Restrictions on For-Profit Education: Not surprisingly, the Biden administration is proposing further restrictions and regulation of for-profit education providers. And, while the details of the plan have not been shared, the Democratically-controlled House Committee on Education and Labor included further restrictions around the 90/10 rule for for-profit providers in their budget reconciliation package this week. The 90/10 rule currently caps the percentage of revenue a for-profit institution can receive from federal financial aid (90% from federal Title IV sources, 10% from other non-federal sources). It has long been debated whether other federal sources such as GI Bill benefits should be included in the ratio (Democrats argue this is a ‘loophole’ and historically, Republicans have fought to preserve the current calculation). The change proposed in the House reconciliation package now re-elevates the debate around what federal sources should be included in the ratio, such as workforce funds to employer tuition benefits.
One thing is clear: the Biden administration has prioritized ‘consumer protection’ from ‘predatory institutions’ that have ‘left graduates and nongraduates with mountains of debt, and very few opportunities.’ The question remains whether this sentiment will extend to all institutions, regardless of tax status.
The postsecondary education agenda and the team that will lead the work over the next four years should become more clear as Secretary-elect Miguel Cardona is expected to be confirmed by the Senate before the end of the week.