INTERNATIONAL BUSINESS TIMES: For-Profit Colleges’ 90/10 Loophole Latest Target For Democrats With Military And Veterans Education Protection Act
Career College Central Summary:
Three Democratic senators have introduced legislation that would close a loophole allowing for-profit colleges to take in increased amounts of federal money by collecting veterans' tuition. Sens. Tom Carper of Delaware, Dick Durbin of Illinois and Richard Blumenthal of Connecticut formally announced their Military and Veterans Education Protection Act on Wednesday.
"As you well know, some for-profit colleges lure veterans into deals that fail them and do not provide them with the education and the qualifications they think they are going to receive," they wrote in a letter to Veterans Affairs Secretary Bob McDonald earlier this week. “Ultimately, the victims are not just those veterans but also taxpayers because it is taxpayer money that often is lost."
The bill aims to stop for-profit colleges from exploiting a technicality in a government rule mandating that they receive no more than 90 percent of their revenue from federal sources. Often called the 90/10 rule, the law doesn't designate military and veteran educational assistance as federal funds. For-profit colleges, then, can take in money from the GI Bill and other aid programs through the "90/10 loophole." For example, the recently shuttered Corinthian Colleges Inc. collected more than $180 million in Post-9/11 GI bill dollars, according to a news release.
The Democrats want to stop this as part of their efforts to regulate for-profit schools, which they've called out in recent years for predatory lending and rigged job placement rates. Just Tuesday, a federal court upheld a policy from the Education Department requiring for-profit colleges to prove their students were making enough money after graduation to pay off their loans.
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INTERNATIONAL BUSINESS TIMES