Renewed Push to Close 90/10 Loophole

A group of Senate Democrats reintroduced legislation last week to tighten restrictions on the flow of U.S. Department of Veterans Affairs (VA) and Department of Defense (DOD) education funds to for-profit institutions, according to a press release. The Military and Veterans Education Protection Act—introduced by Sens. Tom Carper (DE), Richard Durbin (IL), Richard Blumenthal (CT), Patty Murray (WA), and Jon Tester (MT)—would close a loophole in the federal 90/10 rule.

The rule, signed into law over two decades ago, limits the amount of federal funding for-profit colleges and universities may receive from taxpayers, requiring that at least 10 percent of their revenue come from non-federal sources. However, a loophole in the law excludes VA and DOD education benefits, like the Post-9/11 GI Bill and Tuition Assistance (TA), from being counted as federal funds.

Some for-profit schools exploit the exception by using aggressive recruitment practices and deceptive marketing tools to enroll servicemembers, veterans, and other GI Bill beneficiaries, the senators stated in their press release. The proposed legislation would close the 90/10 loophole by counting VA and DOD funds as federal dollars.

"While not all for-profit schools are bad actors, one veteran misled or mistreated by a for-profit school is one veteran too many," said Senator Carper. "Unfortunately, too many for-profit schools are taking advantage of the 90/10 loophole and exploiting our veterans and service members for their generous education benefits."

"Closing the 90/10 loophole and counting G.I. Bill dollars as federal dollars, which they are, is a commonsense fix that will help us improve educational outcomes for veterans and protect taxpayers," he continued.


Related Links

U.S. Senate Tom Carper's Press Release