S. 4056 — Proprietary Education Oversight Task Force Act

This section defines 11 terms for purposes of the Act: (1) accrediting agency (i.e., a private educational association recognized by the Secretary of Education under the Higher Education Act of 1965); (2) Department (i.e., Department of Education); (3) executive officer (i.e., with respect to a publicly traded proprietary institution of higher education, the president, certain vice presidents, or other policy-making officers); (4) Federal education assistance (i.e., Federal funds disbursed by specified departments to or for students' cost of attendance at proprietary institutions); (5) institutional debt (i.e., debt owed by a student or parent to a higher education institution, including from private loans, income-share agreements, Title IV returns, or unpaid charges); (6) private education loan (i.e., a loan by a private educational lender, as defined in 15 U.S.C. 1650(a), for postsecondary expenses and not under specified Federal programs); (7) proprietary institution of higher education (as defined in the Higher Education Act of 1965); (8) recruiting and marketing activities (i.e., generally, advertising, misrepresentations, lead generation, and related efforts by proprietary institutions, with specified exceptions); (9) Secretary (i.e., Secretary of Education); (10) State approval agency (i.e., a State agency authorizing postsecondary programs); and (11) veterans service organization (i.e., an organization recognized by the Secretary of Veterans Affairs for veterans' representation).

This section establishes the Proprietary Education Interagency Oversight Committee, composed of the head (or designee) of the Department of Education, Consumer Financial Protection Bureau, Department of Justice, Securities and Exchange Commission, Department of Defense, Department of Veterans Affairs, Federal Trade Commission, Department of Labor, Internal Revenue Service, and any other relevant federal agency at the President's discretion. The Committee is to improve enforcement of federal laws, increase accountability of proprietary institutions of higher education (i.e., for-profit colleges) to students and taxpayers, promote high-quality education programs, and reduce fraud and abuse. To meet these purposes, the Committee must (1) coordinate administrative oversight, including developing a memorandum of understanding for an annual report under section 6, encouraging interagency information-sharing on investigations and audits, and increasing coordination with state agencies such as attorneys general and approval agencies; and (2) synthesize cross-agency data to produce the annual report, publish a "For-Profit College Warning List for Parents and Students" under section 7, and ensure consistent dissemination of consumer information. The Secretary of Education (or designee) serves as chairperson, with Department support; the Committee meets at least quarterly; and agency heads must notify complainants about proprietary institutions that their information may be used for the Committee's purposes.

This section establishes a Proprietary Education Oversight Advisory Committee (Advisory Committee) in the Department of Education to advise the Proprietary Education Oversight Committee, with meetings at least twice each fiscal year and subject to the Federal Advisory Committee Act. The Advisory Committee comprises 13 members: (1) 4 representatives from state attorneys general, with appointments by House and Senate leaders; and (2) 9 members appointed by the Secretary, including representatives from a state approval agency, veterans service organization, accrediting agency, civil rights organization, proprietary institution of higher education, consumer advocate organization, legal assistance organization for students or borrowers, and one current dependent student and one current independent student at a proprietary institution. Members serve 6-year terms, with vacancies filled in the same manner as original appointments within 90 days (and Federal Register notice required within 30 days for Secretary-appointed positions). The Advisory Committee must provide advice on complaints and state enforcement against proprietary institutions, minority and veteran enrollment, student outcomes (e.g., graduation rates, earnings above high school graduates, licensure pass rates, job placement in degree field), student loan burdens (e.g., median debt by degree, cohort default rates, debt-to-earnings rates), marketing and recruitment practices, per-pupil instructional spending, recommended federal enforcement actions, and preparation of a report under section 6. To perform its duties, the Advisory Committee may share complaint data among members and the oversight committee while protecting personally identifiable information privacy.

This section requires the Secretary of Education, in consultation with the Committee, to establish a centralized toll-free telephone number, website, and database for the collection, monitoring, and response to student complaints regarding proprietary institutions of higher education (i.e., for-profit colleges) eligible for federal student aid. The Committee must coordinate complaint routing with represented federal agencies and, to the extent practicable, qualified state approval agencies, subject to privacy protections; complaint data must be used for interagency coordination, investigations and enforcement against such institutions, and preparation of reports and warning lists under §§6 and 7. This section further mandates reciprocal data sharing of student complaint information among Committee members, accrediting agencies, the Federal Trade Commission, other federal agencies, and state agencies, consistent with federal privacy and data security standards.

This section directs the Committee to submit an annual report to the Senate Committee on Health, Education, Labor, and Pensions, the House Committee on Education and Workforce, and other appropriate congressional committees. The report must exclude personally identifiable information and be publicly accessible to parents, students, and stakeholders. The report must describe (1) each Committee member's role in achieving the Committee's purposes; (2) any adverse enforcement actions by the federal government, Committee member agencies, or states against proprietary institutions of higher education; (3) summaries of complaints, administrative proceedings, audits, and accrediting actions against each proprietary institution; (4) specified industry-wide data on proprietary institutions for the prior academic year, including total federal education assistance received and its percentage of total assistance to all institutions of higher education—disaggregated by title IV loans and grants, chapter 33 of title 38 (Post-9/11 GI Bill), section 2007 of title 10 (Tuition Assistance), section 1784a of title 10 (My Career Advancement Account program for military spouses), and other assistance—with corresponding percentages for each; average retention and graduation rates; average cohort default and debt-to-earnings rates; average pre-enrollment expenditures per student; average educational and general expenditures per student; licensing exam pass rates for proprietary attendees versus all test-takers; and private education loan usage; and (5) Committee recommendations for legislative and administrative actions to strengthen enforcement, accountability, fraud prevention, and program quality.

This section directs the Secretary, on behalf of the Committee, to publish each academic year the “For-Profit College Warning List for Parents and Students” comprised of proprietary institutions of higher education that (1) have been sued for financial relief by a federal or state authority or through a qui tam action with federal intervention; (2) are required to pay a debt or incur liability from a settlement, arbitration, or judgment addressing misrepresentation, fraud, False Claims Act violations (31 USC 3729–3733), or borrower-defense-to-repayment claims; (3) have pending borrower defense discharge claims for which the Secretary has formed a group process; (4) have had eligibility withdrawn or suspended for title IV Higher Education Act (20 USC 1070 et seq.) loans or grants, chapter 33 GI Bill benefits (38 USC ch. 33), tuition assistance under 10 USC 2007, spouse tuition assistance under 10 USC 1784a, or other federal education assistance; or (5) have been deemed ineligible for or required to repay federal education assistance in the prior applicable reporting year. The list must include a plain-language summary of each institution’s inclusion basis and follow Committee-established review procedures that specify identification processes and deficiencies and allow the institution a written response opportunity prior to final publication. The Secretary must publish the list by July 1 of each fiscal year in a prominent, easily accessible manner without personally identifiable information and may incorporate it into preexisting platforms.