I 
119TH CONGRESS 
1ST SESSION H. R. 2271 
To amend the Higher Education Act of 1965 to modify the application 
and review process for changes of control, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
MARCH 21, 2025 
Mr. OWENS introduced the following bill; which was referred to the Committee 
on Education and Workforce 
A BILL 
To amend the Higher Education Act of 1965 to modify 
the application and review process for changes of control, 
and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Change of Ownership 
and Conversion Improvement Act’’. 
SEC. 2. FINDINGS. 
Congress finds the following: 
(1) Institutions of higher education in the 
United States frequently merge with, consolidate, 
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and acquire other institutions that result in a 
change in ownership. 
(2) These transactions are generally good for 
students, as they promote innovation, drive competi-
tion, and prevent stagnation. 
(3) Changing demographics and evolving higher 
education enrollment patterns may lead to more 
mergers and acquisitions in the future. 
(4) Proprietary institutions that voluntarily 
convert to nonprofit status or are acquired by non-
profit and public entities can have a positive impact 
on students and society. 
(5) The Department of Education has an inter-
est in safeguarding Federal student aid funds and 
therefore should conduct thorough and comprehen-
sive reviews of all changes in ownership involving in-
stitutions of higher education. 
(6) These reviews are necessary to ensure that 
the acquiring entity has the financial and adminis-
trative capacity to manage the target institutions. 
(7) The Department of Education should con-
duct these reviews in a thorough and comprehensive 
manner but should do so as quickly as possible to 
promote the execution of these transactions. 
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(8) As of May 2021, the Department of Edu-
cation had ‘‘very few staff’’ assigned to evaluate 
pretransaction, change of control, and conversion ap-
plications on a full-time basis. 
(9) Consequently, these transactions are proc-
essed by the Department of Education at an ex-
traordinary slow rate of speed, with some institu-
tions waiting up to 5 years before receiving a final 
determination. 
(10) One of the primary challenges in proc-
essing these applications quickly is the lack of fund-
ing to hire enough qualified staff. 
(11) Currently, general taxpayers are bearing 
the cost of reviewing these transactions. 
(12) It is in the interest of institutions and the 
United States to charge a fee for applications involv-
ing changes in ownership at institutions of higher 
education that are submitted to the Department of 
Education. 
(13) In consideration for the fee, the Depart-
ment of Education will be required to guarantee an 
expedited review process for all applicants, absent 
compelling circumstances where good cause exists 
for delay. 
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(14) The Government Accountability Office has 
identified weaknesses in the Department of Edu-
cation’s post-transaction monitoring process, which 
will likewise require additional staff to be hired to 
conduct monitoring. 
(15) Institutions that have converted from pro-
prietary status to nonprofit status and have an on-
going financial relationship with the former owners 
of the institution are at highest risk of entering into 
financial arrangements that result in improper pri-
vate inurement. 
(16) These institutions should be closely mon-
itored for a period after these transactions occur and 
should be required to pay a fee to support the hiring 
of staff to conduct this monitoring. 
(17) The Government Accountability Office has 
likewise found weaknesses in the Internal Revenue 
Service review process for conversion requests and 
the post-transaction monitoring process. 
(18) In order to support a more thorough re-
view of these applications and to conduct moni-
toring, the Department of Education will remit part 
of the fee paid by institutions to the Internal Rev-
enue Service for these purposes. 
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SEC. 
3. 
MODIFYING 
THE 
APPROVAL 
PROCESS 
FOR 
CHANGES OF CONTROL. 
(a) AMENDMENTS.—Section 498(i) of the Higher 
Education Act of 1965 (20 U.S.C. 1099c(i)) is amended— 
(1) in the subsection heading, by inserting 
‘‘AND PROPOSED CHANGES OF OWNERSHIP’’ after 
‘‘OWNERSHIP’’; 
(2) in paragraph (1)— 
(A) by striking ‘‘(1) An eligible institu-
tion’’, and inserting the following: ‘‘(1)(A) An 
eligible institution’’; 
(B) by striking ‘‘the requirements of sec-
tion 102 (other than the requirements in sub-
sections (b)(5) and (c)(3))’’ and inserting ‘‘the 
applicable requirements of section 102 or 
103(13)’’; and 
(C) by adding at the end the following: 
‘‘(B)(i) Prior to a change in ownership resulting in 
a change of control, an institution may seek a 
pretransaction determination about whether the institu-
tion will meet the applicable requirements of section 102 
or 103(13) and this section after such proposed change 
in ownership by submitting to the Secretary a materially 
complete pretransaction review application. 
‘‘(ii) In reviewing applications submitted under clause 
(i), the Secretary shall only provide a comprehensive re-
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an institution that has paid a fee under subparagraph (B) 
to pay an additional fee under subparagraph (A). 
‘‘(6)(A) The Secretary shall approve or deny a mate-
rially complete application (including pretransaction re-
views and conversion applications) submitted under this 
section as soon as practicable and not later than the 90- 
day period beginning on the date of receipt of such an 
application, except that in a case in which the Secretary 
determines, on a nondelegable basis, that good cause exists 
to not make the determination during such 90-day period, 
the Secretary shall notify the institution in writing detail-
ing the reasons for a good cause extension. 
‘‘(B) If the Secretary fails to approve or deny a mate-
rially complete application during the period described in 
subparagraph (A) and does not find good cause for exten-
sion, the materially complete application shall be deemed 
approved. 
‘‘(C) In no case may the Secretary grant a good cause 
extension under this section to an institution for more 
than one month at a time, or for a total of more than 
more than 12 months. 
‘‘(D) To ensure timely submission of all relevant doc-
umentation, the Secretary may deny an application if an 
institution does not make a good faith effort to submit 
to the Secretary, in a timely manner— 
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‘‘(i) all relevant documentation; or 
‘‘(ii) a materially complete application. 
‘‘(E)(i) Upon approving or denying an application 
under this paragraph, the Secretary shall publish in the 
Federal Register the reasoning for such approval or de-
nial, including— 
‘‘(I) a copy of the approval or denial letter sent 
to the institution; and 
‘‘(II) any analysis regarding how the Secretary 
determined under paragraph 7(A)(iii) that a director 
of the institution was an interested or disinterested 
party to the transaction. 
‘‘(ii) The Secretary shall not publish under clause (i) 
any information that is otherwise exempt from disclosure 
under section 552 of title 5, United States Code (relating 
to the Freedom of Information Act), including trade se-
crets and commercial or financial information that is privi-
leged or confidential. 
‘‘(7)(A) In the case of a proprietary institution that 
subsequent to the transaction would be owned and oper-
ated by an entity (in this paragraph referred to as the 
‘buyer’) seeking to be recognized as a public or other non-
profit institution, the buyer shall meet the definition of 
a nonprofit institution under section 103(13) if— 
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‘‘(i) the buyer pays no more than fair market 
value for any assets of the proprietary institution; 
‘‘(ii) the buyer pays no more than fair market 
value for any service or lease contracts, including 
such service and lease contracts provided by the en-
tity selling the proprietary institution; and 
‘‘(iii) to prevent self-dealing in the case where 
one or more individuals with a substantial ownership 
or controlling interests in the proprietary institution 
will also have substantial or controlling interests in 
the institution seeking to be recognized as a public 
or other nonprofit institution (meaning that one or 
more individuals are on both sides of the trans-
action), the change of control transaction, and any 
substantial asset acquisition, service, or lease agree-
ments with the proprietary institution shall be ap-
proved by a disinterested committee of directors of 
the entity that seeks to be recognized as a public or 
other nonprofit institution. 
‘‘(B) For the purposes of this paragraph, parties to 
the transaction are entitled to a rebuttable presumption 
that the assets, lease contracts, and service contracts that 
are part of the transaction are purchased at fair market 
value if— 
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‘‘(i) the acquiring entity pays no more than fair 
market value for such assets, lease contracts, or 
service contracts; and 
‘‘(ii) the value of the assets, lease contracts, or 
service contracts are evaluated by at least one inde-
pendent third-party entity hired by parties on both 
sides of the transaction. 
‘‘(8)(A) An institution that has been approved for 
conversion by the Secretary shall be subject to a moni-
toring period for a 5-year period beginning on the day 
after the date of such approval. In conducting the moni-
toring of the institution under this paragraph, the Sec-
retary— 
‘‘(i) shall only conduct monitoring to ensure 
that the institution is in compliance with the re-
quirements of section 103(13) and paragraph (7) of 
this subsection; and 
‘‘(ii) may require the institution to submit reg-
ular reports or conduct audits of such institution re-
lating to such compliance. 
‘‘(B) Each institution that is subject to the moni-
toring period under this paragraph shall remit an annual 
fee to the Secretary— 
‘‘(i) in an amount equal to 0.15 percent of the 
total revenue derived from this title by such institu-
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tion for the most recent fiscal year for which data 
is available; and 
‘‘(ii) that shall be exclusively for expenses re-
lated to monitoring of the institution for the period 
described in subparagraph (A)— 
‘‘(I) of which 50 percent shall be used by 
the Secretary, without further appropriation, 
exclusively for expenses related to monitoring of 
the institution during such period; and 
‘‘(II) of which 50 percent shall be remitted 
by the Secretary to the Commissioner of Inter-
nal Revenue, to be available to such Commis-
sioner, without further appropriation, exclu-
sively for monitoring compliance with the Inter-
nal Revenue Code of such institution during 
such period. 
‘‘(C) An institution may not be subject to an annual 
fee under subparagraph (B) for monitoring related to a 
conversion that exceeds $60,000. 
‘‘(D) If the Secretary determines that an institution 
should be subject to the monitoring under this paragraph 
beyond the 5-year period described in subparagraph (A), 
the Secretary shall provide the reasons justifying an exten-
sion in writing to the institution (and in the Federal Reg-
ister) at least 30 days before the expiration of such period. 
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‘‘(E) Any institution that is subject to monitoring 
under this paragraph may seek a waiver to be exempt from 
such monitoring (including the annual fee under subpara-
graph (B)) on an annual basis for any year during the 
monitoring period and the Secretary shall grant such waiv-
er if there is no ongoing contractual or financial relation-
ship between the institution and the former entity or indi-
viduals that previously owned the institution. The Sec-
retary may grant a waiver for more than 1 year in the 
case where the entity that formerly owned the proprietary 
institution has closed or no longer exists and the Secretary 
determines the institution is not at risk of violating the 
requirements of section 103(13) or paragraph (7) of this 
subsection. 
‘‘(9) Any institution that submits an application for 
conversion shall not promote or market itself, in any man-
ner, as a public or other nonprofit institution of higher 
education unless— 
‘‘(A) the Secretary has provided final approval 
of the conversion of the institution to a public or 
other nonprofit institution of higher education under 
this section; 
‘‘(B) an accrediting agency or association recog-
nized by the Secretary pursuant to section 496 has 
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