Senate bill would lift federal aid cap on for-profit colleges

What does this do?

The PARITY Act would eliminate the 90/10 rule, which currently bars for-profit colleges from receiving more than 90% of their total revenue from federal financial aid programs like Pell Grants and student loans. If passed, for-profit schools could draw any share of their income from federal student aid, with no legal ceiling.

Who does it affect?

Students at for-profit colleges are most directly affected, including many working adults, military veterans, and lower-income students who rely heavily on federal aid. The for-profit schools themselves and federal taxpayers, whose money funds student aid programs, are also affected.

Why does it matter?

Supporters argue the current rule treats for-profit schools unequally compared to public and nonprofit colleges, which face no such cap. Critics contend the rule protects taxpayers and students from schools that may enroll students primarily to collect federal aid dollars.

What does it cost, and who pays?

• Aid funds come from federal budget
• Taxpayers bear cost of student aid
• No spending figures specified