; (B) by striking the subsection designation and all that follows through the end of paragraph (3) and inserting the following: (c) Financial responsibility standards (1) The Secretary shall determine whether an institution has the financial responsibility required by this title in accordance with paragraph (2). (2) An institution shall be determined to be financially responsible by the Secretary, as required by this title, if the institution is able to provide the services described in its official publications and statements, is able to provide the administrative resources necessary to comply with the requirements of this title, and meets one of the following conditions: (A) Such institution has its liabilities backed by the full faith and credit of a State, or its equivalent. (B) Such institution has a bond credit quality rating of investment grade or higher from a recognized credit rating agency. (C) Such institution has expendable net assets equal to not less than one-half of the annual potential liabilities of such institution to the Secretary for funds under this title, including loan obligations discharged pursuant to section 437, and to students for refunds of institutional charges, including funds under this title, as calculated by an independent certified public accountant in accordance with generally accepted auditing standards. (D) Such institution establishes, with the support of a financial statement audited by an independent certified public accountant in accordance with generally accepted auditing standards, that the institution has sufficient resources to ensure against the precipitous closure of the institution, including the ability to meet all of its financial obligations (including refunds of institutional charges and repayments to the Secretary for liabilities and debts incurred in programs administered by the Secretary). (E) Such institution has met criteria, prescribed by the Secretary by regulation in accordance with paragraph (3), that— (i) establish ratios that demonstrate financial