Sec. 498. Program review and data
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Section 498A ( 20 U.S.C. 1099c–1 ) is amended to read as follows: In this section: The term executive compensation , when used with respect to an institution of higher education, means the wages, salary, fees, commissions, fringe benefits, deferred compensation, retirement contributions, options, bonuses, property, and any other form of remuneration that the Secretary determines is appropriate, given to the 5 percent of employees at the institution who are the highest compensated.
The term relevant Federal agency means— the Department of Education; the Department of Veterans Affairs; the Department of Defense; the Bureau of Consumer Financial Protection; the Federal Trade Commission; or any other Federal agency that provides Federal student assistance or that the Secretary determines appropriate. The term relevant State entity or agency means— an appropriate State licensing or authorizing agency; the attorney general (or the equivalent thereof) of the State; or any other State entity or agency that the Secretary determines appropriate.
The Secretary— is authorized to conduct program reviews, including on-site visits, of each institution of higher education participating in a program authorized under this title; and shall conduct a program review under this subsection of each institution of higher education that poses a significant risk of failure to comply with this title, as described in paragraphs
(2)and (3). The Secretary shall, on an annual basis, conduct program reviews of each institution of higher education participating in a program authorized under this title that meets 1 or more of the following criteria: As of the date of the determination— more than 15 percent of the students enrolled at the institution have received a Federal Direct Unsubsidized Stafford Loan during the previous year; and the institution has a cohort default rate, as defined in section 435(m), that is more than 20 percent. As of the date of the determination— the institution has a cohort default rate, as defined in section 435(m), that exceeds the national average, as determined by the Secretary in accordance with such section; and the institution has an aggregate amount of defaulted loans, as determined by the Secretary, that places the institution in the highest 1 percent of institutions participating in programs authorized under this title in terms of the aggregate amount of defaulted loans. In the case of proprietary institutions of higher education, the institution received more than 80 percent of the institution’s revenues from Federal funds as defined in section 102(b)(2)(B), during the 2 most recent years for which data is available. The institution is among the top 1 percent of institutions participating in programs authorized under this title in terms of numbers or rates of complaints related to Federal student financial aid, educational practices and services, or recruiting and marketing practices, as reported in the complaint tracking system established under section 161. As of the date of the determination, the institution is among the top 1 percent of institutions in terms of low graduation rates, as determined by the Secretary, of all institutions participating in programs authorized under this title. The institution spends more than 20 percent of the institution’s revenues on recruiting and marketing activities and executive compensation. In the fiscal year immediately following the most recent cohort default rate period— the institution’s loan defaults increased by 50 percent or more as compared to the preceding period; and more than 50 percent of the students attending the institution received loans under this title. The institution has been put on probation by, or is subject to a show cause order from, a nationally recognized accrediting agency or association that is recognized by the Secretary pursuant to part H of title IV; The institution, or an executive of the institution, has publicly acknowledged or disclosed that the institution— is in violation or noncompliance with any provision of law administered by a relevant Federal agency or relevant State entity or agency; or is being investigated regarding a potential violation of such provision of law. The institution— is a proprietary institution of higher education that has acquired a nonprofit institution of higher education at any point during the 1-year period preceding the date of the determination; or was a proprietary institution of higher education and has become a nonprofit institution of higher education at any time during the 1-year period preceding the date of the determination. The Secretary shall— post, on a publicly available website, the name of each institution of higher education that is reviewed under subparagraph (A); indicate, on such website, with respect to each such institution, which of the mandatory review criteria, as described in subparagraph (A), such institution met; and indicate on the College Navigator website of the Department, or any successor website, the name of each institution of higher education that is reviewed under subparagraph (A). Each institution of higher education that is reviewed under subparagraph
(A)shall— post on the home page of the institution's website that the institution will be subject to a mandatory program review and why the institution is being reviewed and shall maintain such posting and explanation for 1 year or until the Secretary has issued its final program review report under subsection (c)(5)(C), whichever occurs sooner; provide a clear, conspicuous disclosure of the information described in clause
(i)to students who inquire about admission to the institution or submit an application for admission to the institution prior to the student signing an enrollment agreement with the institution, for 1 year or until the Secretary has issued the final program review report under subsection (c)(6)(C), whichever occurs sooner; and include the information described in clause
(i)on materials of acceptance or admission submitted to each student before the student enrolls in the institution, for 1 year or until the Secretary has issued the final program review report under subsection (c)(6)(C), whichever occurs sooner. The Secretary shall use a risk-based approach to select, on an annual basis not less than 2 percent of institutions of higher education participating in a program authorized under this title that are not reviewed under paragraph (2), for a program review. This approach shall prioritize program reviews of institutions that— have received large increases in funding under this title during the 5-year period preceding the date of the determination; have a large proportion of overall revenue from Federal funds, as defined in section 102(b)(2)(B); have a significant fluctuation in Federal Direct Stafford Loan volume, Federal Pell Grant award volume, or any combination thereof, in the year for which the determination is made, compared to the year prior to such year, that is not accounted for by changes in the Federal Direct Stafford Loan program, the Federal Pell Grant program, or any combination thereof; have experienced sharp increases in enrollment in absolute numbers or rate of growth; have high rates of defaults, relative to all other institutions of higher education participating in a program authorized under this title, for loans issued under this title over the lifetime of the loans; have a large aggregate dollar amount of loans under this title in default, or a high cohort default rate as described in section 435(m); have a high student default risk, as compared to the student default risk for all institutions participating in a program under this title; have a high proportion or high rate of complaints related to Federal student financial aid, educational practices and services, or recruiting and marketing practices, as reported in the complaint tracking system established under section 161; have extremely low graduation rates, as determined by the Secretary; are in poor financial health according to financial responsibility standards described in section 498(c); are spending a large percentage of the institution's revenues on recruiting and marketing activities and executive compensation; in the case of proprietary institutions of higher education, have large profit margins and profit growth; have been put on notice or warning by its accrediting agency; has been found to have compliance problems under this title, or is at significant risk of failing to comply with applicable Federal or State laws, by a relevant Federal agency or a relevant State entity or agency, including the Comptroller General of the United States; has had a large amount of funds returned under section 484B; or in the case of proprietary institutions of higher education, have experienced a change in ownership or control of the institution, including a buyout. The Secretary shall publish, and update as necessary, the specific criteria that the Secretary will use to determine which institutions of higher education are selected for risk-based reviews under subparagraph (A). The Secretary shall— post on the College Navigator website, or any successor website, of the Department, the name of each institution of higher education that is found to have violated a provision of this title knowingly and willfully or with gross negligence; indicate on such website, with respect to each such institution, which of the provisions of this title the institution violated; and maintain such posting until the date the institution of higher education rectifies the violation or the date that is 1 year after the date the Secretary issues the final program review report under subsection (c)(6)(C) with respect to such institution, whichever date is later. Each institution of higher education that is found to have violated a provision of this title knowingly and willfully or with gross negligence shall— not later than 15 days after the date of issuance of the final program review report containing the finding, post on the home page of the institution’s website that the institution has been found to have violated a provision of this title knowingly and willfully or with gross negligence, including the provision the institution was found to have violated; maintain such posting until the date the institution rectifies the violation or the date that is 1 year after the date the Secretary issues the final program review report under subsection (c)(6)(C) with respect to such institution, whichever date is later; and include the information described in subparagraph
(A)on materials of acceptance or admission submitted to each student before the student enrolls in the institution until the date the institution rectifies the violation or the date that is 1 year after the date the Secretary issues the final program review report under subsection (c)(6)(C) with respect to such institution, whichever date is later. The Secretary may give not more than 72 hours notice to an institution of higher education that will undergo a program review pursuant to subsection
(b)of such review. The Secretary shall share all final program review determinations conducted under this section with relevant Federal agencies and relevant State entities or agencies, and appropriate accrediting agencies and associations, to enable such agencies, entities, and associations to determine the eligibility of institutions for funds or accreditation. To the extent practicable, the Secretary shall coordinate program reviews conducted under this section with other reviews and audits conducted by the Department, and with relevant Federal agencies and relevant State entities or agencies. If, in the course of conducting a program review, the Secretary obtains evidence that any institution of higher education or person has engaged in conduct that may constitute a violation of this title, including a failure to fully comply with the program review process and reporting requirements under this section, the Secretary may sanction such institution or person, pursuant to section 489A. If, in the course of conducting a program review, the Secretary obtains evidence that any institution of higher education or person has engaged in conduct that may constitute a violation of Federal law, the Secretary shall transmit such evidence to the Attorney General of the United States, the Director of the Bureau of Consumer Financial Protection, the Commissioner of the Federal Trade Commission, or the head of any other appropriate Federal agency who may institute proceedings under appropriate law. Nothing in this paragraph shall be constructed to affect any other authority of the Secretary to disclose information. When conducting program reviews under this section, the Secretary shall assess the institution of higher education's compliance with the provisions of this title. Each program review shall include, at a minimum, the following: With regard to the institutional information, the Secretary shall assess financial capability, administrative capability, and program integrity, including whether the institution— knowingly and willfully misused Federal student aid from any source; violated section 487(a)(20); engaged in any substantial misrepresentation or other serious violation, as defined in section 489A; or violated the program integrity regulations promulgated by the Secretary under this Act. With regard to student information, the Secretary shall examine— graduation rates compared with all other institutions participating in a program authorized under this title; student complaints, including interviews with current and former students, faculty and staff, and accrediting agencies; and information from the complaint data system established under section 161. The Secretary shall provide training, including investigative training, to personnel of the Department designed to improve the quality of financial and compliance audits and program reviews conducted under this section, including instruction about appropriately and effectively conducting such audits and reviews for institutions of higher education from different sectors of higher education. In carrying out program reviews under this section, the Secretary shall— establish guidelines designed to ensure uniformity of practice in the conduct of such reviews; make available to each institution of higher education participating in a program authorized under this title complete copies of all review guidelines and procedures used in program reviews, except that internal training materials for Department staff related to identifying instances of fraud, misrepresentation, or intentional noncompliance shall not be disclosed; permit an institution of higher education to correct or cure an administrative, accounting, or recordkeeping error within 90 days of the issuance of the final program review report, if the error is not part of a pattern of error and there is no evidence of fraud or misconduct related to the error; without sharing personally identifiable information and 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 ), inform the relevant Federal agencies and relevant State entities or agencies, and accrediting agency or association, whenever the Secretary finds a violation of this title or sanctions an institution of higher education under section 432, 489A, or 498; and provide to an institution of higher education 90 calendar days to review and respond to any program review report and relevant materials related to the report before any final program review report is issued. Not later than 180 calendar days after issuing a program review report under this section, the Secretary shall review and consider an institution of higher education’s response, and issue a final program review determination or audit determination. The final determination shall include— a written statement addressing the institution of higher education’s response; a written statement of the basis for such determination; and a copy of the institution’s response. The Secretary shall maintain and preserve at all times the confidentiality of any program review report until a final program review determination is issued, other than to inform the relevant Federal agencies and relevant State entities or agencies, and accrediting agency or association, as required under this section. The Secretary shall promptly disclose each program review report and each final program review determination to the institution of higher education under review. Any personally identifiable information from the education records of students shall be removed from any program review report or final program review determination before the report is shared with any relevant Federal agency, State entity or agency, or accrediting agency or association. The Secretary shall conduct follow-up reviews of each institution of higher education that has been found in violation of a provision of this title not later than 1 year after the date of such finding. Such follow-up reviews may only assess whether the institution of higher education has corrected violations found in a previous program review or final program review determination. .
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- 20 USC 1099c–1
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