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Amends subsection (b) by (1) modifying paragraph (1) subparagraph punctuation and adding a new subparagraph (F) referencing new paragraph (2); (2) redesignating existing paragraph (2) as paragraph (3); and (3) inserting a new paragraph (2) titled 'Revenue sources' that defines 'alternative financing agreement' and 'Federal education assistance funds', establishes an 85/15 non-Federal revenue requirement for proprietary institutions, specifies cash-basis accounting and detailed rules for counting and excluding various revenue sources (including treatment of loans, income share and other alternative financing agreements, institutional scholarships, and certain Title IV funds), sets ineligibility and regaining-eligibility rules, and creates an annual reporting requirement to authorizing committees.
Makes multiple amendments to section 487: strikes subsection (a) paragraph (24); redesignates paragraphs (25) through (29) as paragraphs (24) through (28), respectively; updates internal cross-references (e.g., in paragraph (24)(A)(ii) and paragraph (26)); strikes subsection (d); redesignates subsections (e) through (j) as subsections (d) through (i), respectively; and adjusts related cross-references in the subsection text.
Updates internal cross-references in section 152: in subsection (a)(1)(A) replaces references to 'subsections (a)(27) and (h) of section 487' with 'subsections (a)(26) and (g) of section 487', and in subsection (b)(1)(B)(i)(I) replaces 'section 487(e)' with 'section 487(d)'. These are conforming changes reflecting the redesignation and removal actions in section 487.
Amends section 153(c)(3) by striking each place the referenced term appears and inserting a reference to 'section 487(a)(24)' (conforming the cross‑reference to the renumbered paragraph in section 487).
In section 496(c)(3)(A) replaces the cross-reference 'section 487(f)' with 'section 487(e)' (a conforming change reflecting redesignation of subsection lettering in section 487).
In section 498(k)(1) replaces the cross-reference 'section 487(f)' with 'section 487(e)' (a conforming change reflecting redesignation of subsection lettering in section 487).
Requires for‑profit (proprietary) colleges to get at least 15% of their revenue from non‑Federal sources (an “85/15” style rule). It creates detailed rules for how to count revenues and exclusions, treats scholarships and alternative financing in specific ways, requires annual reporting to Congress, and establishes penalties and conforming changes to the Higher Education Act. The rule takes effect beginning the second full award year that starts after the law is signed.
Amends Section 102(b) of the Higher Education Act of 1965 (20 U.S.C. 1002(b)) to require proprietary institutions to meet a new paragraph governing revenue sources (the 85/15 rule).
85/15 rule: To qualify as a proprietary institution under Section 102(b), the institution must derive not less than 15 percent of its revenues from sources other than Federal education assistance funds, calculated according to the section’s rules.
Defines the term 'Federal education assistance funds' as Federal funds disbursed or delivered to or on behalf of a student to be used to attend the institution, as calculated under the section’s calculation rules.
Defines 'alternative financing agreement' (term appears and begins definition: 'means a financing agreement between a student of an institution and...' — the uploaded text begins this definition but is truncated in the file).
Calculation method: Institutions must use the cash basis of accounting when making 85/15 calculations.
Who is affected and how:
For‑profit (proprietary) colleges: These institutions are directly targeted. They must change how they calculate and report revenues, may alter tuition pricing, scholarships, or alternative financing strategies, and could lose eligibility for Federal education assistance or face other penalties if they fail the test. Some institutions heavily reliant on Federal aid may need to find new revenue sources, cut programs, restructure, or consider closure or sale.
Students (especially those attending proprietary colleges): Students could see changes in tuition, scholarship availability, or program offerings. If institutions respond by reducing enrollment or closing programs, students may face transfer or completion challenges. Changes may also affect future cohorts' access to Federal aid depending on institutional compliance.
Department of Education and Congress: The Department will have new compliance, calculation, enforcement, and reporting tasks. Congress will receive annual reports and data that could inform further oversight or legislative action.
Taxpayers and Federal budget: If the rule reduces Federal student aid outlays to noncompliant institutions, Federal spending on student aid could decline; conversely, enforcement and administration will require Department resources.
Accreditors and state regulators: These entities may face indirect impacts if institutional business models change, potentially affecting oversight, monitoring, or institutional approvals.
Timing and transition: The second full award year after enactment gives institutions and the Department time to adapt systems, update reporting, and restructure revenue sources. The detailed calculation rules increase legal and administrative complexity, so institutions will likely need accounting, compliance, and legal work to implement the required reporting and revenue adjustments.
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POST Act of 2025
Read twice and referred to the Committee on Health, Education, Labor, and Pensions.
Introduced June 18, 2025 by Richard Joseph Durbin · Last progress June 18, 2025
Read twice and referred to the Committee on Health, Education, Labor, and Pensions.
Introduced in Senate