90/10 Provisions of American Rescue Plan Act of 2021 Brings Major Change
Katy Lee Carey and Vince Sampson
March 31, 2021
President Joe Biden signed the American Rescue Plan Act of 2021 on March 11. The ARPA includes a major change in the 90/10 revenue test that provides for-profit institutions and their students access to the FSA programs.
For proprietary institutions subject to the 90/10 rule, President Joe Biden’s signing of the American Rescue Plan Act of 2021[1] on March 11 reflects a major change in this revenue test that provides for-profit institutions and their students access to the Federal Student Aid programs.
Under the currently effective Higher Education Act and its implementing regulations[2], a Title IV-participating proprietary institution must annually derive at least 10% of its revenue “from sources other than Title IV, HEA program funds” in order to retain eligibility. If an institution does not meet this test for two consecutive fiscal years, it loses its eligibility to participate in the Title IV programs for at least two fiscal years, and if an institution does not pass the measure in any fiscal year, it becomes provisionally certified for the two fiscal years, requiring the institution meet a number of additional requirements.
