“(a) Demonstration projects authorized.—The Secretary shall select, in accordance with subsection (d), eligible entities to voluntarily carry out competency-based education demonstration projects and receive waivers or other flexibility described in subsection (e) to carry out such projects.

“(b) Application.—

“(1) IN GENERAL.—Each eligible entity desiring to carry out a demonstration project under this section shall submit an application to the Secretary, at such time and in such manner as the Secretary may require.

“(2) OUTREACH.—The Secretary shall, prior to any deadline to submit applications under paragraph (1), conduct outreach to historically Black colleges and universities, Hispanic-serving institutions, Native American-serving, nontribal institutions, institutions serving students with special needs, and institutions located in rural areas to provide those institutions with information on the opportunity to apply to carry out a demonstration project under this section.

“(3) AMENDMENTS.—

“(A) IN GENERAL.—An eligible entity that has been selected to carry out a demonstration project under this section may submit to the Secretary amendments to the eligible entity’s approved application under paragraph (1), at such time and in such manner as the Secretary may require, which the Secretary shall approve or deny within 30 days of receipt.

“(B) EXPANDING ENROLLMENT.—Notwithstanding the assurance required with respect to maximum enrollment under paragraph (4)(I)—

“(i) an eligible entity whose demonstration project has been evaluated under subsection (g)(2) not less than twice may submit to the Secretary an amendment to the eligible entity’s application under paragraph (1) to increase enrollment in the project to more than 3,000 students, but not more than 5,000 students, and which shall specify—

“(I) the proposed maximum enrollment or annual enrollment growth for the project;

“(II) how the eligible entity will successfully carry out the project with such maximum enrollment or enrollment growth; and

“(III) any other amendments to the eligible entity’s application under paragraph (1) that are related to such maximum enrollment or enrollment growth; and

“(ii) the Secretary shall determine whether to approve or deny an amendment submitted under clause (i) for a demonstration project based on the project’s evaluations under subsection (g)(2).

“(4) CONTENTS.—Each application under paragraph (1) shall include—

“(A) a description of each competency-based education program to be offered by the eligible entity under the demonstration project;

“(B) a description of the proposed academic delivery, business, and financial models for the demonstration project, including explanations of how each competency-based education program offered under the demonstration project will—

“(i) result in the achievement of competencies;

“(ii) differ from standard credit hour approaches, in whole or in part; and

“(iii) result in lower costs or shortened time to the completion of a recognized educational credential;

“(C) a description of how each competency-based education program offered under the demonstration project will progress a student toward completion of a recognized educational credential;

“(D) a description of the meaningful role of the appropriate faculty of the eligible entity in the development, design, implementation, delivery, and evaluation of each such competency-based education program;

“(E) a description of how each such competency-based education program will provide strong post-enrollment earnings and loan repayment outcomes;

“(F) a description of how the eligible entity will articulate the transcript from a competency-based education program offered under the demonstration project to another program at the eligible entity or at another institution of higher education;

“(G) a description of the statutory and regulatory requirements described in subsection (e) for which the eligible entity is seeking a waiver or other flexibility, and why such waiver or flexibility is necessary to carry out the demonstration project;

“(H) a description of how a third party will assess student learning for each competency-based education program offered under the demonstration project;

“(I) a description of how the eligible entity will develop and evaluate the competencies and assessments of student knowledge administered as part of the demonstration project, including how such competencies and assessments are aligned with workforce needs;

“(J) a description of the proposal for determining a student’s Federal student aid eligibility under this title for participating in the demonstration project, the award and distribution of such aid, and the safeguards to ensure that students are making satisfactory progress that warrants the disbursement of such aid;

“(K) an assurance that the demonstration project will enroll a minimum of 25 students and a maximum of 3,000 students or, in the case of an eligible entity with an application amendment approved under paragraph (3)(B), the maximum enrollment approved under such paragraph;

“(L) a description of the population of students to whom competency-based education under the demonstration project will be offered, including demographic information and prior educational experience, disaggregated by students who are Federal Pell Grant recipients, students of color, students with disabilities, students who are veterans or members of the Armed Forces, and first generation college students, and how such eligible entity will, when appropriate, address the specific needs of each such population of students when carrying out the demonstration project;

“(M) an assurance that students participating in the demonstration project will not, on average, be eligible for more Federal assistance under this title than such students would have been eligible for under a traditional program;

“(N) the cost of attendance for each competency-based education program offered under the demonstration project, disaggregated by each of the applicable costs or allowances described in paragraphs (1) through (13) of section 472, and the estimated amount of the cost of attendance of each such program to be covered by need-based grant aid and merit-based grant aid from Federal, State, institutional, and private sources;

“(O) an assurance that the eligible entity will identify and disseminate best practices with respect to the demonstration project to other eligible entities carrying out a demonstration project under this section;

“(P) a description of other competency-based education the eligible entity offers or plans to offer outside of the demonstration project;

“(Q) an assurance that the eligible entity will use data to—

“(i) ensure that each competency-education program under the demonstration project meets the benchmarks established in accordance with subsection (c)(2)(E); and

“(ii) improve each such program;

“(R) an assurance that the eligible entity has an agreement with the accrediting agency or association of the eligible entity to establish the standards described in subsection (c); and

“(S) such other elements as the Secretary may require.

“(c) Recognition by accrediting agency or association.—To carry out a competency-based education program under a demonstration project under this section, an eligible entity shall ensure that before, on, or after the date of approval of the eligible entity’s application under subsection (b), the accrediting agency or association of the eligible entity will establish the following standards with respect to such competency-based education program:

“(1) Standards for determining whether the eligible entity or the program requires students to demonstrate competencies that are—

“(A) capable of being validly and reliably assessed; and

“(B) appropriate in scope and rigor for the award of the relevant recognized educational credential.

“(2) Standards for determining whether the eligible entity or the program demonstrate—

“(A) the administrative capacity and expertise that will ensure—

“(i) the validity and reliability of assessments of competencies; and

“(ii) good practices in assessment and measurement;

“(B) sufficient educational content, activities, and resources (including faculty support)—

“(i) to enable students to learn or develop what is required to demonstrate or attain mastery of competencies; and

“(ii) that are consistent with the qualifications of graduates of traditional programs;

“(C) that the quality of demonstration of competence is judged at mastery for each competency that is assessed for the award of a recognized educational credential;

“(D) a standard for the amount of learning that is included in a unit of competency;

“(E) reasonable benchmarks for graduation rates and the employment and earnings of graduates, including placements in a field for which the program prepares students, debt-to-earnings ratios, loan repayment rates, and student satisfaction; and

“(F) regular evaluation of whether the program meets the benchmarks under subparagraph (E).

“(3) Standards for determining when to deny, withdraw, suspend, or terminate the accreditation of the program if the benchmarks under paragraph (2)(E) are not achieved, including standards for providing sufficient opportunity—

“(A) for the eligible entity or program to provide a written response regarding the failure to achieve such benchmarks be considered by the agency or association in the manner described in section 496(a)(6)(B); and

“(B) for the eligible entity or program to appeal any adverse action under this subparagraph before an appeals panel that meets the requirements of section 496(a)(6)(C).

“(d) Selection.—

“(1) IN GENERAL.—Not later than 9 months after the date of enactment of the Advancing Competency-Based Education Act of 2017, the Secretary shall select not more than 100 eligible entities to carry out a demonstration project under this section under which at least 1 competency-based education program is offered.

“(2) CONSIDERATIONS.—In selecting eligible entities under paragraph (1), the Secretary shall—

“(A) consider the number and quality of applications received;

“(B) consider an eligible entity’s—

“(i) ability to successfully execute the demonstration project as described in the eligible entity’s application under subsection (b);

“(ii) commitment and ability to effectively finance the demonstration project;

“(iii) ability to provide administrative capability and the expertise to evaluate student progress based on measures other than credit hours or clock hours;

“(iv) history of compliance with the requirements of this Act;

“(v) commitment to work with the Director of the Institute of Education Sciences and the Secretary to evaluate the demonstration project and the impact of the demonstration project under subsection (g)(2); and

“(vi) commitment and ability to assess student learning through a third party;

“(C) ensure the selection of a diverse group of eligible entities with respect to size, mission, student population, and geographic distribution;

“(D) not limit the types of programs of study or courses of study approved for participation in a demonstration project; and

“(E) not select an eligible entity that has had, for 1 of the preceding 2 fiscal years, a cohort default rate (defined in section 435(m)) that is 30 percent or greater.

“(e) Waivers and other flexibility.—

“(1) IN GENERAL.—With respect to any eligible entity selected to carry out a demonstration project under this section, the Secretary may—

“(A) waive any requirements of the provisions of law (including any regulations promulgated under such provisions) listed in paragraph (2) for which the eligible entity has provided a reason for waiving under subsection (b)(4)(F); or

“(B) provide other flexibility, but not waive, any requirements of the provisions of law (including any regulations promulgated under such provisions) listed in paragraph (3) for which the eligible entity has provided a reason for such flexibility under subsection (b)(4)(F).

“(2) PROVISIONS ELIGIBLE FOR WAIVERS.—The Secretary may waive the following under paragraph (1)(A):

“(A) Subparagraphs (A) and (B) of section 102(a)(3).

“(B) Section 484(l)(1).

“(3) PROVISIONS ELIGIBLE FOR FLEXIBILITY.—The Secretary may provide the flexibility described in paragraph (1)(B) with respect to the requirements under provisions in title I, part F of this title, or this part, that inhibit the operation of a competency-based education program, relating to the following:

“(A) Documenting attendance.

“(B) Weekly academic activity.

“(C) Minimum weeks of instructional time.

“(D) Requirements for credit hour or clock hour equivalencies.

“(E) Requirements for substantive interaction with faculty.

“(F) Definitions of the terms ‘academic year’, ‘full-time student’, ‘term’ (including ‘standard term’, ‘non-term’, and ‘non-standard term’), ‘satisfactory academic progress’, ‘educational activity’, ‘project of study’, and ‘payment period’.

“(G) Methods of disbursing student financial aid by institutions of higher education selected, as of the date of enactment of the Advancing Competency-Based Education Act of 2017, as experimental sites under section 487A(b)(3) to carry out competency-based education programs.

“(f) Notification.—Not later than 9 months after the date of enactment of the Advancing Competency-Based Education Act of 2017, the Secretary shall make available to the authorizing committees and the public a list of eligible entities selected to carry out a demonstration project under this section, which shall include for each such eligible entity—

“(1) the specific waiver or other flexibility from statutory or regulatory requirements offered under subsection (e); and

“(2) a description of the competency-based education programs to be offered under the project.

“(g) Information and evaluation.—

“(1) INFORMATION.—

“(A) STUDENT-LEVEL DATA.—Each eligible entity that carries out a demonstration project under this section shall provide to the Director of the Institute of Education Sciences the student-level data for the students enrolled in a program described in subparagraph (C)(i)(I), the student-level data for the students enrolled in a program described in subparagraph (C)(i)(II), and the student-level data for students enrolled in a program described in subparagraph (C)(i)(III) to enable the Director—

“(i) to determine the aggregate information described in subparagraph (B) with respect to each such program; and

“(ii) to the extent practicable, to compare the programs using a rigorous evaluation, such as propensity score matching.

“(B) AGGREGATE INFORMATION.—For purposes of the evaluation under paragraph (2), the Director shall use the student-level data provided under subparagraph (A) by an eligible entity to determine the following information with respect to each program described in subparagraph (C)(i) offered at such eligible entity:

“(i) The average number of credit hours students earned prior to enrollment in the program, if applicable.

“(ii) The number and percentage of students enrolled in a competency-based program that are also enrolled in programs of study or courses of study offered in credit hours or clock hours, disaggregated by student status as a first-year, second-year, third-year, fourth-year, or other student.

“(iii) The average period of time between the enrollment of a student in the program and the first assessment of student knowledge of such student.

“(iv) The average time to 25 percent, 50 percent, 75 percent, 100 percent, 150 percent, and 200 percent completion of a recognized educational credential.

“(v) The percentage of assessments of student knowledge that students passed on the first attempt during the period of enrollment in the program.

“(vi) The percentage of assessments of student knowledge that students passed on the second attempt and the average period of time between the first and second attempts during the period of enrollment in the program.

“(vii) The average number of competencies a student acquired while enrolled in a program and the period of time during which the student acquired such competencies.

“(viii) The number and percentage of students completing the program who find employment, disaggregated by number and percentage of such students finding employment in a field related to the program.

“(ix) The median student earnings 1, 3, and 4 years after graduating from the program, if available.

“(x) Such other information as the Director may reasonably require.

“(C) DISAGGREGATION.—The information determined under subparagraph (B) shall be disaggregated as follows, provided that the disaggregation of the information does not identify any individual student:

“(i) For each eligible entity that carries out a demonstration project under this section, disaggregation by—

“(I) the students enrolled in each competency-based education program under the project;

“(II) the students enrolled in each competency-based education program not being carried out under the project; and

“(III) the students enrolled in a program not described in subclause (I) or (II).

“(ii) For each group of students described in clause (i), disaggregation by age, race, gender, disability status, students who are Veterans or servicemembers, first generation college students, and status as a recipient of a Federal Pell Grant.

“(D) COUNCIL.—The Director shall provide to the Competency-Based Education Council any information described in subparagraph (A) or (B) (other than personally identifiable information) that may be necessary for the Council to carry out its duties under section 3(e) of the Advancing Competency-Based Education Act of 2017.

“(2) EVALUATION.—

“(A) IN GENERAL.—The Director, in consultation with the Secretary and using the information determined under paragraph (1), shall annually evaluate each eligible entity carrying out a demonstration project under this section. Each evaluation shall be disaggregated in accordance with subparagraph (B) and include—

“(i) the extent to which the eligible entity has met the elements of its application under subsection (b)(4);

“(ii) whether the demonstration project led to reduced cost or time to completion of a recognized educational credential, and the amount of cost or time reduced for such completion;

“(iii) obstacles related to student financial assistance for competency-based education;

“(iv) the extent to which statutory or regulatory requirements not waived or for which flexibility is not provided under subsection (e) presented difficulties or unintended consequences for students or eligible entities;

“(v) a description of the waivers or flexibility provided under subsection (e) that were most beneficial to students or eligible entities, and an explanation of such benefits;

“(vi) the percentage of students who received each of the following—

“(I) a grant under this title;

“(II) a loan under this title;

“(III) a State grant;

“(IV) a State loan;

“(V) an institutional grant;

“(VI) an institutional loan; and

“(VII) a private loan;

“(vii) total cost and net cost to the student of the program;

“(viii) the average outstanding balance of principal and interest on loans made under this title that students have upon graduation;

“(ix) the 3-year cohort default rate;

“(x) the 1- and 3-year repayment rate of loans made under this title;

“(xi) the median student earnings 1, 3, and 4 years after graduation;

“(xii) enrollment data, disaggregated by—

“(I) enrollment status, retention rates, credit accumulation, and completion rates for—

“(II) first-time, full-time students;

“(III) first-time, part-time students;

“(IV) nonfirst-time, full-time students;

“(V) nonfirst-time, part-time students;

“(VI) eligibility for Federal Pell grants;

“(VII) race and ethnicity; and

“(VIII) transfer rates;

“(xiii) a description of the assessments of student knowledge and the corresponding competencies;

“(xiv) a description of the role of faculty and faculty involvement; and

“(xv) outcomes of the assessments of student knowledge.

“(B) DISAGGREGATION.—The data collected under clauses (vi) through (xii) shall be disaggregated by each group of students described in paragraph (1)(C)(i).

“(3) ANNUAL REPORT.—The Director, in consultation with the Secretary, shall annually provide to the authorizing committees a report on—

“(A) the evaluations required under paragraph (2);

“(B) the number and types of students receiving assistance under this title for competency-based education programs offered under projects under this section;

“(C) any proposed statutory or regulatory changes designed to support and enhance the expansion of competency-based education programs, which may be independent of or combined with traditional credit hour or clock hour projects;

“(D) the most effective means of delivering competency-based education programs through projects under this section; and

“(E) the appropriate level and distribution methodology of Federal assistance under this title for students enrolled in a competency-based education program.

“(h) Coordination.—An eligible entity or the Director shall consult with the Secretary of Education or the Secretary of the Treasury to obtain the employment, earnings, and loan information that may be necessary for purposes of subsection (c)(2)(F) or subsection (g), respectively.

“(i) Oversight.—In carrying out this section, the Secretary shall, on a continuing basis—

“(1) assure compliance of eligible entities with the requirements of this title (other than the provisions of law and regulations that are waived under subsection (e));

“(2) provide technical assistance;

“(3) monitor fluctuations in the student population enrolled in the eligible entities carrying out the demonstration projects under this section;

“(4) consult with appropriate accrediting agencies or associations and appropriate State regulatory authorities for additional ways of improving the delivery of competency-based education programs; and

“(5) collect and disseminate to eligible entities carrying out a demonstration project under this section, best practices with respect to such projects.

“(j) Data privacy.—

“(1) IN GENERAL.—It shall be unlawful for any person who obtains or has access to personally identifiable information in connection with this section to willfully disclose to any person (except as authorized in this Act or any Federal law) such personally identifiable information.

“(2) PENALTY.—Any person who violates paragraph (1) shall be fined not more than $5,000, imprisoned not more than 5 years, or both, together with the costs of prosecution.

“(3) EMPLOYEE OR OFFICER OF THE UNITED STATES.—If a violation of paragraph (1) is committed by any officer or employee of the United States, the officer or employee shall be dismissed from office or discharged from employment upon conviction for the violation.

“(4) SALE OF DATA PROHIBITED.—Data collected under this section shall not be sold to any third party by the Director, any postsecondary institution, or any other entity.

“(5) LIMITATION ON USE BY OTHER FEDERAL AGENCIES.—The Director shall not allow any other Federal agency to use data collected under this section for any purpose except as explicitly authorized by this Act.

“(6) LAW ENFORCEMENT.—Personally identifiable information collected under this section shall not be used for any law enforcement activity or any other activity that would result in adverse action against any student, including debt collection activity or enforcement of the immigration laws.

“(k) Authorization of appropriations.—There are authorized to be appropriated $5,000,000 to carry out this section.

“(l) Definitions.—For the purpose of this section:

“(1) COMPETENCY-BASED EDUCATION PROGRAM.—The term ‘competency-based education program’ means a program that provides competency-based education for which the accrediting agency or association of the institution of higher education offering such program has established or will establish the standards described in subsection (c) and, in accordance with such standards—

“(A) measures academic progress and attainment by the assessment of student learning in lieu of, or in addition to, credit or clock hours;

“(B) measures and assesses such academic progress and attainment in terms of a student’s mastery of competencies by identifying what students know and the skills mastered through rigorous assessment;

“(C) determines and reports to the Secretary the number of credit or clock hours that would be needed for the attainment of a similar level of knowledge, skills, and characteristics in a standard credit or clock hour program;

“(D) provides the educational content, activities, support, and resources necessary to enable students to attain the knowledge, skills, and characteristics that are required to demonstrate mastery of such competencies, including—

“(i) ready access to academic assistance from faculty who meet the standards of the agency or association for providing instruction in the subject area; and

“(ii) a system for monitoring a student’s engagement and progress in each competency, in which faculty are responsible for providing proactive academic assistance, when needed, on the basis of such monitoring; and

“(E) upon a student’s demonstration or mastery of a set of competencies identified and required by the institution, leads to or results in the awarding of a recognized educational credential.

“(2) ELIGIBLE ENTITY.—The term ‘eligible entity’ means an institution of higher education, which may be an institution of higher education that offers a dual or concurrent enrollment program.

“(3) INSTITUTION OF HIGHER EDUCATION.—The term ‘institution of higher education’ has the meaning given the term in section 102, except that such term does not include institutions described in section 102(a)(1)(C).

“(4) DUAL OR CONCURRENT ENROLLMENT PROGRAM.—The term ‘dual or concurrent enrollment program’ has the meaning given the term in section 8101 of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 7801).

“(5) DIRECTOR.—The term ‘Director’ means the Director of the Institute of Education Sciences.

“(6) FIRST GENERATION COLLEGE STUDENT.—The term ‘first generation college student’ has the meaning given the term in section 402A(h)(3).”.