Congress quietly loosens federal oversight of for-profit colleges

What it does

This bill amends the Higher Education Act to allow for-profit colleges to count revenue from distance education programs toward their '90/10 rule' compliance, regardless of where the program is physically delivered. The 90/10 rule requires proprietary institutions to derive at least 10% of revenue from non-federal sources; this change expands what counts as qualifying non-federal revenue, making it easier for for-profit colleges to meet that threshold.

Why we flagged it

The bill's operative effect is to weaken federal oversight of for-profit institutions by loosening a key compliance metric. While framed as a technical amendment to distance education treatment, it functions as a regulatory relief measure for a sector with a documented history of predatory lending and low completion rates.

What the text implies

• Distance education revenue is often generated through partnerships, third-party platforms, or international enrollment — sources that may be harder for the Department of Education to audit or verify, creating a loophole in the 90/10 calculation.
• The amendment does not require that distance education programs meet the same quality, completion, or employment-outcome standards as in-person programs, potentially allowing low-quality offerings to count toward compliance.
• Weakening the 90/10 rule reduces federal leverage to enforce gainful employment rules, program integrity standards, and consumer protection requirements that depend on the threat of loss of federal aid eligibility.
• For-profit colleges have historically used distance education to rapidly scale enrollment with minimal infrastructure; this change incentivizes further expansion into distance modalities with reduced federal scrutiny.

Section numbers refer to the bill text the analysis read — linked under Primary records below.

Who it affects

The 90/10 rule is a primary federal accountability mechanism preventing for-profit colleges from becoming entirely dependent on federal student aid. Expanding the definition of qualifying non-federal revenue weakens that lever, reducing federal ability to sanction predatory practices at institutions that have historically targeted low-income and vulnerable students. Citizens lose oversight protection.

Who stands to gain

• for-profit colleges and universities
• distance education platform providers serving proprietary institutions

Named in the bill

for-profit colleges, proprietary institutions of higher education, U.S. Department of Education, Higher Education Act of 1965, Section 487(d)(1)(B)(iii)

Where it stands

• Feb 10, 2025 — Introduced · Congress.gov: “Introduced in House”
• Feb 10, 2025 — Referred to House Committee on Education and Workforce · Congress.gov: “Referred to the House Committee on Education and Workforce”

Dates and quoted wording are Congress.gov's action record; the timeline shows status changes, not every procedural step.

Money around this bill

1 lobbying clients named this bill on 1 disclosure filings across 1 quarter, Jun 2026 to Jun 2026. Those filings disclosed $100,000 in lobbying spend. A filing names 17 bills on average, so that figure is what each filing reported, not a share belonging to this bill.

More lobbying clients named this bill than 0% of bills with at least one filing.

Burgess Owens, the sponsor, reported $135,166 in PAC receipts in the 2026 cycle.

• Career Education Colleges & Universities (fka Ass'n of Private Sector Colleges a — $100,000 on 1 filing

Lobbying Disclosure Act filings through Jul 20, 2026. A filing shows who paid to lobby on a bill it names, not what changed.