Bill would let for-profit colleges run entirely on federal student aid
S. 4348 — PARITY Act · Filed by Jim Banks (R-IN) · 1 cosponsor · Introduced Apr 20, 2026 · Referred to committee
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What it does
This bill repeals the 90/10 rule for proprietary (for-profit) schools under federal student aid law. The 90/10 rule requires that for-profit schools derive at least 10% of their revenue from non-federal sources; this bill removes that requirement entirely, allowing for-profit schools to operate on 100% federal student aid funding with no private revenue threshold.
Why we flagged it
The bill's operative mechanism is the removal of a financial-stability rule that constrained for-profit schools' reliance on federal aid. This is regulatory relief narrowly benefiting the for-profit education sector.
What the text implies
- Removes a structural incentive for for-profit schools to maintain financial stability and diversify revenue; schools can now operate entirely on federal student aid without private investment or tuition revenue.
- Increases moral hazard: for-profit schools have no financial penalty for poor outcomes, since they do not risk their own capital if federal aid dries up or students default.
- May accelerate school closures without warning, as schools with zero non-federal revenue can shut down abruptly when federal aid is suspended or reduced, leaving students mid-program.
- Shifts default risk entirely to federal loan programs and taxpayers; the 90/10 rule was a proxy for institutional financial health and skin-in-the-game accountability.
Section numbers refer to the bill text the analysis read — linked under Primary records below.
Who it affects
Removing the 90/10 rule eliminates a structural safeguard designed to ensure for-profit schools have financial skin in the game and are not entirely dependent on federal student aid. Students attending schools with no revenue diversification face heightened risk of institutional collapse, leaving them with debt but no degree. Taxpayers absorb increased default risk on federal loans.
Who stands to gain
- for-profit education companies and chains
- proprietary school operators
Named in the bill
for-profit schools, proprietary schools, Section 487 of the Higher Education Act of 1965, Title IV federal student aid, Department of Education
Where it stands
1 cosponsor: 1 Republicans.
- Apr 20, 2026 — Introduced · Congress.gov: “Introduced in Senate”
- Apr 20, 2026 — Referred to Senate Committee on Health, Education, Labor, and Pensions · Congress.gov: “Read twice and referred to the Committee on Health, Education, Labor, and Pensions”
Dates and quoted wording are Congress.gov's action record; the timeline shows status changes, not every procedural step.
Money around this bill
2 lobbying clients named this bill on 2 disclosure filings across 1 quarter, Jun 2026 to Jun 2026. Those filings disclosed $510,000 in lobbying spend. A filing names 12 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 41% of bills with at least one filing.
Jim Banks, the sponsor, reported $559,626 in PAC receipts in the 2026 cycle.
- University of Phoenix Inc — $410,000 on 1 filing
- 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.
How this was measured
Analysis — Quorum's AI read the bill text published by Congress.gov (308 characters) on Sep 7, 2026. Section numbers in the findings refer to that text, linked below; transparency and hidden-provision scores are compared against the median of 16,398 analysed bills.
Status and sponsors — Congress.gov's bill record — actions, committee referrals and cosponsors — loaded nightly. The timeline shows status changes, not every procedural action.
Money — Senate Lobbying Disclosure Act filings whose specific-issue field names this bill for quarters ending Jun 2026 to Jun 2026. A filing's amount is reported whole beside the median number of bills a filing names; it is never divided across them. PAC receipts are FEC-reported contributions to the sponsor's candidate committee in the 2026 cycle.
As of — lobbying records through Jul 20, 2026 · page rendered 2026-10-23.
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