Teach-out agreements and plans

Section 496(c) of the Higher Education Act of 1965 (20 U.S.C. 1099b(c)), as amended by sections 8 and 11, is further amended— (1) by striking paragraph (3) and inserting the following: (3) (A) requires an institution to submit for approval to the accrediting agency or association a teach-out agreement if— (i) the accrediting agency or association acts to withdraw, terminate, or suspend the accreditation of the institution; (ii) the accrediting agency or association requires the institution to show cause for continued accreditation; or (iii) the institution notifies the accrediting agency or association that the institution intends to cease operations; (B) requires an institution to— (i) submit for approval to the accrediting agency or association a teach-out plan not later than 30 days after the date— (I) the Department notifies the accrediting agency or association of an action against the institution pursuant to section 487(f); (II) the accrediting agency or association places the institution on probation or show cause, or notifies the institution that the agency or association deems it a high-risk institution; (III) the institution is required to post a Letter of Credit to the Department of Education; (IV) the institution is placed on Heightened Cash Monitoring 2; (V) the institution receives a failing Financial Responsibility Composite Score; (VI) the institution is subject to an enhanced accreditation review under subsection (s)(2); or (VII) the institution is at risk under regulations prescribed by the Secretary for this purpose; and (ii) regularly update and maintain the teach-out plan until such time as the Secretary determines; and (C) does not approve a teach-out agreement or plan that includes a plan for the participation of any institution of higher education that is the subject of an investigation, settlement, or adverse judgment by a Federal authority (including the Department) or a State for a violation relating to fraud, fiscal misconduct, or deceptive practices at the institution;; (2) by redesignating paragraphs (4) through (11) as paragraphs (5) through (12), respectively; and (3) by inserting after paragraph (3) the following: (4) with respect to private institutions, ensures that sufficient funds have been, or will be, allocated to carry out all teach-out plans and agreements required under paragraph (3);.