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119-hr-10562119th CongressWALLET

Students Not Profits Act of 2026

Sponsored By: Representative Jayapal, Pramila [D-WA-7]

Introduced

Summary

Blocks for‑profit colleges from receiving Title IV federal student aid and tightens who can get that aid by adding enrollment caps, new misconduct disqualifiers, stronger oversight, and a strict path to convert to nonprofit status.

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  • Students and families: For‑profit institutions would lose access to Title IV aid, and Title IV‑funded programs face new caps and rules — online enrollment capped at 50% and incarcerated‑student enrollment capped at 25% — while certificate programs must prepare students for gainful employment.
  • College leaders and owners: The bill bans tuition‑sharing payments tied to recruitment and lets the Secretary require individuals who exercise substantial control to assume personal liability for federal losses from closures or borrower‑defense claims.
  • Foreign programs and nonprofit conversions: It imposes specific clinical and performance thresholds for foreign medical, veterinary, and nursing schools — including 75% pass‑rate tests for some programs — and creates a Secretary‑approved conversion pathway with a minimum 5‑year transition and a new office to monitor nonprofit integrity.

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Bill Overview

Analyzed Economic Effects

6 provisions identified: 3 benefits, 0 costs, 3 mixed.

Personal liability for school executives

If enacted, the Secretary would be able to require one or more individuals who exercised substantial control over a school to assume personal liability for Federal losses. Liability would cover losses tied to Title IV loan discharges from institutional closure and successful borrower defense claims. This would raise big financial risk for executives while creating another way for taxpayers and students to recover money.

New definition for vocational schools

If enacted, the bill would define a postsecondary vocational institution eligible for Title IV as a school that trains students for recognized occupations and meets certain statutory requirements. The school would generally need to have been in existence at least two years. Some schools that admit students past the State's compulsory attendance age or that allow dual enrollment could also qualify.

Strict rules for nonprofit conversions

If enacted, for-profit colleges would be able to convert to nonprofit status only with Secretary approval and strict checks. Applicants would need 501(c)(3)/501(a) tax status, proof assets were not paid for above their value, and no substantial economic benefit to former owners. Converted schools would remain subject to former proprietary rules for at least five years. The Department would publish applications and must create an office to monitor conversions within one year.

New Title IV eligibility caps and disqualifiers

If enacted, the bill would tighten which schools count as institutions of higher education for Title IV aid. It would cap distance education at 50% of students, incarcerated student enrollment at 25%, and students without a high school credential at 50%. Certificate and nondegree programs funded by Title IV would have to prepare students for recognized jobs. Schools or managers with bankruptcies, fraud findings, predatory recruitment, or prior control of a closed institution could be disqualified. The Secretary must certify institutions before they meet the statutory definition.

Tighter rules for foreign professional schools

If enacted, the Secretary would set stricter conditions for foreign medical, veterinary, and nursing schools to qualify for Part D loans. Medical schools would need at least 60% meeting the enrollment test and a 75% ECFMG pass rate. Nursing schools would need U.S. clinical training agreements or degree reciprocity, reimburse certain default costs, and show at least a 75% NCLEX pass rate. Foreign schools that fail to provide required information would be ineligible. A student already enrolled could still get a Part D loan for the academic year after eligibility is lost.

Ban recruiter pay tied to tuition

If enacted, the bill would ban payments by schools to unaffiliated recruiters when the payment is based on tuition those recruiters generate. This would stop outside recruiters from getting money tied to how much students pay. The change aims to reduce aggressive or predatory recruitment practices.

Sponsors & CoSponsors

Sponsor

Jayapal, Pramila [D-WA-7]

WA • D

Cosponsors

  • Rep. García, Jesús G. "Chuy" [D-IL-4]

    IL • D

    Sponsored 9/24/2026

  • Rep. Pingree, Chellie [D-ME-1]

    ME • D

    Sponsored 9/24/2026

  • Rep. Pressley, Ayanna [D-MA-7]

    MA • D

    Sponsored 9/24/2026

  • Rep. Tlaib, Rashida [D-MI-12]

    MI • D

    Sponsored 9/24/2026

Roll Call Votes

No roll call votes available for this bill.

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