Sen. Carper Commends Attorneys General Effort to Change For-Profit School Funding Rule

22 Attorneys General Send Letter to Congress to Request That G.I. Bill Funds Should Count Toward 90 Percent Cap on Schools' Federal Money Limit

WASHINGTON – Today, Sen. Tom Carper (D-Del.), a veteran and Chairman of the Subcommittee on Federal Financial Management, commended 22 Attorneys General, including Delaware Attorney General Beau Biden, for their support in the effort to close a loophole in the Higher Education Act that is harming American veterans and their families. In a letter to Congressional leaders on Tuesday, the attorneys general, led by Kentucky Attorney General Jack Conway, ask Congress to require that GI Bill and Veteran’s Assistance educational benefits be subject to the 90/10 rule, which prohibits for-profit colleges from deriving more than 90 percent of their revenue from Department of Education (Title IV) funding sources.

“I believe we have a moral imperative to ensure that those who have sacrificed for our country obtain the best education possible, one that will equip them with the skills they need to find a good job, repay their college loans, and go on to live productive lives,” said Sen. Tom Carper. “That’s why we must focus on how we can fix problems within the higher education system and encourage all schools to deliver a higher quality education to our military and veteran populations. We must also demand more from the schools that serve our service members and veterans so we can get better results from this taxpayer funded program. I thank this coalition of Attorneys General for its support in our efforts.”

“Our military servicemembers have earned the educational benefits that are meant to help them provide for their families and strengthen our workforce,” said Attorney General Biden. “We must close this loophole and make sure for-profit colleges’ focus is on providing a quality education and real-world skills to our citizen soldiers, not on exploiting them to make money.”

The Post-9/11 G.I. Bill and the Tuition Assistance program provide our nation’s active service members and veterans with the most comprehensive benefits since World War II. However, under current law, revenues a school receives from DOD and VA financial aid programs – like the Tuition Assistance Program and the Post-9/11 GI Bill – are not counted the same as the Department of Education’s (DOE) federal student aid.

Currently, for-profit schools can derive 90 percent of their funding from public sources (Title IV funds) and then the remaining 10 percent from government veterans’ programs, rather than obtaining at least 10% of their revenue from non-federal sources as the law intended. This has led to a series of problems among some bad actors within the for-profit education industry, where school recruiters seek to enroll as many veterans or military students as possible through unscrupulous recruitment tactics or dishonest marketing practices. Once enrolled, many of our service members and veterans using their federally funded benefits don’t always receive a quality education, unfairly impacting not only our service members and veterans, but also American taxpayers.

In February, Sen. Carper introduced the bipartisan and bicameral bill, The Military and Veterans Education Protection Act (S. 2116), which changes the 90/10 formula so that a for-profit school’s revenues from DOD and VA programs are counted as federal dollars on the 90 percent side of the 90/10 formula rather than as private dollars on the 10 percent side. The for-profit school would then have to ensure that at least 10 percent of its revenue would come from truly non-federal, non-DOD, VA or DOE funding sources. The legislation would also amend current law so that if a school is out of compliance for two consecutive years, it would lose eligibility to accept not only new DOE dollars, but also new DOD and VA dollars. Schools will regain their eligibility once they take a series of steps toward compliance, which is unchanged from current law.

The attorneys general who asked Congress to close the 90/10 loophole include Kentucky Attorney General Jack Conway, Arizona Attorney General Tom Horne, Arkansas Attorney General Dustin McDaniel, California Attorney General Kamala Harris, Connecticut Attorney General George Jepsen, Delaware Attorney General Beau Biden, Idaho Attorney General Lawrence Wasden, Illinois Attorney General Lisa Madigan, Iowa Attorney General Tom Miller, Maryland Attorney General Doug Gansler, Massachusetts Attorney General Martha Coakley, Michigan Attorney General Bill Schuette, Mississippi Attorney General Jim Hood, Nevada Attorney General Catherine Cortez Masto, New Mexico Attorney General Gary King, New York Attorney General Eric Schneiderman, North Carolina Attorney General Roy Cooper, South Carolina Attorney General Alan Wilson, South Dakota Attorney General Marty Jackley, Tennessee Attorney General Bob Cooper, West Virginia Attorney General Darrell McGraw, and the state of Hawaii’s Office of Consumer Protection.