Change of Ownership and Conversion Improvement Act

This bill changes how the Department of Education reviews college ownership changes and when a for‑profit college tries to become a nonprofit. It sets a 90‑day deadline to approve or deny a complete application; if the Department misses it without a valid reason, the application is automatically approved. Schools can ask for a pre‑deal review; if that is approved at least 90 days before the deal and the terms don’t change, the final approval is automatic. The Department must publish its reasons for approvals or denials and clearly list what paperwork is required; if it asks for extra documents, it must explain why .

To fund faster, thorough reviews, schools pay application fees based on the federal student aid money they receive: 0.15% for ownership changes and 0.30% for conversion requests, capped at $120,000; for conversions, half of the fee goes to the IRS. After a conversion, the school is monitored for five years, with an annual fee of 0.15% (capped at $60,000), and half of that fee also goes to the IRS. Monitoring can be extended only with written, public reasons, and schools can get waivers if they have no ongoing ties to former owners. A school cannot market itself as nonprofit until federal, state, accreditor, and IRS approvals are final. Deals must be at fair market value, and if people are on both sides of the deal, a neutral board committee must approve; an independent valuation creates a presumption that prices are fair. The Department must post an annual report on review times and outcomes; if it misses the deadline, it cannot spend the collected fees for a year. These changes apply to applications submitted on or after January 1, 2026, and the Government Accountability Office will review results five years after enactment. The findings explain that these fees shift costs from general taxpayers to the institutions involved .

Key points

• Who is affected: Colleges and universities that change owners or convert from for‑profit to public or nonprofit; the Department of Education and the IRS (for parts of the review and monitoring) .
• What changes: 90‑day decision clock with limited extensions and automatic approval if missed; optional pre‑deal review; fees to fund reviews; five‑year post‑conversion monitoring with possible waivers; fair‑value and conflict‑of‑interest safeguards; public explanations, document lists, and annual reports .
• When: Applies to applications filed on or after January 1, 2026; GAO review due five years after enactment.