IHE Nonprofit Clarity Act
The IHE Nonprofit Clarity Act would clarify and codify, within the Higher Education Act of 1965 (HEA), that any institution of higher education that is a nonprofit organization under section 501(c)(3) of the Internal Revenue Code and exempt from federal taxation under section 501(a) is automatically deemed a nonprofit institution of higher education for purposes of the HEA. In short, the bill removes ambiguity by tying nonprofit status under the IRS code directly to nonprofit status for HEA purposes. This is a definitional change rather than a new funding or program authorization, and it would be applied by the Department of Education when administering HEA programs. The bill is sponsored by Mr. Biggs (R-AZ) and introduced in the 119th Congress. It adds a new sentence to the HEA’s definition of nonprofit institutions, effective for purposes of all HEA applications, programs, and requirements. There are no explicit appropriations or enforcement provisions in the text.
Key Points
- 1What it does: Adds a new sentence to HEA Section 103(13) making any institution that is a 501(c)(3) nonprofit under the IRS code and exempt under 501(a) automatically a nonprofit institution of higher education for HEA purposes.
- 2Scope: Applies “notwithstanding” the existing definition, ensuring 501(c)(3) status is sufficient for nonprofit treatment under the HEA.
- 3By design: This is a definitional/clarifying change, not a funding provision or new program authorization.
- 4Policy effect: Helps prevent ambiguity about which schools count as nonprofit under HEA, particularly for religiously affiliated or other organizations that operate as 501(c)(3) entities.
- 5Legislative status: Introduced in the House by Mr. Biggs of Arizona and referred to the Committee on Education and Workforce; no companion Senate text provided in the excerpt.