Sponsors (6)
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Tightens federal oversight of higher education by changing how amendments to the Higher Education Act are read and by imposing new performance, accountability, and transparency rules for colleges and career programs. It links some program eligibility to graduates’ debt versus earnings, expands borrower relief for misconduct or school closures, limits schools’ use of arbitration and contract barriers, restricts incentive-based recruiting pay, requires minimum tuition spending on instruction and student services, creates a new enforcement unit inside the federal student aid office, and mandates broad public posting of institutional financial and compliance records. Colleges, students, federal loan borrowers, accreditors, and state and federal oversight bodies would face new reporting and compliance duties. Programs that fail the new performance or reporting rules could lose access to federal student aid, and the Department of Education would get new investigatory and enforcement tools including secret-shopping, emergency actions, civil penalties, and recoupment authority.
States that the table of contents for this Act is as follows; the section itself provides no entries or additional provisions.
Clarifies that, except where the Act explicitly says otherwise, any amendment or repeal described in this Act is a reference to the corresponding section or provision of the Higher Education Act of 1965.
Amends Higher Education Act definitions/coverage provisions related to gainful employment programs by changing: (1) HEA section 101(b) (20 U.S.C. 1001(b)); (2) HEA section 102(b)(1)(A)(i) (20 U.S.C. 1002(b)(1)(A)(i)); (3) HEA section 102(c)(1)(A) (20 U.S.C. 1002(c)(1)(A)); and (4) HEA section 481(b)(1)(A)(i) (20 U.S.C. 1088(b)(1)(A)(i)).
Adds a new HEA provision (section 498C) to create “debt-to-earnings” and “earnings premium” metrics for eligible programs, including definitions of annual debt-to-earnings rate, discretionary debt-to-earnings rate, annual loan payment, discretionary earnings, earnings premium, and median annual earnings.
Sets standards for when an eligible program does not meet debt-to-earnings or earnings premium requirements: a program fails the standards if it fails the debt-to-earnings rates or fails the earnings premium in 2 out of any 3 consecutive years. A program fails the debt-to-earnings rates if its discretionary debt-to-earnings rate is at least 20% and its annual debt-to-earnings rate is at least 8%. A program fails the earnings premium if its earnings premium is zero or negative.
Who is affected and how:
Students and prospective students: Likely to benefit from stronger borrower relief rules, clearer performance-based signals about program value, and greater public access to program and school information; may face fewer low‑quality programs over time.
Federal student loan borrowers: Will see expanded paths to relief if harmed by institutional misconduct or school closure; public reporting of borrower-defense outcomes improves visibility of redress options.
Institutions of higher education (public, private nonprofit, and for-profit): Face new compliance, reporting, and spending requirements; risk losing Title IV eligibility if programs fail performance metrics; will incur administrative costs to meet transparency, hiring, contracting, and spending rules; owners must sign participation agreements, increasing owner-level accountability.
Accrediting agencies and third‑party contractors: Must share records and will be subject to closer scrutiny; accreditor actions and enforcement measures become more public, and contractual relationships with institutions are more tightly regulated.
Department of Education and state oversight bodies: Will need to stand up or expand enforcement capacity, conduct studies, publish expanded data, and coordinate investigations; the new enforcement unit increases departmental workload but centralizes authority to act more quickly.
Employers, recruiters, and program vendors: Restrictions on incentive-based pay and tighter contracting rules will affect recruiting practices and vendor relationships.
Short-term effects: Compliance, reporting, and administrative burdens increase for institutions and accreditors; probable investigations, audits, and some emergency actions as the enforcement unit becomes operational.
Long-term effects: Potential reduction in low-quality or deceptive programs, reallocation of tuition spending toward instruction and student services, improved consumer information for students, and stronger federal enforcement of Title IV rules. There is also potential for litigation from institutions reacting to tighter rules and enforcement actions.
Amends section 141 (20 U.S.C. 1018) to add a new subsection establishing an enforcement unit within the PBO with a Chief Enforcement Officer, duties, divisions, staffing, appointment/bonus provisions, and coordination authorities; also redesignates subsections (g)-(i) as (h)-(j).
Rewrites subsection (a) to explicitly authorize the Secretary to issue subpoenas for production of documentary evidence from any place in a State and to require by subpoena oral testimony, with appearance required at any place in a State.
Amends section 498A to expand program review criteria (including financial responsibility and other eligibility-related reviews), add a risk-review identified category of 'high-risk' institutions with listed risk factors, broaden training to include civil investigative training and identifying marketing misrepresentations, redesignate subsections, and require program reviews to examine recruiting/marketing materials, consumer complaints and borrower defense claims, actions by State or Federal regulators, and actions by accreditors.
Multiple amendments to program participation agreement provisions: (1) alters civil penalties provision (487(c)(3)(B)) to set minimum dollar and percentage penalties, treat repeated views/experiences of misrepresentations as separate violations, and accrue violations across commonly owned institutions/affiliates; (2) adds a new false claims provision making institutions subject to 31 U.S.C. 3729–3733 with damages defined as total funds distributed for loans during the relevant period; (3) modifies certification of compliance paragraph to strengthen acknowledgments that violations constitute material noncompliance and require evidence of authority to operate in a State; and (4) adds program participation agreement compliance as a requirement tied to complaint/report responses under section 161 or other Department requirements.
Amends section 498 to require institutions demonstrate full compliance with each provision under the title to receive full non-provisional certification, prohibits continued participation absent full compliance with section 487(a)(16), adjusts provisions on site visits and certification delays, expands grounds for provisional certification, allows additional conditions for provisionally certified institutions, redesignates subsections, and adds authority for termination of provisionally certified institutions failing obligations or found to have substantial misrepresentations or violations of consumer protection laws.
Amends the general definition of 'institution of higher education' to add conditions for institutions providing distance education or correspondence in States where they are not located, including requirements for interstate reciprocity agreements (enrollment caps, enforcement of non-registration and non-fee laws, and decision-making by member State regulatory representatives), and renumbers certain paragraphs.
Amends 20 U.S.C. 1099b(c) to add accreditor responsibilities to assess student risk and program risk (including programs managed by third-party servicers), determine need for additional oversight, and provide adequate monitoring of quality and risk.
Amends paragraph (3) of section 458(a) (orig. 20 U.S.C. 1087h(a)(3)) to authorize annual mandatory availability of funds for administrative costs up to a limit (not to exceed 5 percent of the average outstanding Federal student loan portfolio), make such funds available until expended, allow carryover to subsequent fiscal years, and require detailed budget information in the Department's annual budget request.
Amends definitions in section 102 (including proprietary and postsecondary vocational institutions) by inserting additional language (text not shown in chunk).
Amends section 481(b)(1)(A)(i) by inserting additional language (text not shown in chunk) related to definitions such as 'eligible program'.
And 3 more affected sections...
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Referred to the Committee on Education and Workforce, and in addition to the Committee on the Judiciary, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Introduced April 10, 2025 by Mark Takano · Last progress April 10, 2025
Referred to the Committee on Education and Workforce, and in addition to the Committee on the Judiciary, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Introduced in House