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The 90/10 Rule under HEA Title IV: Background and Issues. CRS Report R46773, Version 1

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Title: The 90/10 Rule under HEA Title IV: Background and Issues. CRS Report R46773, Version 1
Language: English
Authors: Hegji, Alexandra, Library of Congress, Congressional Research Service (CRS)
Source: Congressional Research Service. 2021.
Availability: Congressional Research Service. Web site: https://crsreports.congress.gov/
Peer Reviewed: N
Page Count: 27
Publication Date: 2021
Intended Audience: Policymakers
Document Type: Reports - Descriptive
Education Level: Higher Education
Postsecondary Education
Descriptors: Federal Legislation, Educational Legislation, Higher Education, Federal Programs, Student Loan Programs, Eligibility, Educational Finance, Tuition, Fees, Federal Aid, Resource Allocation, Income, Accountability, Funding Formulas, Compliance (Legal), Public Colleges, Private Colleges
Laws, Policies and Program Identifiers: Higher Education Act Title IV, Higher Education Act Amendments 1992, Higher Education Act Amendments 1998, Higher Education Opportunity Act 2008
Abstract: Title IV of the Higher Education Act (HEA; P.L. 89-329), as amended, authorizes the primary programs that provide federal financial assistance (e.g., Pell Grants and Direct Loans) to students to assist them in obtaining a postsecondary education at eligible institutions of higher education (IHEs). IHEs seeking to participate in the Title IV programs must meet a variety of requirements. In general, many of these requirements apply to all institutional sectors--public, nonprofit, and proprietary (or private-for-profit). One of the requirements, the 90/10 rule, applies only to proprietary IHEs. Under the 90/10 rule, proprietary IHEs must derive at least 10% of their total tuition and fees revenues from non-Title IV sources (or, conversely, no more than 90% of their tuition and fees revenue from Title IV funds) during a fiscal year. The HEA and accompanying regulatory provisions specify how revenues are to be calculated. If an IHE fails to meet the rule's requirement in a single year, its certification to participate in the Title IV aid programs becomes provisional for two institutional fiscal years. If an IHE fails to meet the rule's requirements in two consecutive years, it loses its eligibility to participate in the Title IV programs for at least two institutional fiscal years. The rationale behind the 90/10 rule is twofold: (1) reducing fraud, waste, and abuse at proprietary IHEs; and (2) if a proprietary IHE is of sufficient quality, it should be able to attract a specific percentage of revenues from non-Title IV sources. This report examines the 90/10 rule. It begins with a history of the rule and then describes the current form of the rule. Finally, the report discusses a variety of congressional proposals relating to the rule, along with relevant policy considerations.
Abstractor: ERIC
Entry Date: 2021
Accession Number: ED614219
Database: ERIC
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  Data: The 90/10 Rule under HEA Title IV: Background and Issues. CRS Report R46773, Version 1
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  Data: Title IV of the Higher Education Act (HEA; P.L. 89-329), as amended, authorizes the primary programs that provide federal financial assistance (e.g., Pell Grants and Direct Loans) to students to assist them in obtaining a postsecondary education at eligible institutions of higher education (IHEs). IHEs seeking to participate in the Title IV programs must meet a variety of requirements. In general, many of these requirements apply to all institutional sectors--public, nonprofit, and proprietary (or private-for-profit). One of the requirements, the 90/10 rule, applies only to proprietary IHEs. Under the 90/10 rule, proprietary IHEs must derive at least 10% of their total tuition and fees revenues from non-Title IV sources (or, conversely, no more than 90% of their tuition and fees revenue from Title IV funds) during a fiscal year. The HEA and accompanying regulatory provisions specify how revenues are to be calculated. If an IHE fails to meet the rule's requirement in a single year, its certification to participate in the Title IV aid programs becomes provisional for two institutional fiscal years. If an IHE fails to meet the rule's requirements in two consecutive years, it loses its eligibility to participate in the Title IV programs for at least two institutional fiscal years. The rationale behind the 90/10 rule is twofold: (1) reducing fraud, waste, and abuse at proprietary IHEs; and (2) if a proprietary IHE is of sufficient quality, it should be able to attract a specific percentage of revenues from non-Title IV sources. This report examines the 90/10 rule. It begins with a history of the rule and then describes the current form of the rule. Finally, the report discusses a variety of congressional proposals relating to the rule, along with relevant policy considerations.
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