Late last week, a group of lawmakers introduced the first bipartisan bill in the Senate to protect military and veteran students by closing the 90/10 loophole.
Current law limits for-profit schools from receiving more than 90 percent of their tuition dollars from federal sources, requiring them to secure at least 10 percent of their revenues from sources other than taxpayers. However, military and veterans' education benefits, such as, like the Post-9/11 GI Bill and Tuition Assistance (TA), are not counted against that cap. Some for-profit schools have exploited this 90/10 loophole by using aggressive recruitment practices and deceptive marketing to enroll servicemembers, veterans and other GI Bill beneficiaries, according to a press release.
The Protect Veterans' Education and Training Spending (Protect VETS) Act—led by U.S. Senator Tom Carper (D-DE) along with Sens. James Lankford (R-OK), Bill Cassidy (R-LA), and Jon Tester (D-MT), Ranking Member of the Senate Committee on Veterans' Affairs—would close the loophole by counting Department of Veterans Affairs and Department of Defense education funds as federal dollars.
The proposed legislation would also:
- require proprietary schools to provide updated 90/10 data in their annual report to Congress;
- move to a system of tiered penalties for schools that violate the 90/10 rule;
- provide an appeal process that grants high-quality proprietary institutions relief from penalties;
- add a caution flag to the GI Bill Comparison Tool when an institution violates 90/10; and
- apply the new 90/10 rule for a limited time to for-profit schools after they convert to non-profit status.
"Unfortunately, for too long, bad-actors in the for-profit sector have exploited a loophole in the system—known as the 90/10 loophole—and taken advantage of our veterans and their generous education benefits. To be clear, not all for-profit schools are bad actors. In fact, many are doing a good job. However, I believe that one veteran misled or mistreated by a for-profit school is one veteran too many," said Sen. Carper. "In response, I believe it's long past time for Congress to heed the advice of our nation's Veterans Service Organizations and close the 90/10 loophole."
The Protect VETS Act is the first 90/10 loophole bill to receive bipartisan backing in the Senate, a point that advocates hope will spur momentum in Congress, The Military Times reported.
In an unexpected move, Senate Health, Education, Labor and Pensions Committee Chairman Lamar Alexander (R-TN) issued his support this week for the proposed bill, Inside Higher Ed reported. Alexander's decision, which comes after years of opposition on his part, appears to be part of the ongoing negotiations over his package of legislation to narrowly update to the Higher Education Act.
"I appreciate the work Senators Carper, Cassidy, Lankford and Tester have done to take a highly partisan issue and create a bipartisan solution," Alexander said in a statement. "This is a responsible and reasonable step to ensure that all of our military and veteran students are attending quality institutions worth their time and money."
U.S. Senator Tom Carper's Press Release
The Military Times
Inside Higher Ed