[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4390 Introduced in House (IH)]
112th CONGRESS
2d Session
H. R. 4390
To amend the Higher Education Opportunity Act to restrict institutions
of higher education from using revenues derived from Federal
educational assistance funds for advertising, marketing, or recruiting
purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
April 18, 2012
Mr. Grijalva introduced the following bill; which was referred to the
Committee on Education and the Workforce
_______________________________________________________________________
A BILL
To amend the Higher Education Opportunity Act to restrict institutions
of higher education from using revenues derived from Federal
educational assistance funds for advertising, marketing, or recruiting
purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. FINDINGS.
(a) Findings.--Congress finds the following:
(1) From 1998 to 2008, enrollment in for-profit
institutions of higher education increased by 225 percent, from
553,000 students to 1,800,000 students.
(2) On average, 86 percent of revenues at 15 large,
publicly traded companies that operate for-profit institutions
of higher education came from the Federal Government through
student aid programs.
(3) In 2009, students who enrolled at for-profit
institutions of higher education received $30,000,000,000 in
Federal Pell Grants and student loans.
(4) Eight out of the 10 top recipients of Post-9/11
Educational Assistance funds are for-profit institutions of
higher education. For-profit colleges received 37 percent
($4,400,000,000) of all Post-9/11 Educational Assistance funds
during the 2-year period of August 1, 2009 through July 30,
2011.
(5) Six of the top 10 military tuition assistance
recipients are for-profit institutions of higher education.
For-profit colleges received half of all tuition assistance
dollars--$280,000,000 out of $563,000,000 spent last year.
(6) The 15 companies that received 86 percent of their
revenues from Federal student aid programs spent $3,700,000,000
(23 percent of expenditures) on advertising, marketing, and
recruitment in fiscal year 2009.
(7) According to documents obtained by the Committee on
Health, Education, Labor and Pensions of the Senate (referred
to in this Act as the ``HELP Committee''), 30 companies
operating for-profit institutions of higher education spent
$4,100,000,000 on advertising, marketing, and recruitment in
fiscal year 2009.
(8) An analysis of 8 publicly traded companies that operate
institutions of higher education shows that, on average, they
spend 31 percent of expenditures on advertising, marketing, and
recruiting.
(9) Documents obtained by the HELP Committee reveal that
for-profit institutions of higher education have created
sophisticated marketing plans and employed many third parties
as well as large sales forces specifically tasked with
enrolling as many students as possible, including veterans,
servicemembers, and their families.
(10) In 2010, an undercover investigation by the Government
Accountability Office documented misleading and deceptive
recruitment practices at each of 15 for-profit institutions of
higher education campuses visited. Misleading statements
included information regarding the cost of attendance,
transferability of credits, loan repayment by future employers,
job placement, and likelihood of graduation.
(11) Documents produced to the HELP Committee demonstrate
that revenue from Federal funds is used to pay recruiters, who,
at some for-profit institutions of higher education, are
trained to exploit emotional vulnerabilities of prospective
students to meet enrollment thresholds.
(12) Documents produced to the HELP Committee demonstrate
that revenues from Federal funds are used to pay very large
sales staff titled ``enrollment advisors'', including 8,137,
5,669 and 3,069 of such individuals at 3 large for-profit
companies.
(13) The number of enrollment advisors at several for-
profit institutions of higher education examined by the HELP
Committee are very disproportionate with the number of staff
engaged in all student support services, including job
placement, which were 3,737, 2,582 and 2,472 at the same 3 for-
profit companies.
SEC. 2. RESTRICTIONS ON SOURCES OF FUNDS FOR RECRUITING AND MARKETING
ACTIVITIES.
Section 119 of the Higher Education Opportunity Act (20 U.S.C.
1011m) is amended--
(1) in the section heading, by inserting ``and restrictions
on sources of funds for recruiting and marketing activities''
after ``funds'';
(2) in subsection (d), by striking ``subsections (a)
through (c)'' and inserting ``subsections (a), (b), (c), and
(e)'';
(3) by redesignating subsection (e) as subsection (f); and
(4) by inserting after subsection (d) the following:
``(e) Restrictions on Sources of Funds for Recruiting and Marketing
Activities.--
``(1) In general.--An institution of higher education, or
other postsecondary educational institution, may not use
revenues derived from Federal educational assistance funds for
recruiting or marketing activities described in paragraph (2).
``(2) Covered activities.--Except as provided in paragraph
(3), the recruiting and marketing activities subject to
paragraph (1) shall include the following:
``(A) Advertising and promotion activities,
including paid announcements in newspapers, magazines,
radio, television, billboards, electronic media, naming
rights, or any other public medium of communication,
including paying for displays or promotions at job
fairs, military installations, or college recruiting
events.
``(B) Efforts to identify and attract prospective
students, either directly or through a contractor or
other third party, including contact concerning a
prospective student's potential enrollment or
application for grant, loan, or work assistance under
title IV of the Higher Education Act of 1965 (20 U.S.C.
1070 et seq.) or participation in preadmission or
advising activities, including--
``(i) paying employees responsible for
overseeing enrollment and for contacting
potential students in-person, by phone, by
email, or by other internet communications
regarding enrollment; and
``(ii) soliciting an individual to provide
contact information to an institution of higher
education, including websites established for
such purpose and funds paid to third parties
for such purpose.
``(C) Such other activities as the Secretary of
Education may prescribe, including paying for promotion
or sponsorship of education or military-related
associations.
``(3) Exceptions.--Any activity that is required as a
condition of receipt of funds by an institution under title IV
of the Higher Education Act of 1965 (20 U.S.C. 1070 et seq.),
is specifically authorized under such title, or is otherwise
specified by the Secretary of Education, shall not be
considered to be a covered activity under paragraph (2).
``(4) Federal educational assistance funds.--In this
subsection, the term `Federal educational assistance funds'
means funds provided directly to an institution or to a student
attending such institution under any of the following
provisions of law:
``(A) Title IV of the Higher Education Act of 1965
(20 U.S.C. 1070 et seq.).
``(B) Chapter 30, 31, 32, 33, 34, or 35 of title
38, United States Code.
``(C) Chapter 101, 105, 106A, 1606, 1607, or 1608
of title 10, United States Code.
``(D) Section 1784a, 2005, or 2007 of title 10,
United States Code.
``(E) Title I of the Workforce Investment Act of
1998 (29 U.S.C. 2801 et seq.).
``(F) The Adult Education and Family Literacy Act
(20 U.S.C. 9201 et seq.).
``(5) Rule of construction.--Nothing in this section shall
be construed as a limitation on the use by an institution of
revenues derived from sources other than Federal educational
assistance funds.
``(6) Reporting.--Each institution of higher education, or
other postsecondary educational institution, that receives
revenues derived from Federal educational assistance funds
shall report annually to the Secretary and to Congress the
institution's expenditures on advertising, marketing, and
recruiting.''.
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