Education advocates are hoping new bipartisan legislation can help advance long pursued reforms on how much money for-profit colleges can accept from student veterans’ education benefits.
The new bill — dubbed the Protect VETS Act — would close the “90/10 loophole” in federal funding rules regarding for-profit education institutions. Under current law, schools cannot receive more than 90 percent of their tuition dollars from federal sources, but military and veterans’ education benefits are not counted against that cap.
For years, advocates have argued that leaves veterans susceptible to victimization by unscrupulous recruiters looking to draw in students with stable sources of income. They say that GI Bill payouts should be counted on the 90 percent side of the federal rule, forcing the schools to find additional tuition support from non-taxpayer sources.
The new measure would do that, and create a series of stiff financial penalties for groups that violate the federal funding ratio. If schools violate the caps for a year, they’ll be unable to enroll new military students using Defense Department education benefits. If they do it for three years, they’ll lose all federal funding.
“It’s long past time for Congress to heed the advice of our nation’s veterans service organizations and close the 90/10 loophole,” said Sen. Tom Carper, D-Del., and a sponsor of the measure. “Our commitment to care for our veterans is a sacred obligation, and ensuring their hard-earned GI Bill benefits are safeguarded is part of that sacred obligation.”
The measure also received backing from fellow Democrat Jon Tester, of Montana, ranking member of the Senate Veterans’ Affairs Committee, and Republican Sens. James Lankford, of Oklahoma, and Bill Cassidy, of Louisiana. In a statement, Lankford said the bill would put “reasonable protections in place that are fair to veterans, taxpayers, and schools.”
This is the first time a 90/10 loophole bill has received bipartisan backing in the Senate, a point that advocates hope will spur momentum in Congress.
But the proposal has faced fierce opposition from industry officials in recent years, who argue it will unfairly limit veterans non-traditional college options by forcing schools to find offsetting money for their tuition payouts. And Republican lawmakers in general have not been receptive to similar past proposals.
"Manipulating the 90/10 rule to include military and veteran benefits on the 90 side is a way to restrict choice for veterans at career, tech and trade schools," said Michael Dakduk, co-chair of Veterans for Career Education, an advocacy campaign linked to the for-profit education industry. “It is no coincidence that proposals to change the 90/10 rule do not extend to public colleges and universities.”
An analysis by the Brookings Institution earlier this year found that based on 2015 data, colleges serving 24 percent of all for-profit students would have failed the 90/10 rule. They predicted a change in the law could produce significant financial distress for the for-profit education industry.
Cassidy and Lankford said they hope to work with colleagues to emphasize the importance of the legislation, but they’ll do so amid impeachment proceedings against the president on Capitol Hill and an increasing partisan divide among lawmakers.
Thirty-seven veterans groups have offered public support to the legislation, including the American Legion, Student Veterans of America, and Iraq and Afghanistan Veterans of America.
“We are thrilled to finally have a real chance to close the 90/10 loophole and remove the target from the backs of veterans and service members,” said Carrie Wofford, president at Veterans Education Success, in a statement.
No congressional hearings have been scheduled on the new legislation.