Sec. 12. Program participation agreements
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It is the sense of Congress 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 of the Higher Education Act of 1965 ( 20 U.S.C. 1094 ) is amended— in subsection (a)— in paragraph (19), by inserting housing facilities, after libraries, ; 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. ; and by adding at the end the following new paragraphs: 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 Protections and Regulation for Our Students 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. 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). ; and in subsection (c)(1)(A)(i), by striking available and inserting made publicly available and provided .
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