Refers to federal regulation (90/10 rule) overseen by the U.S. Department of Education that governs for-profit higher education institutions. The rule is a proxy for measuring educational value at proprietary institutions with the intent to ensure that schools do not overly rely on federal aid and to encourage diversification of funding. Through a cap on federal funding, a proprietary school can receive a maximum of 90% of its revenue from federal financial aid sources such as Pell Grants and federal loans. The remaining 10% of revenue a proprietary school can receive must come from alternative sources, excluding federal funds. Federal policy subsequently updated the 90/10 rule to require proprietary institutions to receive at least 10% of their revenue from nonfederal educational assistance sources every fiscal year. This change was made to enhance financial stability and accountability within the for-profit education sector.
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