SB 4348, the PARITY Act, would repeal the federal “90/10 rule” as it applies to proprietary schools participating in Title IV federal student aid programs under the Higher Education Act of 1965. The bill amends Section 487 of the Higher Education Act by striking the paragraph and subsection that contain the 90/10 requirement, which currently limits the share of revenue for-profit colleges may receive from federal education funds and other federal sources.
In practical terms, the bill would remove a federal compliance condition tied to institutional eligibility for student aid, eliminating the existing revenue test for proprietary schools. Supporters would likely view this as regulatory relief for for-profit colleges, while opponents would likely see it as weakening a safeguard intended to ensure these schools maintain some market-based revenue and do not rely too heavily on federal dollars.
Impact
The bill would directly amend 20 U.S.C. 1094, the Higher Education Act provision governing institutional participation in federal student aid programs, by repealing the statutory 90/10 rule requirements. This would affect proprietary schools, their revenue reporting and compliance obligations, and the Department of Education’s enforcement of Title IV eligibility conditions. If enacted, it would remove a longstanding federal restriction on how much federal funding these institutions may count toward their revenue mix.
Sentiment
No committee transcript or vote record is available, so there is no documented floor or committee debate to gauge sentiment. Based on the bill text and title, the measure appears to be framed as deregulatory and pro-institution by its sponsor, suggesting support from proprietary school interests and likely skepticism from advocates of stronger oversight of for-profit higher education.
Contention
The central point of contention is the repeal of the 90/10 rule itself. Critics of repeal would likely argue that the rule helps prevent overreliance on federal aid and protects students from low-quality or predatory proprietary institutions, while supporters would argue that the rule is outdated, distorts institutional financing, and unfairly constrains access to federal aid for students attending these schools. The dispute is therefore between regulatory oversight and institutional flexibility, with students, taxpayers, proprietary colleges, and federal education regulators as the main affected parties.