Bill Details
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This bill would change how federal higher education law treats nonprofit colleges and universities. It says that if an institution of higher education is organized as a nonprofit under section 501(c)(3) of the tax code, it must be treated as a nonprofit school for purposes of the Higher Education Act. In simple terms, the bill makes the school’s tax status the deciding factor, so qualifying colleges and universities would clearly count as nonprofit institutions under federal education law.
- Applies to schools that are recognized as tax-exempt nonprofits under section 501(c)(3) of the Internal Revenue Code.
- Directs federal education law to treat those schools as nonprofit institutions of higher education, even if there could be any other question under current law.
- Does not create a new program or funding stream; it mainly changes a legal definition used in higher education rules.
Official Summaries
IHE Nonprofit Clarity Act
This bill specifies that an institution of higher education (IHE) that is recognized as a tax-exempt nonprofit organization under Section 501(c)(3) of the Internal Revenue Code of 1986 must also be deemed as a nonprofit IHE for purposes of the Higher Education Act of 1965. Thus, if the Internal Revenue Service recognizes an IHE as a tax-exempt nonprofit organization, then the Department of Education must also recognize the IHE as a nonprofit IHE.
Current Full Text
[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1852 Introduced in House (IH)]
<DOC>
119th CONGRESS
1st Session
H. R. 1852
To amend the Higher Education Act of 1965 to require that any
institution of higher education that is a nonprofit organization under
section 501(c)(3) of the Internal Revenue Code be deemed a nonprofit
institution of higher education for purposes of such Act.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
March 5, 2025
Mr. Biggs of Arizona introduced the following bill; which was referred
to the Committee on Education and Workforce
_______________________________________________________________________
A BILL
To amend the Higher Education Act of 1965 to require that any
institution of higher education that is a nonprofit organization under
section 501(c)(3) of the Internal Revenue Code be deemed a nonprofit
institution of higher education for purposes of such Act.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``IHE Nonprofit Clarity Act''.
SEC. 2. DEFINITION OF NONPROFIT INSTITUTION OF HIGHER EDUCATION.
Section 103(13) of the Higher Education Act of 1965 (20 U.S.C.
1003(13)) is amended by inserting at the end the following:
``Notwithstanding the preceding sentence, in the case of an institution
of higher education that is an organization described in section
501(c)(3) of the Internal Revenue Code and exempt from taxation under
section 501(a) of such Code, such institution of higher education shall
be deemed to be a nonprofit institution of higher education for
purposes of this Act.''.
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