Carper Introduces Measure to Ban Colleges from Spending Federal Financial Aid Dollars on Marketing and Recruiting

Legislation would crack down on for-profit colleges that spend federal financial aid dollars on marketing and predatory student recruitment practices

WASHINGTON –Today, U.S. Senator Tom Carper (D-Del.) joined Senator Sherrod Brown (D-Ohio) to introduce the Protecting Financial Aid for Students and Taxpayers Act, which would maximize the value of federal student aid and taxpayer dollars by prohibiting the use of the Post-9/11 G.I. Bill, Pell Grants, federal student loans, and other federal education funds for advertising, marketing, and recruitment. The legislation would help ensure that colleges and universities – especially for-profit educational companies – use federal student assistance and taxpayer dollars to actually educate students, not enroll them.

“Some for-profit colleges are aggressively recruiting and marketing to our veterans, and they’re using taxpayer dollars to do it. This is just plain wrong,” said Senator Carper. “The Post-9/11 G.I. Bill is a generous taxpayer benefit, and it should be focused on providing our veterans with high-quality college education and career training that translates into meaningful civilian careers. Congress must ensure that all federal education assistance is being spent on improving classroom outcomes for all students, and not subsidizing aggressive marketing campaigns.”

Since 2009, more than 1.3 million service members, veterans, and their families have financed their higher education using the Post-9/11 G.I. Bill, and millions more will take advantage of this benefit in the years to come. In the past five years, 40 percent of Post-9/11 G.I. Bill tuition benefits have gone to the for-profit sector, even as questions continue to be raised about these institutions’ graduation, default, and job placement rates.

Some of the largest for-profit education companies routinely spend a disproportionately large part – almost 25 percent – of their budgets on advertising, marketing and recruitment, which is often aggressive and deceptive. In contrast, non-profit colleges and universities typically spend a fraction of that—just one-half of one percent – on similar efforts to enroll students.

The bill introduced today would require any college or university which receives more than 65 percent of its revenue from federal educational assistance funds to report its marketing spending to the U.S. Department of Education and to certify that no federal education dollars were spent on marketing.

Earlier this summer, Senator Carper was joined by Senator Brown and more than twenty of their Democratic colleagues to introduce the Military and Veterans Education Protection Act of 2015, which would close the “90-10 Loophole” and prevent for-profit schools from being 100 percent subsidized by taxpayers.