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Code · BILL · 116th Congress · H.R. 4662 (Introduced in House) — To amend the Higher Education Act of 1965 to require that institutions of higher education maintain certain adjusted... · Sec. 6

Sec. 6. Cohort default rates

1,422 words·~6 min read·/bill/116/hr/4662/ih/section-6

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Section 435(a) of the Higher Education Act of 1965 ( 20 U.S.C. 1085(a) ) is amended— in paragraph (7)(A), by adding at the end the following: The default management plan required under clause
(i)may not include placing students in forbearance as a means of reducing the cohort default rate or the adjusted cohort default rate of the institution. ; and by adding at the end the following: Except as provided in subparagraphs
(B)and (D), beginning on the date that is one year after the date on which the final adjusted cohort default rates are published by the Secretary for not less than 3 fiscal years, in a case in which one of the following determinations is made with respect to an institution, such institution shall be ineligible to participate in a program under this title for the fiscal year for which the determination is made and for the two succeeding fiscal years: The institution’s adjusted cohort default rate is greater than 20 percent for each of the three most recent fiscal years for which the final adjusted cohort default rates are published. With respect to the six most recent fiscal years for which the final adjusted cohort default rates are published— the institution’s adjusted cohort default rate is greater than 15 percent for each such fiscal year; and the Secretary determines that, during such 6-year period, the institution has not made adequate progress in meeting standards for student achievement established by the relevant accrediting agency or association pursuant to section 496(a)(5)(A). With respect to the eight most recent fiscal years for which the final adjusted cohort default rates are published— the institution’s adjusted cohort default rate is greater than 10 percent for each such fiscal year; and the Secretary determines that, during such 8-year period, the institution has not made adequate progress in meeting standards for student achievement established by the relevant accrediting agency or association pursuant to section 496(a)(5)(A). With respect to an institution that loses eligibility to participate in a program under this title in accordance with subparagraph (A)(ii), such institution may request and be granted an exception to such loss of eligibility for a category of educational programs at such institution by demonstrating to the Secretary that the adjusted cohort default rate for the category of educational programs is 15 percent or less for each fiscal year of the 6-year period on which such loss of eligibility for the institution is based. In determining the adjusted cohort default rate for a category of educational programs for purposes of this paragraph— subsection
(m)shall be applied— in paragraph (1)— in subparagraph (A), by substituting received for enrollment in the category of educational programs for which such rate is being determined for received for attendance at the institution ; and in subparagraph (E)(i)(II), by substituting, percentage of students enrolled in the category of educational programs for which such rate is being determined for percentage of students enrolled at the institution ; and as if the following were added at the end of paragraph (2): In the case of a student who has received a loan for enrollment in more than one category of educational programs, the student (and such student’s subsequent repayment or default) is attributed to the last category of educational programs in which such student was enrolled. . A covered institution with an adjusted cohort default rate that is greater than 20 percent for the first fiscal year for which such rates are published by the Secretary may request that any determination of such covered institution’s ineligibility under subparagraph
(A)not be based on the adjusted cohort default rate of such covered institution for any or all of the first 3 fiscal years for which such rates are published by the Secretary. To be granted a request under clause (i), a covered institution shall submit to the Secretary a default management plan as specified in paragraph (7). In this subparagraph, the term covered institution means— a public institution of higher education; a part B institution (as defined in section 322); or a private, nonprofit institution of higher education at which not less than 45 percent of the total student enrollment consists of low-income students (as such term is defined in section 419N(b)(7)). The term category of educational programs , when used with respect to an institution, means one of the following: The educational programs at the institution leading to an undergraduate, non-degree credential. The educational programs at the institution leading to an associate’s degree. The educational programs at the institution leading to a bachelor’s degree. The educational programs at the institution leading to a graduate, non-degree credential. The educational program at the institution leading to a graduate degree. Beginning on the date on which the final adjusted cohort default rates are published by the Secretary for not less than 3 fiscal years— paragraph
(1)shall be applied by substituting paragraph
(9)for paragraph
(2); paragraph
(3)shall be applied by substituting adjusted cohort default rate, calculated in accordance with subsection (m)(1)(D), is greater than 20 percent for any 3 consecutive fiscal years for cohort default rate, calculated in accordance with subsection (m), is equal to or greater than the threshold percentage specified in paragraph (2)(B)(iv) for any two consecutive fiscal years ; paragraph
(4)shall be applied— in subparagraph (C), by substituting adjusted cohort default rate is greater than 15 percent for cohort default rate equals or exceeds 20 percent ; and in the matter following subparagraph (C), by substituting adjusted cohort default rate to reflect the percentage of defaulted loans in the representative sample that are required to be excluded pursuant to subsection (m)(1)(B) for cohort default rate to reflect the percentage of defaulted loans in the representative sample that are required to be excluded pursuant to subsection (m)(1)(B) ; paragraph (5)(A) shall be applied by substituting paragraph
(9)for paragraph
(2); and paragraph
(7)shall be applied— in subparagraph (A)(i)— in the matter preceding subclause (I), by substituting adjusted cohort default rate is greater than 20 percent for cohort default rate is equal to or greater than the threshold percentage specified in paragraph (2)(B)(iv) ; and in subclauses
(I)and (II), by substituting adjusted cohort default rate for cohort default rate ; and in subparagraph (B)(i), by substituting adjusted cohort default rate is greater than 20 percent for cohort default rate is equal to or greater than the threshold percentage specified in paragraph (2)(B)(iv) . . Section 435(a)(2) of the Higher Education Act of 1965 ( 20 U.S.C. 1085(a) ) is amended— in the paragraph heading, by adding at the end the following: ; and Before fiscal year 2018 in subparagraph (B)(iv), by striking and any succeeding fiscal year and inserting through fiscal year 2017 . Section 435(m)(1) of the Higher Education Act of 1965 ( 20 U.S.C. 1085(m)(1) ) is amended by adding at the end the following: With respect to a cohort default rate calculated for an institution under this paragraph for fiscal year 2018 and for each succeeding fiscal year, such cohort default rate shall be adjusted as follows: In determining the number of current and former students at an institution who enter repayment for such fiscal year— any such student who is in nonmandatory forbearance for such fiscal year for a period of greater than 18 months but less than 36 months shall not be counted as entering repayment for such fiscal year; such a student shall be counted as entering repayment for the first fiscal year for which the student ceases to be in a period of forbearance and otherwise meets the requirements for being in repayment; and any such student who is in a period of forbearance for three or more years shall be counted as in default and included in the institution’s total number of students in default. Such rate shall be multiplied by the percentage of students enrolled at the institution for such fiscal year who are borrowing a loan under part D of this title. The result obtained under this subparagraph for an institution shall be referred to in this Act as the adjusted cohort default rate . . Section 435(m) of the Higher Education Act of 1965 ( 20 U.S.C. 1085(m) ) is amended by adding at the end the following: Beginning on the date on which the final adjusted cohort default rates for fiscal year 2018 are made available for publication by the Secretary, paragraph
(4)shall be applied by substituting adjusted cohort default for cohort default each place it appears. .
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Sec. 6
Cohort default rates
U.S.C.§ 1085
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