Legislation would close the "90/10 Loophole" to better align incentives so for-profit colleges better serve students and taxpayers
Sep 17 2014
WASHINGTON - Today, Senator Tom Carper (D-Del.), chairman of the Homeland Security and Governmental Affairs Committee, introduced the Military and Veterans Education Protection Act to close a loophole that allows for-profit schools to avoid having to secure at least 10 percent of their revenue from non-federal sources. Senator Carper marked the 70th anniversary of the original G.I. Bill earlier this year by vowing to continue protecting veteran students from bad actors. Senator Carper also chaired a hearing last July on the 90/10 Rule. This is the second consecutive Congress in which Senator Carper has introduced legislation to close the 90/10 loophole.
“After sacrificing years of their lives abroad to protect our freedom, our nation’s veterans have earned the right to attain a high-quality, affordable education here at home with the help of the Post-9/11 G.I. Bill,” Sen. Carper said. “Since 2009, more than 1 million service members, veterans, and their families have financed their higher education using the G.I. Bill, and millions more will take advantage of this generous 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. The recent announcement that the for-profit chain Corinthian Colleges—which received $186 million in Post-9/11 G.I. Bill dollars—will sell or close 107 campuses nationwide due to financial problems is another glaring reminder that Congress must remain diligent to protect active-duty military, veterans, and taxpayers.
“The stories I’ve heard from veterans, including those who have testified before my committee, have convinced me that we can’t sit back and expect this situation to fix itself,” Sen. Carper said. “While not every for-profit college is a bad actor, one veteran mistreated is one veteran too many. We need to use common sense here. It doesn’t make sense for taxpayers to send veterans to for-profit schools that can be 100 percent subsidized using taxpayers’ dollars. Closing the 90/10 loophole is a common sense approach that demonstrates we’re serious about improving education outcomes for our veterans. I went to graduate school at the University of Delaware thanks to the G.I. Bill, an experience that fundamentally changed my life. I want to make sure every veteran has a similar experience and gets the most out of their hard-earned G.I. Bill benefits.”
The leaders of two prominent veterans service organizations have endorsed Senator Carper’s work to close the 90/10 loophole.
“Closing the 90/10 loophole will remove the incentive for some for-profit schools to use overly aggressive tactics to recruit service members and veterans. We believe [this] legislation will create an environment that will allow these individuals to make informed decisions about educational opportunities,” said Paul Rieckhoff, founder and executive director of Iraq and Afghanistan Veterans of America (IAVA).
“As it stands, the 90/10 loophole encourages aggressive recruitment of veterans and service members using their earned benefits, creating an environment in the higher education community not conducive to transparency and accountability. This legislation, coupled with consumer education resources, will remove the incentive to target this population for monetary gain,” said D. Wayne Robinson, chief executive officer of Student Veterans of America (SVA).