In order to be an eligible institution for the purposes of any program authorized under this subchapter, an institution must be an institution of higher education or an eligible institution (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 institution to participate in a program upon compliance with the following requirements:
except that an emergency action shall not exceed 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 emergency action is unwarranted;
except that an emergency action shall not exceed 30 days unless the limitation, suspension, or termination proceedings are initiated by the Secretary against the individual or organization 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.
the Secretary may impose a civil penalty upon such institution of not to exceed $25,000 for each violation or misrepresentation.
In making calculations under subsection (a)(24), a proprietary institution of higher education shall-
A proprietary institution of higher education that fails to meet a requirement of subsection (a)(24) for two consecutive institutional 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 eligibility to participate in the programs authorized by this subchapter, a proprietary institution of higher education shall demonstrate compliance with all eligibility and certification requirements under section 1099c of this title for a minimum of two institutional fiscal years after the institutional fiscal year in which the institution became ineligible.
In addition to such other means of enforcing the requirements of this subchapter as may be available to the Secretary, if a proprietary institution of higher education fails to meet a requirement of subsection (a)(24) for any institutional fiscal year, then the institution's eligibility to participate in the programs authorized by this subchapter becomes 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 terminate-
The Secretary shall publicly disclose on the College Navigator website-
Not later than July 1, 2009, and 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 this subchapter, as provided in the audited financial statements submitted to the Secretary by each institution pursuant to the requirements of subsection (a)(24)-
An institution of higher education's code of conduct, as required under subsection (a)(25), shall include the following requirements:
The institution shall not enter into any revenue-sharing arrangement with any lender.
For purposes of this paragraph, the term "revenue-sharing arrangement" means an arrangement between an institution and a lender under which-
No officer or employee of the institution who is employed in the financial aid office of the institution or who otherwise has responsibilities with respect to education loans, or agent who has responsibilities with respect to education loans, shall solicit or accept any gift from a lender, guarantor, or servicer of education loans.
In this paragraph, the term "gift" means any gratuity, favor, discount, entertainment, hospitality, loan, or other item having 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 purchase of a ticket, payment in advance, or reimbursement after the expense has been incurred.
The term "gift" shall not include any of the following:
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 officer, employee, or agent, shall be considered a gift to the officer, employee, or agent if-
An officer or employee who is employed in the financial aid office of the institution or who otherwise has responsibilities with respect to education loans, or an agent who has responsibilities with respect to education loans, shall not accept from any lender or affiliate of any lender any fee, payment, or other financial benefit (including the opportunity to purchase stock) as compensation for any type of consulting arrangement or other contract to provide services to a lender or on behalf of a lender relating to education loans.
Nothing in this subsection shall be construed as prohibiting-
The institution shall not-
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 exchange for the institution providing concessions or promises regarding providing the lender with-
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, premiums, additional interest, or financial support to such lender for the purpose of such lender extending credit to the student or the family.
The institution shall not request or accept from any lender any assistance with call center staffing or financial aid office staffing.
Nothing in paragraph (1) shall be construed to prohibit the institution from requesting or accepting assistance from a lender related to-
Any employee who is employed in the financial aid office of the institution, or who otherwise has responsibilities with respect to education 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 guarantors, shall be prohibited from receiving anything 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.
In the event the Secretary initiates the limitation, suspension, or termination of the participation of an institution of higher education in any program under this subchapter under the authority of subsection (c)(1)(F) or initiates an emergency action under the authority of subsection (c)(1)(G) and its prescribed regulations, the Secretary shall require that institution to prepare a teach-out plan for submission to the institution's accrediting agency or association in compliance with section 1099b(c)(3) of this title, the Secretary's regulations on teach-out plans, and the standards of the institution's accrediting agency or association.
In this subsection, the term "teach-out plan" means a written plan that provides for the equitable treatment of students if an institution of higher education ceases to operate before all students have completed their program of study, and may include, if required by the institution's accrediting agency or association, an agreement between institutions for such a teach-out plan.
The Inspector General of the Department shall-
In compiling, maintaining, and making available a preferred lender list as required under subsection (a)(27), the institution will-
The Secretary shall maintain and regularly update a list of lender affiliates of all eligible lenders, and shall provide such list to institutions for use in carrying out paragraph (1)(B).
An institution shall use the most recent list of lender affiliates provided by the Secretary under subparagraph (A) in carrying out paragraph (1)(B).
For the purpose of this section:
The term "agent" has the meaning given the term in section 1019 of this title.
The term "affiliate" means a person that controls, is controlled by, or is under common control with another person. A person controls, is controlled by, or is under common control with another person if-
The term "education loan" has the meaning given the term in section 1019 of this title.
The term "eligible institution" means any such institution described in section 1002 of this title.
The term "officer" has the meaning given the term in section 1019 of this title.
The term "preferred lender arrangement" has the meaning given the term in section 1019 of this title.
Nothing in the amendments made by the Higher Education Amendments of 1992 shall be construed 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 proceeding. The Secretary shall allow the institution to use any reasonable means, including stenographers, of recording the hearing.
1 So in original. The closing parenthesis probably should not appear.
20 U.S.C. § 1094
EDITORIAL NOTES
REFERENCES IN TEXTThe Higher Education Amendments of 1992, referred to in subsec. (j), is Pub. L. 102-325, 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 PROVISIONSA 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 participation agreements, prior to the general revision of this part by Pub. L. 99-498.
AMENDMENTS2021-Subsec. (a)(24). Pub. L. 117-2, §2013(a), substituted "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 subsection (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 provisions. 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 "students 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), substituted "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 respect to institutions of higher education that are foreign institutions, and may waive such requirements with respect to a foreign institution whose students receives 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 redesignated (i) and (j), respectively. Subsec. (i). Pub. L. 110-315, §493(c)(1), (d), redesignated 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 subpar. (C) generally. Prior to amendment, subpar. (C) read as follows: "This paragraph shall apply to elections as defined in section 431(1) of title 2, and includes the election for Governor or other chief executive within 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) required 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 review 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), substituted "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 subchapter," after "shall publish".Subsec. (c)(5). Pub. L. 105-244, §489(c)(3), substituted "State agencies notifying the Secretary" for "State review 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 Student Assistance Report" after "amount of such assistance". 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 program under this subchapter of any otherwise eligible institution,".1992-Subsec. (a). Pub. L. 102-325, §490(f)(1), substituted "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 "Report". Subsec. (a)(3). Pub. L. 102-325, §490(a)(1), inserted before period at end ", together with assurances 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-" 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), substituted "shall" for "is authorized to" in introductory provisions.Subsec. (c)(1)(A)(i). Pub. L. 102-325, §490(c), substituted "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" for "a financial and compliance audit of an eligible 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 lenders, State agencies, and the State review entities referred 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 Secretary deems necessary to the sound administration of the financial aid programs, such as the pertinent actions of any owner, shareholder, or person exercising control over an eligible institution".Subsec. (c)(1)(C). Pub. L. 102-325, §490(d)(3), added subpar. (C). Former subpar. (C) redesignated (E). Subsec. (c)(1)(D). Pub. L. 102-325, §490(d)(3), added subpar. (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), redesignated subpar. (C) as (E). Former subpar. (E) redesignated (G). Subsec. (c)(1)(F). Pub. L. 102-325, §490(d)(2), redesignated subpar. (D) as (F). Former subpar. (F) redesignated (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), redesignated subpar. (E) as (G). Former subpar. (G) redesignated (I). Subsec. (c)(1)(H). Pub. L. 102-325, §490(d)(2), (4), redesignated 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), redesignated 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 consultation 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 students 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), substituted ", any regulation" for "or any regulation" and inserted "or any applicable special arrangement, agreement, 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, §2013, 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 negotiated rulemaking requirements under section 492 of the Higher Education Act of 1965 (20 U.S.C. 1098a), except that such negotiated rulemaking shall commence 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, §493, 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 section 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 instruction 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, §2003, 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 DATESection 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 periods 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, §489, 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 subsection [amending this section] is carried out."