AEG18183 S.L.C. 115TH CONGRESS 2D SESSION S. ll To establish State-Federal partnerships to provide students the opportunity to attain higher education at in-State public institutions of higher education without debt, to provide Federal Pell Grant eligibility to DREAMer students, to repeal suspension of eligibility under the Higher Education Act of 1965 for drug-related offenses, and for other purposes. IN THE SENATE OF THE UNITED STATES llllllllll Mr. SCHATZ (for himself, Mrs. GILLIBRAND, Mr. BOOKER, Ms. HARRIS, Mr. MERKLEY, Ms. WARREN, Mr. BROWN, Mr. BLUMENTHAL, and Ms. BALDWIN) introduced the following bill; which was read twice and referred to the Committee on llllllllll A BILL To establish State-Federal partnerships to provide students the opportunity to attain higher education at in-State public institutions of higher education without debt, to provide Federal Pell Grant eligibility to DREAMer students, to repeal suspension of eligibility under the Higher Education Act of 1965 for drug-related offenses, and for other purposes. 1 Be it enacted by the Senate and House of Representa- 2 tives of the United States of America in Congress assembled, AEG18183 S.L.C. 2 1 2 SECTION 1. SHORT TITLE. This Act may be cited as the ‘‘Debt-Free College Act 3 of 2018’’. 4 5 SEC. 2. DEBT-FREE COLLEGE PARTNERSHIP. Title IV of the Higher Education Act of 1965 (20 6 U.S.C. 1070 et seq.) is amended by adding at the end 7 the following: 8 9 10 ‘‘PART J—DEBT-FREE COLLEGE PARTNERSHIP ‘‘SEC. 499A–1. PURPOSE. ‘‘The purpose of this part is to establish State-Fed- 11 eral partnerships that will— 12 13 ‘‘(1) increase investment in public higher education; and 14 ‘‘(2) provide students the opportunity to attain 15 higher education at in-State public institutions of 16 higher education without debt (‘debt-free college’). 17 18 19 ‘‘SEC. 499A–2. DEFINITIONS. ‘‘In this part: ‘‘(1) COLLEGE COMPLETION PROGRAM.—The 20 term ‘college completion program’ means a program 21 or service at an institution of higher education that 22 is dedicated to addressing barriers to degree attain- 23 ment, particularly for low-income students, for the 24 purpose of increasing the percentage of students 25 completing programs of study in their entirety and 26 attaining related degrees. AEG18183 S.L.C. 3 1 ‘‘(2) COST 2 attendance’ means— OF ATTENDANCE.—The term ‘cost of 3 ‘‘(A) tuition and fees normally assessed a 4 student carrying the same academic workload 5 as determined by the institution, and including 6 costs for rental or purchase of any equipment, 7 materials, or supplies required of all students in 8 the same course of study; 9 ‘‘(B) an allowance for books, supplies, 10 transportation, and miscellaneous personal ex- 11 penses, including a reasonable allowance for the 12 documented rental or purchase of a personal 13 computer, for a student attending the institu- 14 tion on at least a half-time basis, as determined 15 by the institution; 16 ‘‘(C) an allowance (determined by the in- 17 stitution) for room and board costs incurred by 18 the student which— 19 ‘‘(i) shall be an allowance determined 20 by the institution for a student without de- 21 pendents residing at home with parents; 22 ‘‘(ii) for students without dependents 23 residing in institutionally owned or oper- 24 ated housing, shall be a standard allowance 25 determined by the institution based on the AEG18183 S.L.C. 4 1 amount normally assessed most of its resi- 2 dents for room and board; 3 ‘‘(iii) for students who live in housing 4 located on a military base or for which a 5 basic allowance is provided under section 6 403(b) of title 37, United States Code, 7 shall be an allowance based on the ex- 8 penses reasonably incurred by such stu- 9 dents for board but not for room; and 10 ‘‘(iv) for all other students shall be an 11 allowance based on the expenses reason- 12 ably incurred by such students for room 13 and board. 14 ‘‘(3) DEBT-FREE COLLEGE COMMITMENT.—The 15 term ‘debt-free college commitment’ means a com- 16 mitment by a State participating in the State-Fed- 17 eral partnership under this part to cover the unmet 18 financial need for all eligible students. 19 20 ‘‘(4) ELIGIBLE STUDENT.—The term ‘eligible student’ means an individual who— 21 ‘‘(A) is enrolled, or is eligible to enroll, in 22 a public institution of higher education in the 23 State in which the individual resides; 24 25 ‘‘(B) completes a Free Application for Federal Student Aid; and AEG18183 S.L.C. 5 1 ‘‘(C) demonstrates satisfactory academic 2 progress, as defined under the Federal Pell 3 Grant program under subpart 1 of part A, once 4 enrolled in a public institution of higher edu- 5 cation in the State in which the individual re- 6 sides. 7 ‘‘(5) FULL-TIME EQUIVALENT STUDENTS.—The 8 term ‘full-time equivalent students’ means the sum 9 of the number of students enrolled full time at an 10 institution, plus the full-time equivalent of the num- 11 ber of students enrolled part time, which shall be de- 12 fined and calculated in the manner determined most 13 appropriate by the Secretary. 14 ‘‘(6) NET STATE OPERATING SUPPORT.—The 15 term ‘net State operating support’ means an amount 16 that is equal to the amount of State funds and local 17 government appropriations used to support public 18 higher education annual operating expenses in the 19 State, calculated in accordance with subparagraphs 20 (A) and (B). 21 ‘‘(A) CALCULATION.—A State’s net State 22 operating support shall, for a fiscal year, be an 23 amount that is equal to the difference resulting 24 from the gross amount of State funds appro- 25 priated and disbursed by the State and ex- AEG18183 S.L.C. 6 1 pended by the recipient institutions in the fiscal 2 year for public higher education operating ex- 3 penses in the State, minus— 4 5 ‘‘(i) such appropriations that are returned to the State; 6 ‘‘(ii) State-appropriated funds derived 7 from Federal sources, including funds pro- 8 vided under this part; 9 ‘‘(iii) local government funds not ap- 10 propriated for operating support for public 11 higher education; 12 ‘‘(iv) amounts that are portions of 13 multi-year appropriations to be distributed 14 over multiple years that are not to be 15 spent for the year for which the calculation 16 is being made; 17 18 ‘‘(v) tuition charges remitted to the State to offset State appropriations; 19 ‘‘(vi) State funding for students in 20 non-credit continuing or adult education 21 courses and non-credit extension courses; 22 ‘‘(vii) sums appropriated to private 23 nonprofit institutions of higher education, 24 or to proprietary institutions of higher AEG18183 S.L.C. 7 1 education, for capital outlay or operating 2 expenses; and 3 ‘‘(viii) any other funds excluded under 4 subparagraph (B). 5 ‘‘(B) EXCLUSIONS.—Net State operating 6 support does not include— 7 ‘‘(i) funds for— 8 ‘‘(I) student aid programs that 9 provide grants to students attending 10 in-State private nonprofit institutions 11 of higher education, in-State propri- 12 etary institutions of higher education, 13 independent institutions, and out-of- 14 State institutions; 15 ‘‘(II) capital outlay; 16 ‘‘(III) deferred maintenance; or 17 ‘‘(IV) research and development; 18 or 19 ‘‘(ii) any other funds that the Sec- 20 21 retary may exclude. ‘‘(7) NET STATE OPERATING SUPPORT PER FTE 22 STUDENT.—The 23 per FTE student’ means, for a fiscal year— 24 25 term ‘net State operating support ‘‘(A) the net State operating support for the previous fiscal year; divided by AEG18183 S.L.C. 8 1 ‘‘(B) the full-time equivalent students for 2 the previous fiscal year. 3 ‘‘(8) PARTNERSHIP OFFICE.—The term ‘Part- 4 nership Office’ means the Office created under sec- 5 tion 499A–4(a). 6 ‘‘(9) PUBLIC INSTITUTION OF HIGHER EDU- 7 CATION.—The 8 cation’ means an educational institution in any State 9 that— term ‘public institution of higher edu- 10 ‘‘(A) admits as regular students only per- 11 sons having a certificate of graduation from a 12 school providing secondary education, or the 13 recognized equivalent of such a certificate, or 14 persons who are eligible students; 15 ‘‘(B) is legally authorized within such 16 State to provide a program of education beyond 17 secondary education; 18 ‘‘(C) provides an educational program for 19 which the institution awards a bachelor’s degree 20 or provides not less than a 2-year program that 21 is acceptable for full credit toward such a de- 22 gree, or awards a degree that is acceptable for 23 admission to a graduate or professional degree 24 program, subject to review and approval by the 25 Secretary; AEG18183 S.L.C. 9 1 2 ‘‘(D) has the full faith and credit of the State; and 3 ‘‘(E) is accredited by a nationally recog- 4 nized accrediting agency or association, or if 5 not so accredited, is an institution that has 6 been granted preaccreditation status by such an 7 agency or association that has been recognized 8 by 9 preaccreditation status, and the Secretary has 10 determined that there is satisfactory assurance 11 that the institution will meet the accreditation 12 standards of such an agency or association 13 within a reasonable time. 14 ‘‘(10) the Secretary RELEVANT for the COMMITTEES granting OF of CON- 15 GRESS.—The 16 means the Committee on Health, Education, Labor, 17 and Pensions and the Committee on Appropriations 18 of the Senate and the Committee on Education and 19 the Workforce and the Committee on Appropriations 20 of the House of Representatives. 21 term ‘relevant committees of Congress’ ‘‘(11) UNMET NEED.—The term ‘unmet need’ 22 means the difference between a student’s cost of at- 23 tendance to attend an in-State public institution of 24 higher education and the student’s expected family AEG18183 S.L.C. 10 1 contribution plus any Federal, State, or local sources 2 of grant aid. 3 ‘‘SEC. 499A–3. ESTABLISHMENT OF A STATE-FEDERAL PART- 4 5 NERSHIP GRANT PROGRAM. ‘‘(a) GRANTS AUTHORIZED.—The Secretary shall 6 award grants to States to establish State-Federal partner7 ships with a goal of providing debt-free college for all eligi8 ble students at in-State public institutions of higher edu9 cation. 10 ‘‘(b) APPLICATION.—A State that desires to partici- 11 pate in the State-Federal partnership under this part shall 12 submit an application to the Secretary at such time, in 13 such manner, and accompanied by such information as the 14 Secretary may require. 15 16 ‘‘(c) AMOUNT OF GRANTS.— ‘‘(1) IN GENERAL.—The Secretary shall award 17 a grant to a State that submits an application under 18 subsection (b) for a fiscal year in an amount that is 19 equal to State’s net State operating support. 20 ‘‘(2) RATABLE REDUCTION.—If the amount ap- 21 propriated to carry out this part for a fiscal year is 22 insufficient to award each State the State’s full 23 grant amount pursuant to paragraph (1), the Sec- 24 retary shall establish procedures for ratably reducing 25 each State’s award amount for such fiscal year. AEG18183 S.L.C. 11 1 ‘‘(d) AMOUNTS NOT EXPENDED.—Any amount of a 2 grant awarded under this part that is not expended on 3 allowable expenditures by the end of the fiscal year for 4 which the grant was awarded shall be applied to the fol5 lowing year’s grant award amount, if the State remains 6 eligible to receive a grant under this part for such fol7 lowing year. If such State is not eligible to receive a grant 8 under this part for such following year, the State shall 9 return the unexpended balance amount to the Federal 10 Government. 11 12 ‘‘SEC. 499A–4. STATE-FEDERAL PARTNERSHIP RESPON- SIBILITIES. 13 ‘‘(a) FEDERAL.— 14 ‘‘(1) IN GENERAL.—The Secretary shall create 15 an office in the Department of Education to admin- 16 ister the State-Federal partnerships established 17 under this part. Such Partnership Office shall be re- 18 sponsible for— 19 ‘‘(A) administering grant awards; 20 ‘‘(B) monitoring compliance with partner- 21 ship requirements; 22 ‘‘(C) providing technical assistance to 23 States in applying for participation in, and im- 24 plementing, a partnership; and AEG18183 S.L.C. 12 1 ‘‘(D) providing information to students in 2 participating States. 3 ‘‘(2) EVALUATIONS.—The Partnership Office 4 shall develop metrics of evaluation and perform an 5 annual evaluation of each State participating in a 6 State-Federal partnership under this part. The eval- 7 uation shall assess the State’s success in meeting the 8 partnership’s goals, including— 9 10 11 12 ‘‘(A) providing debt-free college for all eligible students; ‘‘(B) increasing State investment in higher education; 13 ‘‘(C) maintaining access to in-State public 14 institutions of higher education for low-income 15 and underserved students; 16 17 ‘‘(D) maintaining and improving rates of college completion and academic quality; 18 ‘‘(E) maintaining or reducing the cost of 19 public higher education and the price charged 20 to students; and 21 ‘‘(F) investing in improving capacity, ac- 22 cess, quality, and student achievement of in- 23 State public institutions of higher education. 24 ‘‘(3) ANNUAL 25 REPORT.—The Partnership Of- fice shall submit an annual report to the relevant AEG18183 S.L.C. 13 1 committees of Congress and include information 2 gained from the annual evaluation under paragraph 3 (2). 4 ‘‘(4) WEBSITE.—The Partnership Office shall 5 create a public, consumer-oriented website with in- 6 formation about State-Federal partnerships estab- 7 lished under this part, including information from 8 the annual evaluation under paragraph (2). 9 ‘‘(b) STATE.— 10 ‘‘(1) IN GENERAL.—A State that receives a 11 grant under this part to establish a State-Federal 12 partnership shall— 13 ‘‘(A) distribute the grant funds according 14 to the allowable uses of funds described in sec- 15 tion 499A–5 in a manner designed to best 16 achieve the partnership’s goal of providing debt- 17 free college for all eligible students at in-State 18 public institutions of higher education; 19 ‘‘(B) maintain access at each in-State pub- 20 lic institution of higher education for low-in- 21 come and underserved students; 22 ‘‘(C) cap tuition and fees at public institu- 23 tions of higher education in the State at levels 24 as of the date of enactment of the Debt-Free 25 College Act of 2018, with a yearly increase al- AEG18183 S.L.C. 14 1 lowed based on the Consumer Price Index (as 2 determined by the Secretary); 3 ‘‘(D) commit to working with in-State pub- 4 lic institutions of higher education to reduce 5 tuition and fees as the net State operating sup- 6 port increases; 7 ‘‘(E) maintain State need-based financial 8 aid programs in effect on the date of enactment 9 of the Debt-Free College Act of 2018 or use 10 State funds for such programs to further the 11 debt-free commitment made under the State- 12 Federal partnership; 13 ‘‘(F) maintain or increase levels of net 14 State operating support in effect on the date of 15 enactment of the Debt-Free College Act of 16 2018, subject to the maintenance of effort pro- 17 visions contained in this part; 18 ‘‘(G) develop, adopt, and implement a 19 State formula for calculating the cost of attend- 20 ance at in-State public institutions of higher 21 education; 22 23 ‘‘(H) develop statewide credit transfer policies to— AEG18183 S.L.C. 15 1 ‘‘(i) facilitate credit transfers among 2 in-State public institutions of higher edu- 3 cation; and 4 ‘‘(ii) provide students with clear and 5 timely information about credit transfer 6 policies at in-State public institutions of 7 higher education; and 8 ‘‘(I) clearly communicate to prospective 9 students, their families, and the general public 10 how the State plans to implement the State- 11 Federal partnership and how eligible students 12 can attend a public institution of higher edu- 13 cation in the State without debt, including early 14 notification for students of their eligibility for 15 financial aid under the partnership. 16 ‘‘(2) 5-YEAR 17 ‘‘(A) IN PLAN.— GENERAL.—In order to receive a 18 grant under this part, a State shall provide to 19 the Secretary a 5-year plan for achieving the 20 goals of the State-Federal partnership. A State 21 shall update and resubmit a plan every 5 years 22 thereafter. 23 ‘‘(B) PLAN TO MEET GOALS.—The 5-year 24 plan shall detail how the State plans to meet 25 the goal of providing debt-free college for all eli- AEG18183 S.L.C. 16 1 gible students at in-State public institutions of 2 higher education within 5 years and increase 3 the State’s investment in higher education, with 4 specific benchmarks detailed for each year. 5 ‘‘(C) APPROVED BY THE SECRETARY.— 6 The 5-year plan, and the State’s annual 7 progress, shall be approved by the Secretary in 8 order for the State to be eligible to receive, or 9 continue receiving, grant funds under the State- 10 11 Federal Partnership award. ‘‘(D) WAIVER OF 5-YEAR DEADLINE.—A 12 State may apply for a waiver from the deadline 13 of meeting all of the State-Federal partner- 14 ship’s goals within 5 years if the State— 15 16 ‘‘(i) provides a credible plan for making progress towards the goals; and 17 ‘‘(ii) is able to demonstrate that the 18 State will, at a minimum, provide debt-free 19 college within 5 years to eligible students 20 who are Federal Pell Grant recipients 21 under subpart 1 of part A. 22 ‘‘(3) NO ADDITIONAL ELIGIBILITY REQUIRE- 23 MENTS.—A 24 part to establish a State-Federal partnership may State that receives a grant under this AEG18183 S.L.C. 17 1 not impose additional eligibility requirements on stu- 2 dents other than those contained in this part. 3 4 5 ‘‘SEC. 499A–5. USES OF FUNDS. ‘‘(a) IN GENERAL.— ‘‘(1) NEED-BASED AID FOR PELL RECIPI- 6 ENTS.—A 7 part to establish a State-Federal partnership shall 8 disburse funds from the net State operating support 9 and the partnership grant funds on the basis of 10 need, as determined by the Free Application for 11 Federal Student Aid, to cover the unmet need for 12 each eligible student who receives a Federal Pell 13 Grant under subpart 1 of part A. 14 State that receives a grant under this ‘‘(2) DISBURSEMENT OF REMAINING FUNDS.— 15 Any funds that remain after a State disburses funds 16 in accordance with paragraph (1) shall be used by 17 the State to cover part or all of the unmet need for 18 eligible students who do not receive a Federal Pell 19 Grant under subpart 1 of part A, with priority based 20 on student financial need, in a manner determined 21 by the State. 22 ‘‘(3) NO FUNDS IN EXCESS OF COST OF AT- 23 TENDANCE.—An 24 funds under this part in excess of the student’s ac- 25 tual cost of attendance. eligible student shall not receive AEG18183 S.L.C. 18 1 ‘‘(4) PRIVATE AID NOT TAKEN INTO AC- 2 COUNT.—In 3 the State shall not take into account any private 4 sources of aid or loans available to an eligible stu- 5 dent. 6 ‘‘(b) COLLEGE COMPLETION PROGRAMS.— 7 disbursing funds under this paragraph, ‘‘(1) IN GENERAL.—A State that receives a 8 grant under this part for a fiscal year to establish 9 a State-Federal partnership shall use 4 percent of 10 the grant funds for such fiscal year to establish or 11 increase funding for college completion programs. 12 ‘‘(2) DISTRIBUTION.—From the total amount 13 of grant funds available under paragraph (1) for a 14 fiscal year, the State shall provide to each public in- 15 stitution of higher education in the State that is eli- 16 gible to participate in programs under this title for 17 such fiscal year an amount that bears the same rela- 18 tion to such total amount as the number of students 19 enrolled in such institution of higher education who 20 are eligible to receive a Federal Pell Grant bears to 21 the number of students enrolled in all public institu- 22 tions of higher education in the State who are eligi- 23 ble to receive a Federal Pell Grant. 24 25 ‘‘(3) ALLOWABLE USES.—An institution of higher education that receives funds under para- AEG18183 S.L.C. 19 1 graph (2) shall use such funds to establish, imple- 2 ment, or expand a college completion program, in- 3 cluding for the following purposes: 4 ‘‘(A) Providing information to prospective 5 and current students to assist and improve 6 completion, including creating materials clari- 7 fying different program completion require- 8 ments and costs, holding seminars for prospec- 9 tive or current students on course schedules 10 and 11 websites to make information publically avail- 12 able. program costs, and updating school 13 ‘‘(B) Hiring additional counselors and ad- 14 visors to focus on student completion support 15 and training existing personnel to implement 16 the college completion program. 17 ‘‘(C) Increasing academic support pro- 18 grams, such as writing coaches, tutors, pre- 19 requisite skill courses, and study materials, and 20 enhancing academic facilities for students. 21 ‘‘(D) Providing microgrants for students 22 participating in the college completion program 23 who maintain good academic standing and 24 progress toward on-time graduation. 25 ‘‘(4) REPORTING.— AEG18183 S.L.C. 20 1 ‘‘(A) REPORTS FROM INSTITUTIONS.—An 2 institution of higher education that receives 3 funds under paragraph (2) shall submit to the 4 State in which the institution is located at the 5 end of each fiscal year a report that details the 6 uses of funds, changes in the ratios of students 7 to counselors, and 2-year and 4-year degree at- 8 tainment rates, disaggregated by race and Fed- 9 eral Pell Grant recipient status. 10 ‘‘(B) SUSPENSION.—If a State determines 11 that an institution of higher education that re- 12 ceives funds under paragraph (2) for a fiscal 13 year used such funds for activities that were 14 not allowable uses under paragraph (3), the 15 State may suspend distribution of funds to the 16 institution for the following fiscal year and re- 17 quire the institution to submit proposed expend- 18 itures for approval before receiving funds again 19 under paragraph (2). 20 ‘‘(C) REPORT FROM STATE.—A State that 21 receives a grant under this part for a fiscal year 22 to establish a State-Federal partnership shall 23 submit to the Secretary at the end of each fis- 24 cal year a report that details the uses of grant 25 funds under this subsection in public institu- AEG18183 S.L.C. 21 1 tions of higher education in the State that are 2 eligible to participate in programs under this 3 title, changes in the ratio of students to coun- 4 selors in such institutions in the State, and 2- 5 year and 4-year degree attainment rates in such 6 institutions in the State, disaggregated by race 7 and Federal Pell Grant recipient status. 8 ‘‘(c) HIGHER EDUCATION RELATED ACTIVITIES.—A 9 State that receives a grant under this part to establish 10 a State-Federal partnership may use not more than 5 per11 cent of the grant funds for the following higher education 12 related activities: 13 ‘‘(1) Increasing the capacity within the public 14 higher education system of the State, including 15 through the following: 16 ‘‘(A) Construction of new facilities. 17 ‘‘(B) Renovation of existing facilities. 18 ‘‘(C) Hiring of faculty. 19 ‘‘(D) Student support services. 20 21 ‘‘(2) Increasing the enrollment of low-income and underserved students. 22 ‘‘(3) Improving student outcomes, including 23 meeting student learning goals, increasing comple- 24 tion rates, and improving post-graduate job place- AEG18183 S.L.C. 22 1 ment, in consultation with faculty and staff at in- 2 State public institutions of higher education. 3 4 ‘‘(4) Providing information to prospective students and families. 5 ‘‘(5) Developing new higher education programs 6 to meet the State’s workforce needs, in consultation 7 with faculty and staff at in-State public institutions 8 of higher education, employers, and other relevant 9 stakeholders. 10 ‘‘(6) Programs and student support services at 11 public secondary schools if those programs and serv- 12 ices directly support an activity described in any of 13 paragraphs (1) through (5). 14 ‘‘(7) Other activities as approved by the Sec- 15 retary to improve the State’s public higher education 16 system, particularly for low-income and underserved 17 students. 18 ‘‘(d) ADMINISTRATION AND OTHER USES.—A State 19 that receives a grant under this part to establish a State20 Federal partnership may use not more than 1 percent of 21 the grant funds— 22 ‘‘(1) to administer the partnership; and 23 ‘‘(2) for— AEG18183 S.L.C. 23 1 ‘‘(A) higher education research and data 2 tools, such as those that link education and em- 3 ployment data systems; 4 ‘‘(B) forming agreements with other States 5 participating in the partnership for reciprocal 6 student eligibility; and 7 ‘‘(C) developing and implementing systems 8 to provide early notification to students and 9 families of their eligibility for financial aid. 10 ‘‘(e) PROHIBITION ON USE OF FUNDS.—A State that 11 receives a grant under this part to establish a State-Fed12 eral partnership may not use grant funds for— 13 ‘‘(1) endowments; or 14 ‘‘(2) the construction of athletic or commercial 15 venues. 16 ‘‘SEC. 499A–6. MAINTAINING NET STATE OPERATING SUP- 17 PORT FOR HIGHER EDUCATION. 18 ‘‘(a) IN GENERAL.—A State that receives a grant 19 under this part to establish a State-Federal partnership 20 shall maintain net State operating support for a fiscal year 21 at a level that is not less than the level that is equal to 22 the average of such net State operating support for the 23 3 fiscal years preceding such fiscal year. 24 ‘‘(b) WAIVERS.— AEG18183 S.L.C. 24 1 ‘‘(1) IN GENERAL.—The Secretary may grant a 2 waiver to a State from the requirement under sub- 3 section (a) for a fiscal year, if the State dem- 4 onstrates that— 5 ‘‘(A) the net State operating support for 6 such fiscal year as a percentage of total revenue 7 available to the State that will fund higher edu- 8 cation for such fiscal year is not less than such 9 percentage for the previous fiscal year; and 10 ‘‘(B) unexpected or uncontrollable cir- 11 cumstances prevent the State from maintaining 12 such State support. 13 ‘‘(2) NO REDUCTION FOR SUBSEQUENT FISCAL 14 YEAR.—If 15 under paragraph (1) for a fiscal year, a determina- 16 tion of the required level of net State operating sup- 17 port for subsequent fiscal years shall exclude the fis- 18 cal year for which the waiver was granted. 19 20 the Secretary grants a State a waiver ‘‘SEC. 499A–7. OVERSIGHT. ‘‘(a) IN GENERAL.—If a State that receives a grant 21 under this part to establish a State-Federal partnership 22 breaches a term of the partnership, the Partnership Office 23 shall notify the State and provide the State an opportunity 24 to correct the record or cure the breach within 30 days 25 of the notification. AEG18183 S.L.C. 25 1 ‘‘(b) RECOMMENDATION.—Based on the State’s re- 2 sponse to a notification under subsection (a), the Partner3 ship Office shall recommend that the Secretary— 4 ‘‘(1) take no action; 5 ‘‘(2) place the State on probation; or 6 ‘‘(3) deem the State ineligible to continue to 7 participate in the partnership. 8 ‘‘(c) IMPLEMENTATION.— 9 ‘‘(1) IN GENERAL.—Except as provided in para- 10 graph (2), the Secretary shall implement the rec- 11 ommendation of the Partnership Office under sub- 12 section (b). 13 14 ‘‘(2) EXCEPTION.— ‘‘(A) IN GENERAL.—Subject to subpara- 15 graph (B), the Secretary may choose not to im- 16 plement the recommendation of the Partnership 17 Office under subsection (b). 18 ‘‘(B) REASONS AND REPORT.—If the Sec- 19 retary chooses not to implement the rec- 20 ommendation of the Partnership Office under 21 subsection (b), the Secretary shall— 22 23 24 25 ‘‘(i) provide an explanation for such decision; and ‘‘(ii) notify the relevant committees of Congress in a report. AEG18183 S.L.C. 26 1 2 ‘‘(d) PROBATION.— ‘‘(1) IN GENERAL.—If a State is placed on pro- 3 bation by the Secretary due to a breach of a term 4 of the partnership, the State shall develop a plan to 5 remedy the breach. 6 ‘‘(2) WITHHOLDING.—With respect to a State 7 that is placed on probation by the Secretary due to 8 a breach of a term of the partnership, the Secretary 9 shall withhold half of the State’s partnership grant 10 award until the breach has been remedied or the 11 State has demonstrated credible progress towards 12 remedying the breach. 13 ‘‘(e) INELIGIBILITY.— 14 ‘‘(1) IN GENERAL.—If a State is deemed ineli- 15 gible to continue to participate in a partnership due 16 to a breach of a term of the partnership, the State 17 shall not receive its partnership grant award for the 18 subsequent year. 19 ‘‘(2) REMAINING INELIGIBLE.—A State that is 20 deemed ineligible to continue to participate in a 21 partnership due to a breach of a term of the part- 22 nership, shall remain ineligible for participation until 23 the State has demonstrated that the State meets the 24 partnership’s requirements. AEG18183 S.L.C. 27 1 2 ‘‘SEC. 499A–8. STATE WITHDRAWAL OR INELIGIBILITY. ‘‘(a) IN GENERAL.—If a State that receives a grant 3 under this part to establish a State-Federal partnership 4 intends to withdraw from the partnership or becomes ineli5 gible to continue participation under this part, the State 6 shall comply with the requirements of this section, includ7 ing, if the State intends to withdraw, notifying the Sec8 retary and the Partnership Office 60 days prior to the 9 withdrawal. 10 11 ‘‘(b) CONTINUED COVERAGE.— ‘‘(1) IN GENERAL.—Any unexpended balance 12 from a State-Federal partnership grant award that 13 remains after a State notifies the Partnership Office 14 of the State intention to withdraw from the partner- 15 ship or becomes ineligible to continue participation 16 under this part shall be placed into an escrow ac- 17 count at the Department and used solely to provide 18 need-based grant aid to an eligible student who has 19 received a Federal Pell Grant under subpart 1 of 20 part A and who was enrolled before the State noti- 21 fied the Partnership Office of the State’s intention 22 to withdraw from the partnership or the State be- 23 came ineligible. 24 25 ‘‘(2) COVERAGE GRAM.— UNTIL STUDENTS FINISH PRO- AEG18183 S.L.C. 28 1 ‘‘(A) IN GENERAL.—A State that with- 2 draws from a State-Federal partnership or be- 3 comes ineligible to continue participation under 4 this part shall continue to cover the unmet need 5 for each eligible student who received a Federal 6 Pell Grant under subpart 1 of part A and who 7 was enrolled before the State notified the Part- 8 nership Office of the State’s intention to with- 9 draw from the partnership or became ineligible 10 until each such student completes the student’s 11 program of study at the institution or until the 12 allotted time for completion of such program of 13 study expires. 14 ‘‘(B) PRIORITY.—In carrying out subpara- 15 graph (A), a State shall prioritize funding 16 based on students’ financial need. 17 ‘‘(3) COMMUNICATION OF INFORMATION.—A 18 State that withdraws from a State-Federal partner- 19 ship or becomes ineligible to continue participation 20 under this part shall communicate its withdrawal or 21 ineligibility, as appropriate, to students and families 22 in the State and provide clear information to eligible 23 students described in paragraph (2)(A) that the stu- 24 dents may continue to have their cost of attendance AEG18183 S.L.C. 29 1 at an in-State public institution of higher education 2 covered. 3 4 ‘‘SEC. 499A–9. AUTHORIZATION OF APPROPRIATIONS. ‘‘(a) IN GENERAL.—There are authorized to be ap- 5 propriated to carry out this part— 6 ‘‘(1) $81,000,000,000 for fiscal year 2018; and 7 ‘‘(2) such sums as may be necessary for each 8 fiscal years 2019 through 2028. 9 ‘‘(b) AVAILABILITY.—Funds made available under 10 subsection (a) shall be available for obligation through 11 September 30 of the fiscal year succeeding the fiscal year 12 for which such sums were appropriated.’’. 13 SEC. 3. DEBT-FREE COLLEGE GRANT PROGRAM FOR HBCUS 14 15 AND MSIS. Part F of title III of the Higher Education Act of 16 1965 (20 U.S.C. 1067q et seq.) is amended by adding at 17 the end the following: 18 ‘‘SEC. 372. DEBT-FREE COLLEGE GRANT PROGRAM FOR 19 20 HBCUS AND MSIS. ‘‘(a) DEFINITION OF ELIGIBLE INSTITUTION.— 21 ‘‘(1) IN GENERAL.—In this section, except as 22 provided in paragraph (2), the term ‘eligible institu- 23 tion’ means an institution of higher education that 24 is— AEG18183 S.L.C. 30 1 ‘‘(A) a private, nonprofit 2-year or 4-year 2 part B institution (as defined in section 322); 3 ‘‘(B) a Tribal College or University (as de- 4 5 6 7 8 9 fined in section 316); or ‘‘(C) a private, nonprofit 2-year or 4-year institution— ‘‘(i) that is— ‘‘(I) a Hispanic-serving institution (as defined in section 502); 10 ‘‘(II) an Alaska Native-serving 11 institution (as defined in section 12 317(b)); 13 ‘‘(III) a Native Hawaiian-serving 14 institution (as defined in section 15 317(b)); 16 17 ‘‘(IV) a Predominantly Black Institution (as defined in section 318); 18 ‘‘(V) an Asian American and Na- 19 tive American Pacific Islander-serving 20 institution (as defined in section 21 320(b)); or 22 ‘‘(VI) a Native American-serving, 23 nontribal institution (as defined in 24 section 319); and AEG18183 S.L.C. 31 1 ‘‘(ii) in which not less than 35 percent 2 of the students enrolled at the institution 3 are eligible to receive a Federal Pell Grant. 4 ‘‘(2) FOR-PROFIT INSTITUTION THAT CON- 5 VERTED TO A NONPROFIT INSTITUTION.—Notwith- 6 standing paragraph (1), an institution of higher edu- 7 cation is not an eligible institution if the institution 8 was a for-profit institution of higher education that 9 converted to a nonprofit institution of higher edu- 10 cation and less than 25 years have passed since the 11 date of such conversion. 12 ‘‘(b) GRANT PROGRAM AUTHORIZED.— 13 ‘‘(1) IN GENERAL.—The Secretary shall award 14 grants to eligible institutions to enable the institu- 15 tions to provide need-based financial aid to cover 16 unmet need for students enrolled at the institutions. 17 ‘‘(2) DURATION.—Grants awarded under this 18 section shall be for a period of 5 years. 19 ‘‘(c) APPLICATION.—An eligible institution that de- 20 sires a grant under this section shall submit an application 21 to the Secretary at such time, in such manner, and accom22 panied by such information as the Secretary may require, 23 including a plan detailing how— AEG18183 S.L.C. 32 1 ‘‘(1) the eligible institution will use grant funds 2 to provide debt-free college to the students enrolled 3 at the institution; and 4 ‘‘(2) the institution plans to meet the require- 5 ments of the grant program. 6 ‘‘(d) AWARDING OF GRANTS.— 7 8 9 10 ‘‘(1) IN GENERAL.— ‘‘(A) IN GENERAL.—A grant amount awarded to an eligible institution under this section for a year— 11 ‘‘(i) shall be in an amount equal to 12 the amount of the institution’s expendi- 13 tures on student undergraduate instruction 14 and academic support for the year; and 15 ‘‘(ii) shall not be disbursed for the 16 year until the Partnership Office created 17 under section 499A–4(a) reviews and ap- 18 proves the annual update submitted by the 19 institution pursuant to subsection (f). 20 ‘‘(B) RATABLE REDUCTION.—If the 21 amount appropriated to carry out this section 22 for a fiscal year is insufficient to award each el- 23 igible institution the institution’s full grant 24 amount pursuant to subparagraph (A), the Sec- 25 retary shall establish procedures for ratably re- AEG18183 S.L.C. 33 1 ducing each institution’s award amount for 2 such fiscal year. 3 ‘‘(2) WAIVERS.— 4 ‘‘(A) IN GENERAL.—Subject to subpara- 5 graph (B), if the percentage of students eligible 6 to receive a Federal Pell Grant who are enrolled 7 at an eligible institution that receives a grant 8 under this section decreases to less than 35 per- 9 cent after the first year of the grant award, 10 such institution may apply to the Secretary for 11 a waiver of the requirement that an institution 12 to be eligible to receive a grant under this sec- 13 tion have not less than 35 percent of the stu- 14 dents enrolled at the institution eligible to re- 15 ceive a Federal Pell Grant. 16 ‘‘(B) RESTRICTIONS ON WAIVER.—The 17 Secretary shall grant a waiver under subpara- 18 graph (A)— 19 20 21 22 23 24 ‘‘(i) only if the decrease in percentage is— ‘‘(I) small relative to the size of the student body; or ‘‘(II) the result of unexpected or uncontrollable circumstances; and AEG18183 S.L.C. 34 1 ‘‘(ii) not more than 2 times during the 2 3 4 5 year grant period. ‘‘(e) USE OF GRANT FUNDS.— ‘‘(1) IN GENERAL.—An eligible institution that 5 receives a grant under this section shall use the 6 grant funds as follows: 7 8 ‘‘(A) 95 percent of the grant funds shall be— 9 ‘‘(i) used to cover the unmet need for 10 financial assistance to attend the institu- 11 tion of students who have not yet earned 12 a bachelor’s degree; and 13 ‘‘(ii) disbursed according to financial 14 need. 15 ‘‘(B) 5 percent of the grant funds shall be 16 17 18 used for the following activities: ‘‘(i) Increasing capacity through construction or renovation of facilities. 19 ‘‘(ii) Hiring faculty. 20 ‘‘(iii) Student support services. 21 ‘‘(iv) Other activities to increase en- 22 rollment of low-income and underserved 23 students, improve student outcomes, and 24 provide information to prospective students 25 and families, and other activities as ap- AEG18183 S.L.C. 35 1 proved by the Secretary to improve access, 2 affordability, or quality of the education 3 provided by the institution. 4 ‘‘(2) PROHIBITION ON USE OF FUNDS.—An eli- 5 gible institution that receives a grant under this sec- 6 tion may not use grant funds for endowments or the 7 construction of athletic or commercial venues. 8 ‘‘(f) ANNUAL UPDATE.—An eligible institution that 9 receives a grant under this section shall submit to the Sec10 retary an annual update— 11 ‘‘(1) with any changes to the institution’s ex- 12 penditures on student instruction and academic sup- 13 port; and 14 ‘‘(2) on how the institution is fulfilling the 15 terms of the grant. 16 ‘‘(g) TERMS OF THE GRANT.— 17 ‘‘(1) GRANTEE COMMITMENT.—An eligible in- 18 stitution that receives a grant under this section 19 shall carry out the following: 20 ‘‘(A) Cap tuition and fees at the institution 21 at the level as of the date of enactment of the 22 Debt-Free College Act of 2018, with a yearly 23 increase allowed based on the Consumer Price 24 Index (as determined by the Secretary). AEG18183 S.L.C. 36 1 ‘‘(B) Maintain expenditures on instruction 2 and academic support at the institution at a 3 level that is not less than the average of such 4 expenditures at the institution over the period 5 of 3 years preceding the date of enactment of 6 the Debt-Free College Act of 2018. 7 ‘‘(C) Maintain the enrollment of low-in- 8 come students, as defined by the Secretary, at 9 the institution at a level that is not less than 10 the level of such enrollment as of the date of 11 enactment of the Debt-Free College Act of 12 2018. 13 ‘‘(D) Maintain institutional aid at a level 14 that is not less than the average of such aid 15 over the period of 3 years preceding the date of 16 enactment of the Debt-Free College Act of 17 2018. 18 ‘‘(E) Submit to the Secretary for approval 19 the institution’s calculation of the cost of at- 20 tendance at such institution. 21 22 23 24 ‘‘(F) Clearly communicate to prospective students and their families the following: ‘‘(i) How students can attend the institution without debt. AEG18183 S.L.C. 37 1 ‘‘(ii) That a debt-free college edu- 2 cation provided pursuant to this section is 3 conditioned upon institutional eligibility 4 and participation under this section and 5 may not apply for each year that the stu- 6 dent is enrolled at the institution. 7 ‘‘(2) BREACH 8 ‘‘(A) IN OF TERMS OF GRANT.— GENERAL.—If an eligible institu- 9 tion that receives a grant under this section 10 breaches a term of the grant, the Partnership 11 Office created under section 499A–4(a) shall 12 notify the institution and provide the institution 13 with an opportunity to correct the record or 14 cure the breach not later than 30 days after the 15 date of the notification. 16 ‘‘(B) RECOMMENDATION.—The Partner- 17 ship Office created under section 499A–4(a) 18 shall, after considering the eligible institution’s 19 response to a notification under subparagraph 20 (A) or lack of response, make a recommenda- 21 tion to the Secretary that the Secretary— 22 23 24 25 ‘‘(i) take no action with respect to the eligible institution; ‘‘(ii) place the eligible institution on probation; or AEG18183 S.L.C. 38 1 ‘‘(iii) revoke the eligible institution’s 2 eligibility for the grant program under this 3 section. 4 ‘‘(C) PROBATION.—An eligible institution 5 that is placed on probation by the Secretary 6 shall develop a plan to remedy the breach of the 7 term of the grant. If the eligible institution does 8 not remedy the breach, the Secretary may levy 9 a fine against the institution of an amount not 10 to exceed 1 percent of the annual grant 11 amount. 12 ‘‘(D) INELIGIBILITY.—If an eligible insti- 13 tution’s eligibility for the grant program under 14 this section has been revoked by the Secretary, 15 such institution shall— 16 ‘‘(i) place into escrow any unexpended 17 grant 18 (e)(1)(A) to be disbursed directly to stu- 19 dents enrolled at the institution; funds described in subsection 20 ‘‘(ii) return to the Secretary any un- 21 expended funds described in subsection 22 (e)(1)(B); 23 ‘‘(iii) remain ineligible to receive a 24 grant under this section during the 3-year AEG18183 S.L.C. 39 1 period after the date eligibility was re- 2 voked; and 3 ‘‘(iv) notify prospective and enrolled 4 students at the institution and their fami- 5 lies of such ineligibility for participation in 6 the grant program under this section. 7 ‘‘(h) WITHDRAWAL.—An eligible institution that re- 8 ceives a grant under this section that intends to withdraw 9 from the grant program under this section shall— 10 ‘‘(1) notify the Partnership Office created 11 under section 499A–4(a) not less than 60 days prior 12 to the withdrawal; 13 ‘‘(2) place into escrow any unexpended grant 14 funds to be disbursed directly to students enrolled at 15 the institution; and 16 ‘‘(3) notify prospective and enrolled students at 17 the institution and their families of such withdrawal. 18 ‘‘(i) AUTHORIZATION OF APPROPRIATIONS.— 19 20 ‘‘(1) IN 23 24 are authorized to be appropriated to carry out this section— 21 22 GENERAL.—There ‘‘(A) $3,000,000,000 for fiscal year 2018; and ‘‘(B) such sums as may be necessary for each fiscal years 2019 through 2028. AEG18183 S.L.C. 40 1 ‘‘(2) AVAILABILITY.—Funds made available 2 under paragraph (1) shall be available for obligation 3 through September 30 of the fiscal year succeeding 4 the fiscal year for which such sums were appro- 5 priated.’’. 6 7 SEC. 4. TITLE IV ELIGIBILITY FOR DREAMER STUDENTS. Section 484 of the Higher Education Act of 1965 (20 8 U.S.C. 1091) is amended— 9 (1) in subsection (a)(5), by inserting ‘‘, or be a 10 Dreamer student, as defined in subsection (u)’’ after 11 ‘‘becoming a citizen or permanent resident’’; and 12 (2) by adding at the end the following: 13 14 15 ‘‘(u) DREAMER STUDENTS.— ‘‘(1) IN GENERAL.—In this section, the term ‘Dreamer student’ means an individual who— 16 ‘‘(A) was younger than 16 years of age on 17 the date on which the individual initially en- 18 tered the United States; 19 ‘‘(B) has provided a list of each secondary 20 school that the student attended in the United 21 States; and 22 ‘‘(C)(i) has earned a high school diploma, 23 the recognized equivalent of such diploma from 24 a secondary school, or a high school equivalency 25 diploma in the United States or is scheduled to AEG18183 S.L.C. 41 1 complete the requirements for such a diploma 2 or equivalent before the next academic year be- 3 gins; 4 ‘‘(ii) has acquired a degree from an institu- 5 tion of higher education or has completed not 6 less than 2 years in a program for a bacca- 7 laureate degree or higher degree at an institu- 8 tion of higher education in the United States 9 and has made satisfactory academic progress, 10 as defined in subsection (c), during such time 11 period; 12 13 ‘‘(iii) at any time was eligible for a grant of deferred action under— 14 ‘‘(I) the June 15, 2012, memorandum 15 from the Secretary of Homeland Security 16 entitled ‘Exercising Prosecutorial Discre- 17 tion with Respect to Individuals Who 18 Came to the United States as Children’; or 19 ‘‘(II) the November 20, 2014, memo- 20 randum from the Secretary of Homeland 21 Security entitled ‘Exercising Prosecutorial 22 Discretion with Respect to Individuals 23 Who Came to the United States as Chil- 24 dren and with Respect to Certain Individ- AEG18183 S.L.C. 42 1 uals Who Are the Parents of U.S. Citizens 2 or Permanent Residents’; or 3 ‘‘(iv) has served in the uniformed services, 4 as defined in section 101 of title 10, United 5 States Code, for not less than 4 years and, if 6 discharged, received an honorable discharge. 7 ‘‘(2) HARDSHIP EXCEPTION.—The Secretary 8 shall issue regulations that direct when the Depart- 9 ment shall waive the requirement of subparagraph 10 (A) or (B), or both, of paragraph (1) for an indi- 11 vidual to qualify as a Dreamer student under such 12 paragraph, if the individual— 13 ‘‘(A) demonstrates compelling cir- 14 cumstances for the inability to satisfy the re- 15 quirement of such subparagraph (A) or (B), or 16 both; and 17 ‘‘(B) satisfies the requirement of para- 18 graph (1)(C).’’. 19 SEC. 5. REPEAL OF SUSPENSION OF ELIGIBILITY UNDER 20 THE HIGHER EDUCATION ACT OF 1965 FOR 21 GRANTS, LOANS, AND WORK ASSISTANCE FOR 22 DRUG-RELATED OFFENSES. 23 (a) REPEAL.—Subsection (r) of section 484 of the 24 Higher Education Act of 1965 (20 U.S.C. 1091(r)) is re25 pealed. AEG18183 S.L.C. 43 1 (b) REVISION OF FAFSA FORM.—Section 483 of the 2 Higher Education Act of 1965 (20 U.S.C. 1090) is 3 amended by adding at the end the following: 4 ‘‘(i) CONVICTIONS.—The Secretary shall not include 5 any question about the conviction of an applicant for the 6 possession or sale of illegal drugs on the FAFSA (or any 7 other form developed under subsection (a)).’’. 8 (c) CONFORMING AMENDMENTS.—The Higher Edu- 9 cation Act of 1965 (20 U.S.C. 1001 et seq.) is amended— 10 11 (1) section 428(b)(3) ‘‘485(l)’’ and inserting ‘‘485(k)’’; and (B) in subparagraph (D), by striking 15 ‘‘485(l)’’ and inserting ‘‘485(k)’’; 16 (2) 18 19 20 U.S.C. (A) in subparagraph (C), by striking 14 17 (20 1078(b)(3))— 12 13 in in section 435(d)(5) (20 U.S.C. 1085(d)(5))— (A) in subparagraph (E), by striking ‘‘485(l)’’ and inserting ‘‘485(k)’’; and (B) in subparagraph (F), by striking 21 ‘‘485(l)’’ and inserting ‘‘485(k)’’; 22 (3) in section 484 (20 U.S.C. 1091), as amend- 23 ed by section 6, by redesignating subsections (s),(t), 24 and (u) as subsections (r), (s), and (t), respectively; 25 (4) in section 485 (20 U.S.C. 1092)— AEG18183 S.L.C. 44 1 (A) by striking subsection (k); and 2 (B) by redesignating subsections (l) and 3 (m) as subsections (k) and (l), respectively; and 4 (5) in section 487(e)(2)(B)(ii)(IV) (20 U.S.C. 5 1094(e)(2)(B)(ii)(IV)), by striking ‘‘(l) of section 6 485’’ and inserting ‘‘(k) of section 485’’.