Change of Ownership and Conversion Improvement Act
The legislation proposes that institutions undergoing a change in ownership will pay an administrative fee linked to their revenue, which will be used exclusively for processing applications and conducting necessary monitoring. This change is intended to expedite the review process that is currently perceived as slow, with some institutions experiencing delays of up to five years for final determinations. Additionally, it outlines a comprehensive monitoring process for institutions converting from proprietary to nonprofit status, ensuring compliance and mitigating risks associated with potential financial mismanagement.
House Bill 7144, titled the 'Change of Ownership and Conversion Improvement Act', aims to amend the Higher Education Act of 1965 by modifying the application and review process for changes in control of institutions of higher education. The bill identifies that institutions are often involved in mergers and acquisitions that can positively affect students by fostering innovation and competition. It emphasizes the need for thorough reviews by the Department of Education to ensure that financial and administrative capacities of acquiring entities are adequate to manage these institutions.
There are concerns surrounding the implications of this bill, particularly regarding fairness in treatment of proprietary institutions versus public or nonprofit counterparts. Critics argue that while expediting the process can benefit many, it may overlook the essential scrutiny needed to prevent financial mismanagement in rapidly changing institutional ownerships. The requirement of fees for processing applications may also be viewed as a burden by some institutions, particularly smaller or struggling establishments. Overall, the intent behind the bill is to streamline an otherwise convoluted process while maintaining safeguards, which is a point of contention among educational stakeholders.