DEFINITIONS.

SEC. 481. DEFINITIONS. (a) Institution of Higher Education.— Section 481 of the Act (20 U.S.C. 1088(a)) is amended by striking the heading of such section and subsection (a) and inserting the following: “SEC. 481. DEFINITIONS. “(a) Institution of Higher Education.— (1) Subject to paragraphs (2) through (4) of this subsection, the term ‘institution of higher education’ for purposes of this title includes, in addition to the institutions covered by the definition in section 1201(a)— “(A) a proprietary institution of higher education; “(B) a postsecondary vocational institution; and “(C) only for the purposes of part B of this title, an institution outside the United States which is comparable to an institution of higher education as defined in section 1201(a) and which has been approved by the Secretary for the purpose of part B. “(2) (A) For the purpose of qualifying as an institution under paragraph (1)(C) of this subsection, the Secretary shall establish criteria by regulation for the approval of institutions outside the United States and for the determination that such institutions are comparable to an institution of higher education as defined in section 1201(a). In the case of a graduate medical school outside the United States, such criteria shall include a requirement that a student attending a graduate medical school outside the United States is ineligible for loans made, insured, or guaranteed under part B of this title unless— “(i) (I) at least 60 percent of those enrolled and at least 60 percent of the graduates of the graduate medical school outside the United States were not persons described in section 484(a)(5) in the year preceding the year for which a student is seeking a loan under part B of this title; and “(II) at least 60 percent of the individuals who were students or graduates of the graduate medical school outside the United States (both nationals of the United States and others) taking the examinations administered by the Educational Commission for Foreign Medical Graduates received a passing score in the year preceding the year for which a student is seeking a loan under part B of this title; or “(ii) the institution’s clinical training program was approved by a State as of January 1, 1992. “(B) For the purpose of qualifying as an institution under paragraph (1)(C), the Secretary shall establish an advisory panel of medical experts which shall— “(i) evaluate the standards of accreditation applied to applicant foreign medical schools; and 106 STAT. 610 “(ii) determine the comparability of those standards to standards for accreditation applied to United States medical schools. If such accreditation standards are determined not to be comparable, the foreign medical school shall be required to meet the requirements of section 1201(a). “(C) The failure of an institution outside the United States to provide, release, or authorize release to the Secretary of such information as may be required by subparagraph (A) of this paragraph shall render such institution ineligible for the purpose of part B of this title. “(D) The Secretary shall, not later than one year after the date of enactment of the Higher Education Amendments of 1992, prepare and submit to the Committee on Education and Labor of the House of Representatives and the Committee on Labor and Human Resources of the Senate a report on the implementation of the regulations required by subparagraph (A) of this paragraph. “(E) If, pursuant to this paragraph, an institution loses eligibility to participate in the programs under this title, then a student enrolled at such institution may, notwithstanding such loss of eligibility, continue to be eligible to receive a loan under part B while attending such institution for the academic year succeeding the academic year in which such loss of eligibility occurred. “(3) An institution shall not be considered to meet the definition of an institution of higher education in paragraph (1), if such institution— “(A) offers more than 50 percent of such institution’s courses by correspondence, unless the institution is an institution that meets the definition in section 521(4)(C) of the Carl D. Perkins Vocational and Applied Technology Education Act; “(B) enrolls 50 percent or more of its students in correspondence courses, unless the institution is an institution that meets the definition in such section; “(C) has a student enrollment in which more than 25 percent of the students are incarcerated, except that the Secretary may waive the prohibition of this subparagraph for a nonprofit institution that provides a 4-year or a 2-year program of instruction (or both) for which it awards a bachelor’s or associate’s degree, respectively; or “(D) has a student enrollment in which more than 50 percent of the students are admitted pursuant to section 484(d) and does not provide a 4-year or a 2-year program of instruction (or both) for which it awards a bachelor’s or associate’s degree, respectively. “(4) An institution shall not be considered to meet the definition of an institution of higher education in paragraph (1) if— “(A) such institution has filed for bankruptcy; or “(B) the institution, its owner, or its chief executive officer has been convicted of, or has pled nolo contendere or guilty to, a crime involving the acquisition, use, or expenditure of funds under this title, or has been judicially determined to have committed fraud involving funds under this title. “(5) The Secretary shall certify an institution’s qualification as an institution of higher education in accordance with the requirements of subpart 3 of part H. “(6) An institution of higher education shall not be considered to meet the definition of an institution of higher education in paragraph (1) if such institution is removed from eligibility for 106 STAT. 611funds under this title as a result of an action pursuant to part H of this title.”. (b) Proprietary Institutions of Higher Education.— Section 481(b) of the Act is amended by— (1) in clause (1), by striking “not less than a 6-month program” and inserting “an eligible program”; (2) in clause (4)— (A) by striking “for this purpose” and inserting “pursuant to part H of this title”; and (B) by striking “and” at the end thereof; (3) by striking the period at the end of clause (5) and inserting the following: “, and (6) which has at least 15 percent of its revenues from sources that are not derived from funds provided under this title, as determined in accordance with regulations prescribed by the Secretary.”; and (4) by striking the last sentence. (c) Postsecondary Vocational Institution.— Section 481(c)(1) of the Act is amended by striking “not less than a 6-month program” and inserting “an eligible program”. (d) Award Year.— Section 481(d) of the Act is amended to read as follows: “(d) Academic and Award Year.— (1) For the purpose of any program under this title, the term ‘award year’ shall be defined as the period beginning July 1 and ending June 30 of the following year. “(2) For the purpose of any program under this title, the term ‘academic year’ shall require a minimum of 30 weeks of instructional time in which a full-time student is expected to complete at least 24 semester or trimester hours or 36 quarter hours at an institution which measures program length in credit hours or at least 900 clock hours at an institution which measures program length in clock hours.”. (e) Eligible Program.— Section 481(e) of the Act is amended to read as follows: “(e) Eligible Program.— (1) For purposes of this title, the term ‘eligible program’ means a program of at least— “(A) 600 clock hours of instruction, 16 semester hours, or 24 quarter hours, offered during a minimum of 15 weeks, in the case of a program that— “(i) provides a program of training to prepare students for gainful employment in a recognized profession; and “(ii) admits students who have not completed the equivalent of an associate degree; or “(B) 300 clock hours of instruction, 8 semester hours, or 12 hours, offered during a minimum of 10 weeks, in the case of— “(i) an undergraduate program that requires the equivalent of an associate degree for admissions; or “(ii) a graduate or professional program. “(2) The Secretary shall develop regulations to determine the quality of programs of less than 600 clock hours in length. Such regulations shall require, at a minimum, that the programs have a verified rate of completion of at least 70 percent and a verified rate of placement of at least 70 percent. Pursuant to these regulations and notwithstanding paragraph (1), the Secretary shall allow programs of less than 600 clock hours, but greater than 300 clock 106 STAT. 612hours, in length to be eligible to participate in the programs authorized under part B of this title.”. (f) Third Party Servicer.— Section 481 of the Act is amended by adding the following new subsection after subsection (e): “(f) Third Party Servicer.— For purposes of this title, the term ‘third party servicer’ means any State or private, profit or nonprofit organization which enters into a contract with— “(1) any eligible institution of higher education to administer, through either manual or automated processing, any aspect of such institution’s student assistance programs under this title; or “(2) any guaranty agency, or any eligible lender, to administer, through either manual or automated processing, any aspect of such guaranty agency’s or lender’s student loan programs under part B of this title, including originating, guaranteeing, monitoring, processing, servicing, or collecting