Stricter Funding Rules for For-Profit Colleges to Protect Students and Taxpayers (85/15 Rule).
This law tightens financial oversight of proprietary (for-profit) colleges by implementing the 85/15 rule. These schools must now prove that at least 15% of their revenue comes from non-federal sources, ensuring they offer value that students are willing to pay for privately. The goal is to shield students from low-quality institutions reliant solely on public funds and safeguard taxpayer money.
Key points
New 85/15 Revenue Rule: For-profit colleges must derive a minimum of 15% of their income from sources other than federal student aid.
Closing Loopholes: Institutional loans and scholarships funded by affiliated entities will generally no longer count toward the required 15% non-federal revenue.
Loss of Federal Aid: Schools failing the 85/15 requirement will lose access to all federal student financial aid programs for a minimum of two years.
Status:
Expired
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