EdStat: A New Version of the HEA Would Cut the “90/10” Rule, which Requires Colleges to Raise a Minimum of 10 Percent of their Revenues from Sources Other than Federal Financial Aid

The House of Representatives has introduced a new version of the Higher Education Act (Promoting Real Opportunity, Success, and Prosperity through Education Reform, or PROSPER) that would eliminate the gainful-employment provision and not replace it with any comparable regulations. It would also ax the “90/10” rule, which currently requires colleges to raise a minimum of 10 percent of their revenues from sources other than federal financial aid. Still, the history of the gainful-employment regulation shows that it’s possible to create a broad, outcomes-driven accountability system that is agnostic toward the education model an institution uses—and thus, is hospitable to innovation—while still protecting consumers.

Kevin Carey’s article is part of a forum on federal higher-ed spending. For an alternate take, please see, “Changing the Rules to Unleash Innovation,” by Michael Horn and Alana Dunagan.

—Education Next

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