H.R.2271 - Change of Ownership and Conversion Improvement Act (119th Congress)
Summary
H.R.2271, the Change of Ownership and Conversion Improvement Act, aims to amend the Higher Education Act of 1965 to streamline and improve the process for changes of control and conversions of institutions of higher education. The bill addresses concerns about the slow processing times for change of ownership applications at the Department of Education. It introduces administrative fees to fund additional staff and expedite reviews.
Specifically, the bill mandates expedited reviews in exchange for the fees, requires increased transparency in the approval process, and strengthens monitoring of institutions converting from proprietary to non-profit status. It also directs the Government Accountability Office (GAO) to report on the implementation of these changes and make recommendations for further improvements.
The bill also aims to ensure that conversions to non-profit status are legitimate and do not result in improper private inurement.
Expected Effects
The likely effect of H.R.2271 is a more efficient and transparent process for changes in ownership and conversions of higher education institutions. The introduction of fees could lead to faster application processing times, benefiting institutions seeking to merge or convert. Increased monitoring of converted institutions could help prevent financial mismanagement and protect student aid funds.
However, the fees could also pose a financial burden on institutions, particularly smaller ones. The expedited review process may also strain the Department of Education's resources if not managed effectively.
Ultimately, the bill seeks to balance the need for thorough oversight with the desire to facilitate beneficial transactions in the higher education sector.
Potential Benefits
- Expedited Application Reviews: Institutions paying the administrative fee will receive faster processing of their change of ownership applications.
- Increased Transparency: The Department of Education will be required to publish the reasoning behind application approvals or denials in the Federal Register.
- Enhanced Monitoring: Institutions converting to non-profit status will be subject to increased monitoring to prevent financial improprieties.
- GAO Report: The Government Accountability Office will assess the implementation of the Act and recommend improvements.
- Pretransaction Review: Institutions can seek a pretransaction determination to ensure compliance.
Potential Disadvantages
- Administrative Fees: The fees imposed on institutions could be a financial burden, especially for smaller institutions or those undergoing conversion.
- Potential for Increased Costs: The cost of hiring independent third-party entities to evaluate assets, lease contracts, or service contracts could increase the cost of transactions.
- Complexity: The new regulations and requirements could add complexity to the change of ownership and conversion process.
- Monitoring Burden: The monitoring period for converted institutions could be seen as intrusive and burdensome.
- Potential for Delays: While the bill aims to expedite reviews, the Secretary can extend the deadline for good cause, potentially leading to delays.
Constitutional Alignment
H.R.2271 primarily aligns with the constitutional principle of promoting the general welfare, as it seeks to improve the efficiency and oversight of higher education institutions. While the Constitution does not explicitly address education, the implied power to regulate commerce and provide for the general welfare allows Congress to legislate in this area. The bill does not appear to infringe upon any specific constitutional rights or limitations.
The bill's provisions related to fees and reporting requirements are within Congress's power to regulate and oversee federal programs. The emphasis on transparency and accountability aligns with the broader constitutional framework of open government.
However, the bill's impact on individual liberties and rights is minimal, as it primarily focuses on institutional processes and regulations.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).