IHE Nonprofit Clarity Act

This bill makes the definition of a “nonprofit college” the same across the IRS and the Department of Education. If a college or university is recognized by the IRS as a 501(c)(3) nonprofit, then the Department of Education must also treat it as a nonprofit under the Higher Education Act. The bill does this by updating the law’s definition of a nonprofit institution of higher education.

Key points:

• Who is affected: Colleges and universities, the Department of Education, and students attending those schools.
• What changes: A school’s nonprofit status is determined by IRS recognition, and the Education Department must honor that status for Higher Education Act purposes.
• Why it matters: It aims to create clear, consistent treatment of schools across federal agencies, which can affect program eligibility and how schools are categorized for federal education policies.