Sec. 150112. Institutional stabilization program

3,370 words·~15 min read·/bill/116/hr/6800/pcs/section-150112

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

Notwithstanding paragraph

(1)or

(2)of section 498(c) of the Higher Education Act of 1965 ( 20 U.S.C. 1099c(c) ), an eligible institution described in subsection

(b)may, in lieu of submitting a letter of credit in accordance with section 498(c)(3)(A) of such Act, submit an application under subsection (c)(1) to enter into a COVID–19 provisional program participation agreement in accordance with subsection

(d)to provide the Secretary with satisfactory evidence of its financial responsibility. An eligible institution described in this subsection is a private nonprofit institution of higher education that— either— has a composite score of less than 1.0 for the institutional fiscal year ending in 2019, as determined under section 668.171(b)(1) of title 34, Code of Federal Regulations; or on the date of an application under subsection (c)(1), has (or anticipates having) a composite score of less than 1.0 for the institutional fiscal year ending in 2020, as determined under section 668.171(b)(1) of title 34, Code of Federal Regulations; during award year 2018–2019— offered on-campus classes; and qualified for participation in a program under title IV of the Higher Education Act of 1965 ( 20 U.S.C. 1070 et seq.); and on the date of the application under subsection (c)(1), has a liquidity level of less than or equal to 180 days. An eligible institution desiring to enter into a COVID–19 provisional program participation agreement under subsection (d), shall, not later than December 31, 2020, submit to the Secretary an application that includes— the estimated liquidity level of the eligible institution on the date of the application and an assurance that such liquidity level will be attested to in accordance with paragraph (2); an assurance that such eligible institution will submit a record-management plan in accordance with paragraph (3); and an assurance that such eligible institution will submit a teach-out plan in accordance with paragraph (4); and an assurance that such eligible institution will submit reports on teach-out agreements and sufficient progress made on such agreements in accordance with subsection (d)(3) , as applicable. Not later than 60 days after submitting an application under paragraph (1), an eligible institution shall submit to the Secretary an auditor attestation of the liquidity level of such eligible institution on the date such institution submitted such application pursuant to an audit conducted by a qualified independent organization or person in accordance with standards established by the American Institute of Certified Public Accountants. Not later than 60 days after submitting an application under paragraph (1), an eligible institution shall submit to the Secretary a record-management plan approved by the accrediting agency of such eligible institution that includes— a plan for the custody, including by the State authorizing agency, if applicable, and the disposition of— a teach-out plan and teach-out agreement records, as applicable; and student records, including student transcripts, billing, and financial aid records; an estimate of the costs necessary to carry out such record-management plan; and a financial plan to provide funding for such costs. An eligible institution that submits a record-management plan under subparagraph

(A)shall include an assurance to the Secretary that, in the case of the closure of such eligible institution, such eligible institution— will release all financial holds placed on student records; and for the 3-year period beginning on the date of the closure of such eligible institution, will not require a student enrolled in such eligible institution on the date of such closure (and students withdrawn from such eligible institution in the 120 days prior to such date) who requests the student records of such student to purchase such records or otherwise charge such student a fee with respect to such records. Not later than 60 days after submitting an application under paragraph (1), an eligible institution shall submit the record-management plan required under subparagraph

(A)and the assurance under subparagraph

(B)to the accrediting agency and, if applicable, the State authorizing agency, of such eligible institution. Not later than 60 days after submitting an application under paragraph (1), an eligible institution shall submit a teach-out plan approved by the accrediting agency of such eligible institution to the Secretary and, if applicable, the State authorizing agency of such eligible institution. Notwithstanding section 498(c)(3)(A) of the Higher Education Act of 1965 ( 20 U.S.C. 1099c(c)(3)(A) ), the Secretary may not use the composite score of an eligible institution (as determined under section 668.171(b)(1) of title 34, Code of Federal Regulations) to require the eligible institution to submit a new letter of credit or increase the value of an existing letter of credit while the institution has an application pending under paragraph

(1). The eligible institution shall notify the accrediting agency and, if applicable, the State authorizing agency, of such institution— that the institution has submitted an application under paragraph

(1)to the Secretary not later than 10 days after submitting such application; and of the final acceptance or denial of such application not later than 5 days after receiving a final decision from the Secretary. The Secretary shall accept or deny an application under paragraph

(1)not later than 10 days after the date on which an eligible institution completes all of the submission requirements under paragraphs (2), (3), and (4). The Secretary may enter into a COVID–19 provisional program participation agreement under this subsection with an eligible institution that submits an application under subsection (c)(1) on or before December 31, 2020, only if the Secretary has received— an auditor attestation under subsection (c)(2) that such eligible institution has a liquidity level of less than or equal to 180 days on the date of the application of such eligible institution under subsection (c)(1); a record-management plan with respect to such eligible institution in accordance with subsection (c)(3); and a teach-out plan with respect to such eligible institution in accordance with subsection (c)(4). In entering into a COVID–19 provisional program participation agreement with an eligible institution under this subsection, the Secretary shall require such eligible institution— if such eligible institution has a liquidity level of less than or equal to 90 days on the date of the application of such eligible institution under subsection (c)(1), to submit a teach-out agreement (or teach-out agreements, as applicable) to the Secretary, to the accrediting agency of the institution, and, if applicable, the State authorizing agency of the institution, in accordance with paragraph (3); to report to the Secretary in accordance with paragraph (4); to meet the administrative capacity requirements under section 498(d) of the Higher Education Act of 1965 ( 20 U.S.C. 1099c(d) ); and to meet the cash reserves requirements under section 498(c)(6)(A) of the Higher Education Act of 1965 ( 20 U.S.C. 1099c(c)(6)(A) ). Not later than 30 days after the date on which an eligible institution described in paragraph (2)(A) enters into a COVID–19 provisional program participation agreement under this subsection, such eligible institution shall submit to the Secretary an interim teach-out agreement that provides for the equitable treatment of at least 75 percent of enrolled students and a reasonable opportunity for such students to complete their program of study. Not later than 15 days after the date on which an eligible institution submits an interim teach-out agreement in accordance with subparagraph

(A), and every 15 days thereafter, such eligible institution shall submit to the Secretary a report that includes— the percentage of students enrolled in such eligible institution that are covered by a teach-out agreement; the increase in the percentage of students covered by such an agreement, as compared to the most recently submitted report; and such other information as the Secretary or accrediting agency of the eligible institution may require, including the progress of such eligible institution in meeting any benchmarks set by such accrediting agency related to the percentage of students that should be covered by such an agreement. On the date agreed to by the eligible institution, the accrediting agency of such eligible institution, and the Secretary under a COVID–19 provisional program participation agreement under this subsection, such eligible institution shall submit to the Secretary, to the accrediting agency of the institution, and, if applicable, the State authorizing agency of the institution, a teach-out agreement (or agreements, as applicable) that— provides for the equitable treatment of all enrolled students and a reasonable opportunity for such students to complete their program of study; includes— a list of all students enrolled in such eligible institution on the date such eligible institution submitted an application under subsection (c)(1) (and students withdrawn from such eligible institution in the 120 days prior to such date), including the name, contact information, program of study, program requirements completed, and estimated date of program completion of each such student; the amount of any unearned tuition, account balances, student fees, and refunds due to each such student; a plan to notify each such student, in the case of the closure of such eligible institution, of— the process for obtaining a closed school discharge under section 437(c)(1) of the Higher Education Act of 1965 ( 20 U.S.C. 1087(c)(1) ), using standard language developed by the Secretary under subsection (f), and the benefits and consequences of such discharge; if applicable, information on institutional and State refund policies; the teach-out institution or institutions available to enroll such student; the tuition and fees of the educational program offered by each such teach-out institution and the number and types of credit each such teach-out institution will accept prior to the enrollment of such student; and the record-management plan submitted in accordance with subsection (c)(3). In the case of an eligible institution that enters into a COVID–19 provisional program participation agreement under this subsection and has a liquidity level of greater than 90 days on the date of the application of such eligible institution under subsection (c)(1), if the Secretary determines such eligible institution has declined such that the liquidity level of such eligible institution is consistently less than or equal to 90 days, the Secretary may require such eligible institution to submit a teach-out agreement (or agreements, as applicable) to the Secretary in accordance with subparagraph (C). In the case of an eligible institution described in paragraph (2)(A), the Secretary shall require such eligible institution to report to the Secretary the liquidity level and total student enrollment of such eligible institution not less than once every 15 days, until such eligible institution closes or no longer participates in a COVID–19 provisional program participation agreement under this subsection. In the case of an eligible institution that enters into a COVID–19 provisional program participation agreement under this subsection and has a liquidity level of greater than 90 days on the date of the application of such eligible institution under subsection (c)(1), the Secretary shall require such eligible institution to report to the Secretary the liquidity level and total student enrollment of such eligible institution not less than once every 30 days, until such eligible institution closes or no longer participates in a COVID–19 provisional program participation agreement under this subsection. All eligible institutions that enter into a COVID–19 provisional program participation agreement under this subsection shall comply with the reporting requirements under paragraph

(2)of section 668.175(d) of title 34, Code of Federal Regulations (as such paragraph is in effect on the date of enactment of this section). The Secretary may not require an eligible institution that enters into a COVID–19 provisional program participation agreement under this subsection to submit a new letter of credit or increase the value of an existing letter of credit for the duration of the agreement. A COVID–19 provisional program participation agreement under this subsection may only be entered into for a period less than or equal to the period— beginning on the first date of the agreement; and ending on the last day of the first full award year that begins after the date described in subparagraph

(A). A COVID–19 provisional program participation agreement under this subsection may be renewed for 1 award year subsequent to the award year described in paragraph (6)(B) , and shall expire no later than June 30, 2022. Notwithstanding subparagraph

(A), if the Secretary determines that an extension of renewal authority is in the best interest of the eligible institutions with a COVID–19 provisional program participation agreement under this subsection, the Secretary may permit COVID–19 provisional program participation agreement under this subsection to be renewed, on an annual basis, for not more than 3 total consecutive award years subsequent to the award year described in paragraph (6)(B) , provided that no agreement under this subsection shall expire later than June 30, 2024. An eligible institution desiring to renew a COVID–19 provisional program participation agreement shall— submit to the Secretary the liquidity level of the institution on the last day of the most recent fiscal year of the eligible institution, to be used for purposes of such an agreement; and not later than 60 days after submitting such liquidity level under clause (i), have such liquidity level attested to in accordance with subsection (c)(2). The participation of an eligible institution in a COVID–19 provisional program participation agreement under this subsection— may be discontinued at any time at the request of the eligible institution; shall be discontinued by the Secretary if such eligible institution receives a composite score of 1.0 or greater for the most recent institutional fiscal year, as determined under section 668.171(b)(1) of title 34, Code of Federal Regulations; and shall have no affect on the eligibility of the institution to participate in a program participation agreement under section 487(a) of the Higher Education Act of 1965 ( 20 U.S.C. 1094 ) after the COVID–19 provisional program participation agreement under this subsection has expired or been discontinued. From the amounts authorized to be available, subject to appropriation, under subsection

(j), the Secretary may award a grant to an eligible institution that enters into a COVID–19 provisional program participation agreement under this subsection to carry out the requirements of such agreement and provide for the increased economic stability of such eligible institution. Except as otherwise provided in this subsection, the Secretary shall have the same authority with respect to a COVID–19 provisional program participation agreement under this subsection as the Secretary has with respect to a program participation agreement under subparagraphs (B), (F), and

(G)of section 487(c)(1) ( 20 U.S.C. 1099(c)(1) ). An eligible institution that enters into a COVID–19 provisional program participation agreement under subsection

(d)may participate in programs under title IV of the Higher Education Act of 1965 ( 20 U.S.C. 1070 et seq.) only if such eligible institution submits to the Secretary (and the accrediting agency of such eligible institution, as applicable) the agreements and reports applicable to such eligible institution under paragraphs

(3)and

(4)of subsection (d). Not later than 30 days after the date of the enactment of this section, the Secretary shall publish standard language relating to closed school discharges for purposes of subsection (d)(3)(C)(ii)(III)(aa). Not later than 90 days after the date of the enactment of this section and every 90 days thereafter until the date on which every COVID–19 provisional program participation agreement under this subsection has expired or been terminated, or until June 30, 2024, whichever is earlier, the Secretary shall submit to the authorizing committees a report that includes a summary of each COVID–19 provisional program participation agreement entered into or renewed in the preceding 90 days by the Secretary under this section, including the name, total student enrollment, and liquidity level of the institution. With respect to a borrower described in paragraph

(2), the Secretary shall, without any further action by the borrower, discharge the liability of the borrower with respect to each of the borrower’s loans (including the interest and collection fees) described in paragraph (2)(A) in accordance with this subsection. A borrower described in this subparagraph is a borrower who— was enrolled for a period of enrollment at an eligible institution that was participating in a COVID–19 provisional program participation agreement under subsection

(d), and— was unable to complete such period of enrollment due to the closure of the institution; or withdrew from the eligible institution— not more than 120 days before the closure of the eligible institution; or if the Secretary determines an extension of the 120-day period described in subclause

(I)is necessary due to exceptional circumstances related to the closure of the institution, during the extended period determined by the Secretary; has one or more loans— made under title IV of the Higher Education Act of 1965 ( 20 U.S.C. 1070 et seq.) for a program of study at the eligible institution described in subparagraph

(A); and that have not been discharged by the Secretary pursuant to section 437(c)(1) or section 464(g)(1) of the Higher Education Act of 1965 ( 20 U.S.C. 1087(c)(1) ; 1087dd(g)(1)); and during the 3-year period beginning on the date of the closure of the eligible institution described in subparagraph

(A), has not enrolled in any institution of higher education that participates in a program under title IV of the Higher Education Act of 1965 ( 20 U.S.C. 1070 et seq.). Beginning on the date that is 3 years after the date of enactment of this Act and every 180 days thereafter, the Secretary shall report to the authorizing committees the number of loans discharged in accordance with this subsection, and any amounts recovered by the Secretary in accordance with the authority of the Secretary to pursue claims under section 437(c)(1) or section 464(g)(1) of the Higher Education Act of 1965 ( 20 U.S.C. 1087(c)(1) ; 1087dd(g)(1)). In this section: The term liquidity level means, with respect to an eligible institution, the number of days such eligible institution can operate based on available resources, as determined in accordance with the Financial Accounting Standards Board update entitled No. 2016–14 Not-for-Profit Entities (Topic 958) and dated August, 2016. The term teach-out agreement means a written agreement between an eligible institution and one or more teach-out institutions that is in accordance with the requirements in section 496(c)(6) of the Higher Education Act of 1965 ( 20 U.S.C. 1099b(c)(6) ) and that provides for the equitable treatment of students and a reasonable opportunity for students to complete their program of study if such eligible institution, or an institutional location that provides 100 percent of at least one program offered by such eligible institution, ceases to operate or plans to cease operations before all such enrolled students have completed their program of study. The term teach-out institution means an institution of higher education that— is not subject to a COVID–19 provisional program participation agreement under this section; shows no evidence of significant problems (including financial responsibility or administrative capability) that affect, as determined by the Secretary, the institution’s ability to administer a program under title IV of the Higher Education Act of 1965 ( 20 U.S.C. 1070 et seq.); is not required to pay any material debt, as determined by the Secretary, or incur any material liability, as determined by the Secretary, arising from a judgment in a judicial proceeding, an administrative proceeding or determination, or settlement; is not involved in a lawsuit by a Federal or State authority for financial relief on claims related to the making of loans under part D of title IV of the Higher Education Act of 1965 ( 20 U.S.C. 1087a et seq.); has the necessary experience, resources, and capacity, including support services, to enroll students and provide an educational program of acceptable quality that is reasonably similar in content and delivery, and to the extent practicable, scheduling, to that provided by the eligible institution that enters into an agreement with such teach-out institution; and during the five most recent award years, has not been subject to a denial, withdrawal, suspension, or termination of accreditation by an accrediting agency or association recognized by the Secretary. The term teach-out plan means a written plan developed by an eligible institution that provides for the equitable treatment of students if such eligible institution, or an institutional location that provides 100 percent of at least one program offered by the eligible institution, ceases to operate or plans to cease operations before all enrolled students have completed their program of study. There is authorized to be appropriated $300,000,000 to carry out subsection (d)(9) .

Connectionstraces to 7

Traces to 7 documents

U.S. Code

Citation graph

cites case law

Sec. 150112

Institutional stabilization program

Cites 7Cited by 0 across 0 sources