POST Act of 2025
- Bill Number
- S. 2107
- Origin Chamber
- Senate
- Congress
- 119th Congress, Session 1
- Policy Area
- Education
- Status
- Introduced
- Latest Action
- 2025-06-18: Read twice and referred to the Committee on Health, Education, Labor, and Pensions.
- Last Updated
- 2025-12-05T21:37:44Z
AI-Generated Summary
Purpose
The Protecting Our Students and Taxpayers Act of 2025 (POST Act of 2025) aims to amend the Higher Education Act of 1965 to strengthen regulations on proprietary (for-profit) institutions of higher education. It seeks to protect students from excessive reliance on federal student aid and safeguard taxpayer funds by ensuring these institutions maintain a balanced revenue mix from non-federal sources.
Key Provisions
- 85/15 Revenue Rule: Proprietary institutions must derive at least 15% of their revenues from sources other than federal education assistance funds (e.g., Pell Grants, federal loans) to remain eligible for federal student aid under Title IV of the Higher Education Act. Revenues are calculated using cash-basis accounting, including only specific non-federal sources like tuition from non-eligible programs, certain institutional activities, and unrelated scholarships.
- Definitions and Exclusions:
- Defines "federal education assistance funds" as federal aid disbursed to or on behalf of students for attending the institution.
- Excludes institutional loans (unless repaid bona fide by students), certain alternative financing like income-share agreements (unless transparently structured), and funds from federal work-study or matching programs.
- Allows limited inclusion of institutional scholarships only if funded by unrelated outside sources based on academic or financial need.
- Eligibility and Penalties: Institutions failing the 85/15 rule become ineligible for federal aid for at least two fiscal years. To regain eligibility, they must comply with all certification requirements for two additional years.
- Reporting Requirements: The Secretary of Education must submit annual reports to Congress starting three years after enactment, detailing each proprietary institution's federal and non-federal revenue percentages based on audited financial statements.
- Effective Date: Amendments take effect in the second full award year (July 1 to June 30 period) after the bill's enactment.
Significant Changes to Existing Law
- Replaces the prior 90/10 rule (requiring at least 10% non-federal revenue) with the stricter 85/15 rule, increasing the non-federal revenue threshold by 5%.
- Repeals outdated provisions in Section 487 of the Higher Education Act related to the old rule, including reporting and incentive compensation bans tied to it.
- Makes conforming updates to cross-references in other sections of the Act to align with the new structure, without altering core eligibility criteria beyond the revenue rule.
Potential Impacts
- On Government Agencies: The Department of Education will face increased administrative burdens for revenue audits, eligibility certifications, and congressional reporting, potentially requiring more resources for oversight.
- On Citizens (Students): Could reduce access to federal aid at high-risk proprietary institutions, protecting students from schools overly dependent on federal funds that might prioritize enrollment over quality, but may limit options for those relying on for-profit programs.
- On International Relations: Minimal direct impact, as the bill focuses on domestic higher education funding; however, it could indirectly affect international students if institutions lose eligibility and reduce enrollment capacity.
Main Stakeholders Affected
- Proprietary Institutions: For-profit colleges and universities, which must adapt revenue models or risk losing federal aid eligibility, potentially leading to closures or mergers.
- Students: Particularly those enrolled in or considering proprietary programs, who may benefit from reduced risk of attending unstable institutions but face fewer choices.
- Taxpayers and Government: U.S. taxpayers, as the rule aims to curb federal spending on aid to institutions with questionable financial health; the Department of Education as the primary enforcer.
- Accrediting Agencies and States: Involved in approving facilities and programs, with indirect roles in compliance verification.
Notable Legal, Constitutional, or Political Implications
- Legal: Strengthens accountability under Title IV by codifying stricter financial transparency, potentially reducing fraud or misuse of federal funds; includes detailed calculation methods to minimize disputes over compliance.
- Constitutional: No direct challenges anticipated, as it regulates federal spending and eligibility without infringing on free speech or due process; aligns with Congress's spending power under Article I.
- Political: Introduced by a bipartisan group of senators focused on consumer protection, it may spark debate over for-profit education's role, with supporters viewing it as anti-predatory and critics arguing it burdens legitimate institutions; could influence broader higher education reform discussions.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Sen. Durbin, Richard J. [D-IL]
Cosponsors (7)
Sen. Blumenthal, Richard [D-CT], Sen. Hirono, Mazie K. [D-HI], Sen. King, Angus S., Jr. [I-ME], Sen. Merkley, Jeff [D-OR], Sen. Smith, Tina [D-MN], Sen. Reed, Jack [D-RI], Sen. Warren, Elizabeth [D-MA]
Recent Actions
- 2025-06-18: Read twice and referred to the Committee on Health, Education, Labor, and Pensions.
- 2025-06-18: Introduced in Senate
Bill Versions
- Protecting Our Students and Taxpayers Act of 2025 — issued 2025-06-18 — PDF (14 pages)