34 C.F.R. § 600.5

Proprietary institution of higher education

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(a) A proprietary institution of higher education is an educational institution that—

(1) Is not a public or private nonprofit educational institution;

(2) Is in a State;

(3) Admits as regular students only persons who—

(i) Have a high school diploma;

(ii) Have the recognized equivalent of a high school diploma; or

(iii) Are beyond the age of compulsory school attendance in the State in which the institution is physically located;

(4) Is legally authorized to provide an educational program beyond secondary education in the State in which the institution is physically located in accordance with § 600.9;

(5)(i)(A) Provides an eligible program of training, as defined in 34 CFR 668.8, to prepare students for gainful employment in a recognized occupation; or

(B)(1) Has provided a program leading to a baccalaureate degree in liberal arts, as defined in paragraph (e) of this section, continuously since January 1, 2009; and

(2) Is accredited by a recognized regional accrediting agency or association, and has continuously held such accreditation since October 1, 2007, or earlier; and

(ii) May provide a comprehensive transition and postsecondary program for students with intellectual disabilities, as provided in 34 CFR part 668, subpart O;

(6) Is accredited; and

(7) Has been in existence for at least two years.

(b)(1) The Secretary considers an institution to have been in existence for two years only if—

(i) The institution has been legally authorized to provide, and has provided, a continuous educational program to prepare students for gainful employment in a recognized occupation during the 24 months preceding the date of its eligibility application; and

(ii) The educational program that the institution provides on the date of its eligibility application is substantially the same in length and subject matter as the program that the institution provided during the 24 months preceding the date of its eligibility application.

(2)(i) The Secretary considers an institution to have provided a continuous educational program during the 24 months preceding the date of its eligibility application even if the institution did not provide that program during normal vacation periods, or periods when the institution temporarily closed due to a natural disaster that directly affected the institution or the institution's students.

(ii) The Secretary considers an institution to have satisfied the provisions of paragraph (b)(1)(ii) of this section if the institution substantially changed the subject matter of the educational program it provided during that 24-month period because of new technology or the requirements of other Federal agencies.

(3) In determining whether an applicant institution satisfies the requirement contained in paragraph (b)(1) of this section, the Secretary—

(i) Counts any period during which the applicant institution has been certified as a branch campus; and

(ii) Except as provided in paragraph (b)(3)(i) of this section, does not count any period during which the applicant institution was a part of another eligible proprietary institution of higher education, postsecondary vocational institution, or vocational school.

(d) The Secretary does not recognize the accreditation of an institution unless the institution agrees to submit any dispute involving an adverse action, such as the final denial, withdrawal, or termination of accreditation, to arbitration before initiating any other legal action.

(e) For purposes of this section, a “program leading to a baccalaureate degree in liberal arts” is a program that is a general instructional program falling within one or more of the following generally accepted instructional categories comprising such programs, but including only instruction in regular programs, and excluding independently designed programs, individualized programs, and unstructured studies:

(1) A program that is a structured combination of the arts, biological and physical sciences, social sciences, and humanities, emphasizing breadth of study.

(2) An undifferentiated program that includes instruction in the general arts or general science.

(3) A program that focuses on combined studies and research in humanities subjects as distinguished from the social and physical sciences, emphasizing languages, literature, art, music, philosophy, and religion.

(4) Any single instructional program in liberal arts and sciences, general studies, and humanities not listed in paragraphs (e)(1) through (3) of this section.

(Approved by the Office of Management and Budget under control number 1845-0012) (Authority: 20 U.S.C. 1088, 1091) [59 FR 22336, Apr. 29, 1994; 59 FR 32082, June 22, 1994, as amended at 59 FR 47801, Sept. 19, 1994; 59 FR 61177, Nov. 29, 1994; 61 FR 29901, June 12, 1996; 61 FR 60569, Nov. 29, 1996; 64 FR 58615, Oct. 29, 1999; 74 FR 55932, Oct. 29, 2009; 76 FR 66946, Oct. 29, 2010; 84 FR 58915, Nov. 1, 2019]

Notes of Decisions

Cited in 10 cases (1 in the last 5 years), 1993–2022 · leading case: Carlos Urquilla-Diaz v. Kaplan Univ., 780 F.3d 1039 (11th Cir. 2015).

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Carlos Urquilla-Diaz v. Kaplan Univ., 780 F.3d 1039 (11th Cir. 2015). · cites it 2× “§ 1094 (a)(24), (d)(2); and the accreditation requirement, 34 C.F.R. § 600.5 (a)(6). But we modify the judgment of dismissal to be without prejudice with respect to the government.”

Int'l Junior Coll. of Bus. & Tech., Inc. v. Duncan, 802 F.3d 99 (1st Cir. 2015). · cites it 6× “” 34 C.F.R. § 600.5 (d)(l)(1999). Failure to comply with the 90/10 rule meant a school would lose its Title IV eligibility, but the loss of eligibility only became effective the fiscal year following the non-compliant fiscal year (we note that the fiscal year ran from July 1 to…”

Consum. Fin. Prot. Bureau v. Accrediting Council for Indep. Colleges & Schs., 854 F.3d 683 (D.C. Cir. 2017). “§ 1002 (b)(1)(D); 34 C.F.R. § 600.5 (a)(6); Career Educ., Inc.”

Career Educ., Inc., D/B/A Atds-Texas v. Dep't of Educ., 6 F.3d 817 (D.C. Cir. 1993). · cites it 2× “§ 1088 (b) (1988); 34 C.F.R. § 600.5 (1992). Such a school must be in existence for two years, be accredited, and meet other certification standards.”

Career Coll. Ass'n v. Duncan, 796 F. Supp. 2d 108 (D.D.C. 2011). “(defining an institution of higher education as one that is “legally authorized to provide an educational program beyond secondary education in the State in which the institution is physically located,” and stipulating that “[a]n institution is physically located in a State if…”

Mission Grp. Kansas, Inc. v. Riley, 909 F. Supp. 835 (D. Kan. 1995). “The clause stated: The Institution must meet all restrictions that would have applied to the Institution if it has [sic] remained a for-profit entity, including but not limited to, having no more than 85 percent of its revenues de *842 rived from Title IV, HEA program funds, as…”

Carlos Urquilla-Diaz v. Kaplan Univ. (11th Cir. 2015). · cites it 2× “§§ 1001 (a)(4), 1002(b)(1)(C); see also 34 C.F.R. § 600.5 (a)(1). 4 Case: 13-13672 Date Filed: 03/11/2015 Page: 5 of 45 “fixed compensation .”

Carlos Urquilla-Diaz v. Kaplan Univ. (11th Cir. 2019). “§ 1094 (a)(24), (d)(2); and the accreditation requirement, 34 C.F.R. § 600.5 (a)(6). Id. at 1064 . We reversed the district court’s dismissal of Diaz’s claims against Kaplan to the extent that they were based on its alleged violation of the incentive-compensation ban, 20 U.”

Infusino v. Devos (D.D.C. 2022). “Indeed, as the Department admitted in its May 2018 letters to IIA and AIC granting them retroactive interim nonprofit status, “[t]he provisions of 34 C.F.R. 600.5(a)(6) require a proprietary institution of higher education to be fully accredited to qualify as an eligible…”

Career Coll. Ass'n v. Duncan (D.D.C. 2011). “(defining an institution of higher education as one that is “legally authorized to provide an educational program beyond secondary education in the State in which the institution is physically located,” and stipulating that “[a]n institution is physically located in a State if…”

— 34 C.F.R. § 600.5(a)(6) — 1 case

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