HB1174, titled the Ensuring Distance Education Act, would amend the Higher Education Act of 1965 to change how proprietary institutions of higher education may satisfy the federal “90/10 rule.” Under current law, these for-profit colleges must derive at least 10% of their revenue from non-federal sources. The bill would specify that revenue from certain distance education programs can count as non-federal revenue, even when the program is offered in whole or in part through distance education and regardless of where the program is physically carried out.
In practical terms, the bill would expand the types of tuition and fee revenue that for-profit colleges can count toward the non-federal side of the 90/10 calculation. This could make it easier for institutions that rely heavily on online or hybrid programs to comply with federal eligibility requirements for student aid. The measure does not change the 90/10 rule itself, but it broadens the definition of qualifying revenue for purposes of that rule.
Impact
The bill would amend Section 487(d)(1)(B)(iii) of the Higher Education Act of 1965, affecting the federal regulatory framework governing proprietary institutions that participate in Title IV student aid programs. Its main legal effect would be to allow certain distance education revenue to be treated as non-federal revenue in the 90/10 calculation, potentially altering compliance determinations for for-profit colleges and universities with online offerings.
Sentiment
There is limited recorded discussion or voting history available, so the overall sentiment cannot be measured from committee debate or floor votes. Based on the bill’s text and purpose, the measure appears supportive of proprietary institutions with distance education programs and is framed as a technical clarification or modernization of the 90/10 revenue test. No formal opposition or support is documented in the provided materials.
Contention
The likely point of contention is whether allowing distance education revenue to count toward the non-federal revenue requirement weakens the 90/10 rule’s role as a safeguard against overreliance on federal student aid. Supporters would likely argue that online and hybrid programs should be treated the same as other educational delivery models and that the rule should reflect modern enrollment patterns. Critics would likely contend that the change could benefit for-profit colleges by making compliance easier without addressing underlying concerns about quality, dependence on federal aid, or student outcomes.