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[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4026 Introduced in House (IH)]
<DOC>
119th CONGRESS
1st Session
H. R. 4026
To amend the Higher Education Act of 1965 regarding proprietary
institutions of higher education in order to protect students and
taxpayers.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
June 17, 2025
Mr. Cohen introduced the following bill; which was referred to the
Committee on Education and Workforce
_______________________________________________________________________
A BILL
To amend the Higher Education Act of 1965 regarding proprietary
institutions of higher education in order to protect students and
taxpayers.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Protecting Our Students and
Taxpayers Act of 2025'' or ``POST Act of 2025''.
SEC. 2. 85/15 RULE.
(a) In General.--Section 102(b) of the Higher Education Act of 1965
(20 U.S.C. 1002(b)) is amended--
(1) in paragraph (1)--
(A) in subparagraph (D), by striking ``and'' after
the semicolon;
(B) in subparagraph (E), by striking the period at
the end and inserting ``; and''; and
(C) by adding at the end the following:
``(F) meets the requirements of paragraph (2).'';
(2) by redesignating paragraph (2) as paragraph (3); and
(3) by inserting after paragraph (1) the following:
``(2) Revenue sources.--
``(A) Definitions.--In this paragraph:
``(i) Alternative financing arrangement.--
The term `alternative financing agreement'
means a financing agreement between--
``(I) a student of an institution;
and
``(II)(aa) the institution;
``(bb) any entity or individual--
``(AA) in the institution's
ownership tree; or
``(BB) with any common
ownership of the institution
and the entity providing the
funds; or
``(cc)(AA) an entity that has any
other relationship or agreement with
the institution; or
``(BB) an entity with common
ownership with an entity described in
subitem (AA).
``(ii) Federal education assistance
funds.--The term `Federal education assistance
funds' means Federal funds that are disbursed
or delivered to or on behalf of a student to be
used to attend such institution, as calculated
under subparagraph (C).
``(B) 85/15 rule.--In order to qualify as a
proprietary institution of higher education under this
subsection, an institution shall derive not less than
15 percent of the institution's revenues from sources
other than Federal education assistance funds, as
calculated in accordance with subparagraphs (A) and
(C).
``(C) Implementation of non-federal revenue
requirement.--In making calculations under subparagraph
(B), an institution of higher education shall--
``(i) use the cash basis of accounting;
``(ii) consider as revenue only those funds
generated by the institution from--
``(I) tuition, fees, and other
institutional charges for students
enrolled in programs eligible for
assistance under title IV;
``(II) activities conducted by the
institution that are necessary for the
education and training of the
institution's students, if such
activities are--
``(aa) conducted on campus
or at a facility under the
control of the institution;
``(bb) performed under the
supervision of a member of the
institution's faculty;
``(cc) required to be
performed by all students in a
specific educational program at
the institution; and
``(dd) related directly to
services performed by students;
``(III) a contractual arrangement
with a Federal agency for the purpose
of providing job training to low-income
individuals who are in need of such
training; and
``(IV) funds paid by a student, or
on behalf of a student by a party
unrelated to the institution, its
owners, or affiliates, for an education
or training program that is not
eligible for assistance under title IV,
as long as--
``(aa) such noneligible
program does not include any
courses offered in an eligible
program of the proprietary
institution;
``(bb) such noneligible
program is provided by the
institution, and taught by an
instructor of the institution,
at--
``(AA) its main
campus or one of its
additional locations,
as approved by the
appropriate accrediting
agency or association;
``(BB) another
school facility
approved by the
appropriate State
agency or accrediting
agency or association;
or
``(CC) an employer
facility; and
``(cc) such noneligible
program is not a program where
the institution is merely
providing facilities for test
preparation courses, acting as
a proctor, or overseeing a
course of self-study;
``(iii) presume that any Federal education
assistance funds that are disbursed or
delivered to an institution on behalf of a
student or directly to a student will be used
to pay the student's tuition, fees, or other
institutional charges, regardless of whether
the institution credits such funds to the
student's account or pays such funds directly
to the student, except to the extent that the
student's tuition, fees, or other institutional
charges are satisfied by--
``(I) grant funds provided by an
outside source that--
``(aa) has no affiliation
with the institution; and
``(bb) shares no employees,
executives, or board members
with the institution; and
``(II) institutional scholarships
described in clause (vi);
``(iv) include no loans made by an
institution of higher education as revenue to
the school, except for payments made by current
or former students to the institution during
the fiscal year for which the determination is
being made on such loans that are--
``(I) used to satisfy tuition,
fees, and other institutional charges;
``(II) bona fide, as evidenced by
standalone repayment agreements between
the students and the institution that
are enforceable promissory notes;
``(III) issued at intervals related
to the institution's enrollment
periods;
``(IV) subject to regular loan
repayments and collections by the
institution; and
``(V) separate from the enrollment
contracts signed by the students;
``(v) include funds from an income share
agreement, or any other alternative financing
agreement, with a student only if--
``(I) the institution clearly
identifies the student's institutional
charges, and such charges are the same
or less than the stated rate for
institutional charges;
``(II) the agreement clearly
identifies the maximum time and maximum
amount a student would be required to
pay, including the implied or imputed
interest rate and any fees and revenue
generated for a related third party,
the institution, or an entity described
in subparagraph (A)(i)(II), for that
maximum time period; and
``(III) all payments under the
agreement are applied with a portion
allocated to the return of capital and
a portion allocated to profit, with
revenue, interest, and fees not
included in the calculation;
``(vi) include a scholarship provided by
the institution--
``(I) only if the scholarship is in
the form of monetary aid based upon the
academic achievements or financial need
of students, disbursed to qualified
student recipients during each fiscal
year from an established restricted
account; and
``(II) only to the extent that
funds in that account represent
designated funds, or income earned on
such funds, from an outside source
that--
``(aa) has no affiliation
with the institution; and
``(bb) shares no employees,
executives, or board members
with the institution; and
``(vii) exclude from revenues--
``(I) the amount of funds the
institution received under part C of
title IV, unless the institution used
those funds to pay a student's
institutional charges;
``(II) the amount of funds the
institution received under subpart 4 of
part A of title IV;
``(III) the amount of funds
provided by the institution as matching
funds for any Federal program;
``(IV) the amount of Federal
education assistance funds provided to
the institution to pay institutional
charges for a student that were
refunded or returned; and
``(V) the amount charged for books,
supplies, and equipment, unless the
institution includes that amount as
tuition, fees, or other institutional
charges.
``(D) Regaining eligibility.--Notwithstanding
subparagraph (B), a proprietary institution of higher
education that fails to meet the requirements of such
subparagraph for a fiscal year shall be ineligible for
purposes of this paragraph for a period of not less
than 2 institutional fiscal years. To regain
eligibility under this paragraph, the proprietary
institution shall demonstrate compliance with all
eligibility and certification requirements under
section 498 for a minimum of 2 institutional fiscal
years after the institutional fiscal year in which the
institution became ineligible.
``(E) Report to congress.--Not later than the third
full award year (as defined in section 481(a)(1)) that
begins after the date of enactment of the Protecting
Our Students and Taxpayers Act of 2025, and by July 1
of each succeeding year, the Secretary shall submit to
the authorizing committees a report that contains, for
each proprietary institution of higher education that
receives assistance under title IV and as provided in
the audited financial statements submitted to the
Secretary by each institution pursuant to the
requirements of section 487(c)--
``(i) the amount and percentage of such
institution's revenues received from Federal
education assistance funds; and
``(ii) the amount and percentage of such
institution's revenues received from other
sources.''.
(b) Repeal of Existing Requirements.--Section 487 of the Higher
Education Act of 1965 (20 U.S.C. 1094) is amended--
(1) in subsection (a)--
(A) by striking paragraph (24);
(B) by redesignating paragraphs (25) through (29)
as paragraphs (24) through (28), respectively;
(C) in paragraph (24)(A)(ii) (as redesignated by
subparagraph (B)), by striking ``subsection (e)'' and
inserting ``subsection (d)''; and
(D) in paragraph (26) (as redesignated by
subparagraph (B)), by striking ``subsection (h)'' and
inserting ``subsection (g)'';
(2) by striking subsection (d);
(3) by redesignating subsections (e) through (j) as
subsections (d) through (i), respectively;
(4) in the matter preceding paragraph (1) of subsection (d)
(as redesignated by paragraph (3)), by striking ``(a)(25)'' and
inserting ``(a)(24)'';
(5) in subsection (f)(1) (as redesignated by paragraph
(3)), by striking ``subsection (e)(2)'' and inserting
``subsection (d)(2)''; and
(6) in subsection (g)(1) (as redesignated by paragraph
(3)), by striking ``subsection (a)(27)'' in the matter
preceding subparagraph (A) and inserting ``subsection
(a)(26)''.
(c) Conforming Amendments.--The Higher Education Act of 1965 (20
U.S.C. 1001 et seq.) is amended--
(1) in section 152 (20 U.S.C. 1019a)--
(A) in subsection (a)(1)(A), by striking
``subsections (a)(27) and (h) of section 487'' and
inserting ``subsections (a)(26) and (g) of section
487''; and
(B) in subsection (b)(1)(B)(i)(I), by striking
``section 487(e)'' and inserting ``section 487(d)'';
(2) in section 153(c)(3) (20 U.S.C. 1019b(c)(3)), by
striking ``section 487(a)(25)'' each place the term appears and
inserting ``section 487(a)(24)'';
(3) in section 496(c)(3)(A) (20 U.S.C. 1099b(c)(3)(A)), by
striking ``section 487(f)'' and inserting ``section 487(e)'';
and
(4) in section 498(k)(1) (20 U.S.C. 1099c(k)(1)), by
striking ``section 487(f)'' and inserting ``section 487(e)''.
SEC. 3. EFFECTIVE DATE.
(a) In General.--The amendments made by this Act shall take effect
on the second full award year that begins after the date of enactment
of this Act.
(b) Award Year.--In this section, the term ``award year'' has the
meaning given the term in section 481(a)(1) of the Higher Education Act
of 1965 (20 U.S.C. 1088(a)(1)).
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Education and Workforce.
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