II 

118TH CONGRESS 

2D SESSION S. 4701 

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 

JULY 11 (legislative day, JULY 10), 2024 

Mr. DURBIN 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. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Protecting Our Stu5 dents and Taxpayers Act of 2024’’ or ‘‘POST Act of 

6 2024’’. 

7 SEC. 2. 85/15 RULE. 

8 (a) IN GENERAL.—Section 102(b) of the Higher 

9 Education Act of 1965 (20 U.S.C. 1002(b)) is amended— 

10 (1) in paragraph (1)— 


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1 (A) in subparagraph (D), by striking 

2 ‘‘and’’ after the semicolon; 

3 (B) in subparagraph (E), by striking the 

4 period at the end and inserting ‘‘; and’’; and 

5 (C) by adding at the end the following: 

6 ‘‘(F) meets the requirements of paragraph 

7 (2).’’; 

8 (2) by redesignating paragraph (2) as para9 graph (3); and 

10 (3) by inserting after paragraph (1) the fol11 lowing: 

12 ‘‘(2) REVENUE SOURCES.— 

13 ‘‘(A) DEFINITIONS.—In this paragraph: 

14 ‘‘(i) ALTERNATIVE FINANCING AR15 RANGEMENT.—The term ‘alternative fi16 nancing agreement’ means a financing 

17 agreement between— 

18 ‘‘(I) a student of an institution; 

19 and 

20 ‘‘(II)(aa) the institution; 

21 ‘‘(bb) any entity or individual— 

22 ‘‘(AA) in the institution’s 

23 ownership tree; or 


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1 ‘‘(BB) with any common 

2 ownership of the institution and 

3 the entity providing the funds; or 

4 ‘‘(cc)(AA) an entity that has any 

5 other relationship or agreement with 

6 the institution; or 

7 ‘‘(BB) an entity with common 

8 ownership with an entity described in 

9 subitem (AA). 

10 ‘‘(ii) FEDERAL EDUCATION ASSIST11 ANCE FUNDS.—The term ‘Federal edu12 cation assistance funds’ means Federal 

13 funds that are disbursed or delivered to or 

14 on behalf of a student to be used to attend 

15 such institution, as calculated under sub16 paragraph (C). 

17 ‘‘(B) 85/15 RULE.—In order to qualify as 

18 a proprietary institution of higher education 

19 under this subsection, an institution shall derive 

20 not less than 15 percent of the institution’s rev21 enues from sources other than Federal edu22 cation assistance funds, as calculated in accord23 ance with subparagraphs (A) and (C). 

24 ‘‘(C) IMPLEMENTATION OF NON-FEDERAL

25 REVENUE REQUIREMENT.—In making calculaVerDate Sep 11 2014 06:03 Aug 15, 2024 Jkt 049200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S4701.IS S4701

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1 tions under subparagraph (B), an institution of 

2 higher education shall— 

3 ‘‘(i) use the cash basis of accounting; 

4 ‘‘(ii) consider as revenue only those 

5 funds generated by the institution from— 

6 ‘‘(I) tuition, fees, and other insti7 tutional charges for students enrolled 

8 in programs eligible for assistance 

9 under title IV; 

10 ‘‘(II) activities conducted by the 

11 institution that are necessary for the 

12 education and training of the institu13 tion’s students, if such activities are— 

14 ‘‘(aa) conducted on campus 

15 or at a facility under the control 

16 of the institution; 

17 ‘‘(bb) performed under the 

18 supervision of a member of the 

19 institution’s faculty; 

20 ‘‘(cc) required to be per21 formed by all students in a spe22 cific educational program at the 

23 institution; and 

24 ‘‘(dd) related directly to 

25 services performed by students; 


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1 ‘‘(III) a contractual arrangement 

2 with a Federal agency for the purpose 

3 of providing job training to low-in4 come individuals who are in need of 

5 such training; and 

6 ‘‘(IV) funds paid by a student, or 

7 on behalf of a student by a party un8 related to the institution, its owners, 

9 or affiliates, for an education or train10 ing program that is not eligible for as11 sistance under title IV, as long as— 

12 ‘‘(aa) such noneligible pro13 gram does not include any 

14 courses offered in an eligible pro15 gram of the proprietary institu16 tion; 

17 ‘‘(bb) such noneligible pro18 gram is provided by the institu19 tion, and taught by an instructor 

20 of the institution, at— 

21 ‘‘(AA) its main campus 

22 or one of its additional loca23 tions, as approved by the ap24 propriate accrediting agency 

25 or association; 


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1 ‘‘(BB) another school 

2 facility approved by the ap3 propriate State agency or 

4 accrediting agency or asso5 ciation; or 

6 ‘‘(CC) an employer fa7 cility; and 

8 ‘‘(cc) such noneligible pro9 gram is not a program where the 

10 institution is merely providing fa11 cilities for test preparation 

12 courses, acting as a proctor, or 

13 overseeing a course of self-study; 

14 ‘‘(iii) presume that any Federal edu15 cation assistance funds that are disbursed 

16 or delivered to an institution on behalf of 

17 a student or directly to a student will be 

18 used to pay the student’s tuition, fees, or 

19 other institutional charges, regardless of 

20 whether the institution credits such funds 

21 to the student’s account or pays such 

22 funds directly to the student, except to the 

23 extent that the student’s tuition, fees, or 

24 other institutional charges are satisfied 

25 by— 


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1 ‘‘(I) grant funds provided by an 

2 outside source that— 

3 ‘‘(aa) has no affiliation with 

4 the institution; and 

5 ‘‘(bb) shares no employees, 

6 executives, or board members 

7 with the institution; and 

8 ‘‘(II) institutional scholarships 

9 described in clause (vi); 

10 ‘‘(iv) include no loans made by an in11 stitution of higher education as revenue to 

12 the school, except for payments made by 

13 current or former students to the institu14 tion during the fiscal year for which the 

15 determination is being made on such loans 

16 that are— 

17 ‘‘(I) used to satisfy tuition, fees, 

18 and other institutional charges; 

19 ‘‘(II) bona fide, as evidenced by 

20 standalone repayment agreements be21 tween the students and the institution 

22 that are enforceable promissory notes; 

23 ‘‘(III) issued at intervals related 

24 to the institution’s enrollment periods; 


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1 ‘‘(IV) subject to regular loan re2 payments and collections by the insti3 tution; and 

4 ‘‘(V) separate from the enroll5 ment contracts signed by the stu6 dents; 

7 ‘‘(v) include funds from an income 

8 share agreement, or any other alternative 

9 financing agreement, with a student only 

10 if— 

11 ‘‘(I) the institution clearly identi12 fies the student’s institutional 

13 charges, and such charges are the 

14 same or less than the stated rate for 

15 institutional charges; 

16 ‘‘(II) the agreement clearly iden17 tifies the maximum time and max18 imum amount a student would be re19 quired to pay, including the implied or 

20 imputed interest rate and any fees 

21 and revenue generated for a related 

22 third party, the institution, or an enti23 ty described in subparagraph 

24 (A)(i)(II), for that maximum time pe25 riod; and 


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1 ‘‘(III) all payments under the 

2 agreement are applied with a portion 

3 allocated to the return of capital and 

4 a portion allocated to profit, with rev5 enue, interest, and fees not included 

6 in the calculation; 

7 ‘‘(vi) include a scholarship provided by 

8 the institution— 

9 ‘‘(I) only if the scholarship is in 

10 the form of monetary aid based upon 

11 the academic achievements or finan12 cial need of students, disbursed to 

13 qualified student recipients during 

14 each fiscal year from an established 

15 restricted account; and 

16 ‘‘(II) only to the extent that 

17 funds in that account represent des18 ignated funds, or income earned on 

19 such funds, from an outside source 

20 that— 

21 ‘‘(aa) has no affiliation with 

22 the institution; and 

23 ‘‘(bb) shares no employees, 

24 executives, or board members 

25 with the institution; and 


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1 ‘‘(vii) exclude from revenues— 

2 ‘‘(I) the amount of funds the in3 stitution received under part C of title 

4 IV, unless the institution used those 

5 funds to pay a student’s institutional 

6 charges; 

7 ‘‘(II) the amount of funds the in8 stitution received under subpart 4 of 

9 part A of title IV; 

10 ‘‘(III) the amount of funds pro11 vided by the institution as matching 

12 funds for any Federal program; 

13 ‘‘(IV) the amount of Federal edu14 cation assistance funds provided to 

15 the institution to pay institutional 

16 charges for a student that were re17 funded or returned; and 

18 ‘‘(V) the amount charged for 

19 books, supplies, and equipment, unless 

20 the institution includes that amount 

21 as tuition, fees, or other institutional 

22 charges. 

23 ‘‘(D) REGAINING ELIGIBILITY.—Notwith24 standing subparagraph (B), a proprietary insti25 tution of higher education that fails to meet the 


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1 requirements of such subparagraph for a fiscal 

2 year shall be ineligible for purposes of this 

3 paragraph for a period of not less than 2 insti4 tutional fiscal years. To regain eligibility under 

5 this paragraph, the proprietary institution shall 

6 demonstrate compliance with all eligibility and 

7 certification requirements under section 498 for 

8 a minimum of 2 institutional fiscal years after 

9 the institutional fiscal year in which the institu10 tion became ineligible. 

11 ‘‘(E) REPORT TO CONGRESS.—Not later 

12 than July 1, 2026, and by July 1 of each suc13 ceeding year, the Secretary shall submit to the 

14 authorizing committees a report that contains, 

15 for each proprietary institution of higher edu16 cation that receives assistance under title IV 

17 and as provided in the audited financial state18 ments submitted to the Secretary by each insti19 tution pursuant to the requirements of section 

20 487(c)— 

21 ‘‘(i) the amount and percentage of 

22 such institution’s revenues received from 

23 Federal education assistance funds; and 


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1 ‘‘(ii) the amount and percentage of 

2 such institution’s revenues received from 

3 other sources.’’. 

4 (b) REPEAL OF EXISTING REQUIREMENTS.—Section 

5 487 of the Higher Education Act of 1965 (20 U.S.C. 

6 1094) is amended— 

7 (1) in subsection (a)— 

8 (A) by striking paragraph (24); 

9 (B) by redesignating paragraphs (25) 

10 through (29) as paragraphs (24) through (28), 

11 respectively; 

12 (C) in paragraph (24)(A)(ii) (as redesig13 nated by subparagraph (B)), by striking ‘‘sub14 section (e)’’ and inserting ‘‘subsection (d)’’; and 

15 (D) in paragraph (26) (as redesignated by 

16 subparagraph (B)), by striking ‘‘subsection (h)’’ 

17 and inserting ‘‘subsection (g)’’; 

18 (2) by striking subsection (d); 

19 (3) by redesignating subsections (e) through (j) 

20 as subsections (d) through (i), respectively; 

21 (4) in the matter preceding paragraph (1) of 

22 subsection (d) (as redesignated by paragraph (3)), 

23 by striking ‘‘(a)(25)’’ and inserting ‘‘(a)(24)’’; 


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1 (5) in subsection (f)(1) (as redesignated by 

2 paragraph (3)), by striking ‘‘subsection (e)(2)’’ and 

3 inserting ‘‘subsection (d)(2)’’; and 

4 (6) in subsection (g)(1) (as redesignated by 

5 paragraph (3)), by striking ‘‘subsection (a)(27)’’ in 

6 the matter preceding subparagraph (A) and insert7 ing ‘‘subsection (a)(26)’’. 

8 (c) CONFORMING AMENDMENTS.—The Higher Edu9 cation Act of 1965 (20 U.S.C. 1001 et seq.) is amended— 

10 (1) in section 152 (20 U.S.C. 1019a)— 

11 (A) in subsection (a)(1)(A), by striking 

12 ‘‘subsections (a)(27) and (h) of section 487’’ 

13 and inserting ‘‘subsections (a)(26) and (g) of 

14 section 487’’; and 

15 (B) in subsection (b)(1)(B)(i)(I), by strik16 ing ‘‘section 487(e)’’ and inserting ‘‘section 

17 487(d)’’; 

18 (2) in section 153(c)(3) (20 U.S.C. 

19 1019b(c)(3)), by striking ‘‘section 487(a)(25)’’ each 

20 place the term appears and inserting ‘‘section 

21 487(a)(24)’’; 

22 (3) in section 496(c)(3)(A) (20 U.S.C. 

23 1099b(c)(3)(A)), by striking ‘‘section 487(f)’’ and 

24 inserting ‘‘section 487(e)’’; and 


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1 (4) in section 498(k)(1) (20 U.S.C. 

2 1099c(k)(1)), by striking ‘‘section 487(f)’’ and in3 serting ‘‘section 487(e)’’. 

4 SEC. 3. EFFECTIVE DATE. 

5 The amendments made by this Act shall take effect 

6 on July 1, 2025. 

Æ 


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