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Will the Students Not Profits Act Block Federal Aid for For-Profit Colleges?
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Key points
- Representative Pramila Jayapal introduced HR 10562, the Students Not Profits Act, to ban for-profit colleges from receiving Title IV federal student aid.
- The bill establishes strict regulations for proprietary schools attempting to convert to nonprofit status, including independent asset evaluations.
- The legislation has been referred to the House Committee on Education and the Workforce for further review.
NewsWK — Congressional Democrats want to strip federal funding from proprietary higher education institutions across the United States. Representative Pramila Jayapal of Washington introduced a bill that would fundamentally alter how career-focused colleges operate.
Why it matters
This legislation impacts millions of students who rely on federal loans and grants to attend career-focused schools. If passed, the measure would completely cut off federal student aid for profit institutions. This could force many schools to close. Taxpayers and students alike would face a shifted educational landscape with fewer private vocational options.
What is the Pramila Jayapal higher education bill?
The newly introduced legislation, known as the Students Not Profits Act, targets the business model of proprietary colleges. Introduced on September 24, 2026, the bill amends the Higher Education Act of 1965. It aims to eliminate federal student aid for profit institutions, redirecting federal resources away from commercial educational ventures.
Officially designated as HR 10562, the bill currently sits with the House Committee on Education and the Workforce. Jayapal introduced the measure alongside cosponsors like Representatives Jesús G. “Chuy” García, Chellie Pingree, Ayanna Pressley, and Rashida Tlaib.
How does HR 10562 restrict for-profit colleges federal student aid?
The bill completely bans proprietary schools from participating in Title IV federal student financial aid programs. Additionally, it establishes strict guidelines for businesses attempting to convert into nonprofit entities. Schools must secure official IRS 501(c)(3) status and prove they did not buy assets above fair market value.
Furthermore, the bill mandates independent evaluations of all acquired assets. It also requires institutions to mitigate conflicts of interest on their governing boards. Consequently, these rules prevent owners from profiting after transitions.
This article was produced with the assistance of AI and reviewed by our editorial team.
Sources
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