[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2899 Introduced in House (IH)]
<DOC>
119th CONGRESS
1st Session
H. R. 2899
To provide for accountability in higher education.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
April 10, 2025
Mr. Takano (for himself, Ms. Lee of Nevada, Mr. Krishnamoorthi, Ms.
Waters, and Ms. Adams) introduced the following bill; which was
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
_______________________________________________________________________
A BILL
To provide for accountability in higher education.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Preventing Risky Operations from
Threatening the Education and Career Trajectories of Students Act of
2025'' or the ``PROTECT Students Act of 2025''.
SEC. 2. TABLE OF CONTENTS.
The table of contents for this Act is as follows:
Sec. 1. Short title.
Sec. 2. Table of contents.
Sec. 3. References.
TITLE I--STUDENT AND TAXPAYER PROTECTIONS
Sec. 101. Gainful employment and financial value transparency.
Sec. 102. Borrower defense and substantial misrepresentations.
Sec. 103. Closed school discharge.
Sec. 104. Prohibition on institutions limiting student legal action.
Sec. 105. Incentive compensation.
TITLE II--ENSURING INTEGRITY AT INSTITUTIONS OF HIGHER EDUCATION AND
INSTITUTIONAL CONTRACTORS
Sec. 201. Updating Federal oversight of third-party servicers.
Sec. 202. Job placement rates.
Sec. 203. Allocation of tuition and fee revenue by title IV
institutions.
Sec. 204. Past performance.
Sec. 205. Recoupment.
TITLE III--IMPROVING OVERSIGHT
Sec. 301. Enforcement in the Office of Federal Student Aid.
Sec. 302. For-Profit Education Oversight Coordination Committee.
Sec. 303. Establishment and maintenance of complaint resolution and
tracking system.
Sec. 304. Reforms to eligibility and certification procedures.
Sec. 305. State oversight.
Sec. 306. Accrediting agency oversight.
Sec. 307. Mandatory spending for administrative costs of operating the
student aid programs.
TITLE IV--IMPROVING ACCESS TO STUDENT AND TAXPAYER INFORMATION
Sec. 401. Reporting and disclosures from institutions of higher
education.
Sec. 402. Transparency of oversight activities.
SEC. 3. REFERENCES.
Except as otherwise expressly provided in this Act, wherever in
this Act an amendment or repeal is expressed in terms of an amendment
to, or a repeal of, a section or other provision, the reference shall
be considered to be made to that section or other provision of the
Higher Education Act of 1965 (20 U.S.C. 1001 et seq.).
TITLE I--STUDENT AND TAXPAYER PROTECTIONS
SEC. 101. GAINFUL EMPLOYMENT AND FINANCIAL VALUE TRANSPARENCY.
(a) Defining Gainful Employment Programs.--
(1) Additional institutions.--Section 101(b) (20 U.S.C.
1001(b)) is amended in paragraph (1), by inserting ``,
including that meets the standards for debt-to-earnings and
earnings premium in section 498C,'' after ``gainful employment
in a recognized occupation''.
(2) Proprietary institution of higher education.--Section
102(b)(1)(A)(i) (20 U.S.C. 1002(b)(1)(A)(i)) is amended, by
inserting ``, including that meets the standards for debt-to-
earnings and earnings premium in section 498C'' after ``gainful
employment in a recognized occupation''.
(3) Postsecondary vocational institution.--Section
102(c)(1)(A) (20 U.S.C. 1002(c)(1)(A)) is amended, by inserting
``, including that meets the standards for debt-to-earnings and
earnings premium in section 498C'' after ``gainful employment
in a recognized occupation''.
(4) Eligible program.--Section 481(b)(1)(A)(i) (20 U.S.C.
1088(b)(1)(A)(i)) is amended, by inserting ``, including that
meets the standards for debt-to-earnings and earnings premium
in section 498C'' after ``gainful employment in a recognized
profession''.
(b) Debt-to-Earnings and Earnings Premium.--Subpart 3 of part H of
title IV (20 U.S.C. 1099c et seq.) is amended by adding at the end the
following:
``SEC. 498C. DEBT-TO-EARNINGS AND EARNINGS PREMIUM.
``(a) Definitions.--In this section:
``(1) Annual debt-to-earnings rate.--The term `annual debt-
to-earnings rate' means the rate that is calculated for a
cohort of students by taking the annual loan payment for such
cohort, as calculated by the Secretary, divided by the median
annual earnings for such cohort.
``(2) Annual loan payment.--The term `annual loan payment'
means, for a cohort of students, as defined by the Secretary,
who completed an eligible program, their total annual payment
on loans borrowed to enroll in the institution that offered the
eligible program, measured not less than 2 and not more than 4
years after their completion.
``(3) Discretionary debt-to-earnings rate.--The term
`discretionary debt-to-earnings rate' means the rate that is
calculated for a cohort of students by taking the annual loan
payment for such cohort, as calculated by the Secretary,
divided by the discretionary earnings for such cohort.
``(4) Discretionary earnings.--The term `discretionary
earnings' means, for a cohort of students, as defined by the
Secretary, who completed an eligible program, the median annual
earnings minus the amount that is 150 percent of the poverty
level for an individual, as determined by the Department of
Health and Human Services.
``(5) Earnings premium.--The term `earnings premium' means
the amount by which the median annual earnings exceed the
median earnings for working adults with not more than a high
school diploma, as determined using data from the Bureau of the
Census--
``(A) in the State where the institution that
provides the eligible program is located; or
``(B) if fewer than half of the students in the
eligible program are from the State where the
institution that provides the eligible program is
located, or if the institution is a foreign
institution, nationally.
``(6) Median annual earnings.--The term `median annual
earnings' means, for a cohort of students, as defined by the
Secretary, who completed an eligible program, the midpoint of
their annual earnings measured not less than 2 and not more
than 4 years after their completion.
``(b) Standards.--
``(1) In general.--An eligible program does not meet the
standards for debt-to-earnings or earnings premium if it fails
the debt-to-earnings rates or fails the earnings premium, as
described in paragraph (2), in 2 out of any 3 consecutive
years.
``(2) Failing.--An eligible program--
``(A) fails the debt-to-earnings rates if it has--
``(i) a discretionary debt-to-earnings rate
equal to or greater than 20 percent; and
``(ii) an annual debt-to-earnings rate
equal to or greater than 8 percent; and
``(B) fails the earnings premium if it has an
earnings premium of zero or a negative amount.
``(c) Process.--
``(1) Data match.--In order to ensure compliance with
paragraph (2), the Commissioner of the Internal Revenue
Service, the Commissioner of the Social Security
Administration, and the head of any other Federal agency that
administers the database of individual-level earnings data
shall, in coordination with the Secretary, timely ensure
secure, annual data matches of earnings data with Department of
Education data to produce the median annual earnings of each
eligible program.
``(2) Requirements of the secretary.--The Secretary shall--
``(A) on an annual calendar year basis--
``(i) for each eligible program--
``(I) calculate for each award year
the discretionary debt-to-earnings
rate, the annual debt-to-earnings rate,
and the earnings premium for the
program; and
``(II) publish the discretionary
debt-to-earnings rate, the annual debt-
to-earnings rate, and the earnings
premium for the eligible program for
each award year on a website
established and maintained by the
Secretary;
``(ii) for each eligible program that is a
program of training to prepare students for
gainful employment in a recognized occupation
or a graduate or professional degree program
offered by an institution of higher education
described in section 101(a), issue a notice of
determination not later than 45 days after
completing the data match described in
paragraph (1), informing the institution that
provides the program--
``(I) of the final discretionary
debt-to-earnings rate, the annual debt-
to-earnings rate, and the earnings
premium for the program, which may not
be appealed by the institution unless
the institution believes that the
Secretary erred in the calculation of
any such measure;
``(II) of the final determination
regarding whether the program fails the
debt-to-earnings rates or fails the
earnings premium, as described in
subsection (b)(2);
``(III) whether the program does
not meet the standards for debt-to-
earnings or earnings premium as
described in subsection (b)(1) or could
not meet such standards in the next
year if it fails the debt-to-earnings
rates or fails the earnings premium, as
described in subsection (b)(2), in such
next year; and
``(IV) whether the institution is
required to provide warnings to
enrolled students and prospective
students of the program's failure, or
risk of failure, to meet the standards,
as determined under subclause (III);
and
``(iii) for each eligible program that is a
program of training to prepare students for
gainful employment in a recognized occupation
that does not meet the standards for debt-to-
earnings and earnings premium as described in
subsection (b)(1), enforce the consequences
under subsection (d); and
``(B) develop processes to verify, on an annual
calendar year basis--
``(i) that each eligible program that is a
program of training to prepare students for
gainful employment in a recognized occupation
or a graduate or professional degree program
offered by an institution of higher education
described in section 101(a), provides the
warning described in subparagraph (A)(ii)(IV),
if applicable; and
``(ii) that each eligible program that is a
program of training to prepare students for
gainful employment in a recognized occupation
that does not meet the standards for debt-to-
earnings or earnings premium as described in
subsection (b)(1), does not receive funds as
described in subsection (d).
``(d) Consequences of Not Meeting Standards.--
``(1) No disbursement of funds for enrollment in ineligible
programs.--An institution may not disburse program funds under
this title to students enrolled in a program of training to
prepare students for gainful employment in a recognized
occupation that does not meet the standards for debt-to-
earnings and earnings premium as described in this section.
``(2) Time period to reestablish eligibility.--An
institution may not seek to reestablish the eligibility of a
program of training to prepare students for gainful employment
in a recognized occupation that does not meet the standards for
debt-to-earnings and earnings premium as described in this
section or establish the eligibility of a program of training
to prepare students for gainful employment in a recognized
occupation that is substantially similar to the program that
did not meet such standards until the date that is 3 years
after the date of the notice of determination issued under
subsection (c)(2)(A)(ii) that the program of training to
prepare students for gainful employment in a recognized
occupation does not meet the standards.
``(e) Regulations.--The Secretary shall issue regulations to carry
out this section not later than 1 year after the date of enactment of
the Preventing Risky Operations from Threatening the Education and
Career Trajectories of Students Act of 2025, except that such
regulations shall not be subject to the requirements of sections 482 or
492.''.
SEC. 102. BORROWER DEFENSE AND SUBSTANTIAL MISREPRESENTATIONS.
(a) Borrower Defense to Repayment.--Section 455(h) (20 U.S.C.
1087e(h)) is amended to read as follows:
``(h) Borrower Defenses.--
``(1) In general.--Notwithstanding any other provision of
State or Federal law, the Secretary shall discharge a covered
loan in repayment made to a borrower with a defense to
repayment of the loan, as described in this section.
``(2) Definitions.--In this subsection:
``(A) Repayment.--The term `repayment' means the
period after any in-school deferment or grace period
and before a loan is paid in full other than by a
consolidation loan made under this title, including,
without limitation, a loan in default.
``(B) Covered loan.--The term `covered loan' means
a loan made, insured, or guaranteed under this title
that has an outstanding balance comprised in whole or
in part by repayment obligations incurred to cover the
cost of attendance at an institution of higher
education.
``(3) Basis for defense to repayment.--
``(A) In general.--For purposes of discharge under
this section, a borrower defense to repayment is
established when the Secretary concludes by a
preponderance of the evidence that a qualifying act,
omission, or event occurred, and the student whose cost
of attendance was paid in whole or in part by the
proceeds of a covered loan suffered detriment in the
nature and degree warranting a borrower defense
discharge.
``(B) Qualifying acts, omissions, or events.--A
qualifying act, omission, or event includes without
limitation any of the following:
``(i) The institution, one of its
representatives, or a third-party servicer of
the institution made a substantial
misrepresentation (as described in section
481(g)), directly or indirectly, to the
borrower in connection with the borrower's
decision to attend, or to continue attending,
the institution or the borrower's decision to
take out a covered loan.
``(ii) The institution failed to perform
its obligations under the terms of a contract
with the student and such obligation was
undertaken as consideration or in exchange for
the borrower's decision to attend, or to
continue attending, the institution, for the
borrower's decision to take out a covered loan,
or for funds disbursed in connection with a
covered loan.
``(iii) The institution engaged in
aggressive and deceptive recruitment conduct or
tactics in connection with the borrower's
decision to attend, or to continue attending,
the institution or the borrower's decision to
take out a covered loan. Aggressive and
deceptive recruitment tactics or conduct
include actions by the institution, any of its
representatives, or any entity, organization,
or person with whom the institution has an
agreement to provide educational programs,
marketing, recruitment, or lead generation
services that pressure a student to make
enrollment or loan-related decisions, take