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Change of Ownership and Conversion Improvement Act
4/1/2025, 4:23 AM
Summary of Bill HR 2271
The bill seeks to streamline and improve the process by which colleges and universities can undergo changes in ownership or control. This includes providing clearer guidelines and requirements for institutions seeking to make such changes, as well as ensuring that the Department of Education has the necessary information and resources to properly review and approve these changes.
Additionally, the bill includes provisions to protect students and ensure that their education is not disrupted by changes in control. This includes requiring institutions to provide notice to students and the Department of Education in the event of a change in ownership or control, as well as ensuring that students are able to continue their education without interruption. Overall, the goal of Bill 119 HR 2271 is to improve transparency and accountability in the higher education sector, while also protecting the rights and interests of students. It is an important piece of legislation that aims to ensure that changes in control within higher education institutions are carried out in a fair and responsible manner.
Congressional Summary of HR 2271
Change of Ownership and Conversion Improvement Act
This bill revises the application and review process for institutions of higher education (IHEs) to change ownership or for a proprietary (i.e., for-profit) IHE to convert to public or other nonprofit status.
Specifically, the bill (1) establishes a pretransaction review application, and (2) requires an IHE to pay an administrative fee to the Department of Education (ED) for change in ownership or conversion transactions or pretransaction reviews. In the case of a for-profit IHE seeking conversion or a pretransaction review for conversion, ED must remit 50% of the administrative fee to the Internal Revenue Service (IRS) to determine whether the IHE is exempt from tax and is otherwise in compliance with the applicable requirements of the Internal Revenue Code of 1986 (IRC).
The bill establishes time frames for ED to approve or deny applications. The bill also includes various reporting requirements.
An IHE that has been approved for conversion by ED must be subject to a five-year monitoring period and must also pay an annual fee for this monitoring. ED must remit 50% of the annual fee to the IRS for monitoring the IHE's compliance with the IRC.
The Government Accountability Office must report on the implementation of this bill's provisions.
