The Protecting Our Students and Taxpayers Act of 2024 would strengthen requirements for for-profit colleges by reinstating and expanding the "85/15 rule," which requires these institutions to derive at least 15 percent of their revenue from sources other than federal student aid. The bill closes loopholes by limiting what counts as non-federal revenue, including stricter rules on income share agreements, alternative financing arrangements, and institutional scholarships. It also tightens calculations to prevent for-profit schools from artificially inflating non-federal revenue through relationships with affiliated entities or owners. Schools that fail to meet the 85/15 requirement would lose federal student aid eligibility for at least two years and must demonstrate full compliance with all regulations for two additional years before regaining eligibility. Beginning July 1, 2026, the Secretary of Education would be required to submit annual reports to Congress documenting the revenue sources of all for-profit institutions receiving federal aid. The bill takes effect on July 1, 2025.
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