PARITY Act
- Sponsor
- Rep. Harris, Mark [R-NC-8]
- Committees
- Education and Workforce Committee (primary)
- Last action
- Jul 2, 2026
Bottom line
This bill seeks to remove a key financial accountability regulation for for-profit colleges, potentially increasing their reliance on federal student aid and altering the landscape of higher education funding.
What it actually does
H.R. 9580, also known as the PARITY Act, proposes to eliminate the '90/10 rule' for proprietary (for-profit) schools under Title IV of the Higher Education Act of 1965. This rule currently requires for-profit educational institutions to derive at least 10% of their revenue from non-federal sources, preventing them from being entirely dependent on federal student aid programs. The bill achieves this by repealing specific paragraphs within Section 487 of the Higher Education Act.
Proponents argue
Proponents argue that the 90/10 rule is an outdated and burdensome regulation that unfairly targets for-profit institutions, limiting their ability to serve students, particularly veterans and low-income individuals. They contend that repealing the rule would promote greater access to education by allowing these schools more flexibility in their funding models, reducing administrative overhead, and ensuring that all federal student aid, including veterans' benefits, is treated equally regardless of the institution type. They also suggest it would foster a more level playing field between proprietary and non-profit institutions.
Opponents contend
Opponents assert that repealing the 90/10 rule would remove a critical safeguard against predatory practices by for-profit colleges, potentially leading to increased reliance on federal student aid and a greater risk of taxpayer dollars being used to fund institutions with poor student outcomes. They argue that the rule incentivizes schools to provide quality education that attracts non-federal funding and protects students from institutions that might otherwise enroll them solely for federal aid. Critics also highlight concerns about student debt and the potential for increased defaults if schools are less accountable for student success.
The bill text is extremely short and can be read in under two minutes, but understanding its implications requires familiarity with existing higher education regulations and their historical context.
Section 2
Repeal of the 90/10 Rule
This section directly repeals paragraph (24) of subsection (a) and subsection (d) of Section 487 of the Higher Education Act of 1965. These specific statutory provisions establish and define the 90/10 rule, which mandates that proprietary institutions must obtain at least 10% of their revenue from non-federal sources to remain eligible for federal student financial assistance programs.
Supporters argue
Supporters argue that repealing the 90/10 rule removes an arbitrary and discriminatory regulation that disproportionately affects for-profit schools, especially those serving veterans and minority students. They contend it would allow these institutions to better serve their student populations without the pressure of finding non-federal revenue, which can be challenging for schools focused on specific vocational training or serving vulnerable populations. They also argue that all federal funds, including VA benefits, should be treated equally.
Critics contend
Critics argue that the 90/10 rule is a vital consumer protection that prevents for-profit colleges from becoming entirely dependent on federal funds, which can lead to a lack of accountability and poor student outcomes. They assert that removing this rule would incentivize schools to enroll students regardless of their ability to succeed, solely to access federal aid, potentially increasing student debt and default rates at taxpayer expense. They also highlight concerns that it could lead to a decline in educational quality as schools face less pressure to attract private paying students.
Tradeoffs
The bill navigates the tension between providing regulatory relief and flexibility for proprietary schools to operate and ensuring accountability for taxpayer dollars and student outcomes. It balances the desire to expand access to education, particularly for specific demographics, against the risk of increased federal financial exposure and potential for predatory practices if oversight is reduced.