Sec. 3. Administration and eligibility requirements
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Section 487(d)(2) of the Higher Education Act of 1965 ( 20 U.S.C. 1094(d)(2) ) is amended— in subparagraph (A), by adding at the end the following: The provisions of this subparagraph shall apply only until the beginning of the 2022 institutional fiscal year. ; in subparagraph (B), by striking In addition and inserting Until the beginning of the 2022 institutional fiscal year, in addition ; by adding at the end the following: Notwithstanding any other provision of this section, beginning with the 2022 institutional fiscal year, a proprietary institution of higher education that fails to meet the requirement of subsection (a)(24) shall be subject to the following:
If the failure to meet the requirement of subsection (a)(24) is in a year that is immediately subsequent to a year in which the institution met the requirement of subsection (a)(24), no Federal educational assistance shall be paid by the Department of Veterans Affairs or the Department of Defense— to the institution for new enrollments; or on behalf of a student or to a student to be used to attend the institution if the student is a new student. If the failure to meet the requirement of subsection (a)(24) is the second consecutive failure— no Federal educational assistance shall be paid by the Department of Veterans Affairs or the Department of Defense— to the institution for new enrollments; or on behalf of a student or to a student to be used to attend the institution if the student is a new student; and no Federal educational assistance shall be paid to the institution or on behalf of a student or to a student to be used to attend the institution unless the enrollment total at the institution for the academic year that is subsequent to the year of the second consecutive failure is equal to or less than the enrollment total of the previous academic year.
If the failure to meet the requirement of subsection (a)(24) is the third consecutive failure, the institution shall be ineligible to participate in or receive funds under any program of Federal educational assistance for a period of not less than two institutional fiscal years. For a proprietary institution of higher education to regain eligibility to participate in or receive funds after being ineligible pursuant to a failure to meet a requirement as described in clause (i), the Secretary shall certify that the institution has demonstrated compliance with all eligibility and certification requirements for the program.
A proprietary institution of higher education described in item
(bb)that fails to meet the requirement of subsection (a)(24) for an institutional fiscal year may submit an appeal to the Secretary to remain eligible to participate in or receive funds under any program of Federal educational assistance for the institutional fiscal year. In order to regain eligibility to participate in or receive funds under any program of Federal educational assistance for the succeeding institutional fiscal year, the proprietary institution of higher education shall demonstrate compliance as described in clause (ii). In order to be eligible to submit an appeal under item (aa), proprietary institution of education shall derive not less than 10 percent of such institution's revenues from sources other than funds provided under this title. In the appeal under subclause (I), a proprietary institution of higher education shall submit a plan explaining the reasons for failure to comply with the requirement of subsection (a)(24) and describing the steps the institution will take to comply moving forward, including descriptions of any partnerships proposed or existing on the date of the appeal between the institution and employers, as well as a description of the expected tuition rates for the institution for the next 3 institutional fiscal years. Not later than 30 days after the date the Secretary receives an appeal submitted under subclause (I), the Secretary shall determine whether the appeal should be granted. Such determination shall be based only on the institution meeting all of the following conditions: The institution has had no final adverse action taken by the institution's accrediting agency or association in the 5-year period preceding the date of the determination. The institution has not been found to be in violation or noncompliance with any provision in this title in the 5-year period preceding the date of the determination. The institution has not been found to be in violation or noncompliance with the Department of Defense Voluntary Education Partnership Memorandum of Understanding
(MOU)in the 5-year period preceding the date of the determination. The institution has not been found by the Department of Veterans Affairs or the relevant State approving agency to be in violation or noncompliance with the Principles of Excellence program established under Executive Order 13607 (77 Fed. Reg. 25861; relating to establishing principles of excellence for educational institutions serving service members, veterans, spouses, and other family members) in the 5-year period preceding the date of the determination. The institution has not been found in a final order by the Federal Trade Commission to have engaged in unfair or deceptive acts or practices in the 5-year period preceding the date of the determination. The institution offers high-quality academic or job-training programs, and positions veterans and service members after graduation for success in the workforce. A proprietary institution of higher education may submit not more than 3 consecutive appeals and not more than 5 appeals in 10 years under subclause (I). If the Secretary grants an appeal under this clause and subsequently determines that the proprietary institution of higher education is not in compliance with the plan described in subclause (II), the Secretary shall impose the sanction for which the appeal was granted. If the Secretary grants consecutive appeals under this clause and subsequently determines that the proprietary institution of higher education is not in compliance with the plan described in subclause (II), the Secretary shall impose the cumulative sanctions for the consecutive years for which the appeals were granted. The Secretary shall submit a copy of each determination under subclause
(III)to the Secretary of Veterans Affairs, the Secretary of Defense, the relevant State approving agency, the relevant accrediting agency or association, and the authorizing committees. In addition to such other means of enforcing the requirements of this subparagraph as may be available to the Secretary, if a proprietary institution of higher education fails to meet a requirement of subsection (a)(24) for any institutional fiscal year, then the institution's eligibility to participate in the programs authorized by this title becomes provisional for the two institutional fiscal years after the institutional fiscal year in which the institution failed to meet the requirement of subsection (a)(24), except that such provisional eligibility shall terminate— on the expiration date of the institution's program participation agreement under this subsection that is in effect on the date the Secretary determines that the institution failed to meet the requirement of subsection (a)(24); or in the case that the Secretary determines that the institution failed to meet a requirement of subsection (a)(24) for three consecutive institutional fiscal years, on the date the institution is determined ineligible in accordance with this subparagraph. In this subparagraph, the term Federal educational assistance has the meaning given the term in subsection (a)(24)(B). .
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- 77 FR 25861
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