TITLE IV--STUDENT ASSISTANCE
PART H--PROGRAM INTEGRITY
SEC. 493. ELIGIBILITY AND CERTIFICATION PROCEDURES
(a) SINGLE APPLICATION FORM- Section 498(b) (20 U.S.C. 1099c(b)) is amended--
(1) in paragraph (1), by striking `and capability' and inserting `financial responsibility, and administrative capability';
(2) by amending paragraph (3) to read as follows:
`(A) a description of the third party servicers of an institution of higher education; and
`(B) the institution to maintain a copy of any contract with a financial aid service provider or loan servicer, and provide a copy of any such contract to the Secretary upon request;';
(3) in paragraph (4), by striking the period and inserting `; and'; and
(4) by adding at the end the following:
`(5) provides, at the option of the institution, for participation in one or more of the programs under part B or D.'.
(b) FINANCIAL RESPONSIBILITY STANDARDS- Section 498(c) is amended--
(1) in paragraph (2)--
(A) in the first sentence, by striking `with respect to operating losses, net worth, asset to liabilities ratios, or operating fund deficits' and inserting `regarding ratios that demonstrate financial responsibility,'; and
(B) in the second sentence, by inserting `, public,' after `for profit';
(2) in paragraph (3)(A), by inserting `that the Secretary determines are reasonable' after `guarantees'; and
(3) in paragraph (4)--
(A) in the matter preceding subparagraph (A), by striking `ratio of current assets to current liabilities' and inserting `criteria'; and
(B) in subparagraph (C), by striking `current operating ratio requirement' and inserting `criteria'.
(c) FINANCIAL GUARANTEES FROM OWNERS-
(1) AMENDMENT- Section 498(e) is amended by adding at the end the following:
`(6) Notwithstanding any other provision of law, any individual who--
`(A) the Secretary determines, in accordance with paragraph (2), exercises substantial control over an institution participating in, or seeking to participate in, a program under this title;
`(B) is required to pay, on behalf of a student or borrower, a refund of unearned institutional charges to a lender, or to the Secretary; and
`(C) willfully fails to pay such refund or willfully attempts in any manner to evade payment of such refund,
shall, in addition to other penalties provided by law, be liable to the Secretary for the amount of the refund not paid, to the same extent with respect to such refund that such an individual would be liable as a responsible person for a penalty under section 6672(a) of Internal Revenue Code of 1986 with respect to the nonpayment of taxes.'.
(2) EFFECTIVE DATE- The amendment made by paragraph (1) shall be effective with respect to any unpaid refunds that were first required to be paid to a lender or to the Secretary on or after 90 days after the date of enactment of this Act.
(d) APPLICATIONS AND SITE VISITS- Section 498(f) is amended--
(1) in the subsection heading, by striking `; SITE VISITS AND FEES' and inserting `AND SITE VISITS';
(2) in the second sentence, by striking `shall' and inserting `may';
(3) in the third sentence--
(A) by striking `may establish' and insert `shall establish'; and
(B) by striking `may coordinate' and inserting `shall, to the extent practicable, coordinate'; and
(4) by striking the fourth sentence.
(e) TIME LIMITATIONS ON, AND RENEWAL OF, ELIGIBILITY- Subsection (g) of section 498 is amended to read as follows:
`(g) TIME LIMITATIONS ON, AND RENEWAL OF, ELIGIBILITY-
`(1) GENERAL RULE- After the expiration of the certification of any institution under the schedule prescribed under this section (as this section was in effect prior to the enactment of the Higher Education Act Amendments of 1998), or upon request for initial certification from an institution not previously certified, the Secretary may certify the eligibility for the purposes of any program authorized under this title of each such institution for a period not to exceed 6 years.
`(2) NOTIFICATION- The Secretary shall notify each institution of higher education not later than 6 months prior to the date of the expiration of the institution's certification.
`(3) INSTITUTIONS OUTSIDE THE UNITED STATES- The Secretary shall promulgate regulations regarding the recertification requirements applicable to an institution of higher education outside of the United States that meets the requirements of section 102(a)(1)(C) and received less than $500,000 in funds under part B for the most recent year for which data are available.'.
(f) PROVISIONAL CERTIFICATION- Section 498(h)(2) is amended--
(1) by striking `the approval' and inserting `the recognition'; and
(2) by striking `of approval' and inserting `of recognition'.
(g) CHANGE IN OWNERSHIP- Section 498(i) is amended by adding at the end the following:
`(4)(A) The Secretary may provisionally certify an institution seeking approval of a change in ownership based on the preliminary review by the Secretary of a materially complete application that is received by the Secretary within 10 business days of the transaction for which the approval is sought.
`(B) A provisional certification under this paragraph shall expire not later than the end of the month following the month in which the transaction occurred, except that if the Secretary has not issued a decision on the application for the change of ownership within that period, the Secretary may continue such provisional certification on a month-to-month basis until such decision has been issued.'.
(h) TREATMENT OF BRANCHES- The second sentence of section 498(j)(1) is amended by inserting `after the branch is certified by the Secretary as a branch campus participating in a program under this title,' after `2 years'.
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