[106th Congress Public Law 420]
[From the U.S. Government Printing Office]
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[DOCID: f:publ420.106]
[[Page 114 STAT. 1867]]
Public Law 106-420
106th Congress
An Act
To enhance protections against <<NOTE: Nov. 1, 2000 - [S. 1455]>> fraud
in the offering of financial assistance for college education, and for
other purposes.
Be it enacted by the Senate and House of <<NOTE: College Scholarship
Fraud Prevention Act of 2000.>> Representatives of the United States of
America in Congress assembled,
SECTION 1. <<NOTE: 20 USC 1001 note.>> SHORT TITLE.
This Act may be cited as the ``College Scholarship Fraud Prevention
Act of 2000''.
SEC. 2. <<NOTE: 20 USC 1092d note.>> FINDINGS.
Congress makes the following findings:
(1) A substantial amount of fraud occurs in the offering of
college education financial assistance services to consumers.
(2) Such fraud includes the following:
(A) Misrepresentations regarding the provision of
sources from which consumers may obtain financial
assistance (including scholarships, grants, loans,
tuition, awards, and other assistance) for purposes of
financing a college education.
(B) Misrepresentations regarding the provision of
portfolios of such assistance tailored to the needs of
specific consumers.
(C) Misrepresentations regarding the pre-selection
of students as eligible to receive such assistance.
(D) Misrepresentations that such assistance will be
provided to consumers who purchase specified services
from specified entities.
(E) Misrepresentations regarding the business
relationships between particular entities and entities
that award or may award such assistance.
(F) Misrepresentations regarding refunds of
processing fees if consumers are not provided specified
amounts of such assistance, and other misrepresentations
regarding refunds.
(3) In 1996, the Federal Trade Commission launched ``Project
Scholarscam'', a joint law enforcement and consumer education
campaign directed at fraudulent purveyors of so-called
``scholarship services''.
(4) Despite the efforts of the Federal Trade Commission,
colleges and universities, and nongovernmental organizations,
the continued lack of awareness about scholarship fraud permits
a significant amount of fraudulent activity to occur.
[[Page 114 STAT. 1868]]
SEC. 3. SENTENCING <<NOTE: 28 USC 994 note.>> ENHANCEMENT FOR
HIGHER EDUCATION FINANCIAL ASSISTANCE FRAUD.
Pursuant to its authority under section 994(p) of title 28, United
States Code, the United States Sentencing Commission shall amend the
Federal sentencing guidelines in order to provide for enhanced penalties
for any offense involving fraud or misrepresentation in connection with
the obtaining or providing of, or the furnishing of information to a
consumer on, any scholarship, grant, loan, tuition, discount, award, or
other financial assistance for purposes of financing an education at an
institution of higher education, such that those penalties are
comparable to the base offense level for misrepresentation that the
defendant was acting on behalf of a charitable, educational, religious,
or political organization, or a government agency.
SEC. 4. EXCLUSION OF DEBTS RELATING TO COLLEGE FINANCIAL
ASSISTANCE SERVICES FRAUD FROM PERMISSIBLE
EXEMPTIONS OF PROPERTY FROM ESTATES IN
BANKRUPTCY.
Section 522(c) of title 11, United States Code, is amended--
(1) by striking ``or'' at the end of paragraph (2);
(2) by striking the period at the end of paragraph (3) and
inserting ``; or''; and
(3) by adding at the end the following:
``(4) a debt in connection with fraud in the obtaining or
providing of any scholarship, grant, loan, tuition, discount,
award, or other financial assistance for purposes of financing
an education at an institution of higher education (as that term
is defined in section 101 of the Higher Education Act of 1965
(20 U.S.C. 1001)).''.
SEC. 5. SCHOLARSHIP <<NOTE: 20 USC 1092d.>> FRAUD ASSESSMENT AND
AWARENESS ACTIVITIES.
(a) Annual Report on Scholarship Fraud.--
(1) Requirement.--The Attorney General and the Secretary of
Education, in conjunction with the Federal Trade Commission,
shall jointly submit to Congress each year a report on fraud in
the offering of financial assistance for purposes of financing
an education at an institution of higher education. Each report
shall contain an assessment of the nature and quantity of
incidents of such fraud during the one-year period ending on the
date of such report.
(2) <<NOTE: Deadline.>> Initial report.--The first report
under paragraph (1) shall be submitted not later than 18 months
after the date of the enactment of this Act.
(b) <<NOTE: Internet.>> National Awareness Activities.--The
Secretary of Education shall, in conjunction with the Federal Trade
Commission, maintain a scholarship fraud awareness site on the Internet
web site of the Department of Education. The scholarship fraud awareness
site may include the following:
(1) Appropriate materials from the Project Scholarscam
awareness campaign of the Commission, including examples of
common fraudulent schemes.
(2) A list of companies and individuals who have been
convicted of scholarship fraud in Federal or State court.
(3) An Internet-based message board to provide a forum for
public complaints and experiences with scholarship fraud.
[[Page 114 STAT. 1869]]
(4) An electronic comment form for individuals who have
experienced scholarship fraud or have questions about
scholarship fraud, with appropriate mechanisms for the transfer
of comments received through such forms to the Department and
the Commission.
(5) Internet links to other sources of information on
scholarship fraud, including Internet web sites of appropriate
nongovernmental organizations, colleges and universities, and
government agencies.
(6) An Internet link to the Better Business Bureau in order
to assist individuals in assessing the business practices of
other persons and entities.
(7) Information on means of communicating with the Federal
Student Aid Information Center, including telephone and Internet
contact information.
Approved November 1, 2000.
LEGISLATIVE HISTORY--S. 1455:
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CONGRESSIONAL RECORD:
Vol. 145 (1999):
Nov. 4, considered and passed
Senate.
Vol. 146 (2000):
Sept. 25, considered and passed
House.
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