119-s2107

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 2107 Introduced in Senate

    (IS) ]

<DOC>

119th CONGRESS
 1st Session
 S. 2107

 To amend the Higher Education Act of 1965 regarding proprietary 
 institutions of higher education in order to protect students and 
 taxpayers.

_______________________________________________________________________

 IN THE SENATE OF THE UNITED STATES

 June 18, 2025

 Mr. Durbin (for himself, Mr. Blumenthal, Ms. Hirono, Mr. King, Mr. 
Merkley, Ms. Smith, Mr. Reed, and Ms. Warren) introduced the following 
 bill; which was read twice and referred to the Committee on Health, 
 Education, Labor, and Pensions

_______________________________________________________________________

 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) ).
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