House Subcommittee Debates Funding Restrictions for For-Profit Colleges Enrolling Veterans – NASFAA
A House subcommittee on veterans affairs held a hearing Wednesday to discuss 18 draft bills related to education—including legislation that would impose new funding restrictions on for-profit colleges enrolling veterans.
For-profit institutions are prohibited from collecting more than 90% of their revenue from federal aid programs, otherwise known as the “90/10” rule. Currently, GI Bill benefits are not defined as federal student aid for this purpose, and are therefore considered private sources of revenue and contribute to an institution’s 10% of the ratio. Reps. Mike Levin (D-CA), chairman of the subcommittee, and Mark Takano (D-CA) proposed legislation to discontinue what they dubbed “this 90/10 loophole.”
“This loophole makes veterans a target for low-quality institutions that are unable to attract non-federal sources of funding,” Levin told the committee. “These institutions often use deceptive marketing techniques and are financially unstable, placing veterans at risk of losing their invested time, effort, and benefits due to a closure.”
Levin said that officials from the Department of Veteran Affairs (VA) told the committee in previous hearings that VA does not have the authority to mandate that institutions count GI Bill benefits as federal funds. His proposed legislation grants VA this oversight ability.