Sec. 125. Requirements for teach-out plans and teach-out agreements

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Notwithstanding section 487(f)(2) of the Higher Education Act of 1965 ( 20 U.S.C. 1094(f)(2) ), in the event an institution of higher education, during the period described in subsection (d), is required to submit to its accrediting agency or association a teach-out plan (in accordance with section 487(f) and section 496(c)(3) of such Act ( 20 U.S.C. 1094(f) ; 1099b(c)(3))), or to submit a teach-out agreement among institutions (in accordance with section 496(c)(6) of such Act ( 20 U.S.C. 1099b(c)(6) )), the following shall apply to such plans and agreements:

The definitions and requirements described in this subsection. Any other applicable standards of the institution’s accrediting agency or association. Any other provisions the Secretary of Education determines are necessary to protect the interests of the United States and to promote the purposes of this section. The term closing institution means an institution of higher education— that ceases to operate or plans to cease operations before all enrolled students have completed their program of study; or that has an institutional location that— provides 100 percent of at least 1 program offered by the institution of higher education; and ceases to operate or plans to cease operations before all enrolled students have completed their program of study.

The term teach-out plan means a written plan developed by a closing institution that provides for the equitable treatment of students. A teach-out plan shall include a record-retention plan that includes— a plan for the custody (including by any applicable State authorizing agencies), and the disposition, of teach-out records that meets the requirements of paragraph (5)(B)(iii); an assurance that in the event of the closure of the institution or an institutional location of the institution, such institution— will meet the requirements of paragraph (5)(B)(iv); and will refund students the amount of any unearned tuition, account balances, and student fees, and refunds due; and an estimate of the costs necessary to carry out such record-retention plan.

The term teach-out agreement means a written agreement between a closing institution and one or more other institutions of higher education (in this section referred to as a teach-out institution) that— provides for the equitable treatment of students and a reasonable opportunity for students to complete their program of study; and meets the requirements in section 496(c)(6) of the Higher Education Act of 1965 ( 20 U.S.C. 1099b(c)(6) ). In approving a teach-out agreement, the accrediting agency or association shall determine a timeline for an interim teach-out agreement and a final teach-out agreement that provides for the equitable treatment of students and ensures— that the teach-out institution— to the extent practicable, is an institution of higher education that meets the requirements of section 101 or section 102(c) of the Higher Education Act of 1965 ( 20 U.S.C. 1001 ; 1002(c)); has the necessary experience, resources, and support services to provide an educational program that is of acceptable quality and reasonably similar in content, delivery modality, and scheduling to that provided by the closing institution with which the teach-out institution has entered into the teach-out agreement; has not been subject to a sanction of probation or equivalent or show cause by its accrediting agency or association or any applicable State authorizing or licensing agency in the past 5 years; and shows no evidence of significant problems (including financial stability or administrative capability) that affect the institution’s capacity to carry out its mission and meet all obligations to enrolled students, which shall include a showing that there is no evidence of the conditions described in section 602.24(c)(8) of title 34, Code of Federal Regulations, as in effect on the date of enactment of this Act; and that the closing institution— provides the accrediting agency or association and the Secretary a complete list of all students who are enrolled in each program at the institution or who have withdrawn from the institution within the last 180 days, including each student’s name, contact information, program of study, the program requirements each student has completed, and the estimated date of completion in the absence of the closure of such institution or institutional location; provides to the accrediting agency or association and the Secretary, for each program of study at the closing institution, records of any agreements pertaining to the acceptance of students, transfer of credits, articulation agreements, or waiver of program requirements between the closing institution and any other institutions of higher education; provides a record-retention plan to all enrolled students that delineates the final disposition of teach-out records, digitally where practicable, including student transcripts, billing, financial aid records, and the amount of any unearned tuition, account balances, student fees, and refunds due to each such student; releases all financial holds placed on student records and, for the 3-year period beginning on the date of the closure of such institution or institutional location, provides each student (including each student who withdrew from such institution during the 180-day period prior to the date of such closure) with the student’s official transcripts and complete academic records at no cost to the student; provides students with information, using standard language developed by the Secretary under subsection (b), regarding— the benefits and consequences of choosing to— continue the student’s studies by transferring to a teach-out institution; and receive a closed school discharge under section 437(c)(1) and section 464(g)(1) of the Higher Education Act of 1965 ( 20 U.S.C. 1087(c)(1) ; 1087dd(g)(1)); and if applicable, information on institutional and State refund policies; provides students with information about additional tuition and fee charges, if any, at the teach-out institution; and provides students with accurate information on the number and types of credits the teach-out institution is willing to accept prior to the student’s enrollment in that institution or any other institution of higher education with which the closing institution has an articulation agreement.

Not later than 10 days after being required to submit a teach-out plan or teach-out agreement to its accrediting agency or association, the institution of higher education shall submit a notice of such plan or agreement to the Secretary of Education and to any applicable State authorizing agencies of such institution. Not later than 5 days after receiving approval from its accrediting agency or association of a teach-out plan or teach-out agreement, as applicable, the institution of higher education shall submit the approved plan or agreement to the Secretary of Education and to any applicable State authorizing agencies of such institution.

Not later than 60 days after the date of the enactment of this section, the Secretary of Education shall publish standard language relating to closed school discharges for purposes of subsection (a)(5)(B)(v). An institution of higher education is prohibited from engaging in misrepresentation about the nature of teach-out plans, teach-out agreements, and transfer of credit. Upon determination, after reasonable notice and opportunity for a hearing, that an institution of higher education is in violation of this subsection, the Secretary of Education— shall impose a civil penalty not to exceed $25,000 for each misrepresentation; and may impose an additional sanction described in section 497(c)(3) of the Higher Education Act of 1965 ( 20 U.S.C. 1094(c)(3) ).

The provisions of this section shall be in effect during the period beginning on the date of enactment of this Act and ending on the date on which on which sections 487(f) of the Higher Education Act of 1965 ( 20 U.S.C. 1094(f) ) or paragraphs

(3)and

(6)of section 493(c) of such Act ( 20 U.S.C. 1098b(c) ) are amended or repealed.

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Sec. 125

Requirements for teach-out plans and teach-out agreements

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