Sec. 482. Programmatic loan repayment rates
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Part G of title IV ( 20 U.S.C. 1088 et seq. is amended, as amended by section 481, is further amended by inserting after section 481A ( 20 U.S.C. 1088a ) the following: With respect to fiscal year 2016 and each succeeding fiscal year, an educational program at an institution of higher education whose loan repayment rate is less than 45 percent for each of the 3 most recent fiscal years for which data are available shall not be considered an eligible program for the fiscal year in which the determination is made and for the 2 succeeding fiscal years, unless, not later than 30 days after receiving notification from the Secretary of the loss of eligibility under this paragraph, the institution appeals the loss of such program’s eligibility to the Secretary.
The Secretary shall issue a decision on any such appeal within 45 days after its submission. Such decision may permit a program to be considered an eligible program, if— the institution demonstrates to the satisfaction of the Secretary that— the Secretary’s calculation of such program’s loan repayment rate is not accurate; and recalculation would increase such program’s loan repayment rate for any of the 3 fiscal years equal to or greater than 45 percent; or the program is not subject to paragraph
(1)by reason of paragraph (3). An institution that demonstrates to the Secretary that a program’s participation rate index is equal to or less than 0.11 for any of the 3 most recent fiscal years for which data is available shall not be subject to paragraph (1). The participation rate index for a program shall be determined by multiplying— the amount of the difference between— 1.0; and the quotient that results by dividing— the program’s loan repayment rate for a fiscal year, or the weighted average loan repayment rate for a fiscal year, by 100; and the quotient that results by dividing— the percentage of the program’s regular students, enrolled on at least a half-time basis, who received a covered loan for a 12-month period ending during the 6 months immediately preceding the fiscal year for which the program’s loan repayment rate or the weighted average loan repayment rate is determined, by 100. An institution shall provide the Secretary with sufficient data to determine the program’s participation rate index not later than 30 days after receiving an initial notification of the program’s draft loan repayment rate under subsection (d)(4)(C). Prior to publication of a final loan repayment rate under subsection (d)(4)(A) for a program at an institution that provides the data described in subparagraph (C), the Secretary shall notify the institution of the institution’s compliance or noncompliance with subparagraph (A). An institution with a program whose loan repayment rate is less than 45 percent for any fiscal year shall establish a repayment improvement task force to prepare a plan to— identify the factors causing such program’s loan repayment rate to fall below such percent; establish measurable objectives and the steps to be taken to improve the program’s loan repayment rate; and specify actions that the institution can take to improve student loan repayment, including appropriate counseling regarding loan repayment options. Each institution subject to this paragraph shall submit the plan under subparagraph
(A)to the Secretary, who shall review the plan and offer technical assistance to the institution to promote improved student loan repayment. An institution with a program whose loan repayment rate is less than 45 percent for two consecutive fiscal years, shall— require the institution’s repayment improvement task force established under paragraph
(1)to review and revise the plan required under such paragraph; and submit such revised plan to the Secretary. The Secretary— shall review each revised plan submitted in accordance with this paragraph; and may direct that such plan be amended to include actions, with measurable objectives, that the Secretary determines, based on available data and analyses of student loan repayment and non-repayment, will promote student loan repayment. Except as provided in subsection (d), for purposes of this section, the term loan repayment rate means, when used with respect to an educational program at an institution— with respect to any fiscal year in which 30 or more current and former students in such program enter repayment on a covered loan received for attendance in such program, the percentage of such current and former students— who enter repayment in such fiscal year on a covered loan received for attendance in such program; and who are in a positive repayment status on each such covered loan at the end of the second fiscal year following the fiscal year in which such students entered repayment on such loan; and with respect to any fiscal year in which fewer than 30 of the current and former students in such program enter repayment on a covered loan received for attendance in such program, the percentage of such current and former students— who, in any of the three most recent fiscal years, entered repayment on a covered loan received for attendance in such program; and who are in a positive repayment status on each such covered loan at the end of the second fiscal year following the fiscal year in which such students entered repayment on such loan. The Secretary shall require that each guaranty agency that has insured loans for current or former students of the institution afford such institution a reasonable opportunity (as specified by the Secretary) to review and correct errors in the information required to be provided to the Secretary by the guaranty agency for the purposes of calculating a loan repayment rate for programs at such institution, prior to the calculation of such rate. For purposes of this section, the term positive repayment status , when used with respect to a borrower of a covered loan, means— the borrower has entered repayment on such loan, and such loan is less than 90 days delinquent; the loan is paid in full (but not through consolidation); or with respect to a covered loan that is a Federal ONE Loan, the loan is in a deferment described in 469A(b)(1), and with respect to a covered loan made, insured, or guaranteed under part B or made under part D, the loan is in a deferment or forbearance that is comparable to a deferment described in 469A(b)(1). For purposes of this section— the term covered loan means— a loan made, insured, or guaranteed under section 428 or 428H; a Federal Direct Stafford Loan; a Federal Direct Unsubsidized Stafford Loan; a Federal Direct PLUS Loan issued to a graduate or professional student; a Federal ONE Loan; or the portion of a loan made under section 428C, a Federal Direct Consolidation Loan, or a Federal ONE Consolidation Loan that is used to repay any loan described in clauses
(i)through (v); and the term covered loan does not include a loan described in subparagraph
(A)that has been discharged under section 437(a). In the case of a student who has attended and borrowed at more than one institution of higher education or for more than one educational program at an institution, the student (and such student’s subsequent positive repayment status on a covered loan, if applicable)) shall be attributed to each institution of higher education and educational program for attendance at which the student received a loan that entered repayment for the fiscal year for which the loan repayment rate is being calculated. A loan on which a payment is made by an institution of higher education, such institutions’s owner, agent, contractor, employee, or any other entity or individual affiliated with such institution, in order to prevent the borrower from being more than 90 days delinquent on the loan, shall be considered more than 90 days delinquent for purposes of this subsection. The Secretary shall prescribe regulations designed to prevent an institution of higher education from evading the application of a loan repayment rate determination under this section to an educational program at such institution through— the use of such measures as branching, consolidation, change of ownership or control, or any similar device; or creating a new educational program that is substantially similar to a program determined to be ineligible under subsection (a). The Secretary shall publish not less often than once every fiscal year a report showing final loan repayment data for each program at each institution of higher education for which a loan repayment rate is calculated under this section. The Secretary shall publish the report described in subparagraph
(A)by September 30 of each year. The Secretary shall provide institutions with draft loan repayment rates for each educational program at the institution at least 6 months prior to the release of the final rates under subparagraph (A). An institution may challenge a program’s draft loan repayment rate provided under clause
(i)for any fiscal year by demonstrating to the satisfaction of the Secretary that such draft loan repayment rate is not accurate. During the transition period, the cohort default rate for each institution of higher education shall be calculated under section 435(m)(1) for each fiscal year for which such rate has not yet been calculated and any requirements with respect to such rates shall continue to apply, except that the loans with respect to which such cohort default rate shall be calculated shall be the covered loans defined in subsection (c)(4). After the transition period, no new cohort default rates shall be calculated for an institution of higher education and any requirements with respect to such rates shall cease to apply. For purposes of this subsection— the term cohort default rate has the meaning given the term in section 435(m); and the term transition period means the period— beginning on the date of enactment of the PROSPER Act; and ending on the date on which the Secretary has published under subsection (d)(4)(A) the final loan repayment rate for each program at each institution of higher education with respect to each of fiscal years 2016, 2017, and 2018. .
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