38 U.S.C. § 3673 — Approval activities: cooperation and co-

Page 811 TITLE 38—VETERANS’ BENEFITS § 3673 acting in the role of a State approving agency, shall contact the Secretary of Education to de- termine whether the course of education subject to such approval process has withdrawn, or been denied or suspended, from receiving for benefits under title IV of the Higher Education Act of 1965 (20 U.S.C. 1070 et seq.). (d) APPROPRIATE EXECUTIVE.—In this section, the appropriate executive of an educational in- stitution or training establishment is a senior executive official, senior administrator, owner, or operator designated by the institution or es- tablishment. (Added Pub. L. 117–333, § 11(a), Jan. 5, 2023, 136 Stat. 6132.) Editorial Notes REFERENCES IN TEXT The Higher Education Act of 1965, referred to in sub- secs. (b)(1)(B)(i)(II), (2), (3)(B) and (c), is Pub. L. 89–329, Nov. 8, 1965, 79 Stat. 1219. Title IV of the Act is classi- fied generally to subchapter IV (§ 1070 et seq.) of chap- ter 28 of Title 20, Education. For complete classifica- tion of this Act to the Code, see section 1 of Pub. L. 89–329, set out as a Short Title note under section 1001 of Title 20 and Tables. CODIFICATION Pub. L. 117–333, § 11(a), Jan. 5, 2023, 136 Stat. 6132, which directed the amendment of subchapter I of this chapter by adding this section after section 3672 of this title, was executed by adding this section after section 3672 in this subchapter, to reflect the probable intent of Congress and the redesignation of former subchapter I of this chapter as subchapter II by section 2(a)(1) of Pub. L. 117–333. Statutory Notes and Related Subsidiaries APPLICABILITY Pub. L. 117–333, § 11(c), Jan. 5, 2023, 136 Stat. 6134, pro- vided that: ‘‘The application required by section 3672A of title 38, United States Code, as added by subsection (a), shall— ‘‘(1) be developed by not later than October 1, 2023; and ‘‘(2) be required for the approval of any new course of education proposed on or after that day.’’ § 3673. Approval activities: cooperation and co- ordination of activities (a) COOPERATION IN ACTIVITIES.—The Secretary and each State approving agency shall take cog- nizance of the fact that definite duties, func- tions, and responsibilities are conferred upon the Secretary and each State approving agency under the educational programs established under this chapter and chapters 34 and 35 of this title. To assure that such programs are effec- tively and efficiently administered, the coopera- tion of the Secretary and the State approving agencies is essential. It is necessary to establish an exchange of information pertaining to activi- ties of educational institutions, and particular attention should be given to the enforcement of approval standards, enforcement of enrollment restrictions, and fraudulent and other criminal activities on the part of persons connected with educational institutions in which eligible per- sons or veterans are enrolled under this chapter and chapters 34 and 35 of this title. (b) COORDINATION OF ACTIVITIES.—The Sec- retary shall take appropriate actions to ensure the coordination of approval activities per- formed by State approving agencies under this chapter and chapters 34 and 35 of this title and approval activities performed by the Depart- ment of Labor, the Department of Education, and other entities in order to reduce overlap and improve efficiency in the performance of such activities. (c) AVAILABILITY OF INFORMATION MATERIAL.— The Secretary will furnish the State approving agencies with copies of such Department of Vet- erans Affairs informational material as may aid them in carrying out chapters 34 and 35 of this title. (d) USE OF STATE APPROVING AGENCIES FOR OVERSIGHT ACTIVITIES.—The Secretary shall uti- lize the services of a State approving agency for conducting a risk-based survey developed under section 3673A of this title and other such over- sight purposes as the Secretary, in consultation with the State approving agencies, considers ap- propriate without regard to whether the Sec- retary or the agency approved the courses of- fered in the State concerned. (e) NOTICE OF GOVERNMENT ACTION.—(1)(A) If the Secretary receives notice described in para- graph (2), or otherwise becomes aware of an ac- tion or event described in paragraph (3), with re- spect to an educational institution, the Sec- retary shall transmit such notice or provide no- tice of such action or event to the State approv- ing agency for the State where the educational institution is located by not later than 30 days after the date on which the Secretary receives such notice or becomes aware of such action or event. (B) If a State approving agency receives notice as described in paragraph (2), or otherwise be- comes aware of an action or event described in paragraph (3), with respect to an educational in- stitution, other than from the Secretary pursu- ant to subparagraph (A) of this paragraph, the State approving agency shall immediately no- tify the Secretary. (C) Not later than 60 days after the date on which a State approving agency receives notice under subparagraph (A), receives notice as de- scribed in subparagraph (B), or becomes aware as described in such subparagraph, as the case may be, regarding an educational institution, such State approving agency shall— (i) complete a risk-based survey of such edu- cational institution; and (ii) provide the Secretary with— (I) a complete report on the findings of the State approving agency with respect to the risk-based survey completed under clause (i) and any actions taken as a result of such findings; and (II) any supporting documentation and pertinent records. (2) Notice described in this paragraph is any of the following: (A) Notice from the Secretary of Education of an event under paragraph (3)(A). (B) Notice of an event under paragraph (3)(B). (C) Notice from a State of an action taken by that State under paragraph (3)(C). (D) Notice provided by an accrediting agency or association of an action described in para- Page 812 TITLE 38—VETERANS’ BENEFITS § 3673 1 So in original. graph (3)(D) taken by that agency or associa- tion. (E) Notice that the Secretary of Education has placed the educational institution on pro- visional certification status. (3) An action or event under this paragraph is any of the following: (A) The receipt by an educational institu- tion of payments under the heightened cash monitoring level 2 payment method pursuant to section 487(c)(1)(B) of the Higher Education Act of 1965 (20 U.S.C. 1094). (B) Punitive action taken by the Attorney General, the Federal Trade Commission, or any other Federal department or agency for misconduct or misleading marketing practices that would violate the standards defined by the Secretary of Veterans Affairs. (C) Punitive action taken by a State against an educational institution. (D) The loss, or risk of loss, by an edu- cational institution of an accreditation from an accrediting agency or association, includ- ing notice of probation, suspension, an order to show cause relating to the educational in- stitution’s academic policies and practices or to its financial stability, or revocation of ac- creditation. (E) The placement of an educational institu- tion on provisional certification status by the Secretary of Education. (4) If a State approving agency disapproves or suspends an educational institution, the State approving agency shall provide notice of such disapproval or suspension to the Secretary and to all other State approving agencies. (5) This subsection shall be carried out using amounts made available pursuant to section 3674(a)(4) of this title as long as such amounts remain available. (6) For each notice transmitted or provided to a State approving agency under paragraph (1) with respect to an educational institution, the Secretary shall ensure the careful review of— (A) to the extent possible, the action that gave rise to such notice; and (B) any other action against the educational institution by any Federal or State govern- ment entity or by the educational institu- tion’s accreditor. (7) In this subsection, the term ‘‘risk-based survey’’ means the risk-based survey developed under section 3673A of this title. (f) OUTREACH ACTIVITIES.—(1) A State approv- ing agency may conduct outreach activities if— (A) the State approving agency has properly conducted its enforcement and approval of courses and programs of education under this chapter; and (B) funds are still available to do so. (2) For purposes of paragraph (1)(A), a State approving agency shall be considered to have properly conducted its enforcement and ap- proval of courses and programs of education under this chapter if the State approving agency has— (A) met fulfilled 1 its requirements pursuant to the applicable cooperative agreements be- tween the State approving agency and the De- partment relating to the oversight and ap- proval of courses and programs of education under this chapter; and (B) completed a risk-based survey of any course or program of education determined to be of questionable quality or at risk by any Federal or State agency or any accrediting agency. (3) Outreach activities conducted under para- graph (1) shall be carried out using amounts de- rived from amounts not specifically appro- priated to carry out this subsection. (Added Pub. L. 88–126, § 1, Sept. 23, 1963, 77 Stat. 158, § 1773; amended Pub. L. 89–358, § 3(a)(7), (11), Mar. 3, 1966, 80 Stat. 20, 21; Pub. L. 92–540, title IV, § 403(6), Oct. 24, 1972, 86 Stat. 1090; Pub. L. 97–295, § 4(51), Oct. 12, 1982, 96 Stat. 1308; Pub. L. 101–237, title IV, § 423(b)(1), Dec. 18, 1989, 103 Stat. 2092; renumbered § 3673, Pub. L. 102–83, § 5(a), Aug. 6, 1991, 105 Stat. 406; Pub. L. 110–389, title III, § 326(a)(1), (2)(A), (3), Oct. 10, 2008, 122 Stat. 4169; Pub. L. 111–377, title II, § 203(b), Jan. 4, 2011, 124 Stat. 4125; Pub. L. 115–48, title III, § 310, Aug. 16, 2017, 131 Stat. 994; Pub. L. 115–62, title V, § 501(a), Sept. 29, 2017, 131 Stat. 1165; Pub. L. 116–315, title I, §§ 1013(b)(1), 1014(a), 1023, Jan. 5, 2021, 134 Stat. 4943, 4959.) Editorial Notes AMENDMENTS 2021—Subsec. (d). Pub. L. 116–315, § 1013(b)(1), sub- stituted ‘‘shall’’ for ‘‘may’’ and ‘‘a risk-based survey developed under section 3673A of this title’’ for ‘‘com- pliance and risk-based surveys’’. Subsec. (e). Pub. L. 116–315, § 1014(a), added subsec. (e). Subsec. (f). Pub. L. 116–315, § 1023, added subsec. (f). 2017—Subsec. (d). Pub. L. 115–62 inserted ‘‘compliance and’’ before ‘‘risk-based surveys’’. Pub. L. 115–48, in heading, struck out ‘‘Compliance and’’ before ‘‘Oversight’’ and, in text, substituted ‘‘con- ducting risk-based surveys and other such oversight’’ for ‘‘such compliance and oversight’’, and inserted ‘‘, in consultation with the State approving agencies,’’ after ‘‘as the Secretary’’. 2011—Subsec. (d). Pub. L. 111–377 added subsec. (d). 2008—Pub. L. 110–389, § 326(a)(2)(A), amended section catchline generally. Prior to amendment, catchline read as follows: ‘‘Cooperation’’. Subsec. (a). Pub. L. 110–389, § 326(a)(3)(A), inserted heading. Subsecs. (b), (c). Pub. L. 110–389, § 326(a)(1), (3)(B), added subsec. (b), redesignated former subsec. (b) as (c), and inserted heading in subsec. (c). 1991—Pub. L. 102–83 renumbered section 1773 of this title as this section. 1989—Pub. L. 101–237 substituted ‘‘Secretary’’ for ‘‘Ad- ministrator’’ wherever appearing in subsecs. (a) and (b) and ‘‘Department of Veterans Affairs’’ for ‘‘Veterans’ Administration’’ in subsec. (b). 1982—Pub. L. 97–295 inserted ‘‘of this title’’ after ‘‘34 and 35’’ wherever appearing. 1972—Subsec. (a). Pub. L. 92–540 inserted ‘‘this chapter and’’ before ‘‘chapters 34 and 35’’ wherever appearing. 1966—Subsec. (a). Pub. L. 89–358, § 3(a)(7), (11), sub- stituted ‘‘chapters 34 and 35’’ for ‘‘this chapter’’ twice and inserted ‘‘or veterans’’ after ‘‘eligible persons’’. Subsec. (b). Pub. L. 89–358, § 3(a)(7), substituted ‘‘chap- ters 34 and 35’’ for ‘‘this chapter’’. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2021 AMENDMENT Pub. L. 116–315, title I, § 1013(b)(2), Jan. 5, 2021, 134 Stat. 4943, provided that: ‘‘The amendment made by Page 813 TITLE 38—VETERANS’ BENEFITS § 3674 paragraph (1) [amending this section] shall take effect on October 1, 2022.’’ Pub. L. 116–315, title I, § 1014(b), Jan. 5, 2021, 134 Stat. 4945, provided that: ‘‘The amendment made by sub- section (a) [amending this section] shall take effect on August 1, 2021.’’ EFFECTIVE DATE OF 2011 AMENDMENT Amendment by Pub. L. 111–377 effective Aug. 1, 2011, see section 203(e) of Pub. L. 111–377, set out as a note under section 3034 of this title. § 3673A. Risk-based surveys (a) DEVELOPMENT REQUIRED.—The Secretary, in partnership with State approving agencies, shall develop a risk-based survey for oversight of educational institutions with courses and pro- grams of education approved under this chapter. (b) SCOPE.—(1) The scope of the risk-based sur- vey developed under subsection (a) shall be de- termined by the Secretary, in partnership with the State approving agency. (2) At a minimum the scope determined under paragraph (1) shall include the following: (A) Rapid increase in veteran enrollment. (B) Rapid increase in tuition and fees. (C) Complaints tracked and published with the mechanism required by section 3698(b)(2) from students pursuing programs of education with educational assistance furnished under laws administered by the Secretary, based on severity or volume of the complaints. (D) Compliance with section 3680A(d)(1) of this title. (E) Veteran completion rates. (F) Indicators of financial stability. (G) Review of the advertising and recruiting practices of the educational institution, in- cluding those by third-party contractors of the educational institution. (H) Matters for which the Federal Govern- ment or a State Government brings an action in a court of competent jurisdiction against an educational institution, including matters in cases in which the Federal Government or the State comes to a settled agreement on such matters outside of the court. (c) DATABASE.—The Secretary, in partnership with the State approving agencies under this chapter, shall establish a searchable database or use an existing system, as the Secretary con- siders appropriate, to serve as a central reposi- tory for information required for or collected during site visits for the risk-based survey de- veloped under subsection (a), so as to improve future oversight of educational institutions with programs of education approved under this chap- ter. (d) NOTICE.—To the maximum amount fea- sible, the Secretary, or a State approving agen- cy, as applicable, shall provide not more than two business days of notice to an educational in- stitution before conducting a targeted risk- based survey of the institution under this sec- tion. (Added Pub. L. 116–315, title I, § 1013(a)(1), Jan. 5, 2021, 134 Stat. 4942; amended Pub. L. 117–16, § 7(a)(3), (b)(1), June 8, 2021, 135 Stat. 285; Pub. L. 117–333, § 12(a), Jan. 5, 2023, 136 Stat. 6134; Pub. L. 118–210, title II, § 204, Jan. 2, 2025, 138 Stat. 2763.) Editorial Notes AMENDMENTS 2025—Subsec. (d). Pub. L. 118–210 substituted ‘‘two business days’’ for ‘‘one business day’’. 2023—Subsec. (d). Pub. L. 117–333 added subsec. (d). 2021—Pub. L. 117–16, § 7(b)(1), made technical correc- tion to directory language of Pub. L. 116–315, § 1013(a)(1), which enacted this section. Subsec. (a). Pub. L. 117–16, § 7(a)(3)(A), struck out ‘‘searchable’’ before ‘‘risk-based survey’’. Subsec. (c). Pub. L. 117–16, § 7(a)(3)(B), inserted ‘‘searchable’’ before ‘‘database’’. Statutory Notes and Related Subsidiaries DEADLINE FOR RISK-BASED SURVEYS DATABASE Pub. L. 118–210, title II, § 206(d), Jan. 2, 2025, 138 Stat. 2764, provided that: ‘‘The Secretary of Veterans Affairs shall establish the database required under section 3673A(c) of title 38, United States Code, by not later than 180 days after the date of the enactment of this Act [Jan. 2, 2025].’’ § 3674. Reimbursement of expenses (a)(1) Subject to paragraphs (2) through (4) of this subsection, the Secretary is authorized to enter into contracts or agreements with State and local agencies to pay such State and local agencies for reasonable and necessary expenses of salary and travel incurred by employees of such agencies and an allowance for administra- tive expenses in accordance with the formula contained in subsection (b) of this section in (A) rendering necessary services in ascertaining the qualifications of educational institutions for furnishing courses of education to eligible per- sons or veterans under this chapter and chapters 30 through 35 of this title and chapter 106 of title 10, and in the supervision of such educational in- stitutions, and (B) furnishing, at the request of the Secretary, any other services in connection with such chapters. Each such contract or agree- ment shall be conditioned upon compliance with the standards and provisions of such chapters. The Secretary may also reimburse such agencies for work performed by their subcontractors where such work has a direct relationship to the requirements of such chapters, and has had the prior approval of the Secretary. (2)(A) The Secretary shall make payments to State and local agencies, out of amounts in the Department of Veterans Affairs readjustment benefits account and amounts appropriated to the Secretary, for the reasonable and necessary expenses of salary and travel incurred by em- ployees of such agencies in carrying out con- tracts or agreements entered into under this section, for expenses approved by the Secretary that are incurred in carrying out activities de- scribed in section 3674A(a)(3) of this title (except for administrative overhead expenses allocated to such activities), and for the allowance for ad- ministrative expenses described in subsection (b). (B) The Secretary shall make such a payment to an agency within a reasonable time after the agency has submitted a report pursuant to para- graph (3) of this subsection. (C) Subject to paragraph (4) of this subsection, the amount of any such payment made to an agency for any period shall be equal to the amount of the reasonable and necessary ex-