American Dream Accounts Act of 2012 - Authorizes the Secretary of Education to award competitive grants to eligible entities so each can establish and administer American Dream Accounts for a group of at least 30 low-income public school students who, at the time the entities apply for a grant, are attending a grade no higher than ninth grade.
Lists as eligible entities: (1) state educational agencies, (2) local educational agencies, (3) charter schools, (4) institutions of higher education (IHEs), (5) nonprofit organizations, (6) entities experienced in educational savings or assisting low-income students attain higher education, and (7) consortia of two or more of these entities.
Describes an American Dream Account as a personal online account for low-income students that monitors their progress toward higher education and includes a college savings account that provides some tax-preferred accumulation.
Requires American Dream Accounts to provide students with opportunities, either online or in person, to: (1) attain financial literacy; (2) learn about preparing for enrollment in an IHE; and (3) identify their skills or interests, including career interests.
Requires grantees, subject to federal privacy laws and regulations, to allow vested stakeholders to have secure Internet access to an American Dream Account, but not the college savings account portion of that Account.
Prohibits grantees from using their grant to provide the initial deposit into the college savings account portion of a student's American Dream Account.
Prohibits the funds in those college savings accounts from being considered in making federal student financial aid determinations.
[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4207 Introduced in House (IH)]
112th CONGRESS
2d Session
H. R. 4207
To award grants in order to establish longitudinal personal college
readiness and savings online platforms for low-income students.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
March 19, 2012
Mr. Fattah introduced the following bill; which was referred to the
Committee on Education and the Workforce
_______________________________________________________________________
A BILL
To award grants in order to establish longitudinal personal college
readiness and savings online platforms for low-income students.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``American Dream Accounts Act of
2012''.
SEC. 2. FINDINGS.
Congress finds the following:
(1) Only 9.8 out of every 100 individuals from low-income
families will graduate from an institution of higher education
before reaching the age of 24.
(2) Lack of knowledge about how to apply to, and pay for,
an institution of higher education is a barrier for many low-
income students and students who would be in the first
generation in their families to attend an institution of higher
education.
(3) According to Public Agenda, most young adults give
secondary school counselors fair or poor ratings for advice
about attending an institution of higher education, including
advice about how to decide what institution of higher education
to attend, how to pay for higher education, what careers to
pursue, and how to apply to an institution of higher education.
(4) More than 1,700,000 students fail to file the Free
Application for Federal Student Aid (FAFSA), and about one-
third of such students would qualify for a Federal Pell Grant.
(5) During the last 2 decades, costs of attending
institutions of higher education have increased dramatically,
but need-based financial aid has not kept pace with such
increasing costs.
(6) In the 1990-1991 school year, the maximum Federal Pell
Grant covered 45 percent of the average cost of attendance at a
public 4-year institution of higher education (including
tuition, fees, room, and board), but in the 2010-2011 school
year, the maximum Federal Pell Grant covered only 34 percent of
such cost.
(7) Parental and youth college savings are strong
predictors of a youth's expectations about attendance at an
institution of higher education.
(8) Only 32 percent of parents who earn less than $35,000 a
year are saving for their child's education at an institution
of higher education.
(9) According to the Center for Social Development,
``wilt'' occurs when a young person who expects to graduate
from a 4-year institution of higher education has not yet
attended such institution by the ages of 19 to 22.
(10) Children who have savings dedicated for attendance at
an institution of higher education are 4 times more likely to
attend a 4-year institution of higher education and avoid
``wilt''.
SEC. 3. DEFINITIONS.
In this Act:
(1) ESEA definitions.--The terms ``local educational
agency'', ``parent'', ``State educational agency'', and
``Secretary'' shall have the meanings given the terms in
section 9101 of the Elementary and Secondary Education Act of
1965 (20 U.S.C. 7801) and the term ``charter school'' shall
have the meaning given the term in section 5210 of such Act.
(2) American dream account.--The term ``American Dream
Account'' means a personal online account for low-income
students that monitors higher education readiness and includes
a college savings account.
(3) Appropriate committees of congress.--The term
``appropriate committees of Congress'' means the Committee on
Health, Education, Labor, and Pensions, the Committee on
Appropriations, and the Committee on Finance of the Senate, and
the Committee on Education and the Workforce, the Committee on
Appropriations, and the Committee on Ways and Means of the
House of Representatives, as well as any other Committee of the
Senate or House of Representatives that the Secretary
determines appropriate.
(4) College savings account.--The term ``college savings
account'' means a savings account that--
(A) provides some tax-preferred accumulation;
(B) is widely available (such as Qualified Tuition
Programs under section 529 of the Internal Revenue Code
of 1986 or Coverdell Education Savings Accounts under
section 530 of the Internal Revenue Code of 1986); and
(C) contains funds that may be used only for the
costs associated with attending an institution of
higher education, including--
(i) tuition and fees;
(ii) room and board;
(iii) textbooks;
(iv) supplies and equipment; and
(v) Internet access.
(5) Dual enrollment program.--The term ``dual enrollment
program'' means an academic program through which a secondary
school student is able simultaneously to earn credit toward a
secondary school diploma and a postsecondary degree or
credential.
(6) Eligible entity.--The term ``eligible entity'' means--
(A) a State educational agency;
(B) a local educational agency;
(C) a charter school;
(D) an institution of higher education;
(E) a nonprofit organization;
(F) an entity with demonstrated experience in
educational savings or in assisting low-income students
to prepare for, and attend, an institution of higher
education; or
(G) a consortium of 2 or more of the entities
described in subparagraphs (A) through (F).
(7) Institution of higher education.--The term
``institution of higher education'' has the meaning given the
term in section 101(a) of the Higher Education Act of 1965 (20
U.S.C. 1001(a)).
(8) Low-income student.--The term ``low-income student''
means a student who is eligible to receive a free or reduced
price lunch under the Richard B. Russell National School Lunch
Act (42 U.S.C. 1751 et seq.).
SEC. 4. GRANT PROGRAM.
(a) Program Authorized.--The Secretary is authorized to award
grants, on a competitive basis, to eligible entities to enable such
eligible entities to establish and administer American Dream Accounts
for a group of low-income students.
(b) Reservation.--From the amount appropriated each fiscal year to
carry out this Act, the Secretary shall reserve not more than 5 percent
of such amount to carry out the evaluation activities described in
section 7(a).
(c) Duration.--A grant awarded under this Act shall be for a period
of not more than 3 years. The Secretary may extend such grant for an
additional 2-year period if the Secretary determines that the eligible
entity has demonstrated significant progress, based on the factors
described in section 5(b)(10).
SEC. 5. APPLICATIONS; PRIORITY.
(a) In General.--Each eligible entity desiring a grant under this
Act shall submit an application to the Secretary at such time, in such
manner, and containing such information as the Secretary may require.
(b) Contents.--At a minimum, the application described in
subsection (a) shall include the following:
(1) A description of the characteristics of a group of not
less than 30 low-income public school students who--
(A) are, at the time of the application, attending
a grade not higher than grade 9; and
(B) will, under the grant, receive an American
Dream Account.
(2) A description of how the eligible entity will engage,
and provide support (such as tutoring and mentoring for
students, and training for teachers and other stakeholders)
either online or in person, to--
(A) the students in the group described in
paragraph (1);
(B) the family members and teachers of such
students; and
(C) other stakeholders such as school
administrators and school counselors.
(3) An identification of partners who will assist the
eligible entity in establishing and sustaining American Dream
Accounts.
(4) A description of what experience the eligible entity or
the eligible entity's partners have in managing college savings
accounts, preparing low-income students for postsecondary
education, managing online systems, and teaching financial
literacy.
(5) A demonstration that the eligible entity has sufficient
resources to provide an initial deposit into the college
savings account portion of each American Dream Account.
(6) A description of how the eligible entity will help
increase the value of the college savings account portion of
each American Dream Account, such as by providing matching
funds or incentives for academic achievement.
(7) A description of how the eligible entity will notify
each participating student in the group described in paragraph
(1), on a semiannual basis, of the current balance and status
of the student's college savings account portion of the
student's American Dream Account.
(8) A plan that describes how the eligible entity will
monitor participating students in the group described in
paragraph (1) to ensure that each student's American Dream
Account will be maintained if a student in such group changes
schools before graduating from secondary school.
(9) A plan that describes how the American Dream Accounts
will be managed for not less than 1 year after a majority of
the students in the group described in paragraph (1) graduate
from secondary school.
(10) A description of how the eligible entity will
encourage students in the group described in paragraph (1) who
fail to graduate from secondary school to continue their
education.
(11) A description of how the eligible entity will evaluate
the grant program, including by collecting, as applicable, the
following data about the students in the group described in
paragraph (1) during the grant period, and, if sufficient grant
funds are available, after the grant period:
(A) Attendance rates.
(B) Progress reports.
(C) Grades and course selections.
(D) The student graduation rate, as defined in
section 1111(b)(2)(C)(vi) of the Elementary and
Secondary Education Act of 1965 (20 U.S.C.
6311(b)(2)(C)(vi)).
(E) Rates of student completion of the Free
Application for Federal Student Aid described in
section 483 of the Higher Education Act of 1965 (20
U.S.C. 1090).
(F) Rates of enrollment in an institution of higher
education.
(G) Rates of completion at an institution of higher
education.
(12) A description of what will happen to the funds in the
college savings account portion of the American Dream Accounts
that are dedicated to participating students described in
paragraph (1) who have not matriculated at an institution of
higher education at the time of the conclusion of the period of
American Dream Account management described in paragraph (8).
(13) A description of how the eligible entity will ensure
that funds in the college savings account portion of the
American Dream Accounts will not make families ineligible for
public assistance.
(14) A description of how the eligible entity will ensure
that participating students described in paragraph (1) will
have access to the Internet.
(c) Priority.--In awarding grants under this Act, the Secretary
shall give priority to applications from eligible entities that--
(1) are described in section 3(6)(G);
(2) serve the largest number of low-income students; or
(3) in the case of an eligible entity described in
subparagraphs (A) or (B) of section 3(6), provide opportunities
for participating students described in paragraph (1) to
participate in a dual enrollment program at no cost to the
student.
SEC. 6. AUTHORIZED ACTIVITIES.
(a) In General.--An eligible entity that receives a grant under
this Act shall use such grant funds to establish an American Dream
Account for each participating student described in section 5(b)(1),
which will be used to--
(1) open a college savings account for such student;
(2) monitor the progress of such student online, which--
(A) shall include monitoring student data relating
to--
(i) grades and course selections;
(ii) progress reports; and
(iii) attendance and disciplinary records;
and
(B) may also include monitoring student data
relating to a broad range of information, provided by
teachers and family members, related to postsecondary
education readiness, access, and completion;
(3) provide opportunities for such students, either online
or in person, to learn about financial literacy, including by--
(A) assisting such students in financial planning
for enrollment in an institution of higher education;
and
(B) assisting such students in identifying and
applying for financial aid (such as loans, grants, and
scholarships) for an institution of higher education;
(4) provide opportunities for such students, either online
or in person, to learn about preparing for enrollment in an
institution of higher education, including by providing
instruction to students about--
(A) choosing the appropriate courses to prepare for
postsecondary education;
(B) applying to an institution of higher education;
(C) building a student portfolio, which may be used
when applying to an institution of higher education;
(D) selecting an institution of higher education;
(E) choosing a major for the student's
postsecondary program of education or a career path;
and
(F) adapting to life at an institution of higher
education; and
(5) provide opportunities for such students, either online
or in person, to identify skills or interests, including career
interests.
(b) Access to American Dream Account.--
(1) In general.--Subject to paragraphs (3) and (4), and in
accordance with applicable Federal laws and regulations
relating to privacy of information and the privacy of children,
an eligible entity that receives a grant under this Act shall
allow vested stakeholders, as described in paragraph (2), to
have secure access, through the Internet, to an American Dream
Account.
(2) Vested stakeholders.--The vested stakeholders that an
eligible entity shall permit to access an American Dream
Account are individuals (such as the student's teachers, school
counselors, counselors at an institution of higher education,
school administrators, or other individuals) that are
designated, in accordance with the Family Educational Rights
and Privacy Act of 1974 (20 U.S.C. 1232g), by the parent of a
participating student in whose name such American Dream Account
is held, as having permission to access the account. A
student's parent may withdraw such designation from an
individual at any time.
(3) Exception for college savings account.--An eligible
entity that receives a grant under this Act shall not be
required to give vested stakeholders, as described in paragraph
(2), access to the college savings account portion of a
student's American Dream Account.
(4) Adult students.--Notwithstanding paragraphs (1), (2),
and (3), if a participating student is age 18 or older, an
eligible entity that receives a grant under this Act shall not
provide access to such participating student's American Dream
Account without the student's consent, in accordance with the
Family Educational Rights and Privacy Act of 1974 (20 U.S.C.
1232g).
(5) Input of student information.--Student data collected
pursuant to subsection (a)(2)(A) shall be entered into an
American Dream Account only by a school administrator or such
administrator's designee.
(c) Prohibition on Use of Student Information.--An eligible entity
that receives a grant under this Act shall not use any student-level
information or data for the purpose of soliciting, advertising, or
marketing any financial or non-financial consumer product or service
that is offered by such eligible entity, or on behalf of any other
person.
(d) Prohibition on the Use of Grant Funds.--An eligible entity
shall not use grant funds provided under this Act to provide the
initial deposit into a college savings account portion of a student's
American Dream Account.
SEC. 7. REPORTS AND EVALUATIONS.
(a) In General.--Not later than 1 year after the Secretary has
disbursed grants under this Act, and annually thereafter until each
grant disbursed under section 4 has ended, the Secretary shall prepare
and submit a report to the appropriate committees of Congress, which
shall include an evaluation of the effectiveness of the grant program
established under this Act.
(b) Contents.--The report described in subsection (a) shall--
(1) list the grants that have been awarded under section
4(a);
(2) include the number of students who have an American
Dream Account established through a grant awarded under section
4(a);
(3) provide data (including the interest accrued on college
savings accounts that are part of an American Dream Account) in
the aggregate, regarding students who have an American Dream
Account established through a grant awarded under section 4(a),
as compared to similarly situated students who do not have an
American Dream Account;
(4) identify best practices developed by the eligible
entities receiving grants under this Act;
(5) identify any issues related to student privacy and
stakeholder accessibility to American Dream Accounts;
(6) provide feedback from participating students and the
parents of such students about the grant program, including--
(A) the impact of the program;
(B) aspects of the program that are successful;
(C) aspects of the program that are not successful;
and
(D) any other data required by the Secretary; and
(7) provide recommendations for expanding the American
Dream Accounts program.
SEC. 8. ELIGIBILITY TO RECEIVE FEDERAL STUDENT FINANCIAL AID.
Notwithstanding any other provision of law, any funds that are in
the college savings account portion of a student's American Dream
Account shall not affect such student's eligibility to receive Federal
student financial aid, including any Federal student financial aid
under the Higher Education Act of 1965 (20 U.S.C. 1001), and shall not
be considered in determining the amount of any such Federal student
aid.
SEC. 9. AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated to carry out this Act
$3,000,000 for fiscal year 2013, from existing Department of Education
funds, and such sums as may be necessary for each subsequent fiscal
year.
SEC. 10. CONFORMING AMENDMENT.
Section 480(j) of the Higher Education Act of 1965 (20 U.S.C.
1087vv(j)) is amended by adding at the end the following:
``(5) Notwithstanding paragraph (1), amounts made available
under the college savings account portion of an American Dream
Account under the American Dream Accounts Act of 2012 shall not
be treated as estimated financial assistance for purposes of
section 471(3).''.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Education and the Workforce.
Referred to the Subcommittee on Early Childhood, Elementary, and Secondary Education.
Referred to the Subcommittee on Higher Education and Workforce Training.
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