application initiated by a borrower for a private education loan in accordance with section 128(e)(3) of the Truth in Lending Act, provide— certification to such private educational lender— that the student who initiated the application for the private education loan, or on whose behalf the application was initiated, is enrolled or is accepted for enrollment at the institution; of such student's cost of attendance at the institution as determined under part F of this title; and of the difference between— the cost of attendance at the institution; and the student's estimated financial assistance received under this title, if the student pursued such assistance, and other assistance known to the institution, as applicable; or in the case of a private education loan that the institution may not certify because the private education loan does not meet the requirements described in subsection (D), provide notice to the private educational lender of the institution’s refusal to certify the private education loan; and provide the certification described in clause (i)(I), or notice of the refusal to provide certification described in clause (i)(II), as the case may be, or notify the creditor that the institution has received the request for certification and will need additional time to comply with the certification request— within 15 business days of receipt of such certification request; and only after the institution has completed the activities described in subparagraph (B). The institution shall, upon receipt of a certification request described in subparagraph (A)(i), and prior to providing the certification under subparagraph (A)(i)(I) or providing notice of the refusal to provide certification under subparagraph (A)(i)(II)— determine whether the student who initiated the application for the private education loan, or on whose behalf the application was initiated, has applied for and exhausted the Federal financial assistance available to such student under this title and inform the student accordingly; and provide the student whose loan application has prompted the certification request by a private education lender, as described in subparagraph (A)(i), with the following information and disclosures: The availability of, and the student’s potential eligibility for, Federal financial assistance under this title, including the explanation of the benefits provided under Federal student loans developed by the Secretary under section 483A(b). The student's ability to select a private educational lender of the student's choice. The impact of a proposed private education loan on the student's potential eligibility for other financial assistance, including Federal financial assistance under this title. The student’s right to accept or reject a private education loan within the 30-day period following a private educational lender’s approval of a student’s loan application and the right of a borrower of a private education loan to cancel the loan within a 3-day period, in accordance with paragraphs
(6)and
(7)of section 128(e) of the Truth in Lending Act. For purposes of this paragraph, the term private educational lender has the meaning given such term in section 140 of the Truth in Lending Act ( 15 U.S.C. 1650 ). In the case of a private education loan that includes a cosigner, the institution shall not provide certification to a private educational lender under this paragraph unless the private educational lender agrees to send a statement to the borrower’s cosigner, annually notifying the cosigner of the terms, conditions, and status of such private education loan. ; and by adding at the end the following: The institution— shall not include a predispute arbitration agreement in any contract with a student or prospective student for enrollment at the institution; and shall agree that, in any case where a contract for enrollment at the institution entered into by a student before the date of enactment of the Higher Education Affordability Act included a predispute arbitration agreement, such agreement shall be invalid and unenforceable by the institution. In this paragraph, the term predispute arbitration agreement means any agreement to arbitrate a dispute that had not yet arisen at the time of the making of the agreement. The institution will provide the Secretary with any information that the Secretary requests in order to meet the default prevention requirements of section 435(a)(7). If the institution has a student default risk for a fiscal year, as calculated by the Secretary, of 0.1 or greater, the institution will, for such year— provide an individual accepted for enrollment at the institution with a waiting period, beginning on the date that the individual receives notification of the acceptance and lasting for not less than 2 weeks, before the individual is required to enroll in the institution, pay tuition charges, or sign a master promissory note for a loan under this title, in order to give the individual time to consider, and compare among postsecondary options, program costs at the institution and employment prospects upon completion of a program of study; ensure that the receipt of financial aid, incentives, or other benefits is not made contingent on an individual confirming enrollment before the end of the individual's waiting period; inform the individual, in writing and in a manner determined by the Secretary at the time of the acceptance notification, of— the individual's right to the 2-week waiting period under clause
(i)beginning on the date that the individual receives notification of the acceptance; and the reason why the institution is required to provide such waiting period; notify an individual accepted for enrollment at the institution of all financial aid determinations by not less than 1 week before the enrollment confirmation deadline, if all requested application forms are received from the individual on time; and disclose to an individual accepted for enrollment, in a manner determined by the Secretary, that the individual may file a complaint through the complaint tracking system established under section 161 if the individual believes that the institution has violated any provision of this paragraph. If an institution described in subparagraph
(A)fails to meet the requirements of this paragraph, the institution shall be subject to a civil penalty in accordance with section 489A. Notwithstanding subparagraph (A), the Secretary may, after providing notice and an opportunity to comment, elect to replace the use of the student default risk percentage threshold established under subparagraph
(A)with a loan repayment rate threshold calculated in accordance with section 483D(b). In the case of an institution that enrolls during an academic year more than 100 students who are veterans, the institution shall certify that the institution has developed and implemented a plan to ensure the success of veterans at that institution. To the extent practicable, the institution shall make the plan, and associated policies, public and accessible to students who are veterans. Such plan shall include the following: The designation of certain faculty or staff at the institution who will serve as a point of contact for veterans— within campus offices, including the admissions office; and during any orientation process for newly enrolled students. The establishment of a working group that will be responsible for veterans issues. A description of disability services that are available to meet the needs of disabled students who are veterans. A plan for how the institution will identify students who are veterans through the application process, or through other processes, to provide better assistance in the receipt of educational assistance under laws administered by the Secretary of Veterans Affairs or the Secretary of Defense. A description of how the institution will evaluate and maximize the number of credits students can receive from military training and service. The institution, and the officers at the institution, will not make any substantial misrepresentation, as described in section 489A(a)(1)(A). The institution will adopt policies regarding academic leaves of absence, readmission, and dismissal for psychiatric reasons that are comparable to such policies for physical health and other medical reasons, including policies that include the same guarantees of due process and appeal. ; in subsection (c)— in paragraph (1)— in subparagraph (A)(i), by striking available and inserting made publicly available and provided . by striking subparagraphs
(F)and (G); by redesignating subparagraphs
(H)and
(I)as subparagraphs
(F)and (G), respectively; and in subparagraph (F), as redesignated by clause (iii), by striking under paragraph (3)(B) and inserting on the institution of higher education under section 489A ; and by striking paragraph (3); and by redesignating paragraphs
(4)through
(7)as paragraphs
(3)through (6), respectively; by striking subsection (d); by redesignating subsections
(e)through
(j)as subsections
(d)through (i), respectively; and in subsection (f)(1) (as redesignated by paragraph (4)), by striking subsection (e)(2) and inserting subsection (d)(2) . The amendment made by subsection (b)(1)(D) shall take effect on the effective date of the regulations described in section 1012(b).
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