Students Not Profits Act of 2026

The Students Not Profits Act of 2026 (HR10562) was introduced on September 24, 2026, by Rep. Jayapal and four Democratic cosponsors, and referred to the House Committee on Education and Workforce. The bill amends the Higher Education Act to make for-profit institutions ineligible for federal student aid (Pell Grants, federal loans) and imposes enrollment caps on distance education (50%), incarcerated students (25%), and students without a high school diploma (50%) for all institutions. The bill does not authorize any new funding; it restricts access to existing Title IV aid. The legislative path is long: committee markup, House floor vote, Senate passage, and presidential signature. With only Democratic sponsors and no Republican support, the bill faces steep odds in the 119th Congress. The direct losers are for-profit education companies whose business models depend on federal aid. Strategic Education ($STRA) and Adtalem would see their primary revenue source eliminated. Online program manager 2U faces indirect risk from the distance education cap, which could reduce demand for its services. Nonprofit institutions may also need to adjust enrollment composition. The timeline for any movement is uncertain; the bill is likely to stall in committee. Investors should view this as a regulatory signal rather than an imminent threat.