Students Not Profits Act of 2026

Protection from Predatory Practices: Under Section 2, amending section 101(e) of the Higher Education Act, schools cannot receive federal student aid if their owners or executive officers have been convicted of title IV funding crimes, committed fraud, engaged in predatory recruitment, violated consumer protection laws, or been involved with an institution that closed. This protects students from being taken advantage of by bad actors in school leadership.

Clear Standards for Nonprofit Conversions: Under Section 7, adding section 124 to the Act, schools wanting to convert to nonprofit status must apply and prove they meet strict transparency and financial fairness rules. This provision stops fake nonprofit conversions that secretly benefit former owners, ensuring that nonprofit schools truly operate for the public good.

Ban on Tuition-Sharing for Recruitment: Under Section 4, amending section 487(a)(20) of the Act, schools are banned from making payments to outside entities for recruitment services when the payment amount is based on the tuition generated. This protects students from aggressive and manipulative enrollment tactics driven by financial commissions.

Reduced Options for Certain Students: Under Section 2, amending section 101(d) of the Act, schools must limit distance education courses to no more than 50 percent of all students, limit incarcerated students to no more than 25 percent, and limit students without secondary diplomas to no more than 50 percent to qualify for federal student aid. These strict enrollment caps could limit access to higher education for individuals who rely heavily on online learning or prison education programs.

Loss of Federal Aid at For-Profit Schools: Under Section 2, by making for-profit institutions ineligible for Federal student aid, current students attending these specific schools may lose access to federal loans and grants. This could force students to disrupt their education or find alternative funding sources to stay enrolled.