20 U.S.C. § 1094 — Program participation agreements

Page 701 TITLE 20—EDUCATION § 1094 Labor and Human Resources of the Senate and the Committee on Education and the Workforce of the House of Representatives’’. Subsec. (f)(3). Pub. L. 110–315, § 491, substituted ‘‘An- nual reports’’ for ‘‘Reports’’ in heading, in subpar. (B) redesignated cls. (i) and (ii) as subpars. (A) and (B), re- spectively, and adjusted their margins, and substituted ‘‘The Secretary shall provide reports to the authorizing committees on an annual basis’’ for former subpar. (A) which required Secretary to report to congressional committees on evaluations of demonstration programs and for introductory provisions of former subpar. (B) which related to additional annual reports. 1998—Pub. L. 105–244 amended section catchline and text generally. Prior to amendment, section authorized Secretary to make grants to nonprofit private organi- zations to provide training for student financial aid ad- ministrators and TRIO personnel. 1992—Pub. L. 102–325 struck out ‘‘and student sup- port’’ after ‘‘aid’’ in section catchline and amended text generally, substituting present provisions for former subsec. (a) relating to program authority, subsec. (b) relating to use of funds, and subsec. (c) relating to au- thorization of appropriations. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1998 AMENDMENT Amendment by Pub. L. 105–244 effective Oct. 1, 1998, except as otherwise provided in Pub. L. 105–244, see sec- tion 3 of Pub. L. 105–244, set out as a note under section 1001 of this title. § 1093a. Articulation agreements (a) Definition In this section, the term ‘‘articulation agree- ment’’ means an agreement between or among institutions of higher education that specifies the acceptability of courses in transfer toward meeting specific degree or program require- ments. (b) Program to encourage articulation agree- ments (1) Program established The Secretary shall carry out a program for States, in cooperation with public institutions of higher education, to develop, enhance, and implement comprehensive articulation agree- ments between or among such institutions in a State, and (to the extent practicable) across State lines, by 2010. Such articulation agree- ments shall be made widely and publicly avail- able on the websites of States and such insti- tutions. In developing, enhancing, and imple- menting articulation agreements, States and public institutions of higher education may employ strategies, where applicable, includ- ing— (A) common course numbering; (B) a general education core curriculum; (C) management systems regarding course equivalency, transfer of credit, and articula- tion; and (D) other strategies identified by the Sec- retary. (2) Technical assistance provided The Secretary shall provide technical assist- ance to States and public institutions of high- er education for the purposes of developing and implementing articulation agreements in accordance with this subsection. (3) Rule of construction Nothing in this subsection shall be con- strued to authorize the Secretary to require particular policies, procedures, or practices by institutions of higher education with respect to articulation agreements. (Pub. L. 89–329, title IV, § 486A, as added Pub. L. 110–315, title IV, § 492, Aug. 14, 2008, 122 Stat. 3307.) § 1094. Program participation agreements (a) Required for programs of assistance; contents In order to be an eligible institution for the purposes of any program authorized under this subchapter, an institution must be an institu- tion of higher education or an eligible institu- tion (as that term is defined for the purpose of that program) and shall, except with respect to a program under subpart 4 of part A, enter into a program participation agreement with the Secretary. The agreement shall condition the initial and continuing eligibility of an institu- tion to participate in a program upon compli- ance with the following requirements: (1) The institution will use funds received by it for any program under this subchapter and any interest or other earnings thereon solely for the purpose specified in and in accordance with the provision of that program. (2) The institution shall not charge any stu- dent a fee for processing or handling any ap- plication, form, or data required to determine the student’s eligibility for assistance under this subchapter or the amount of such assist- ance. (3) The institution will establish and main- tain such administrative and fiscal procedures and records as may be necessary to ensure proper and efficient administration of funds received from the Secretary or from students under this subchapter, together with assur- ances that the institution will provide, upon request and in a timely fashion, information relating to the administrative capability and financial responsibility of the institution to— (A) the Secretary; (B) the appropriate guaranty agency; and (C) the appropriate accrediting agency or association. (4) The institution will comply with the pro- visions of subsection (c) of this section and the regulations prescribed under that subsection, relating to fiscal eligibility. (5) The institution will submit reports to the Secretary and, in the case of an institution participating in a program under part B or part E, to holders of loans made to the institu- tion’s students under such parts at such times and containing such information as the Sec- retary may reasonably require to carry out the purpose of this subchapter. (6) The institution will not provide any stu- dent with any statement or certification to any lender under part B that qualifies the stu- dent for a loan or loans in excess of the amount that student is eligible to borrow in accordance with sections 1075(a), 1078(a)(2), and 1078(b)(1)(A) and (B) of this title. (7) The institution will comply with the re- quirements of section 1092 of this title. (8) In the case of an institution that adver- tises job placement rates as a means of at- Page 702 TITLE 20—EDUCATION § 1094 tracting students to enroll in the institution, the institution will make available to prospec- tive students, at or before the time of applica- tion (A) the most recent available data con- cerning employment statistics, graduation statistics, and any other information nec- essary to substantiate the truthfulness of the advertisements, and (B) relevant State licens- ing requirements of the State in which such institution is located for any job for which the course of instruction is designed to prepare such prospective students. (9) In the case of an institution participating in a program under part B or D, the institu- tion will inform all eligible borrowers enrolled in the institution about the availability and eligibility of such borrowers for State grant assistance from the State in which the institu- tion is located, and will inform such borrowers from another State of the source for further information concerning such assistance from that State. (10) The institution certifies that it has in operation a drug abuse prevention program that is determined by the institution to be ac- cessible to any officer, employee, or student at the institution. (11) In the case of any institution whose stu- dents receive financial assistance pursuant to section 1091(d) of this title, the institution will make available to such students a program proven successful in assisting students in ob- taining a certificate of high school equiva- lency. (12) The institution certifies that— (A) the institution has established a cam- pus security policy; and (B) the institution has complied with the disclosure requirements of section 1092(f) of this title. (13) The institution will not deny any form of Federal financial aid to any student who meets the eligibility requirements of this sub- chapter on the grounds that the student is participating in a program of study abroad ap- proved for credit by the institution. (14)(A) The institution, in order to partici- pate as an eligible institution under part B or D, will develop a Default Management Plan for approval by the Secretary as part of its initial application for certification as an eligible in- stitution and will implement such Plan for two years thereafter. (B) Any institution of higher education which changes ownership and any eligible in- stitution which changes its status as a parent or subordinate institution shall, in order to participate as an eligible institution under part B or D, develop a Default Management Plan for approval by the Secretary and imple- ment such Plan for two years after its change of ownership or status. (C) This paragraph shall not apply in the case of an institution in which (i) neither the parent nor the subordinate institution has a cohort default rate in excess of 10 percent, and (ii) the new owner of such parent or subordi- nate institution does not, and has not, owned any other institution with a cohort default rate in excess of 10 percent. (15) The institution acknowledges the au- thority of the Secretary, guaranty agencies, lenders, accrediting agencies, the Secretary of Veterans Affairs, and the State agencies under subpart 1 of part H to share with each other any information pertaining to the institu- tion’s eligibility to participate in programs under this subchapter or any information on fraud and abuse. (16)(A) The institution will not knowingly employ an individual in a capacity that in- volves the administration of programs under this subchapter, or the receipt of program funds under this subchapter, who has been convicted of, or has pled nolo contendere or guilty to, a crime involving the acquisition, use, or expenditure of funds under this sub- chapter, or has been judicially determined to have committed fraud involving funds under this subchapter or contract with an institu- tion or third party servicer that has been ter- minated under section 1082 of this title involv- ing the acquisition, use, or expenditure of funds under this subchapter, or who has been judicially determined to have committed fraud involving funds under this subchapter. (B) The institution will not knowingly con- tract with or employ any individual, agency, or organization that has been, or whose offi- cers or employees have been— (i) convicted of, or pled nolo contendere or guilty to, a crime involving the acquisition, use, or expenditure of funds under this sub- chapter; or (ii) judicially determined to have com- mitted fraud involving funds under this sub- chapter. (17) The institution will complete surveys conducted as a part of the Integrated Postsec- ondary Education Data System (IPEDS) or any other Federal postsecondary institution data collection effort, as designated by the Secretary, in a timely manner and to the sat- isfaction of the Secretary. (18) The institution will meet the require- ments established pursuant to section 1092(g) of this title. (19) The institution will not impose any pen- alty, including the assessment of late fees, the denial of access to classes, libraries, or other institutional facilities, or the requirement that the student borrow additional funds, on any student because of the student’s inability to meet his or her financial obligations to the institution as a result of the delayed disburse- ment of the proceeds of a loan made under this subchapter due to compliance with the provi- sions of this subchapter, or delays attributable to the institution. (20) The institution will not provide any commission, bonus, or other incentive pay- ment based directly or indirectly on success in securing enrollments or financial aid to any persons or entities engaged in any student re- cruiting or admission activities or in making decisions regarding the award of student fi- nancial assistance, except that this paragraph shall not apply to the recruitment of foreign students residing in foreign countries who are not eligible to receive Federal student assist- ance. (21) The institution will meet the require- ments established by the Secretary and ac- Page 703 TITLE 20—EDUCATION § 1094 1 So in original. The closing parenthesis probably should not appear. crediting agencies or associations, and will provide evidence to the Secretary that the in- stitution has the authority to operate within a State. (22) The institution will comply with the re- fund policy established pursuant to section 1091b of this title. (23)(A) The institution, if located in a State to which section 20503(b) of title 52 does not apply, will make a good faith effort to dis- tribute a mail voter registration form, re- quested and received from the State, to each student enrolled in a degree or certificate pro- gram and physically in attendance at the in- stitution, and to make such forms widely available to students at the institution. (B) The institution shall request the forms from the State 120 days prior to the deadline for registering to vote within the State. If an institution has not received a sufficient quan- tity of forms to fulfill this section from the State within 60 days prior to the deadline for registering to vote in the State, the institu- tion shall not be held liable for not meeting the requirements of this section during that election year. (C) This paragraph shall apply to general and special elections for Federal office, as de- fined in section 30101(3) of title 52, and to the elections for Governor or other chief executive within such State).1 (D) The institution shall be considered in compliance with the requirements of subpara- graph (A) for each student to whom the insti- tution electronically transmits a message con- taining a voter registration form acceptable for use in the State in which the institution is located, or an Internet address where such a form can be downloaded, if such information is in an electronic message devoted exclusively to voter registration. (24) In the case of a proprietary institution of higher education (as defined in section 1002(b) of this title), such institution will de- rive not less than ten percent of such institu- tion’s revenues from sources other than Fed- eral funds that are disbursed or delivered to or on behalf of a student to be used to attend such institution (referred to in this paragraph and subsection (d) as ‘‘Federal education as- sistance funds’’), as calculated in accordance with subsection (d)(1), or will be subject to the sanctions described in subsection (d)(2). (25) In the case of an institution that partici- pates in a loan program under this subchapter, the institution will— (A) develop a code of conduct with respect to such loans with which the institution’s officers, employees, and agents shall comply, that— (i) prohibits a conflict of interest with the responsibilities of an officer, employee, or agent of an institution with respect to such loans; and (ii) at a minimum, includes the provi- sions described in subsection (e); (B) publish such code of conduct promi- nently on the institution’s website; and (C) administer and enforce such code by, at a minimum, requiring that all of the institu- tion’s officers, employees, and agents with responsibilities with respect to such loans be annually informed of the provisions of the code of conduct. (26) The institution will, upon written re- quest, disclose to the alleged victim of any crime of violence (as that term is defined in section 16 of title 18), or a nonforcible sex of- fense, the report on the results of any discipli- nary proceeding conducted by such institution against a student who is the alleged perpe- trator of such crime or offense with respect to such crime or offense. If the alleged victim of such crime or offense is deceased as a result of such crime or offense, the next of kin of such victim shall be treated as the alleged victim for purposes of this paragraph. (27) In the case of an institution that has en- tered into a preferred lender arrangement, the institution will at least annually compile, maintain, and make available for students at- tending the institution, and the families of such students, a list, in print or other me- dium, of the specific lenders for loans made, insured, or guaranteed under this subchapter or private education loans that the institution recommends, promotes, or endorses in accord- ance with such preferred lender arrangement. In making such list, the institution shall com- ply with the requirements of subsection (h). (28)(A) The institution will, upon the request of an applicant for a private education loan, provide to the applicant the form required under section 1638(e)(3) of title 15, and the in- formation required to complete such form, to the extent the institution possesses such infor- mation. (B) For purposes of this paragraph, the term ‘‘private education loan’’ has the meaning given such term in section 1650 of title 15. (29) The institution certifies that the insti- tution— (A) has developed plans to effectively com- bat the unauthorized distribution of copy- righted material, including through the use of a variety of technology-based deterrents; and (B) will, to the extent practicable, offer al- ternatives to illegal downloading or peer-to- peer distribution of intellectual property, as determined by the institution in consulta- tion with the chief technology officer or other designated officer of the institution. (b) Hearings (1) An institution that has received written notice of a final audit or program review deter- mination and that desires to have such deter- mination reviewed by the Secretary shall sub- mit to the Secretary a written request for re- view not later than 45 days after receipt of noti- fication of the final audit or program review de- termination. (2) The Secretary shall, upon receipt of writ- ten notice under paragraph (1), arrange for a hearing and notify the institution within 30 days of receipt of such notice the date, time, and place of such hearing. Such hearing shall take place not later than 120 days from the date upon which the Secretary notifies the institution. Page 704 TITLE 20—EDUCATION § 1094 (c) Audits; financial responsibility; enforcement of standards (1) Notwithstanding any other provisions of this subchapter, the Secretary shall prescribe such regulations as may be necessary to provide for— (A)(i) except as provided in clauses (ii) and (iii), a financial audit of an eligible institution with regard to the financial condition of the institution in its entirety, and a compliance audit of such institution with regard to any funds obtained by it under this subchapter or obtained from a student or a parent who has a loan insured or guaranteed by the Secretary under this subchapter, on at least an annual basis and covering the period since the most recent audit, conducted by a qualified, inde- pendent organization or person in accordance with standards established by the Comptroller General for the audit of governmental organi- zations, programs, and functions, and as pre- scribed in regulations of the Secretary, the re- sults of which shall be submitted to the Sec- retary and shall be available to cognizant guaranty agencies, eligible lenders, State agencies, and the appropriate State agency no- tifying the Secretary under subpart 1 of part H, except that the Secretary may modify the requirements of this clause with respect to in- stitutions of higher education that are foreign institutions, and may waive such require- ments with respect to a foreign institution whose students receive less than $500,000 in loans under this subchapter during the award year preceding the audit period; (ii) with regard to an eligible institution which is audited under chapter 75 of title 31, deeming such audit to satisfy the require- ments of clause (i) for the period covered by such audit; or (iii) at the discretion of the Secretary, with regard to an eligible institution (other than an eligible institution described in section 1002(a)(1)(C) of this title) that has obtained less than $200,000 in funds under this sub- chapter during each of the 2 award years that precede the audit period and submits a letter of credit payable to the Secretary equal to not less than 1⁄2 of the annual potential liabilities of such institution as determined by the Sec- retary, deeming an audit conducted every 3 years to satisfy the requirements of clause (i), except for the award year immediately pre- ceding renewal of the institution’s eligibility under section 1099c(g) of this title; (B) in matters not governed by specific pro- gram provisions, the establishment of reason- able standards of financial responsibility and appropriate institutional capability for the ad- ministration by an eligible institution of a program of student financial aid under this subchapter, including any matter the Sec- retary deems necessary to the sound adminis- tration of the financial aid programs, such as the pertinent actions of any owner, share- holder, or person exercising control over an el- igible institution; (C)(i) except as provided in clause (ii), a compliance audit of a third party servicer (other than with respect to the servicer’s func- tions as a lender if such functions are other- wise audited under this part and such audits meet the requirements of this clause), with re- gard to any contract with an eligible institu- tion, guaranty agency, or lender for admin- istering or servicing any aspect of the student assistance programs under this subchapter, at least once every year and covering the period since the most recent audit, conducted by a qualified, independent organization or person in accordance with standards established by the Comptroller General for the audit of gov- ernmental organizations, programs, and func- tions, and as prescribed in regulations of the Secretary, the results of which shall be sub- mitted to the Secretary; or (ii) with regard to a third party servicer that is audited under chapter 75 of title 31, such audit shall be deemed to satisfy the require- ments of clause (i) for the period covered by such audit; (D)(i) a compliance audit of a secondary market with regard to its transactions involv- ing, and its servicing and collection of, loans made under this subchapter, at least once a year and covering the period since the most recent audit, conducted by a qualified, inde- pendent organization or person in accordance with standards established by the Comptroller General for the audit of governmental organi- zations, programs, and functions, and as pre- scribed in regulations of the Secretary, the re- sults of which shall be submitted to the Sec- retary; or (ii) with regard to a secondary market that is audited under chapter 75 of title 31, such audit shall be deemed to satisfy the require- ments of clause (i) for the period covered by the audit; (E) the establishment, by each eligible insti- tution under part B responsible for furnishing to the lender the statement required by sec- tion 1078(a)(2)(A)(i) of this title, of policies and procedures by which the latest known address and enrollment status of any student who has had a loan insured under this part and who has either formally terminated his enrollment, or failed to re-enroll on at least a half-time basis, at such institution, shall be furnished either to the holder (or if unknown, the insurer) of the note, not later than 60 days after such ter- mination or failure to re-enroll; (F) the limitation, suspension, or termi- nation of the participation in any program under this subchapter of an eligible institu- tion, or the imposition of a civil penalty under paragraph (3)(B) whenever the Secretary has determined, after reasonable notice and oppor- tunity for hearing, that such institution has violated or failed to carry out any provision of this subchapter, any regulation prescribed under this subchapter, or any applicable spe- cial arrangement, agreement, or limitation, except that no period of suspension under this section shall exceed 60 days unless the institu- tion and the Secretary agree to an extension or unless limitation or termination pro- ceedings are initiated by the Secretary within that period of time; (G) an emergency action against an institu- tion, under which the Secretary shall, effec- tive on the date on which a notice and state- Page 705 TITLE 20—EDUCATION § 1094 ment of the basis of the action is mailed to the institution (by registered mail, return receipt requested), withhold funds from the institu- tion or its students and withdraw the institu- tion’s authority to obligate funds under any program under this subchapter, if the Sec- retary— (i) receives information, determined by the Secretary to be reliable, that the institution is violating any provision of this subchapter, any regulation prescribed under this sub- chapter, or any applicable special arrange- ment, agreement, or limitation, (ii) determines that immediate action is necessary to prevent misuse of Federal funds, and (iii) determines that the likelihood of loss outweighs the importance of the procedures prescribed under subparagraph (D) for limi- tation, suspension, or termination, except that an emergency action shall not ex- ceed 30 days unless limitation, suspension, or termination proceedings are initiated by the Secretary against the institution within that period of time, and except that the Secretary shall provide the institution an opportunity to show cause, if it so requests, that the emer- gency action is unwarranted; (H) the limitation, suspension, or termi- nation of the eligibility of a third party servicer to contract with any institution to administer any aspect of an institution’s stu- dent assistance program under this sub- chapter, or the imposition of a civil penalty under paragraph (3)(B), whenever the Sec- retary has determined, after reasonable notice and opportunity for a hearing, that such orga- nization, acting on behalf of an institution, has violated or failed to carry out any provi- sion of this subchapter, any regulation pre- scribed under this subchapter, or any applica- ble special arrangement, agreement, or limita- tion, except that no period of suspension under this subparagraph shall exceed 60 days unless the organization and the Secretary agree to an extension, or unless limitation or termination proceedings are initiated by the Secretary against the individual or organization within that period of time; and (I) an emergency action against a third party servicer that has contracted with an in- stitution to administer any aspect of the insti- tution’s student assistance program under this subchapter, under which the Secretary shall, effective on the date on which a notice and statement of the basis of the action is mailed to such individual or organization (by reg- istered mail, return receipt requested), with- hold funds from the individual or organization and withdraw the individual or organization’s authority to act on behalf of an institution under any program under this subchapter, if the Secretary— (i) receives information, determined by the Secretary to be reliable, that the individual or organization, acting on behalf of an insti- tution, is violating any provision of this sub- chapter, any regulation prescribed under this subchapter, or any applicable special ar- rangement, agreement, or limitation, (ii) determines that immediate action is necessary to prevent misuse of Federal funds, and (iii) determines that the likelihood of loss outweighs the importance of the procedures prescribed under subparagraph (F), for limi- tation, suspension, or termination, except that an emergency action shall not ex- ceed 30 days unless the limitation, suspension, or termination proceedings are initiated by the Secretary against the individual or organi- zation within that period of time, and except that the Secretary shall provide the individual or organization an opportunity to show cause, if it so requests, that the emergency action is unwarranted. (2) If an individual who, or entity that, exer- cises substantial control, as determined by the Secretary in accordance with the definition of substantial control in subpart 3 of part H, over one or more institutions participating in any program under this subchapter, or, for purposes of paragraphs (1)(H) and (I), over one or more or- ganizations that contract with an institution to administer any aspect of the institution’s stu- dent assistance program under this subchapter, is determined to have committed one or more violations of the requirements of any program under this subchapter, or has been suspended or debarred in accordance with the regulations of the Secretary, the Secretary may use such de- termination, suspension, or debarment as the basis for imposing an emergency action on, or limiting, suspending, or terminating, in a single proceeding, the participation of any or all insti- tutions under the substantial control of that in- dividual or entity. (3)(A) Upon determination, after reasonable notice and opportunity for a hearing, that an el- igible institution has engaged in substantial misrepresentation of the nature of its edu- cational program, its financial charges, or the employability of its graduates, the Secretary may suspend or terminate the eligibility status for any or all programs under this subchapter of any otherwise eligible institution, in accordance with procedures specified in paragraph (1)(D) of this subsection, until the Secretary finds that such practices have been corrected. (B)(i) Upon determination, after reasonable notice and opportunity for a hearing, that an el- igible institution— (I) has violated or failed to carry out any provision of this subchapter or any regulation prescribed under this subchapter; or (II) has engaged in substantial misrepresen- tation of the nature of its educational pro- gram, its financial charges, and the employ- ability of its graduates, the Secretary may impose a civil penalty upon such institution of not to exceed $25,000 for each violation or misrepresentation. (ii) Any civil penalty may be compromised by the Secretary. In determining the amount of such penalty, or the amount agreed upon in compromise, the appropriateness of the penalty to the size of the institution of higher education subject to the determination, and the gravity of the violation, failure, or misrepresentation shall be considered. The amount of such penalty, Page 706 TITLE 20—EDUCATION § 1094 when finally determined, or the amount agreed upon in compromise, may be deducted from any sums owing by the United States to the institu- tion charged. (4) The Secretary shall publish a list of State agencies which the Secretary determines to be reliable authority as to the quality of public postsecondary vocational education in their re- spective States for the purpose of determining eligibility for all Federal student assistance pro- grams. (5) The Secretary shall make readily available to appropriate guaranty agencies, eligible lend- ers, State agencies notifying the Secretary under subpart 1 of part H, and accrediting agen- cies or associations the results of the audits of eligible institutions conducted pursuant to para- graph (1)(A). (6) The Secretary is authorized to provide any information collected as a result of audits con- ducted under this section, together with audit information collected by guaranty agencies, to any Federal or State agency having responsibil- ities with respect to student financial assist- ance, including those referred to in subsection (a)(15) of this section. (7) Effective with respect to any audit con- ducted under this subsection after December 31, 1988, if, in the course of conducting any such audit, the personnel of the Department of Edu- cation discover, or are informed of, grants or other assistance provided by an institution in accordance with this subchapter for which the institution has not received funds appropriated under this subchapter (in the amount necessary to provide such assistance), including funds for which reimbursement was not requested prior to such discovery or information, such institution shall be permitted to offset that amount against any sums determined to be owed by the institu- tion pursuant to such audit, or to receive reim- bursement for that amount (if the institution does not owe any such sums). (d) Implementation of non-Federal revenue re- quirement (1) Calculation In making calculations under subsection (a)(24), a proprietary institution of higher edu- cation shall— (A) use the cash basis of accounting, ex- cept in the case of loans described in sub- paragraph (D)(i) that are made by the pro- prietary institution of higher education; (B) 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 this sub- chapter; (ii) activities conducted by the institu- tion that are necessary for the education and training of the institution’s students, if such activities are— (I) conducted on campus or at a facil- ity under the control of the institution; (II) performed under the supervision of a member of the institution’s faculty; and (III) required to be performed by all students in a specific educational pro- gram at the institution; and (iii) funds paid by a student, or on behalf of a student by a party other than the in- stitution, for an education or training pro- gram that is not eligible for funds under this subchapter, if the program— (I) is approved or licensed by the ap- propriate State agency; (II) is accredited by an accrediting agency recognized by the Secretary; or (III) provides an industry-recognized credential or certification; (C) presume that any Federal education assistance funds that are disbursed or deliv- ered to or on behalf of a student will be used to pay the student’s tuition, fees, or other institutional charges, regardless of whether the institution credits those funds to the student’s account or pays those funds di- rectly to the student, except to the extent that the student’s tuition, fees, or other in- stitutional charges are satisfied by— (i) grant funds provided by non-Federal public agencies or private sources inde- pendent of 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 in- dividuals who are in need of that training; (iii) funds used by a student from savings plans for educational expenses established by or on behalf of the student and which qualify for special tax treatment under title 26; or (iv) institutional scholarships described in subparagraph (D)(iii); (D) include institutional aid as revenue to the school only as follows: (i) in the case of loans made by a propri- etary institution of higher education on or after July 1, 2008 and prior to July 1, 2012, the net present value of such loans made by the institution during the applicable in- stitutional fiscal year accounted for on an accrual basis and estimated in accordance with generally accepted accounting prin- ciples and related standards and guidance, if the loans— (I) are bona fide as evidenced by en- forceable promissory notes; (II) are issued at intervals related to the institution’s enrollment periods; and (III) are subject to regular loan repay- ments and collections; (ii) in the case of loans made by a propri- etary institution of higher education on or after July 1, 2012, only the amount of loan repayments received during the applicable institutional fiscal year, excluding repay- ments on loans made and accounted for as specified in clause (i); and (iii) in the case of scholarships provided by a proprietary institution of higher edu- cation, only those scholarships provided by the institution in the form of monetary aid or tuition discounts based upon the academic achievements or financial need of students, disbursed during each fiscal year from an established restricted ac- count, and only to the extent that funds in Page 707 TITLE 20—EDUCATION § 1094 that account represent designated funds from an outside source or from income earned on those funds; (E) in the case of each student who re- ceives a loan on or after July 1, 2008, and prior to July 1, 2011, that is authorized under section 1078–8 of this title or that is a Fed- eral Direct Unsubsidized Stafford Loan, treat as revenue received by the institution from sources other than funds received under this subchapter, the amount by which the disbursement of such loan received by the institution exceeds the limit on such loan in effect on the day before May 7, 2008; and (F) exclude from revenues— (i) the amount of funds the institution received under part C, unless the institu- tion used those funds to pay a student’s in- stitutional charges; (ii) the amount of funds the institution received under subpart 4 of part A; (iii) the amount of funds provided by the institution as matching funds for a pro- gram under this subchapter; (iv) the amount of funds provided by the institution for a program under this sub- chapter that are required to be refunded or returned; and (v) the amount charged for books, sup- plies, and equipment, unless the institu- tion includes that amount as tuition, fees, or other institutional charges. (2) Sanctions (A) Ineligibility A proprietary institution of higher edu- cation that fails to meet a requirement of subsection (a)(24) for two consecutive insti- tutional fiscal years shall be ineligible to participate in the programs authorized by this subchapter for a period of not less than two institutional fiscal years. To regain eli- gibility to participate in the programs au- thorized by this subchapter, a proprietary institution of higher education shall dem- onstrate compliance with all eligibility and certification requirements under section 1099c of this title for a minimum of two in- stitutional fiscal years after the institu- tional fiscal year in which the institution became ineligible. (B) Additional enforcement In addition to such other means of enforc- ing the requirements of this subchapter as may be available to the Secretary, if a pro- prietary institution of higher education fails to meet a requirement of subsection (a)(24) for any institutional fiscal year, then the in- stitution’s eligibility to participate in the programs authorized by this subchapter be- comes provisional for the two institutional fiscal years after the institutional fiscal year in which the institution failed to meet the requirement of subsection (a)(24), except that such provisional eligibility shall termi- nate— (i) on the expiration date of the institu- tion’s program participation agreement under this subsection that is in effect on the date the Secretary determines that the institution failed to meet the requirement of subsection (a)(24); or (ii) in the case that the Secretary deter- mines that the institution failed to meet a requirement of subsection (a)(24) for two consecutive institutional fiscal years, on the date the institution is determined in- eligible in accordance with subparagraph (A). (3) Publication on college navigator website The Secretary shall publicly disclose on the College Navigator website— (A) the identity of any proprietary institu- tion of higher education that fails to meet a requirement of subsection (a)(24); and (B) the extent to which the institution failed to meet such requirement. (4) Report to Congress Not later than July 1, 2009, and July 1 of each succeeding year, the Secretary shall sub- mit to the authorizing committees a report that contains, for each proprietary institution of higher education that receives assistance under this subchapter, as provided in the au- dited financial statements submitted to the Secretary by each institution pursuant to the requirements of subsection (a)(24)— (A) the amount and percentage of such in- stitution’s revenues received from sources under this subchapter; and (B) the amount and percentage of such in- stitution’s revenues received from other sources. (e) Code of conduct requirements An institution of higher education’s code of conduct, as required under subsection (a)(25), shall include the following requirements: (1) Ban on revenue-sharing arrangements (A) Prohibition The institution shall not enter into any revenue-sharing arrangement with any lend- er. (B) Definition For purposes of this paragraph, the term ‘‘revenue-sharing arrangement’’ means an arrangement between an institution and a lender under which— (i) a lender provides or issues a loan that is made, insured, or guaranteed under this subchapter to students attending the insti- tution or to the families of such students; and (ii) the institution recommends the lend- er or the loan products of the lender and in exchange, the lender pays a fee or provides other material benefits, including revenue or profit sharing, to the institution, an of- ficer or employee of the institution, or an agent. (2) Gift ban (A) Prohibition No officer or employee of the institution who is employed in the financial aid office of the institution or who otherwise has respon- sibilities with respect to education loans, or Page 708 TITLE 20—EDUCATION § 1094 agent who has responsibilities with respect to education loans, shall solicit or accept any gift from a lender, guarantor, or servicer of education loans. (B) Definition of gift (i) In general In this paragraph, the term ‘‘gift’’ means any gratuity, favor, discount, entertain- ment, hospitality, loan, or other item hav- ing a monetary value of more than a de minimus amount. The term includes a gift of services, transportation, lodging, or meals, whether provided in kind, by pur- chase of a ticket, payment in advance, or reimbursement after the expense has been incurred. (ii) Exceptions The term ‘‘gift’’ shall not include any of the following: (I) Standard material, activities, or programs on issues related to a loan, de- fault aversion, default prevention, or fi- nancial literacy, such as a brochure, a workshop, or training. (II) Food, refreshments, training, or in- formational material furnished to an of- ficer or employee of an institution, or to an agent, as an integral part of a train- ing session that is designed to improve the service of a lender, guarantor, or servicer of education loans to the insti- tution, if such training contributes to the professional development of the offi- cer, employee, or agent. (III) Favorable terms, conditions, and borrower benefits on an education loan provided to a student employed by the institution if such terms, conditions, or benefits are comparable to those pro- vided to all students of the institution. (IV) Entrance and exit counseling serv- ices provided to borrowers to meet the institution’s responsibilities for en- trance and exit counseling as required by subsections (b) and (l) of section 1092 of this title, as long as— (aa) the institution’s staff are in con- trol of the counseling, (whether in per- son or via electronic capabilities); and (bb) such counseling does not pro- mote the products or services of any specific lender. (V) Philanthropic contributions to an institution from a lender, servicer, or guarantor of education loans that are unrelated to education loans or any con- tribution from any lender, guarantor, or servicer that is not made in exchange for any advantage related to education loans. (VI) State education grants, scholar- ships, or financial aid funds adminis- tered by or on behalf of a State. (iii) Rule for gifts to family members For purposes of this paragraph, a gift to a family member of an officer or employee of an institution, to a family member of an agent, or to any other individual based on that individual’s relationship with the of- ficer, employee, or agent, shall be consid- ered a gift to the officer, employee, or agent if— (I) the gift is given with the knowledge and acquiescence of the officer, em- ployee, or agent; and (II) the officer, employee, or agent has reason to believe the gift was given be- cause of the official position of the offi- cer, employee, or agent. (3) Contracting arrangements prohibited (A) Prohibition An officer or employee who is employed in the financial aid office of the institution or who otherwise has responsibilities with re- spect to education loans, or an agent who has responsibilities with respect to edu- cation loans, shall not accept from any lend- er or affiliate of any lender any fee, pay- ment, or other financial benefit (including the opportunity to purchase stock) as com- pensation for any type of consulting ar- rangement or other contract to provide serv- ices to a lender or on behalf of a lender re- lating to education loans. (B) Exceptions Nothing in this subsection shall be con- strued as prohibiting— (i) an officer or employee of an institu- tion who is not employed in the institu- tion’s financial aid office and who does not otherwise have responsibilities with re- spect to education loans, or an agent who does not have responsibilities with respect to education loans, from performing paid or unpaid service on a board of directors of a lender, guarantor, or servicer of edu- cation loans; (ii) an officer or employee of the institu- tion who is not employed in the institu- tion’s financial aid office but who has re- sponsibility with respect to education loans as a result of a position held at the institution, or an agent who has responsi- bility with respect to education loans, from performing paid or unpaid service on a board of directors of a lender, guarantor, or servicer of education loans, if the insti- tution has a written conflict of interest policy that clearly sets forth that officers, employees, or agents must recuse them- selves from participating in any decision of the board regarding education loans at the institution; or (iii) an officer, employee, or contractor of a lender, guarantor, or servicer of edu- cation loans from serving on a board of di- rectors, or serving as a trustee, of an insti- tution, if the institution has a written conflict of interest policy that the board member or trustee must recuse themselves from any decision regarding education loans at the institution. (4) Interaction with borrowers The institution shall not— (A) for any first-time borrower, assign, through award packaging or other methods, the borrower’s loan to a particular lender; or Page 709 TITLE 20—EDUCATION § 1094 (B) refuse to certify, or delay certification of, any loan based on the borrower’s selec- tion of a particular lender or guaranty agen- cy. (5) Prohibition on offers of funds for private loans (A) Prohibition The institution shall not request or accept from any lender any offer of funds to be used for private education loans (as defined in section 1650 of title 15), including funds for an opportunity pool loan, to students in ex- change for the institution providing conces- sions or promises regarding providing the lender with— (i) a specified number of loans made, in- sured, or guaranteed under this sub- chapter; (ii) a specified loan volume of such loans; or (iii) a preferred lender arrangement for such loans. (B) Definition of opportunity pool loan In this paragraph, the term ‘‘opportunity pool loan’’ means a private education loan made by a lender to a student attending the institution or the family member of such a student that involves a payment, directly or indirectly, by such institution of points, pre- miums, additional interest, or financial sup- port to such lender for the purpose of such lender extending credit to the student or the family. (6) Ban on staffing assistance (A) Prohibition The institution shall not request or accept from any lender any assistance with call center staffing or financial aid office staff- ing. (B) Certain assistance permitted Nothing in paragraph (1) shall be con- strued to prohibit the institution from re- questing or accepting assistance from a lender related to— (i) professional development training for financial aid administrators; (ii) providing educational counseling ma- terials, financial literacy materials, or debt management materials to borrowers, provided that such materials disclose to borrowers the identification of any lender that assisted in preparing or providing such materials; or (iii) staffing services on a short-term, nonrecurring basis to assist the institution with financial aid-related functions during emergencies, including State-declared or federally declared natural disasters, feder- ally declared national disasters, and other localized disasters and emergencies identi- fied by the Secretary. (7) Advisory board compensation Any employee who is employed in the finan- cial aid office of the institution, or who other- wise has responsibilities with respect to edu- cation loans or other student financial aid of the institution, and who serves on an advisory board, commission, or group established by a lender, guarantor, or group of lenders or guar- antors, shall be prohibited from receiving any- thing of value from the lender, guarantor, or group of lenders or guarantors, except that the employee may be reimbursed for reasonable expenses incurred in serving on such advisory board, commission, or group. (f) Institutional requirements for teach-outs (1) In general In the event the Secretary initiates the limi- tation, suspension, or termination of the par- ticipation of an institution of higher edu- cation in any program under this subchapter under the authority of subsection (c)(1)(F) or initiates an emergency action under the au- thority of subsection (c)(1)(G) and its pre- scribed regulations, the Secretary shall re- quire that institution to prepare a teach-out plan for submission to the institution’s ac- crediting agency or association in compliance with section 1099b(c)(3) of this title, the Sec- retary’s regulations on teach-out plans, and the standards of the institution’s accrediting agency or association. (2) Teach-out plan defined In this subsection, the term ‘‘teach-out plan’’ means a written plan that provides for the equitable treatment of students if an insti- tution of higher education ceases to operate before all students have completed their pro- gram of study, and may include, if required by the institution’s accrediting agency or asso- ciation, an agreement between institutions for such a teach-out plan. (g) Inspector General report on gift ban viola- tions The Inspector General of the Department shall— (1) submit an annual report to the author- izing committees identifying all violations of an institution’s code of conduct that the In- spector General has substantiated during the preceding year relating to the gift ban provi- sions described in subsection (e)(2); and (2) make the report available to the public through the Department’s website. (h) Preferred lender list requirements (1) In general In compiling, maintaining, and making available a preferred lender list as required under subsection (a)(27), the institution will— (A) clearly and fully disclose on such pre- ferred lender list— (i) not less than the information required to be disclosed under section 1019b(a)(2)(A) of this title; (ii) why the institution has entered into a preferred lender arrangement with each lender on the preferred lender list, particu- larly with respect to terms and conditions or provisions favorable to the borrower; and (iii) that the students attending the in- stitution, or the families of such students, do not have to borrow from a lender on the preferred lender list; Page 710 TITLE 20—EDUCATION § 1094 (B) ensure, through the use of the list of lender affiliates provided by the Secretary under paragraph (2), that— (i) there are not less than three lenders of loans made under part B that are not af- filiates of each other included on the pre- ferred lender list and, if the institution recommends, promotes, or endorses pri- vate education loans, there are not less than two lenders of private education loans that are not affiliates of each other included on the preferred lender list; and (ii) the preferred lender list under this paragraph— (I) specifically indicates, for each list- ed lender, whether the lender is or is not an affiliate of each other lender on the preferred lender list; and (II) if a lender is an affiliate of another lender on the preferred lender list, de- scribes the details of such affiliation; (C) prominently disclose the method and criteria used by the institution in selecting lenders with which to enter into preferred lender arrangements to ensure that such lenders are selected on the basis of the best interests of the borrowers, including— (i) payment of origination or other fees on behalf of the borrower; (ii) highly competitive interest rates, or other terms and conditions or provisions of loans under this subchapter or private edu- cation loans; (iii) high-quality servicing for such loans; or (iv) additional benefits beyond the stand- ard terms and conditions or provisions for such loans; (D) exercise a duty of care and a duty of loyalty to compile the preferred lender list under this paragraph without prejudice and for the sole benefit of the students attending the institution, or the families of such stu- dents; (E) not deny or otherwise impede the bor- rower’s choice of a lender or cause unneces- sary delay in loan certification under this subchapter for those borrowers who choose a lender that is not included on the preferred lender list; and (F) comply with such other requirements as the Secretary may prescribe by regula- tion. (2) Lender affiliates list (A) In general The Secretary shall maintain and regu- larly update a list of lender affiliates of all eligible lenders, and shall provide such list to institutions for use in carrying out para- graph (1)(B). (B) Use of most recent list An institution shall use the most recent list of lender affiliates provided by the Sec- retary under subparagraph (A) in carrying out paragraph (1)(B). (i) Definitions For the purpose of this section: (1) Agent The term ‘‘agent’’ has the meaning given the term in section 1019 of this title. (2) Affiliate The term ‘‘affiliate’’ means a person that controls, is controlled by, or is under common control with another person. A person con- trols, is controlled by, or is under common control with another person if— (A) the person directly or indirectly, or acting through one or more others, owns, controls, or has the power to vote five per- cent or more of any class of voting securities of such other person; (B) the person controls, in any manner, the election of a majority of the directors or trustees of such other person; or (C) the Secretary determines (after notice and opportunity for a hearing) that the per- son directly or indirectly exercises a con- trolling interest over the management or policies of such other person’s education loans. (3) Education loan The term ‘‘education loan’’ has the meaning given the term in section 1019 of this title. (4) Eligible institution The term ‘‘eligible institution’’ means any such institution described in section 1002 of this title. (5) Officer The term ‘‘officer’’ has the meaning given the term in section 1019 of this title. (6) Preferred lender arrangement The term ‘‘preferred lender arrangement’’ has the meaning given the term in section 1019 of this title. (j) Construction Nothing in the amendments made by the High- er Education Amendments of 1992 shall be con- strued to prohibit an institution from recording, at the cost of the institution, a hearing referred to in subsection (b)(2), subsection (c)(1)(D), or subparagraph (A) or (B)(i) of subsection (c)(2), of this section to create a record of the hearing, except the unavailability of a recording shall not serve to delay the completion of the pro- ceeding. The Secretary shall allow the institu- tion to use any reasonable means, including ste- nographers, of recording the hearing. (Pub. L. 89–329, title IV, § 487, as added Pub. L. 99–498, title IV, § 407(a), Oct. 17, 1986, 100 Stat. 1488; amended Pub. L. 101–239, title II, §§ 2003(c)(2), 2006(c), Dec. 19, 1989, 103 Stat. 2114, 2118; Pub. L. 101–542, title II, § 205, Nov. 8, 1990, 104 Stat. 2387; Pub. L. 102–26, § 2(c)(3), Apr. 9, 1991, 105 Stat. 124; Pub. L. 102–325, title IV, § 490, July 23, 1992, 106 Stat. 625; Pub. L. 103–208, § 2(h)(42), (43), Dec. 20, 1993, 107 Stat. 2478; Pub. L. 105–244, title I, § 102(b)(4), title IV, § 489(a), (b)(1), (c), Oct. 7, 1998, 112 Stat. 1622, 1750, 1751; Pub. L. 106–113, div. B, § 1000(a)(4) [title III, § 314], Nov. 29, 1999, 113 Stat. 1535, 1501A–266; Pub. L. 110–315, title IV, § 493(a)(1)(A), (b)–(d), Aug. 14, 2008, 122 Stat. 3308, 3309–3317; Pub. L. 111–39, title IV, § 407(b)(8), July 1, 2009, 123 Stat. 1952; Pub. L. 117–2, title II, § 2013(a), (b), Mar. 11, 2021, 135 Stat. 28.) Page 711 TITLE 20—EDUCATION § 1094 Editorial Notes REFERENCES IN TEXT The Higher Education Amendments of 1992, referred to in subsec. (j), is Pub. L. 102–325, July 23, 1992, 106 Stat. 448. For complete classification of this Act to the Code, see Short Title of 1992 Amendment note set out under section 1001 of this title and Tables. PRIOR PROVISIONS A prior section 1094, Pub. L. 89–329, title IV, § 487, as added Pub. L. 96–374, title IV, § 451(a), Oct. 3, 1980, 94 Stat. 1451; amended Pub. L. 99–272, title XVI, § 16034, Apr. 7, 1986, 100 Stat. 356, related to program participa- tion agreements, prior to the general revision of this part by Pub. L. 99–498. AMENDMENTS 2021—Subsec. (a)(24). Pub. L. 117–2, § 2013(a), sub- stituted ‘‘Federal funds that are disbursed or delivered to or on behalf of a student to be used to attend such institution (referred to in this paragraph and sub- section (d) as ‘Federal education assistance funds’)’’ for ‘‘funds provided under this subchapter’’. Subsec. (d). Pub. L. 117–2, § 2013(b)(1), substituted ‘‘non-Federal’’ for ‘‘non-subchapter IV’’ in heading. Subsec. (d)(1)(C). Pub. L. 117–2, § 2013(b)(2), substituted ‘‘Federal education assistance funds’’ for ‘‘funds for a program under this subchapter’’ in introductory provi- sions. 2009—Subsec. (a)(23)(A). Pub. L. 111–39, § 407(b)(8)(A), made technical amendment to reference in original act which appears in text as reference to section 20503(b) of title 52. Subsec. (c)(1)(A)(i), (F), (H). Pub. L. 111–39, § 407(b)(8)(B), substituted ‘‘students receive’’ for ‘‘stu- dents receives’’ in subpar. (A)(i) and ‘‘paragraph (3)(B)’’ for ‘‘paragraph (2)(B)’’ in subpars. (F) and (H). Subsec. (f)(1). Pub. L. 111–39, § 407(b)(8)(C), substituted ‘‘1099b(c)(3)’’ for ‘‘1099b(c)(4)’’. Subsec. (g)(1). Pub. L. 111–39, § 407(b)(8)(D), sub- stituted ‘‘subsection (e)(2)’’ for ‘‘subsection (f)(2)’’. 2008—Subsec. (a)(23)(C), (D). Pub. L. 110–315, § 493(a)(1)(A)(i), realigned margins of subpar. (C) and added subpar. (D). Subsec. (a)(24) to (29). Pub. L. 110–315, § 493(a)(1)(A)(ii), added pars. (24) to (29). Subsec. (c)(1)(A)(i). Pub. L. 110–315, § 493(b), inserted before semicolon at end ‘‘, except that the Secretary may modify the requirements of this clause with re- spect to institutions of higher education that are for- eign institutions, and may waive such requirements with respect to a foreign institution whose students re- ceives less than $500,000 in loans under this subchapter during the award year preceding the audit period’’. Subsecs. (d) to (h). Pub. L. 110–315, § 493(c)(2), added subsecs. (d) to (h). Former subsecs. (d) and (e) were re- designated (i) and (j), respectively. Subsec. (i). Pub. L. 110–315, § 493(c)(1), (d), redesig- nated subsec. (d) as (i), substituted ‘‘Definitions’’ for ‘‘Definition of eligible institution’’ in heading, added pars. (1) to (3), inserted par. (4) designation and heading before definition of ‘‘eligible institution’’, and added pars. (5) and (6). Subsec. (j). Pub. L. 110–315, § 493(c)(1), redesignated subsec. (e) as (j). 1999—Subsec. (a)(23)(C). Pub. L. 106–113 amended sub- par. (C) generally. Prior to amendment, subpar. (C) read as follows: ‘‘This paragraph shall apply to elec- tions as defined in section 431(1) of title 2, and includes the election for Governor or other chief executive with- in such State).’’ 1998—Subsec. (a)(3)(B) to (D). Pub. L. 105–244, § 489(a)(1), redesignated subpars. (C) and (D) as (B) and (C), respectively, and struck out former subpar. (B) which read as follows: ‘‘the appropriate State review entity designated under subpart 1 of part H;’’. Subsec. (a)(4). Pub. L. 105–244, § 489(a)(2), substituted ‘‘subsection (c)’’ for ‘‘subsection (b)’’. Subsec. (a)(9). Pub. L. 105–244, § 489(a)(3), substituted ‘‘part B or D’’ for ‘‘part B’’. Subsec. (a)(14)(A), (B). Pub. L. 105–244, § 489(a)(4)(A), (B), substituted ‘‘part B or D’’ for ‘‘part B’’. Subsec. (a)(14)(C). Pub. L. 105–244, § 489(a)(4)(C), added subpar. (C). Subsec. (a)(15). Pub. L. 105–244, § 489(a)(5), substituted ‘‘the State agencies’’ for ‘‘State review entities’’. Subsec. (a)(18). Pub. L. 105–244, § 489(a)(6), amended par. (18) generally. Prior to amendment, par. (18) re- quired institutions to cause an annual compilation to be prepared of revenues and expenses relating to men’s and women’s sports. Subsec. (a)(21). Pub. L. 105–244, § 489(a)(7), amended par. (21) generally. Prior to amendment, par. (21) read as follows: ‘‘The institution will meet the requirements established by the Secretary, State postsecondary re- view entities, and accrediting agencies pursuant to part H of this subchapter.’’ Subsec. (a)(23). Pub. L. 105–244, § 489(b)(1), added par. (23). Subsec. (c)(1)(A)(i). Pub. L. 105–244, § 489(c)(1)(A), sub- stituted ‘‘clauses (ii) and (iii)’’ for ‘‘clause (ii)’’ and ‘‘appropriate State agency notifying the Secretary under’’ for ‘‘State review entities referred to in’’ and struck out ‘‘or’’ after semicolon. Subsec. (c)(1)(A)(iii). Pub. L. 105–244, § 489(c)(1)(B), (C), added cl. (iii). Subsec. (c)(4). Pub. L. 105–244, § 489(c)(2), struck out ‘‘, after consultation with each State review entity designated under subpart 1 of part H of this sub- chapter,’’ after ‘‘shall publish’’. Subsec. (c)(5). Pub. L. 105–244, § 489(c)(3), substituted ‘‘State agencies notifying the Secretary’’ for ‘‘State re- view entities designated’’. Subsec. (d). Pub. L. 105–244, § 102(b)(4), substituted ‘‘section 1002’’ for ‘‘section 1088’’. 1993—Subsec. (a)(2). Pub. L. 103–208, § 2(h)(42), struck out ‘‘, or for completing or handling the Federal Stu- dent Assistance Report’’ after ‘‘amount of such assist- ance’’. Subsec. (c)(1)(F). Pub. L. 103–208, § 2(h)(43), substituted ‘‘participation in any program under this subchapter of an eligible institution,’’ for ‘‘eligibility for any pro- gram under this subchapter of any otherwise eligible institution,’’. 1992—Subsec. (a). Pub. L. 102–325, § 490(f)(1), sub- stituted ‘‘subpart 4’’ for ‘‘subpart 3’’. Subsec. (a)(2). Pub. L. 102–325, § 490(f)(2), struck out ‘‘provided for in section 1090(e) of this title’’ after ‘‘Re- port’’. Subsec. (a)(3). Pub. L. 102–325, § 490(a)(1), inserted be- fore period at end ‘‘, together with assurances that the institution will provide, upon request and in a timely fashion, information relating to the administrative ca- pability and financial responsibility of the institution to—’’ and added subpars. (A) to (D). Subsec. (a)(8). Pub. L. 102–325, § 490(a)(2), substituted ‘‘application (A)’’ for ‘‘application,’’ inserted ‘‘, and’’ after ‘‘advertisements’’, and added subpar. (B). Subsec. (a)(13) to (22). Pub. L. 102–325, § 490(a)(3), added pars. (13) to (22). Subsec. (b)(2). Pub. L. 102–325, § 490(b)(1), struck out ‘‘on the record’’ after ‘‘for a hearing’’. Subsec. (c)(1). Pub. L. 102–325, § 490(b)(2)(A), sub- stituted ‘‘shall’’ for ‘‘is authorized to’’ in introductory provisions. Subsec. (c)(1)(A)(i). Pub. L. 102–325, § 490(c), sub- stituted ‘‘a financial audit of an eligible institution with regard to the financial condition of the institution in its entirety, and a compliance audit of such institu- tion’’ for ‘‘a financial and compliance audit of an eligi- ble institution,’’ and ‘‘on at least an annual basis’’ for ‘‘at least once every 2 years’’ and inserted ‘‘and shall be available to cognizant guaranty agencies, eligible lend- ers, State agencies, and the State review entities re- ferred to in subpart 1 of part H’’ after ‘‘submitted to the Secretary’’. Subsec. (c)(1)(B). Pub. L. 102–325, § 490(d)(1), inserted before semicolon at end ‘‘, including any matter the Page 712 TITLE 20—EDUCATION § 1094a Secretary deems necessary to the sound administration of the financial aid programs, such as the pertinent ac- tions of any owner, shareholder, or person exercising control over an eligible institution’’. Subsec. (c)(1)(C). Pub. L. 102–325, § 490(d)(3), added sub- par. (C). Former subpar. (C) redesignated (E). Subsec. (c)(1)(D). Pub. L. 102–325, § 490(d)(3), added sub- par. (D). Former subpar. (D) redesignated (F). Pub. L. 102–325, § 490(b)(2)(B), struck out ‘‘on the record’’ after ‘‘opportunity for hearing’’. Subsec. (c)(1)(E). Pub. L. 102–325, § 490(d)(2), redesig- nated subpar. (C) as (E). Former subpar. (E) redesig- nated (G). Subsec. (c)(1)(F). Pub. L. 102–325, § 490(d)(2), redesig- nated subpar. (D) as (F). Former subpar. (F) redesig- nated (H). Pub. L. 102–325, § 490(b)(2)(C), struck out ‘‘on the record’’ after ‘‘opportunity for a hearing’’. Subsec. (c)(1)(G). Pub. L. 102–325, § 490(d)(2), redesig- nated subpar. (E) as (G). Former subpar. (G) redesig- nated (I). Subsec. (c)(1)(H). Pub. L. 102–325, § 490(d)(2), (4), redes- ignated subpar. (F) as (H) and substituted ‘‘a third party servicer’’ for ‘‘an individual or an organization’’. Subsec. (c)(1)(I). Pub. L. 102–325, § 490(d)(2), (5), redes- ignated subpar. (G) as (I) and substituted ‘‘a third party servicer’’ for ‘‘an individual or an organization’’. Subsec. (c)(2). Pub. L. 102–325, § 490(d)(8), added par. (2). Former par. (2) redesignated (3). Pub. L. 102–325, § 490(b)(2)(D), struck out ‘‘on the record’’ after ‘‘opportunity for a hearing’’ in subpars. (A) and (B)(i). Subsec. (c)(3). Pub. L. 102–325, § 490(d)(7), redesignated par. (2) as (3). Former par. (3) redesignated (4). Pub. L. 102–325, § 490(d)(6), inserted ‘‘, after consulta- tion with each State review entity designated under subpart 1 of part H,’’ after ‘‘shall publish’’. Subsec. (c)(4). Pub. L. 102–325, § 490(d)(7), redesignated par. (3) as (4). Subsec. (c)(5) to (7). Pub. L. 102–325, § 490(d)(9), added pars. (5) to (7). Subsec. (d). Pub. L. 102–325, § 490(f)(3), substituted ‘‘section 1088’’ for ‘‘section 1085(a)’’. Subsec. (e). Pub. L. 102–325, § 490(e), added subsec. (e). 1991—Subsec. (a)(11). Pub. L. 102–26 substituted ‘‘whose students receive financial assistance pursuant to section 1091(d) of this title,’’ for ‘‘which admits stu- dents on the basis of their ability to benefit from the education or training provided by such institution (as determined under section 1091(d) of this title),’’. 1990—Subsec. (a)(12). Pub. L. 101–542 added par. (12). 1989—Subsec. (a)(11). Pub. L. 101–239, § 2003(c)(2), added par. (11). Subsec. (c)(1)(D). Pub. L. 101–239, § 2006(c)(2), sub- stituted ‘‘, any regulation’’ for ‘‘or any regulation’’ and inserted ‘‘or any applicable special arrangement, agree- ment, or limitation,’’. Subsec. (c)(1)(E) to (G). Pub. L. 101–239, § 2006(c)(3), added subpars. (E) to (G). Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2021 AMENDMENT Pub. L. 117–2, title II, § 2013(c), Mar. 11, 2021, 135 Stat. 29, provided that: ‘‘The amendments made under this section [amending this section] shall— ‘‘(1) be subject to the master calendar requirements under section 482 of the Higher Education Act of 1965 (20 U.S.C. 1089) and the public involvement and nego- tiated rulemaking requirements under section 492 of the Higher Education Act of 1965 (20 U.S.C. 1098a), ex- cept that such negotiated rulemaking shall com- mence not earlier than October 1, 2021; and ‘‘(2) apply to institutional fiscal years beginning on or after January 1, 2023.’’ EFFECTIVE DATE OF 2009 AMENDMENT Amendment by Pub. L. 111–39 effective as if enacted on the date of enactment of Pub. L. 110–315 (Aug. 14, 2008), see section 3 of Pub. L. 111–39, set out as a note under section 1001 of this title. EFFECTIVE DATE OF 2008 AMENDMENT Pub. L. 110–315, title IV, § 493(a)(1)(B), Aug. 14, 2008, 122 Stat. 3309, provided that: ‘‘The amendment made by subparagraph (A) [amending this section] with respect to section 487(a)(26) of the Higher Education Act of 1965 [20 U.S.C. 1094(a)(26)] (as added by subparagraph (A)) shall apply with respect to any disciplinary proceeding conducted by an institution on or after the day that is one year after the date of enactment of this Act [Aug. 14, 2008].’’ EFFECTIVE DATE OF 1998 AMENDMENT Amendment by Pub. L. 105–244 effective Oct. 1, 1998, except as otherwise provided in Pub. L. 105–244, see sec- tion 3 of Pub. L. 105–244, set out as a note under section 1001 of this title. EFFECTIVE DATE OF 1993 AMENDMENT Amendment by Pub. L. 103–208 effective as if included in the Higher Education Amendments of 1992, Pub. L. 102–325, except as otherwise provided, see section 5(a) of Pub. L. 103–208, set out as a note under section 1051 of this title. EFFECTIVE DATE OF 1991 AMENDMENT Amendment by Pub. L. 102–26 applicable to any grant, loan, or work assistance to cover the cost of instruc- tion for periods of enrollment beginning on or after July 1, 1991, see section 2(d)(1) of Pub. L. 102–26, set out as a note under section 1085 of this title. EFFECTIVE DATE OF 1989 AMENDMENT Pub. L. 101–239, title II, § 2003(c)(3), Dec. 19, 1989, 103 Stat. 2114, provided that: ‘‘The amendments made by this subsection [amending this section and section 1078–1 of this title] shall apply with respect to periods of enrollment beginning on or after January 1, 1990.’’ EFFECTIVE DATE Section effective Oct. 17, 1986, except as otherwise provided, see section 2 of Pub. L. 99–498, set out as a note under section 1001 of this title. Subsec. (a)(10) of this section applicable only to peri- ods of enrollment beginning on or after July 1, 1987, see section 407(b) of Pub. L. 99–498, set out as a note under section 1091 of this title. REGULATION PROHIBITED Pub. L. 105–244, title IV, § 489(b)(2), Oct. 7, 1998, 112 Stat. 1751, provided that: ‘‘No officer of the executive branch is authorized to instruct the institution in the manner in which the amendment made by this sub- section [amending this section] is carried out.’’ § 1094a. Regulatory relief and improvement (a) Quality Assurance Program (1) In general The Secretary is authorized to select insti- tutions for voluntary participation in a Qual- ity Assurance Program that provides partici- pating institutions with an alternative man- agement approach through which individual schools develop and implement their own com- prehensive systems, related to processing and disbursement of student financial aid, verification of student financial aid applica- tion data, and entrance and exit interviews, thereby enhancing program integrity within the student aid delivery system. (2) Criteria and consideration The Quality Assurance Program authorized by this section shall be based on criteria that