PRIA Logo™
119-hr-2271119th CongressWALLET

Change of Ownership and Conversion Improvement Act

Sponsored By: Representative Owens, Burgess [R-UT-4]

Introduced

Summary

Federal review of college ownership changes would be tightened and sped up to protect student aid and make conversions from for-profit to nonprofit or public status more transparent. The bill would create a pretransaction review, require largely 90-day decisions, and set a five-year monitoring and fee program for approved conversions.

Show full summary
  • Students and families would get stronger safeguards against risky ownership changes because buyers would need to demonstrate financial and administrative capacity and conversions must meet nonprofit criteria. Reviews could be deemed approved if no decision arrives within 90 days and no extension is justified.
  • Institutions would face new application and monitoring fees to fund processing and oversight, including a $120,000 cap per transaction, a 0.15% fee for non-conversion reviews, and a 0.30% fee for conversion reviews. Conversion approvals would trigger a five-year annual monitoring fee capped at $60,000 per year.
  • The Department of Education and the IRS would share oversight work. Conversion fees are split so 50% funds Education reviews and 50% is remitted to the IRS to support tax-exempt determinations and compliance.

Note: the bill would also require public notice of required documents, annual reporting on review performance, and a Government Accountability Office evaluation within five years.

Personalized for You

How does this bill affect your finances?

Personalize government policy and PRIA will tell you what this bill means for your household, plus every other piece of legislation we track. PRIA reads each provision against your financial profile to show you exactly what matters to your wallet.

Free to download

Bill Overview

Analyzed Economic Effects

3 provisions identified: 1 benefits, 1 costs, 1 mixed.

New fees on college ownership changes

Institutions would pay fees when filing to convert or change owners. Conversion or pretransaction‑for‑conversion filings would pay 0.30% of covered revenue, capped at $120,000, with half sent to the IRS. Non‑conversion ownership‑change or pretransaction reviews would pay 0.15%, capped at $120,000, to the Department. If a school already paid a pretransaction fee for the same deal, it would not pay again for the later application. Converted schools would pay a yearly monitoring fee of 0.15%, capped at $60,000, split 50/50 with the IRS. If the Department misses a required annual report and is 90 days late, a 12‑month ban on spending or remitting these fees could start unless Congress authorizes it.

Faster, clearer college ownership reviews

This bill would set a 90‑day deadline to approve or deny a materially complete pretransaction or ownership‑change filing. The Secretary could extend for good cause in writing, up to one month at a time, for no more than 12 months. If no decision is made in 90 days and no good cause is found, the filing would be treated as approved. Schools could ask for a full pretransaction review at least 90 days before a deal; if approved and the deal matches, the later application would also be approved. Within 270 days of enactment, the Department would publish the required forms, documents, and what counts as “materially complete,” take public comments, and explain any later extra document requests in the Federal Register.

Stronger guardrails on nonprofit conversions

Schools seeking to convert to nonprofit or public status would not be able to market themselves as such until four approvals are in place: Education, a recognized accreditor, the State, and the IRS for nonprofit status. After approval, converted schools would face five years of monitoring focused on nonprofit rules; the Secretary could extend it with written reasons published at least 30 days before the period ends. A school could get a yearly waiver if it has no ongoing contracts or financial ties with the former owner, and multi‑year waivers are possible if the former owner no longer exists and risk is low. Conversion deals would need fair‑market‑value pricing for assets and service or lease contracts. If insiders are on both sides, a disinterested board committee must approve the deal, and an independent valuation would support that prices are fair.

Sponsors & CoSponsors

Sponsor

Owens, Burgess [R-UT-4]

UT • R

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

No roll call votes available for this bill.

View on Congress.gov
Back to Legislation