BUSINESS JOURNAL: EDMC, for-profits could lose major funding source under Obama’s 2016 budget proposal
Career College Central Summary:
A proposal in President Barack Obama's 2016 budget that would close a loophole in G.I. Bill funding could spell trouble for for-profit education providers if approved by Congress.
What's at issue is the 90-10 rule, which prohibits for-profit colleges from receiving more than 90 percent of their revenue from Department of Education student aid, including grants and loans. The law, which was passed in 1998, aims to ensure for-profit colleges are not financed solely through federal Title IV funds and are capable of attracting students that either paid tuition themselves or used aid from other sources.
Where things get complicated is that under the current legislation, G.I. Bill benefits and Department of Defense Tuition Assistance are not counted in the 90 percent. While those are federal funds, they are counted in the 10-percent category.
Critics say counting G.I. Bill benefits in the 90-percent category has caused veterans to be aggressively targeted for for-profit colleges.
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