Section 1 Short title
This Act may be cited as the “For-Profit Fraud Act”.
For-Profit Fraud Act
A BILL
To revise the 90–10 rule under the Higher Education Act of 1965, and for other purposes.
Sec. 2 85/15 Rule
Section 487 of the Higher Education Act of 1965 (20 U.S.C. 1094) is amended—
in subsection (a)(24)—
by striking “In the case” and inserting:
“(A) In the case”
by striking “not less than ten percent of such institution’s revenues from sources other than funds provided under this title” and inserting “not less than 15 percent of such institution’s revenues from sources other than Federal funds”; and
by adding at the end the following:
“(B) Federal funds—In this paragraph, the term Federal funds means any Federal funds provided, under this Act or any other Federal law, through a grant, contract, subsidy, loan, guarantee, insurance, or other means to a proprietary institution, including Federal funds disbursed or delivered to an institution or on behalf of a student or to a student to be used to attend the institution, except that such term shall not include any monthly housing stipend provided under the Post-9/11 Educational Assistance Program under chapter 33 of title 38, United States Code.”
in subsection (d)—
in the heading, by amending the heading to read as follows: “Implementation of revenue requirements for non-Federal education assistance funds”; and
in paragraph (2)(A), by inserting at the end the following: “The Secretary of Education shall notify the Secretary of Defense and the Secretary of Veterans Affairs when, by reason of failing to meet a requirement of subsection (a)(24), a proprietary institution of higher education becomes ineligible to participate in the programs authorized by this title, and when the institution regains such eligibility.”;
Sec. 3 Ineligibility of certain proprietary institutions of higher education to participate in Department of Defense or Department Of Veterans Affairs programs of educational assistance
Department of Defense—
In general— Chapter 101 of title 10, United States Code, is amended by inserting after section 2008 the following new section:
“2008a. Ineligibility of certain proprietary institutions of higher education to participate in Department of Defense programs of educational assistance
“Upon notice from the Secretary of Education under section 487(d)(2)(A) of the Higher Education Act of 1965 (20 U.S.C. 1094(d)(2)(A)) that a proprietary institution of higher education is ineligible to participate in the programs authorized by title IV of such Act (20 U.S.C. 1070 et seq.), the Secretary of Defense shall ensure that no educational assistance provided by the Secretary under this title or any other provision of law is available or used for education at the institution for the period of institutional fiscal years during which the institution remains ineligible to participate in the programs authorized by title IV of the Higher Education Act of 1965 (20 U.S.C. 1070 et seq.).”
Clerical amendment— The table of sections at the beginning of chapter 101 of such title is amended by inserting after the item relating to section 2008 the following new item:
Department of Veterans Affairs—
In general— Subchapter II of chapter 36 of title 38, United States Code, is amended by inserting after section 3681 the following new section:
“3681A. Ineligibility of certain proprietary institutions of higher education to participate in Department of Veterans Affairs programs of educational assistance
“(a) In general—Upon notice from the Secretary of Education under section 487(d)(2)(A) of the Higher Education Act of 1965 (20 U.S.C. 1094(d)(2)(A)) that a proprietary institution of higher education is ineligible to participate in the programs authorized by title IV of such Act (20 U.S.C. 1070 et seq.), the Secretary of Veterans Affairs shall ensure that no educational assistance provided by the Secretary under this title or any other provision of law is available or used for education at the institution for the period of institutional fiscal years during which the institution remains ineligible to participate in the programs authorized by title IV of the Higher Education Act of 1965 (20 U.S.C. 1070 et seq.).”
Clerical amendment— The table of sections at the beginning of chapter 36 of such title is amended by inserting after the item relating to section 3681 the following new item: