Sponsors
The bill improves oversight, transparency, and student protections by limiting how institutions count federal aid and alternative financing, but does so at the cost of increased compliance burdens, possible tuition rises and program closures at some proprietary schools, and temporary disruptions for affected students during implementation and any resulting ineligibility periods.
Taxpayers and the federal budget face lower risk of Title IV fund misuse because institutions that exceed the revenue thresholds can lose eligibility for at least two fiscal years, creating stronger enforcement incentives.
Students are better protected from institutions counting risky financing as institutional revenue because the bill restricts counting of certain loans and clarifies treatment of income‑share/alternative financing agreements.
Colleges, states, and the public gain clearer, institution‑level transparency because the Secretary must publish annual, audited reports showing the percentage of revenue derived from Federal education assistance.
Students (especially low‑income students) at institutions that become ineligible could lose access to Title IV aid for the duration of at least a two‑year ineligibility period, disrupting enrollment and program completion.
Employees and students face risk of program cuts, enrollment reductions, or closures at some proprietary institutions as schools adjust to new revenue rules, causing job losses and reduced local educational access.
Institutions will incur higher compliance and auditing costs to meet the bill's reporting and verification requirements, which could lead to higher tuition or reduced student services.
Based on analysis of 3 sections of legislative text.
Introduced June 17, 2025 by Stephen Cohen · Last progress June 17, 2025
Requires proprietary (for‑profit) colleges that participate in Title IV federal student aid to derive at least 15% of their institutional revenues from non‑Federal education assistance sources (an "85/15" rule). It sets detailed accounting rules, defines key terms (including alternative financing agreements and Federal education assistance funds), and specifies what revenue counts or is excluded. Institutions that fail the requirement become ineligible to receive Title IV funds for at least two institutional fiscal years and must re‑demonstrate compliance for two years afterward. The bill also reorganizes and corrects cross‑references in the Higher Education Act, requires annual reporting to Congress on revenue sources for proprietary institutions, and makes the changes effective beginning with the second full award year after enactment.