Tom Carper, U.S. Senator for Delaware

Nov 09 2017

Senators Reintroduce Military and Veterans Education Protection Act with Groundbreaking Support from Veterans Service Organizations

Momentum builds to pass legislation that would close the 90/10 loophole and protect veterans from predatory for-profit schools

WASHINGTON—Today, U.S. Senators Tom Carper (D-Del.), Richard Durbin (D-Ill.), Richard Blumenthal (D-Conn.), Patty Murray (D-Wash.) and Jon Tester (D-Mont.) reintroduced the Military and Veterans Education Protection Act, legislation that would close a loophole that allows for-profit schools to avoid having to secure at least 10 percent of their revenue from non-federal sources.

More than two decades ago, Republican President George H.W. Bush signed a bipartisan law that limited how much federal funding for-profit schools may receive from taxpayers. Now called the 90/10 rule, this limit requires for-profit schools to obtain at least 10 percent of their revenues from non-federal sources. However, a loophole in the law excludes Department of Veterans Affairs (VA) and Department of Defense (DOD) education funds, like the Post-9/11 GI Bill and Tuition Assistance (TA), from being counted as federal funds. Some for-profit schools exploit this 90/10 loophole by using aggressive recruitment practices and deceptive marketing tools to enroll servicemembers, veterans and other GI Bill beneficiaries. The Military and Veterans Education Protection Act would close the 90/10 loophole by counting VA and DOD funds as federal dollars.

“While not all for-profit schools are bad actors, one veteran misled or mistreated by a for-profit school is one veteran too many,” said Senator Carper. “Unfortunately, too many for-profit schools are taking advantage of the 90/10 loophole and exploiting our veterans and service members for their generous education benefits. Meanwhile, schools like ITT Tech and Corinthian Colleges, which together received over $1 billion in Post-9/11 GI Bill benefits, went bankrupt and closed their doors for good, leaving taxpayers and thousands of veterans in the lurch. Closing the 90/10 loophole and counting G.I. Bill dollars as federal dollars, which they are, is a commonsense fix that will help us improve educational outcomes for veterans and protect taxpayers.”

“This bill is one of many commonsense reforms we need to bring greater accountability to a for-profit industry that enrolls nine percent of students, but accounts for 17 percent of Department of Education student financial aid and 33 percent of all student loan defaults,” said Senator Durbin. “It’s time for Congress to get serious about addressing for-profit colleges in our higher education system. We’ve been bystanders for too long as for-profit colleges have taken advantage of loopholes like the 90/10 Rule and used unfair, deceptive, and abusive practices to lure students, including veterans and service members, into enrolling while leaving them with worthless diplomas and mountains of debt.”

“The collapse of Corinthian and the immoral, fraudulent behavior of ITT Tech taught us that new law is necessary to protect our servicemembers and veterans from bad actors in the for-profit college industry,” said Senator Blumenthal. “We must stop the for-profit college industry from treating our armed services like a cash cow. Real action from Congress is necessary to stop bad actors from shamefully shaking down servicemembers and veterans, raking in in billions of dollars in VA education benefits every year. Taxpayers and our men and women in uniform deserve action.”

“President Trump and Secretary DeVos have proved time and time again that students and veterans cannot count on this Administration to protect them from predatory institutions. But it is our responsibility to ensure the opportunities being presented to them will open doors, not rob them of their education and savings,” said Senator Murray. “So I’m proud to join my colleagues to introduce the Military and Veterans Education Protection Act to simply close a loophole and ensure our veterans and our members of the military are not being taken advantage of by predatory for-profit colleges.”

“From both a veteran and taxpayer perspective, this is a no-brainer,” said Senator Tester, Ranking Member of the Senate Veterans’ Affairs Committee. “Too many of our brave men and women have faced headaches and hardships in getting an education after they serve our country. This bill will help veterans get a quality education without letting for-profit schools take advantage of the system and the veterans they are supposed to serve.”

In addition to Senators Carper, Durbin, Blumenthal, Murray and Tester, Senators Elizabeth Warren (D-Mass.), Tammy Baldwin (D-Wis.), Jack Reed (D-R.I.), Kirsten Gillibrand (D-N.Y.), Sherrod Brown (D-Ohio), Dianne Feinstein (D-Calif.), Mazie Hirono (D-Hawaii), Maggie Hassan (D-N.H.), Debbie Stabenow (D-Mich.), Jeanne Shaheen (D-N.H.), Al Franken (D-Minn.), Ben Cardin (D-Md.), Sheldon Whitehouse (D-R.I.), Chris Murphy (D-Conn.), Chris Van Hollen (D-Md.), Bernie Sanders (I-Vt.), Ed Markey (D-Mass.), Kamala Harris (D-Calif.), Chris Coons (D-Del.), Chuck Schumer (D-N.Y.), Bob Menendez (D-N.J.), Jeff Merkley (D-Ore.), Angus King (I-Maine), Tammy Duckworth (D-Ill.), Catherine Cortez-Masto (D-Nevada), Claire McCaskill (D-Mo.) and Brian Schatz (D-Hawaii) are cosponsors of the legislation.

Since 2009, more than 1.7 million service members, veterans and their families have used the Post-9/11 GI Bill to finance their higher education. However, over the past several years, about 40 percent of Post-9/11 G.I. Bill tuition benefits have gone to for-profit schools, even as questions continue about their graduation, default and job placement rates. Additionally, some of the largest recipients of Post-9/11 GI Bill funds have closed down after years of delivering poor outcomes to students and taxpayers. Two now-shuttered for-profit colleges, ITT Technical Institutes and Corinthian Colleges, received over $1 billion in Post-9/11 GI Bill benefits before suddenly closing their doors, leaving nearly 7,000 student veterans and every American taxpayer in the lurch. Far too many veterans and service members have exhausted their hard-earned benefits at now-defunct schools. In response, a broad coalition of Veterans Service Organizations (VSOs) and other advocacy groups are rallying behind this commonsense effort to close the 90/10 loophole to protect military and veteran students, as well as taxpayers, from bad actors in the for-profit educational sector.

“Student Veterans of America (SVA) has been committed to closing the 90/10 loophole since 2011,” said William Hubbard, VP of Government Affairs for the Student Veterans of America. “Prospective and current student veterans remain the target of predatory programs that deliver a low-quality education. We remain committed to transparency in higher education and helping student veterans become informed consumers. SVA supports closing this loophole and is pleased to be working with Congress to make that a reality.”

The American Legion passed a resolution at their 2017 National Convention in Reno, Nevada, stating, “The American Legion expresses its strong support for legislation and federal agency action to ensure better quality and student outcomes for institutions approved for use of Department of Veterans Affairs (VA) education benefits by excluding Department of Defense and VA funds from the 90/10 calculation.”

“The 90/10 loophole allows predatory schools to take advantage of the benefits survivors loved ones served and died for,” said Ashlynne Haycock, Manager for Education Services for the Tragedy Assistance Program for Survivors (TAPS). “Just like veterans, surviving family members have been taken advantage of by institutions of higher learning that want access to their educational benefits, only to be left with useless degrees and untransferable credits. If a school is not doing anything morally wrong, they should not object to the closure of the loophole. We must close the loophole to help ensure that surviving families and veterans have access to the highest quality education. These families have already sacrificed so much for this country, they should never be taken advantage of, and should be given every opportunity to pursue their dreams.”

“Just as the Military Order of the Purple Heart fights to expand veterans' educational opportunities as we did with the recently passed Forever GI Bill, we must also make sure that those opportunities are of the highest quality possible,” said Neil Van Ess, National Commander of the Military Order of the Purple Heart. “Closing the 90/10 loophole would be a big step toward achieving that goal, and we thank Senator Carper for introducing this important legislation.”

“In recent research by VES on the 90/10 loophole, we found that revenue has increased by 60% from military education benefits indicating high reliance on the GI Bill and Tuition Assistance benefits to stay in business,” said Tanya Ang, Director of Policy and Outreach for Veterans Education Success. “This is concerning, at best, and something must be done to ensure service members, veterans, and their family members are protected from the predatory practices of fraudulent institutions.”

“The 90/10 loophole has created a reality that unjustly wastes the money of American taxpayers and deprives veterans of the education benefits they have earned,” said Iraq and Afghanistan Veterans of America (IAVA) Legislative Director Tom Porter. “While closing the loophole is not the only solution, it is a significant step Congress should take to improve education outcomes for veterans. Education is the best tool veterans have to transition to civilian life and develop the skills to find a new career. IAVA is committed to ensuring that every veteran can take advantage of their full earned benefits. That means refusing to allow predatory for-profit colleges from targeting GI Bill benefits and failing to deliver on promised quality education.”

Organizations supporting the Military and Veterans Education Protection Act include: The American Legion, Veterans of Foreign Wars, Student Veterans of America, Iraq and Afghanistan Veterans of America, Vietnam Veterans of America, Paralyzed Veterans of America, Veterans Education Success, Tragedy Assistance Program for Survivors, Military Order of the Purple Heart, Military Officers Association of America, Blue Star Families, Military Child Education Coalition, Veterans for Common Sense, Non Commissioned Officers Association, VetsFirst, VetJobs, High Ground Veterans Advocacy, AMVETS, Wounded Warrior Project, The Retired Enlisted Association, Got Your Six, National Guard Association of the United States, Association of the United States Navy, Naval Enlisted Reserve Association, Non Commissioned Officers Association, National Military Family Association, Swords to Plowshares, Air Force Association and the Air Force Sergeants Association.

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