POST Act of 2025
The Protecting Our Students and Taxpayers Act of 2025 (POST Act) would overhaul how proprietary (for-profit) colleges are regulated under the Higher Education Act. The centerpiece is a new 85/15 revenue rule: to keep their eligibility, proprietary institutions must derive at least 15% of their total revenues from sources other than Federal education assistance funds (i.e., non-Federal sources). The bill defines what counts as non-Federal revenue, how it must be calculated (cash basis), and which activities or funding sources are included or excluded. It also tightens oversight by giving the Education Secretary new tools to determine eligibility, sets consequences for failing to meet the 85/15 rule (a minimum two-year ineligibility period), and requires annual reporting to Congress on each institution’s revenue mix. In short, the bill aims to reduce the dependence of for-profit schools on federal student aid by demanding a broader mix of non-Federal funding and by increasing transparency and accountability. The act would also repeal or reorganize existing requirements related to proprietary institutions, aligning them with the new 85/15 framework, and it would take effect two full award years after enactment to give institutions time to adjust. The net effect could be higher emphasis on non-Federal revenue sources (such as tuition, private scholarships, on-site training activities, and certain contracts) and greater regulatory scrutiny of funding arrangements that generate revenue for the institution.
Key Points
- 185/15 revenue rule for proprietary institutions: at least 15% of the institution’s revenues must come from non-Federal education assistance funds; 85% may come from Federal funds or other categories defined by the bill.
- 2Expanded definitions of revenue sources: includes tuition/fees for eligible programs, on-campus activities necessary for education, certain Federal job-training contracts, and other non-Federal arrangements (including certain alternative financing agreements and income-share agreements) that meet specific disclosure and structure requirements.
- 3Stringent exclusions and disclosures: specifies which funds do NOT count as revenue (e.g., most Title IV funds used to pay charges, certain Federal program funds, matching funds, and certain refunds), and requires clear identification and calculation of eligible non-Federal revenues.
- 4Consequences for non-compliance: if an institution fails the 85/15 test for a fiscal year, it becomes ineligible for at least two institutional fiscal years; it must regain eligibility by meeting all requirements under a separate section (section 498) for two subsequent fiscal years.
- 5Reporting to Congress: the Secretary must report, by the third full award year after enactment and annually thereafter, the share of revenues from Federal funds vs. non-Federal sources for each Title IV-receiving proprietary institution, based on audited financial statements.
- 6Repeal and conforming amendments: existing requirements related to proprietary institutions under section 487 are repealed or restructured, with several cross-references updated to align with the new framework.
- 7Effective date: the amendments take effect in the second full award year after enactment.