Sponsors
Introduced June 17, 2025 by Stephen Cohen · Last progress June 17, 2025
The bill strengthens oversight and reduces federal aid dependence at proprietary colleges—improving transparency and taxpayer stewardship—but risks cutting students' access to Title IV aid, reducing financing options, and causing program closures or layoffs, with some impacts delayed by the implementation timetable.
Students at proprietary (for‑profit) institutions and taxpayers: institutions will need at least 15% of revenue from non‑Federal sources, reducing reliance on federal student aid and strengthening financial safeguards for students and stewardship of federal dollars.
Taxpayers and oversight bodies: annual reports will show per‑institution shares of Federal vs. non‑Federal revenue, improving transparency and enabling better congressional and public oversight.
Students and institutions: a clear implementation date (starting the second full award year after enactment) gives schools and financial aid offices at least one full award year to plan and adapt policies, systems, and communications.
Students and institutions: proprietary schools that fail the 15% non‑Federal revenue test will lose Title IV eligibility for at least two fiscal years, disrupting students' access to federal aid and enrollment continuity.
Employees and local communities: institutions unable to meet the revenue threshold may cut programs, close campuses, or lay off staff, harming local economies and reducing educational options.
Low‑income students: limits on counting certain institutional financing (e.g., income‑share agreements or institution loans) unless strict conditions are met may reduce available payment options and make college less affordable for some students.
Based on analysis of 3 sections of legislative text.
Requires proprietary colleges to derive at least 15% of revenue from non‑federal education funds and sets cash‑basis accounting and counting rules for that test.
Requires proprietary (for‑profit) colleges to get at least 15% of their revenues from non‑Federal education assistance funds (an “85/15” test measured on a cash‑basis) and sets detailed rules for how institutions count revenue and alternative financing. It defines key terms, presumes Federal student aid is used to pay institutional charges (unless specific exceptions apply), explains when institution‑made loans count as revenue, and takes effect the second full award year after enactment.