Editor's note: The following is an opinion piece. The writer is not employed by Military Times and the views expressed here do not necessarily represent those of Military Times or its editorial staff.
For-profit colleges — notorious for predatory practices, misleading advertising and aggressive recruiting — enroll only about 9 percent of all post-secondary students in America but take in 17 percent of all U.S. Department of Education federal student aid funds. They are some of the most heavily subsidized private businesses in the country.
A federal law, known as the 90/10 Rule, is meant to ensure that for-profit colleges and universities are not overly dependent on the federal government for their operation and that others, besides federal taxpayers, have skin in the game. The law prohibits for-profit colleges and universities from deriving more than 90 percent of their revenue from federal taxpayers. The other 10 percent must come from nonfederal sources, like tuition payments or private donors.
But a loophole in the law treats only the Education Department’s federal student aid as federal funds; it doesn’t count billions in federal education investments through the Department of Veterans Affairs’ GI Bill and Department of Defense tuition assistance programs as federal revenue.
As a result, the law actually incentivizes for-profit colleges and universities to aggressively recruit and target veterans, service members and their families By enrolling large numbers of these students, predatory for-profit colleges take in more than 90 percent of their revenue from federal taxpayers while still complying with the law.
Because of this loophole, 193 institutions, including some of the largest recipients of GI Bill benefits, received more than 90 percent of their revenue from federal taxpayers, according to data released last year by the Education Department — in response to a request by myself, Sen. Tom Carper of Delaware and 18 other Democratic senators. That amounts to $8 billion cumulatively.
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ITT Tech — which closed in 2016, leaving thousands of veterans in the lurch — actually received 100 percent of its revenue from taxpayers. Further, more than 563 institutions received more than 85 percent of their revenue from federal taxpayers — representing $12.6 billion cumulatively.
To protect veterans, service members, their families, students, and our taxpayer dollars, I have introduced the Protecting Our Students and Taxpayers, or POST, Act, which would reinstate the original ratio — 85/15 — and change the definition of what counts as federal revenue so that it includes all federal money, like GI Bill and TA funds.
The 90/10 Rule, with its failure to include the GI Bill and TA, makes our nation’s service members and veterans attractive targets for predatory for-profit colleges. We can’t let this exploitation of our veterans continue.
I urge my colleagues in Congress to support the POST Act.
Sen. Dick Durbin, D-Ill., serves as the Democratic whip, the party’s No. 2 leadership position in the Senate. He’s the ranking member of the Senate Appropriations Committee’s subcommittee on defense.
