Sec. 4721. Eligibility and certification procedures
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Section 498 of the Higher Education Act of 1965 ( 20 U.S.C. 1099c ) is amended— in subsection (b)— in paragraph (4), by striking and at the end; in paragraph (5), by striking the period at the end and inserting ; and ; and by adding at the end the following: includes an addendum under which an institution of higher education shall report a change in circumstances described in subparagraph (A)(ii) or clauses
(ii)or
(iii)of subparagraph
(B)of subsection (c)(8), not later than 30 days after the date on which such change in circumstance occurs. ; in subsection (c)— in paragraph (1)— in subparagraph (B), by striking and at the end; in subparagraph (C), by striking the period at the end and inserting ; and ; and by adding at the end the following: the institution is not an institution described in paragraph (7)(B). ; and by adding at the end the following: The Secretary may not determine that an institution has the financial responsibility required by this title if such institution is an institution described in subparagraph (B). An institution described in this subparagraph is— a private non-profit institution of higher education or a proprietary institution of higher education (as defined in section 102(b)) that— is required by the accrediting agency of such institution to submit a teach-out plan under section 487(f); with respect to the preceding 2 fiscal years, has an adjusted cohort default rate (as determined under section 435(m)) of 20 percent or greater, unless the institution files a challenge, request for adjustment, or appeal under section 435(a) with respect to such rates for one or both of such fiscal years; is subject to a number of pending or approved borrower relief claims under section 493H from borrowers that equals or exceeds, with respect to the prior academic year, half of the enrollment of full-time equivalent students at such institution; a proprietary institution of higher education (as defined in section 102(b)) that— is publicly traded; and is sanctioned by the Securities and Exchange Commission; fails to file a required annual or quarterly report with the Securities and Exchange Commission; or the stock of which is delisted; or a proprietary institution of higher education (as defined in section 102(b))— that derived, in the most recent award year, more than 85 percent of the revenue of the institution from Federal education assistance funds; or from which shareholder equity is reduced by over 10 percent of the value of the title IV revenues received by such proprietary institution of higher education in the prior academic year. In the case of a private non-profit institution of higher education or a proprietary institution of higher education (as defined in section 102(b)) that submits an addendum described in clause
(ii)or
(iii)to the Secretary, the Secretary shall, not later than 30 days after such addendum is submitted, redetermine whether such institution meets the requirements of this subsection. An institution of higher education shall submit an addendum under subsection (b)(6) if, with respect to such institution of higher education, one of the following occurs: The institution is required to pay any material debt, as determined by the Secretary, or incur any material liability, as determined by the Secretary, arising from a final judgment in a judicial proceeding, an administrative proceeding or determination, or settlement. The institution is involved in a lawsuit that is brought on or after the date of the enactment of College Affordability Act by a Federal or State authority for financial relief on claims related to the making of loans under part D of title IV. Such other circumstance the Secretary determines necessary. An institution of higher education shall submit an addendum under subsection (b)(6) if the Secretary makes a determination that such institution has programs that could become ineligible under gainful employment (as defined in section 104) in the next award year. In the case of an institution that submits an addendum under clause (ii), the Secretary may, not later than 30 days after such addendum is submitted, redetermine whether such institution meets the requirements of this subsection. The Secretary shall require an institution to submit an addendum under subsection (b)(6) if the Secretary makes a determination— that the Secretary will likely receive a significant number of borrower relief claims under section 493H as the result of a lawsuit, settlement, or judgement against the institution; or that the institution experienced one of the following: A significant fluctuation in enrollments between consecutive award years or a period of award years. A citation by a State licensing or authorizing agency for failing State or agency requirements. High annual drop out rates. Pending borrower relief claims under section 493H. If the institution’s financial circumstances materially change after the institution submits an addendum under subsection (b)(6), such institution shall submit to the Secretary such certified financial statements and other information as the Secretary may require. Beginning not later than 90 days after the date of the enactment of this paragraph, and not less than once every 120 days thereafter, the Secretary shall make publicly available on the website of the Department the following: The ratios used to demonstrate financial responsibility under this section. Each reports made to the Secretary under this section. Each audited financial statement submitted to the Secretary by an institution of higher education under this section. Each certified financial statement submitted to the Secretary under paragraph (8)(C). ; and in subsection (i)(2)— in subparagraph (E), by striking or at the end; in subparagraph (F), by striking the period at the end and inserting ; or ; and by adding at the end the following: the transfer of ownership as a result of a court-ordered receivership. . Not 1 year after the date of the enactment of this Act, the Secretary of Education shall carry out a negotiated rulemaking to update the criteria used under section 498(c)(2) of the Higher Education Act of 1965 ( 20 U.S.C. 1099c ) to make a determination of the ability of an institution of higher education to meet the standards under such section in accordance with the amendments made by this section.
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Sec. 4721
Eligibility and certification procedures
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