Bill Summary
This legislation, known as the "Defending All Veterans In Education Act" or "DAVIE Act", aims to close a loophole in the GI Bill and update the 80/20 rule for proprietary institutions of higher education. The 80/20 rule requires that a proprietary institution must derive at least 20% of its revenue from sources other than federal funds in order to be eligible for federal funding. The bill proposes changes to this rule, including defining what counts as federal funds and implementing stricter requirements for calculating revenue sources. It also repeals and replaces existing requirements related to the 80/20 rule. The effective date for these changes is one year after the enactment of the bill.
Possible Impacts
1) The DAVIE Act could affect veterans who are currently using the GI Bill to attend a proprietary institution of higher education. If the institution does not meet the requirements outlined in the Act, the veterans may no longer be able to use their GI Bill benefits at that institution.
2) The Act could also affect low-income individuals who are receiving job training at a proprietary institution. If the institution does not meet the 80/20 revenue requirement and does not qualify as a proprietary institution of higher education, these individuals may lose their job training opportunities.
3) The Act could also impact the operations and revenue sources of proprietary institutions of higher education. Institutions that do not meet the requirements may lose their eligibility for federal funds, which could lead to financial struggles and potential closure of the institution. This could affect the students currently enrolled and future students who were planning on attending the institution.
[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3369 Introduced in House (IH)]
<DOC>
116th CONGRESS
1st Session
H. R. 3369
To close the GI Bill loophole and update the 80/20 rule for proprietary
institutions of higher education.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
June 19, 2019
Ms. Shalala (for herself, Ms. Wasserman Schultz, Mr. Moulton, Mr.
Cisneros, Ms. Houlahan, Ms. Mucarsel-Powell, Mr. Lujan, and Ms.
Sherrill) introduced the following bill; which was referred to the
Committee on Education and Labor
_______________________________________________________________________
A BILL
To close the GI Bill loophole and update the 80/20 rule for proprietary
institutions of 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 ``Defending All Veterans In Education
Act'' or the ``DAVIE Act''.
SEC. 2. CLOSING THE GI BILL LOOPHOLE AND UPDATING THE 80/20 RULE FOR
PROPRIETARY INSTITUTIONS OF HIGHER EDUCATION.
(a) In General.--Section 102(b) of the Higher Education Act of 1965
(20 U.S.C. 1002(b)), is further amended--
(1) in paragraph (1)--
(A) in subparagraph (D), by striking ``and'' after
the semicolon;
(B) in subparagraph (E), by striking the period at
the end and inserting ``; and''; and
(C) by adding at the end the following:
``(F) meets the requirements of paragraph (2).'';
(2) by redesignating paragraph (2) as paragraph (3); and
(3) by inserting after paragraph (1) the following:
``(2) Revenue sources.--
``(A) In general.--In order to qualify as a
proprietary institution of higher education under this
subsection, an institution shall derive not less than
20 percent of the institution's revenues from sources
other than Federal funds, as calculated in accordance
with subparagraphs (B) and (C).
``(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.
``(C) Implementation of non-federal revenue
requirement.--In making calculations under subparagraph
(A), an institution of higher education shall--
``(i) use the cash basis of accounting;
``(ii) consider as revenue only those funds
generated by the institution from--
``(I) tuition, fees, and other
institutional charges for students
enrolled in programs eligible for
assistance under title IV;
``(II) activities conducted by the
institution that are necessary for the
education and training of the
institution's students, if such
activities are--
``(aa) conducted on campus
or at a facility under the
control of the institution;
``(bb) performed under the
supervision of a member of the
institution's faculty; and
``(cc) required to be
performed by all students in a
specific educational program at
the institution; and
``(III) a contractual arrangement
with a Federal agency for the purpose
of providing job training to low-income
individuals who are in need of such
training;
``(iii) presume that any Federal education
assistance funds that are disbursed or
delivered to an institution on behalf of a
student or directly to a student will be used
to pay the student's tuition, fees, or other
institutional charges, regardless of whether
the institution credits such funds to the
student's account or pays such funds directly
to the student, except to the extent that the
student's tuition, fees, or other institutional
charges are satisfied by--
``(I) grant funds provided by an
outside source that--
``(aa) has no affiliation
with the institution; and
``(bb) shares no employees,
executives, or board members
with the institution;
``(II) funds provided under a
contractual arrangement with a Federal,
State, or local government agency for
the purpose of providing job training
to low-income individuals who are in
need of that training; or
``(III) institutional scholarships
described in clause (v);
``(iv) include no loans made by an
institution of higher education as revenue to
the school, except for payments made by
students on such loans;
``(v) include a scholarship provided by the
institution--
``(I) only if the scholarship is in
the form of monetary aid based upon the
academic achievements or financial need
of students, disbursed to qualified
student recipients during each fiscal
year from an established restricted
account; and
``(II) only to the extent that
funds in that account represent
designated funds, or income earned on
such funds, from an outside source
that--
``(aa) has no affiliation
with the institution; and
``(bb) shares no employees,
executives, or board members
with the institution; and
``(vi) exclude from revenues--
``(I) the amount of funds the
institution received under part C of
title IV, unless the institution used
those funds to pay a student's
institutional charges;
``(II) the amount of funds the
institution received under subpart 4 of
part A of title IV;
``(III) the amount of funds
provided by the institution as matching
funds for any Federal program;
``(IV) the amount of Federal
education assistance funds provided to
the institution to pay institutional
charges for a student that were
refunded or returned; and
``(V) the amount charged for books,
supplies, and equipment, unless the
institution includes that amount as
tuition, fees, or other institutional
charges.
``(D) Report to congress.--Not later than July 1,
2020, and by July 1 of each succeeding year, the
Secretary shall submit to the authorizing committees a
report that contains, for each proprietary institution
of higher education that receives assistance under
title IV and as provided in the audited financial
statements submitted to the Secretary by each
institution pursuant to the requirements of section
487(c)--
``(i) the amount and percentage of such
institution's revenues received from Federal
education assistance funds; and
``(ii) the amount and percentage of such
institution's revenues received from other
sources.''.
(b) Repeal of Existing Requirements.--Section 487 of the Higher
Education Act of 1965 (20 U.S.C. 1094) is amended--
(1) in subsection (a)--
(A) by striking paragraph (24);
(B) by redesignating paragraphs (25) through (29)
as paragraphs (24) through (28), respectively;
(C) in paragraph (24)(A)(ii) (as redesignated by
subparagraph (B)), by striking ``subsection (e)'' and
inserting ``subsection (d)''; and
(D) in paragraph (26) (as redesignated by
subparagraph (B)), by striking ``subsection (h)'' and
inserting ``subsection (g)'';
(2) by striking subsection (d);
(3) by redesignating subsections (e) through (j) as
subsections (d) through (i), respectively;
(4) in subsection (d) (as redesignated by paragraph (3)),
by striking ``(a)(25)'' and inserting ``(a)(24)'';
(5) in subsection (f)(1) (as redesignated by paragraph
(3)), by striking ``subsection (e)(2)'' and inserting
``subsection (d)(2)''; and
(6) in subsection (g)(1) (as redesignated by paragraph
(3)), by striking ``subsection (a)(27)'' in the matter
preceding subparagraph (A) and inserting ``subsection
(a)(26)''.
(c) Conforming Amendments.--The Higher Education Act of 1965 (20
U.S.C. 1001 et seq.) is amended--
(1) in section 152 (20 U.S.C. 1019a)--
(A) in subsection (a)(1)(A), by striking
``subsections (a)(27) and (h) of section 487'' and
inserting ``subsections (a)(26) and (g) of section
487''; and
(B) in subsection (b)(1)(B)(i)(I), by striking
``section 487(e)'' and inserting ``section 487(d)'';
(2) in section 153(c)(3) (20 U.S.C. 1019b(c)(3)), by
striking ``section 487(a)(25)'' each place the term appears and
inserting ``section 487(a)(24)'';
(3) in section 496(c)(3)(A) (20 U.S.C. 1099b(c)(3)(A)), by
striking ``section 487(f)'' and inserting ``section 487(e)'';
and
(4) in section 498(k)(1) (20 U.S.C. 1099c(k)(1)), by
striking ``section 487(f)'' and inserting ``section 487(e)''.
SEC. 3. EFFECTIVE DATE.
The amendments made by section 2 shall take effect one year after
the date of the enactment of this Act.
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