1. Short title This Act may be cited as the Merit-based Educational Reforms and Institutional Transparency Act or the MERIT Act . 2. Assessment of admissions practices (a) In general (1) Standards for accreditation Section 496(a)(5) of the Higher Education Act of 1965 ( 20 U.S.C. 1099b(a)(5) ) is amended— (A) by redesignating subparagraphs (G), (H), (I), and (J), as subparagraphs (H), (I), (J), and (K), respectively; (B) by inserting after subparagraph (F) the following: (G) adoption of admissions practices that refrain from any manner of preferential treatment in the admission process to applicants on the basis of the applicant's relationship to— (i) alumni of the institution; or (ii) donors to the institution; ; (C) in subparagraph (H), as redesignated under subparagraph (A), by striking and admissions ; and (D) in the flush matter at the end, by striking subparagraphs (A), (H), and (J) and inserting subparagraphs (A), (I), and (K) . (2) Preferential treatment definition Section 496 of the Higher Education Act of 1965 ( 20 U.S.C. 1099b ) is amended by adding at the end the following: (r) Preferential treatment For the purpose of subsection (a)(5)(G), the term preferential treatment means making an admissions decision or awarding tangible education benefits where an applicant’s relationship with an alumni of, or donor to, the deciding institution serves as the determinative factor. . (b) Rule of construction Section 496(p) of the Higher Education Act of 1965 ( 20 U.S.C. 1099b(p) ) is amended— (1) by redesignating paragraphs (1) and (2) as subparagraphs (A) and (B), respectively, and moving the margins of such subparagraphs (as so redesignated) 2 ems to the right; (2) by striking Nothing in subsection (a)(5) shall be construed to restrict the ability of and inserting the following: (1) In general Nothing in subsection (a)(5) shall be construed to restrict the ability of