WASHINGTON – Higher Education and Workforce Development Chair Burgess Owens (UT-04) introduced the Change of Ownership and Conversion Improvement Act, legislation to ensure the Department of Education does not needlessly slow or impede institutions of higher education that are actively changing ownership or converting from for-profit to nonprofit or public status.

“Ensuring our higher education institutions can evolve efficiently and effectively is crucial for the future of our workforce,” said Chair Owens. “The Change of Ownership and Conversion Improvement Act is a proactive step towards streamlining processes, empowering institutions, and safeguarding the integrity of conversions. By reshaping the application process and implementing rigorous evaluation measures, we are fostering a transparent and accountable system. This legislation not only benefits institutions but also protects taxpayers and maintains the quality of education. It’s time to prioritize progress and efficiency in our education system, and this bill is a significant stride in that direction.” 

Specifically, the Change of Ownership and Conversion Improvement Act would:

• Shift the burden of processing applications from taxpayers to institutions by requiring the institution to pay an administrative fee when applying. The Department of Education will use these fees to hire staff to reduce the application processing time.
• Create numerous safeguards to ensure that any application for a conversion is rigorously evaluated. Specifically, it requires all sales to be at or below fair market value and that any transaction involving an insider be approved by an independent committee of directors for the institution.
• Prohibit institutions from advertising as a nonprofit until after the Department has approved the transaction.
• Require any institution that has recently converted to be subject to a five-year monitoring period and pay a fee to the Department and the IRS to fund monitoring costs.

The full bill text is available here.

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