According to Times Higher Education, the Biden administration has set new limits on for-profit institutions. It not only restricted its access to federal aid, but also its ability to convert to non-profit status.

Aiming to fight fraud, the new limitations concern the 90-10 rule — an American regulation that governs for-profit higher education. It restricts at 90% of revenue an institution can receive from federal financial aid sources, while the other 10% must come from alternative sources. 

When addressing the switching status issue, the new changes focus on defining what a non-profit is and establishing safe conversion procedures. Officials said this aims to avoid institutions to keep their profting powers even after becoming a non-profit, which has happened in the past.  

“[The goal is to] ensure that efforts by for-profit colleges to convert to non-profit status are genuine changes, not mere ploys to evade accountability to students and taxpayers,” said Miguel Cardona, the U.S. Secretary of Education. 

Regarding incarcerated people, the changes aim to benefit inmates to receive Pell Grants, a subsidy for low-income students in the United States. Congress had already excluded for-profits from participating, but the new rules create steps to ensure eligibility based on the best interest of the students.   

Biden’s new measures are a common revision practice new administrations do. Besides this regarding for-profit institutions, other education related topics are being discussed about financial aid and student loan payments.