Tuesday, October 26, 2021
HomePolicyFederal Bill Seeks to Regulate For-Profit Colleges Converting to Nonprofit

Federal Bill Seeks to Regulate For-Profit Colleges Converting to Nonprofit

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Rep. Lucy McBath (D-Georgia), Rep. Sara Jacobs (D-California), and Rep. Kathy Manning (D-North Carolina) have introduced a bill to strengthen oversight of for-profit colleges and universities that are trying to transition into nonprofit status.

HR 2700, otherwise known as the For-Profit College Conversion Accountability Act, was a response to Argosy University trying to convert to a nonprofit institution through its sale to Dream Center Holdings.

“The closure of Argosy University in 2019, after months of misleading students and an attempt to convert to nonprofit status, ripped off thousands of students and veterans, leaving them with untransferable credits, huge amounts of student debt, and degrees that aren’t worth anything,” McBath said in the press release. 

Jacobs and Manning expressed their optimism regarding passage of the bill, which serves as a measure to prevent students from falling victim to unscrupulous for-profit institutions in the future.

“I’m proud to co-sponsor this bill with Congresswoman McBath and Congresswoman Manning that will provide federal oversight to prevent this from happening again,” Jacobs said.

“I’m introducing this bill with my colleagues to establish criteria that ensures institutions are held to a higher standard and can be properly monitored by the Department of Education. I’m proud to stand up for students and to demand increased accountability,” Mannings added.

Rules and Regulations for For-Profit Conversion

HR 2700 lays out clear eligibility requirements. It requires that the conversion is made public with proper advance notice. It also prohibits the institution from marketing itself as a nonprofit until it obtains final approval by the Department of Education while creating an office within the department to determine eligibility and monitor conversion.

This supplements President Joe Biden’s efforts to cancel $1 billion in debt for students who have been scammed by for-profit colleges.

“A close review of these claims and the associated evidence showed these borrowers have been harmed, and we will grant them a fresh start from their debt,” said Secretary of Education Miguel Cardona.

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