Senate panel releases package of bills to tighten oversight of for‑profit colleges, including phase‑out of TAG funding

A New Jersey Senate committee voted to advance a package of bills aimed at increasing transparency and accountability for proprietary (for‑profit) institutions of higher education, including a measure to phase out state Tuition Aid Grants (TAG) for some proprietary schools.

Senators voted to release Senate Bill S3668, which would phase out state TAG funding for students enrolled at certain proprietary institutions and redirect funds to the state summer TAG program, after more than two hours of testimony. The committee chair said the bill will be refined with metrics in the budget committee before final action. Senator Singer and Senator Amato recorded No votes; Senators Cruz Perez and McKeon left affirmative votes and Senator Kryon voted Yes. The motion to release passed.

Why it matters: The bills are intended to change how state aid is allocated and to add reporting and consumer protections for students who enroll in proprietary colleges. Supporters say the changes will reduce taxpayer subsidization of low‑value programs and better protect students; opponents contend the measures could curtail access for nontraditional students who rely on TAG to attend career programs.

What the committee released at a glance:

- S3668 — Phases out TAG for students enrolled in certain proprietary institutions and redirects some funds to summer TAG. Vote to release: Passed (Yes: Kryon, Cruz Perez (left), McKeon (left); No: Singer, Amato). Committee comment: Chair Kryon said metrics will be developed in budget committee hearings.

- S3696 — Requires institutions to notify specified entities about approved federal borrower‑defense loan discharges and includes committee amendments narrowing reporting requirements. Vote to release: Passed (committee amendments adopted; bill released).

- S3730 — Creates a monitoring process when proprietary institutions convert to nonprofit corporations, focused on private inurement concerns. Vote to release: Passed.

- S3731 — Establishes a student tuition recovery fund in the Secretary of Higher Education to compensate students harmed by failing or fraudulent proprietary institutions; committee amendments add administrative clarifications. Vote to release: Passed.

What senators heard: Witnesses for proprietary institutions (DeVry University, Berkeley College, Eastwick College and others) urged fairness and said many of their students are nontraditional, low‑income, veterans and single parents; they asked for uniform metrics across sectors and cautioned against rigid numerical tests (such as a 70% tuition‑based rule that was discussed only for context). Industry witnesses noted campus maintenance, property taxes, and program‑specific costs that can compress instructional spending percentages.

Researchers and advocates pressed the opposite view. Witnesses including a Century Foundation fellow and a George Washington University economist described studies showing lower earnings and higher borrowing and default rates among for‑profit students and urged minimum spending and accountability standards. Impacted borrowers told the committee their loans and credits were mishandled and urged stronger consumer protections.

What happens next: The chair said S3668 will be revised with clearer performance metrics in the budget process. The released bills are scheduled for further legislative consideration and committee reports.