PlainBillCongress, translated.Legislation. Context. Public interest.Referred to the House Committee on Education and Workforce.
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People & committees
Rep. Jayapal, Pramila [D-WA-7] · D–WA
Legislative record
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Referred to the House Committee on Education and Workforce.
Introduced in House
Introduced in House
Primary sources
Text links open the official source. We also preserved the text version used in the PlainBill explanation below.
No related bills are listed in this snapshot. This does not establish whether the proposal has appeared in earlier Congresses.
Source last updated: Sep 28, 2026. Consult Congress.gov for the current record.
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PlainBill explanation
Based on the full Introduced in House · 2026-09-24 text. This explanation has not received human editorial review. This overview describes the proposal’s major provisions; it does not establish what its real-world effects would be.
The proposed Students Not Profits Act of 2026 would change which colleges qualify under federal higher-education law, including limits on enrollment in distance education and restrictions tied to school management. It would require one or more people who substantially control a school to assume liability for certain student-aid losses. Schools seeking nonprofit status would face approval requirements, limits on financial benefits to insiders, and public disclosure of their applications.
This Act may be cited as the Students Not Profits Act of 2026.
limits enrollment of students in distance education courses offered by the institution to not more than 50 percent of all students enrolled in the institution
An institution shall not be considered to meet the definition of an institution of higher education in subsection (a) or (b) if— (1) the institution, or an affiliate of the institution that has the power, by contract or ownership interest, to direct or cause the direction of the management or policies of the institution, has filed for bankruptcy
(B) shall require the assumption of personal liability, by one or more individuals who exercise substantial control over such institution, as determined by the Secretary in accordance with paragraph (2), for financial losses to the Federal Government, student assistance recipients, and other program participants for funds under this title, as a result of loan discharge under section 437(c) due to the closure of the institution, or a successful borrower defense claim filed under section 455(h) with respect to such institution.
Before the Secretary may approve the conversion of an institution of higher education under subsection (a), the application of such institution submitted to the Secretary under subsection (b) shall be published in the Federal Register with an appropriate notice and comment period.
(3) That no member of the governing board of such institution of higher education (other than ex officio members serving at the pleasure of the remainder of the governing board and receiving a fixed salary), or any person with the power to appoint or remove members of such governing board or any immediate family member of such a member of the board or such a person with power of appointment, receives any substantial direct or indirect economic benefit (including a lease, promissory note, or other contract) from such institution of higher education.
Section 2 would remove the words excluding title IV, the student-aid provisions, from two parts of the existing institutional definition. It would add public, nonprofit postsecondary vocational institutions and certain approved foreign institutions, delete existing section 102, and renumber section 103. The existing definitions are not reproduced, so their full change in coverage cannot be determined from this bundle alone.
(A) in subsection (a), in the matter preceding paragraph (1), by striking other than title IV,; (B) in subsection (b)— (i) in the matter preceding paragraph (1), by striking other than title IV,
(3) a public, nonprofit postsecondary vocational institution; and (4) only for the purposes of part D of title IV, an institution outside the United States that is comparable to an institution of higher education, as defined in subsection (a), and that has been approved by the Secretary for the purpose of part D of title IV, consistent with the requirements of section 452(d).
(2) by striking section 102; and (3) by redesignating section 103 as section 102.
To qualify under the proposed definition, a school generally could have no more than 50 percent of its students enrolled in distance education courses. Public or nonprofit technical institutions and career and technical education schools described in the cited Perkins Act provision would be exempt from this limit.
An institution shall be considered to meet the definition of an institution of higher education in subsection (a) or (b) only if such institution— (1) limits enrollment of students in distance education courses offered by the institution to not more than 50 percent of all students enrolled in the institution, unless the institution is a public or nonprofit technical institution or career and technical education school, as described in section 3(3)(C) of the Carl D. Perkins Career and Technical Education Act of 2006
The proposed definition would also cap incarcerated students at 25 percent of a school's enrollment and students without a high-school diploma or recognized equivalent at 50 percent.
(2) limits enrollment of students who are incarcerated to not more than 25 percent of all students enrolled in the institution; (3) limits enrollment of students who do not have a secondary school diploma or its recognized equivalent to not more than 50 percent of all students enrolled in the institution
A certificate or other recognized nondegree program using title IV student-aid funds would have to prepare students for gainful employment in a recognized occupation.
(4) if the institution offers an education or training program that leads to a certificate, or other nondegree recognized credential and funds available under title IV for students are used for enrollment in such education or program, ensures that such education or program prepares students for gainful employment in a recognized occupation.
A school would fail the proposed institutional definition if it, or an affiliate able to direct its management or policies through a contract or ownership interest, had filed for bankruptcy.
An institution shall not be considered to meet the definition of an institution of higher education in subsection (a) or (b) if— (1) the institution, or an affiliate of the institution that has the power, by contract or ownership interest, to direct or cause the direction of the management or policies of the institution, has filed for bankruptcy
A school would also be disqualified for specified conduct by the school, its owner, or an executive officer. Grounds include a conviction, guilty plea, or no-contest plea for a crime involving title IV funds; findings of fraud, substantial misrepresentation, or false certification involving those funds; predatory recruitment or enrollment; and state consumer-protection violations involving those funds.
(2) the institution, the institution's owner, the institution's chief executive officer, or any other executive officer of the institution— (A) has been convicted of, or has pled nolo contendere or guilty to, a crime involving the acquisition, use, or expenditure of funds under title IV; (B) has been determined to have committed fraud, substantial misrepresentation, or false certification involving funds under title IV; (C) has been determined to have engaged in predatory recruitment or enrollment practices; (D) has been determined to have violated a State law relating to consumer protection involving funds under title IV
Another proposed disqualification concerns previous employment or substantial control at a title IV-funded school that closed. The text applies this ground to the school, its owner, and executive officers without expressly requiring responsibility for the closure or misconduct.
(2) the institution, the institution's owner, the institution's chief executive officer, or any other executive officer of the institution
(E) has been previously employed or has exercised substantial control at an institution receiving funds under title IV that closed.
The Secretary would certify whether schools qualify using the referenced title IV procedures. A school removed from title IV funding eligibility through an action under part H would also cease to qualify under the proposed institutional definition.
(f) Certification The Secretary shall certify an institution's qualification as an institution of higher education in accordance with the requirements of subpart 3 of part H of title IV. (g) Loss of eligibility An institution of higher education shall not be considered to meet the definition of an institution of higher education in subsection (a) or (b) if such institution is removed from eligibility for funds under title IV as a result of an action pursuant to part H of title IV.
A qualifying postsecondary vocational school would need an eligible occupational training program, at least two years of existence, and compliance with specified existing statutory criteria. An alternative admissions rule would cover students beyond compulsory school age or students who will be dually or concurrently enrolled in the institution and a secondary school.
the term postsecondary vocational institution means a school that— (A) provides an eligible program of training to prepare students for gainful employment in a recognized occupation; (B) meets the requirements of paragraphs (1), (2), (4), and (5) of subsection (a); and (C) has been in existence for at least 2 years.
also includes an educational institution in any State that, in lieu of the requirement in subsection (a)(1), admits as regular students individuals— (A) who are beyond the age of compulsory school attendance in the State in which the institution is located; or (B) who will be dually or concurrently enrolled in the institution and a secondary school.
Foreign institutions could qualify for the part D loan program through Secretary approval and regulatory comparability criteria. Foreign graduate medical, nursing, and veterinary schools would be exempt from the existing subsection (a)(4) requirement, whose content is not supplied.
(4) only for the purposes of part D of title IV, an institution outside the United States that is comparable to an institution of higher education, as defined in subsection (a), and that has been approved by the Secretary for the purpose of part D of title IV, consistent with the requirements of section 452(d).
the Secretary shall establish criteria by regulation for the approval of institutions outside the United States and for the determination that such institutions are comparable to an institution of higher education, as defined in subsection 101(a) (except that a graduate medical school, nursing school, or a veterinary school, located outside the United States shall not be required to meet the requirements of subsection (a)(4)).
For students at foreign graduate medical schools to receive part D loans, at least 60 percent of the school's enrolled students and 60 percent of its graduates would have to fall outside the group defined in existing section 484(a)(5). The proposal also sets a 75 percent examination pass threshold for medical schools outside the United States or Canada. Both tests use the preceding year; the bundle does not define the section 484(a)(5) group.
a student attending such school outside the United States is ineligible for loans made under part D of title IV unless— (A) in the case of a graduate medical school located outside the United States— (i) at least 60 percent of those enrolled in, and at least 60 percent of the graduates of, the graduate medical school outside the United States were not persons described in section 484(a)(5) in the year preceding the year for which a student is seeking a loan under part D of title IV; and (ii) at least 75 percent of the individuals who were students or graduates of the graduate medical school outside the United States or Canada (both nationals of the United States and others) taking the examinations administered by the Educational Commission for Foreign Medical Graduates received a passing score in the year preceding the year for which a student is seeking a loan under part D of title IV
For loan eligibility at a foreign veterinary school that does not meet existing subsection (a)(4), students would have to complete clinical training at an approved veterinary school in the United States.
(B) in the case of a veterinary school located outside the United States that does not meet the requirements of subsection (a)(4), the institution's students complete their clinical training at an approved veterinary school located in the United States
Foreign nursing schools would need agreements for U.S. clinical training and a degree from an accredited U.S. nursing school. They could certify only the listed Direct Stafford, Unsubsidized Stafford, and PLUS loans. They would also have to reimburse specified loan-default costs and meet a 75 percent registered-nurse licensing-exam pass threshold for the preceding year.
(i) the nursing school has an agreement with a hospital, or accredited school of nursing (as such terms are defined in section 801 of the Public Health Service Act (42 U.S.C. 296)), located in the United States that requires the students of the nursing school to complete the students' clinical training at such hospital or accredited school of nursing; (ii) the nursing school has an agreement with an accredited school of nursing located in the United States providing that the students graduating from the nursing school located outside of the United States also receive a degree from the accredited school of nursing located in the United States
(iii) the nursing school certifies only Federal Direct Stafford Loans under section 455(a)(2)(A), Federal Direct Unsubsidized Stafford Loans under section 455(a)(2)(D), or Federal Direct PLUS Loans under section 455(a)(2)(B) for students attending the institution; (iv) the nursing school reimburses the Secretary for the cost of any loan defaults for current and former students included in the calculation of the institution's cohort default rate during the previous fiscal year
(v) not less than 75 percent of the individuals who were students or graduates of the nursing school, and who took the National Council Licensure Examination for Registered Nurses in the year preceding the year for which the institution is certifying a Federal Direct Stafford Loan under section 455(a)(2)(A), a Federal Direct Unsubsidized Stafford Loan under section 455(a)(2)(D), or a Federal Direct PLUS Loan under section 455(a)(2)(B), received a passing score on such examination.
A foreign school that failed to provide, release, or authorize release of required information would lose part D eligibility. If a school lost eligibility under the proposed foreign-school subsection, an enrolled student could continue receiving part D loans while attending it for the academic year after the loss occurred.
(2) Failure to release information The failure of an institution outside the United States to provide, release, or authorize release to the Secretary of such information as may be required by paragraph (1) shall render such institution ineligible for the purpose of part D of title IV. (3) Special rule If, pursuant to this subsection, an institution loses eligibility to participate in the programs under title IV, then a student enrolled in such institution may, notwithstanding such loss of eligibility, continue to be eligible to receive a loan under part D of title IV while attending such institution for the academic year succeeding the academic year in which such loss of eligibility occurred.
Section 3 would delete existing section 487(a)(24) and section 487(d), under a heading about removing references to proprietary institutions. It would also renumber provisions and update references. The deleted language is not supplied, so the specific obligations being removed cannot be described from this evidence.
3. Repeal of existing references to proprietary institutions 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
(2) by striking subsection (d); (3) by redesignating subsections (e) through (j) as subsections (d) through (i), respectively
Section 4 would make existing section 487(a)(20) apply to payments to an unaffiliated provider when its services include recruitment and payment depends on tuition those services generate. Although titled a prohibition on tuition sharing, the proposal does not reproduce the existing paragraph's restrictions or exceptions.
4. Prohibition on tuition sharing Section 487(a)(20) of the Higher Education Act of 1965 (20 U.S.C. 1094(a)(20)) is amended
(B) This paragraph shall apply to any payment— (i) by an institution to an unaffiliated person or entity that provides a set of services that includes recruitment services; and (ii) the amount of which is based on tuition generated for the institution by the services provided by such person or entity.
Section 5 would require the Secretary to make one or more people who substantially control a school assume personal liability for specified title IV losses to the federal government, aid recipients, and other program participants. This requirement would cover losses resulting from loan discharge under section 437(c) because the school closed or a successful borrower defense claim under section 455(h). The referenced rules for determining substantial control, loan discharge, and borrower defenses are not supplied.
(B) shall require the assumption of personal liability, by one or more individuals who exercise substantial control over such institution, as determined by the Secretary in accordance with paragraph (2), for financial losses to the Federal Government, student assistance recipients, and other program participants for funds under this title, as a result of loan discharge under section 437(c) due to the closure of the institution, or a successful borrower defense claim filed under section 455(h) with respect to such institution.
Section 6 would update statutory references and delete several existing provisions whose contents are not supplied. It would also replace section 807(d)(1)(A) with a clause stating an intention to pursue a career in instruction at a higher-education institution in the United States. The surrounding section 807 text is absent, so this clause's function and full effect cannot be determined from the supplied text.
(3) in section 133(b)— (A) by striking paragraph (5); and (B) by redesignating paragraphs (6) through (9) as paragraphs (5) through (8), respectively
(10) in section 487— (A) in subsection (c)(1)(A)(iii), by striking section 102(a)(1)(C) and inserting section 101(b)(4); and (B) in subsection (i)— (i) by striking paragraph (4); and (ii) by redesignating paragraphs (5) and (6) as paragraphs (4) and (5), respectively
(16) in section 807(d)(1), by striking subparagraph (A) and inserting the following: (A) intend to pursue a career in instruction at an institution of higher education in the United States; and .
Section 7 would require the Secretary to approve a school's conversion to nonprofit status when it meets the listed conditions. An applicant would have to demonstrate nonprofit and federal tax-exempt status and show that assets or services acquired from former owners were not purchased above their value.
On determining that an institution of higher education meets the requirements under subsection (b), the Secretary shall approve the conversion of an institution of higher education to a nonprofit institution of higher education.
(1) That such institution of higher education is a nonprofit institution of higher education. (2) That the assets or services acquired from former owners of such institution of higher education were not acquired for more than the value of such assets or services.
(4) That such institution of higher education is an organization described in section 501(c)(3) of the Internal Revenue Code of 1986 and is exempt from taxation under section 501(a) of such Code.
A conversion applicant would have to demonstrate that board members, people empowered to appoint or remove them, and their immediate family members receive no substantial direct or indirect economic benefit from the school. The board-member restriction would except ex officio members who receive a fixed salary and serve at the pleasure of the rest of the board.
(3) That no member of the governing board of such institution of higher education (other than ex officio members serving at the pleasure of the remainder of the governing board and receiving a fixed salary), or any person with the power to appoint or remove members of such governing board or any immediate family member of such a member of the board or such a person with power of appointment, receives any substantial direct or indirect economic benefit (including a lease, promissory note, or other contract) from such institution of higher education.
A conversion applicant's core functions could not be controlled or significantly directed by an entity other than a public higher-education institution or another nonprofit. An outside entity would conclusively be treated as exercising significant direction if any of its employees or owners served as a school officer, board member, or person with similar authority.
(5) Subject to subsection (c), that none of the core functions of the institution of higher education are under the control of, or subject to significant direction from, an entity that is not a public institution of higher education or other nonprofit entity.
there shall be a conclusive presumption that an entity (other than such institution) exercises significant direction over such institution if one or more of the employees or owners of the entity serves as an officer, member of the board, or person holding similar authority for such institution.
After approval to convert, a school would remain subject to rules governing proprietary institutions for at least five years. Five years is a minimum, not a stated automatic end to those requirements. The provision refers to section 102(b), although section 2 would delete existing section 102 and renumber section 103; the supplied text does not resolve that cross-reference.
(d) Transition period In the case of an institution of higher education approved for conversion under subsection (a), such institution shall be subject to any rules and regulations that apply to proprietary institutions of higher education, as defined in section 102(b), for a minimum of 5 years.
(2) by striking section 102; and (3) by redesignating section 103 as section 102.
Valuing acquisitions from former owners would include ongoing contracts, leases, and other relationships. Applicants could demonstrate value through comparable third-party appraisals, independent financing based on acquired assets, or full and open competition. If the Secretary rejected one of those methods, another demonstration process determined appropriate by the Secretary would be required.
(e) Value The term value, with respect to an acquisition under subsection (b)(2)— (1) includes the value of any ongoing relationship (including any contract, agreement, lease or other arrangement)
(2) subject to paragraph (3), may be demonstrated through— (A) a third-party appraisal based on comparable assets acquired by, or goods or services procured by, nonprofit corporations in similar market conditions; (B) an independent financing of the acquisition based upon the assets acquired; or (C) a full and open competition in the acquisition of services or assets, as such term is defined in section 2.101(b) of title 48, Code of Federal Regulations, as in effect on the date of the enactment of this section
(3) shall be subject to such other demonstration process determined appropriate by the Secretary in a case in which the Secretary does not accept a demonstration process described in paragraph (2).
Conversion applications would have to appear in the Federal Register with an opportunity for comment before approval. The Secretary would also have to publish each determination and its reasons.
(f) Publication (1) Application Before the Secretary may approve the conversion of an institution of higher education under subsection (a), the application of such institution submitted to the Secretary under subsection (b) shall be published in the Federal Register with an appropriate notice and comment period. (2) Determination The Secretary shall publish each determination under this section, and the reasons for such determination, under the Federal Register.
Any institution of higher education marketing itself as nonprofit would need approval of its tax-exempt status from the Commissioner of Internal Revenue. Institutions seeking conversion under the proposed section would additionally need final Secretary approval of the conversion, approval of nonprofit status from a recognized accrediting body, and final state approval where applicable.
An institution of higher education shall not promote or market itself, in any manner, as a nonprofit institution of higher education unless— (1) in the case of an institution of higher education that seeks to convert to a nonprofit institution of higher education under this section— (A) the Secretary has given final approval of the conversion of the institution to a nonprofit institution of higher education under this section; (B) an accrediting agency or association recognized by the Secretary pursuant to section 496 has approved the nonprofit status of the institution; and (C) the State has given final approval to the institution as a nonprofit institution of higher education, as applicable; and (2) the Commissioner of Internal Revenue has approved the institution as tax exempt for purposes of the Internal Revenue Code of 1986.
Within one year after enactment, the Secretary would have to establish a departmental office with the expertise needed to administer the nonprofit-integrity section.
(h) Office To monitor nonprofit integrity Not later than 1 year after the date of enactment of the Students Not Profits Act of 2026, the Secretary shall establish an office within the Department with the expertise necessary to carry out this section.
The Secretary would have to review a school's governance when the Secretary determines that its transactions or arrangements are potential indicators of private inurement, meaning improper private financial benefits. The supplied text does not define the precise legal standard. It describes promoting nonprofit integrity as the review's purpose, not an established result.
125. Review of governance The Secretary shall review the governance of an institution of higher education when such institution has engaged in transactions or arrangements determined by the Secretary as potential indicators of private inurement, in order to promote the highest standards of nonprofit integrity.
The official-actions snapshot updated September 28, 2026, records introduction in the House and referral to the House Committee on Education and Workforce on September 24, 2026. This snapshot does not establish subsequent action or enactment.
Source snapshot updated 2026-09-28T15:42:07Z. 2026-09-24: Referred to the House Committee on Education and Workforce. 2026-09-24: Introduced in House
A closer look
Reviewed version: Introduced in House · 2026-09-24. These findings describe provisions and who may benefit; they are not judgments of waste, corruption, or motive.
This review covers the supplied bill text. “None identified” does not rule out provisions in later versions or accompanying reports and disclosures.
Provisions outside the bill’s main subject, or policy changes attached to appropriations.
None identified in the reviewed text
No provision unrelated to the bill's main higher-education eligibility and institutional-accountability subject was identified in the complete supplied introduced text. This conclusion is limited to that version and does not establish attachment history or the contents of other versions or accompanying materials.
Spending directed to particular recipients or places outside ordinary competitive or formula-based allocation.
None identified in the reviewed text
No congressionally directed spending for particular recipients or places was identified in the complete supplied introduced text. This conclusion is limited to that version; formal earmark status and accompanying disclosures cannot be established from the supplied materials.
Narrow exceptions, exemptions, or preferential treatment that warrant a closer look.
Findings to examine
The supplied introduced text contains narrow exceptions within its main policy. Classification does not establish improper purpose or show whether similar exceptions already exist in current law.
Public or nonprofit technical institutions and career and technical education schools described in the referenced Perkins Act provision would be exempt from the proposed 50 percent distance-education enrollment cap. This gives the specified schools different treatment under the institutional eligibility rules.
(1) limits enrollment of students in distance education courses offered by the institution to not more than 50 percent of all students enrolled in the institution, unless the institution is a public or nonprofit technical institution or career and technical education school, as described in section 3(3)(C) of the Carl D. Perkins Career and Technical Education Act of 2006
Foreign graduate medical, nursing, and veterinary schools would receive an express exemption from subsection (a)(4) when assessed for comparability to U.S. institutions. The underlying requirement is not supplied, limiting assessment of the exemption's practical significance.
the Secretary shall establish criteria by regulation for the approval of institutions outside the United States and for the determination that such institutions are comparable to an institution of higher education, as defined in subsection 101(a) (except that a graduate medical school, nursing school, or a veterinary school, located outside the United States shall not be required to meet the requirements of subsection (a)(4)).
Students enrolled at a foreign institution that loses eligibility under the proposed foreign-school subsection could remain eligible for part D loans while attending that institution during the following academic year. This is a limited continuation of student loan eligibility despite the institution's loss of eligibility under those rules.
If, pursuant to this subsection, an institution loses eligibility to participate in the programs under title IV, then a student enrolled in such institution may, notwithstanding such loss of eligibility, continue to be eligible to receive a loan under part D of title IV while attending such institution for the academic year succeeding the academic year in which such loss of eligibility occurred.
For nonprofit conversion, the restriction on board members receiving substantial economic benefits would except ex officio members who receive a fixed salary and serve at the pleasure of the rest of the board. This is a specific exception within the proposal's restrictions on financial benefits to insiders.
(3) That no member of the governing board of such institution of higher education (other than ex officio members serving at the pleasure of the remainder of the governing board and receiving a fixed salary), or any person with the power to appoint or remove members of such governing board or any immediate family member of such a member of the board or such a person with power of appointment, receives any substantial direct or indirect economic benefit (including a lease, promissory note, or other contract) from such institution of higher education.
Full text preserved for this analysis. Legislative record snapshot: Sep 28, 2026. How PlainBill uses AI