I 
117TH CONGRESS 
1ST SESSION H. R. 2700 
To amend the Higher Education Act of 1965 to describe the process of 
converting a proprietary institution of higher education to a nonprofit 
institution of higher education. 
IN THE HOUSE OF REPRESENTATIVES 
APRIL 20, 2021 
Mrs. MCBATH (for herself, Ms. JACOBS of California, and Ms. MANNING) in-
troduced the following bill; which was referred to the Committee on Edu-
cation and Labor 
A BILL 
To amend the Higher Education Act of 1965 to describe 
the process of converting a proprietary institution of 
higher education to a nonprofit institution of higher edu-
cation. 
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 ‘‘For-Profit College 
Conversion Accountability Act’’. 
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SEC. 2. INTEGRITY OF NONPROFIT INSTITUTIONS OF HIGH-
ER EDUCATION. 
Part B of title I of the Higher Education Act of 1965 
(20 U.S.C. 1011 et seq.) is amended by adding at the end 
the following: 
‘‘SEC. 124. INTEGRITY OF NONPROFIT INSTITUTIONS OF 
HIGHER EDUCATION. 
‘‘(a) DETERMINATION.—The Secretary may approve 
the conversion of an institution of higher education to a 
nonprofit institution of higher education only if the Sec-
retary determines that such institution of higher education 
meets the requirements under subsection (b). 
‘‘(b) APPLICATION.—To be eligible to convert and 
participate as a nonprofit institution of higher education 
under this Act, an institution of higher education shall 
submit an application to the Secretary that demonstrates 
each of the following: 
‘‘(1) That the institution of higher education 
that submits such application is controlled, owned, 
and operated by one or more nonprofit corporations 
or associations, no part of the net earnings of which 
inures, or may lawfully inure, to the benefit of any 
private shareholder or individual. 
‘‘(2) That any assets or services acquired by the 
institution of higher education that submits such ap-
plication from former owners of such institution of 
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higher education were not acquired for more than 
the value of such assets or services. 
‘‘(3) That no member of the governing board of 
the institution of higher education that submits such 
application (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 gov-
erning board or any immediate family member of 
such a member of the board or such a person with 
power of appointment, receives any substantial di-
rect or indirect economic benefit (including a lease, 
promissory note, or other contract) from such insti-
tution of higher education. 
‘‘(4) That the institution of higher education 
that submits such application is an organization de-
scribed in section 501(c)(3) of the Internal Revenue 
Code of 1986 and is exempt from taxation under 
section 501(a) of such Code. 
‘‘(5) Subject to subsection (c), that none of the 
core functions of the institution of higher education 
that submits such application 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. 
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‘‘(c) PRESUMPTION OF SIGNIFICANT DIRECTION.— 
For purposes of paragraph (5) of subsection (b), in the 
case of an institution of higher education that submits an 
application under such subsection, there shall be a conclu-
sive presumption that an entity (other than such institu-
tion of higher education) 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 institu-
tion. 
‘‘(d) TRANSITION PERIOD.— 
‘‘(1) IN GENERAL.—In the case of a proprietary 
institution of higher education approved for conver-
sion under subsection (a), for a period of at least 5 
years that begins on the date such institution is ap-
proved for such conversion, the institution shall be— 
‘‘(A) subject to any provision of this Act 
and any regulation that apply to proprietary in-
stitutions of higher education; and 
‘‘(B) considered a proprietary institution of 
higher education for purposes of this Act. 
‘‘(2) DEFINITION.—The term ‘proprietary insti-
tution of higher education’ has the meaning given 
the term in section 102(b). 
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‘‘(e) VALUE.—The term ‘value’, with respect to an 
acquisition under subsection (b)(2)— 
‘‘(1) includes the value of any ongoing relation-
ship (including any contract, agreement, lease or 
other arrangement); 
‘‘(2) subject to paragraph (3), may be dem-
onstrated through— 
‘‘(A) a third-party appraisal based on com-
parable assets acquired by, or goods or services 
procured by, nonprofit corporations in similar 
market conditions; 
‘‘(B) an independent financing of the ac-
quisition based upon the assets acquired; or 
‘‘(C) a full and open competition in the ac-
quisition 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 
enactment of the For-Profit College Conversion 
Accountability Act; and 
‘‘(3) shall be subject to such other demonstra-
tion process determined appropriate by the Secretary 
in a case in which the Secretary does not accept a 
demonstration process described in paragraph (2). 
‘‘(f) PUBLICATION.— 
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