Home News Durbin, Cohen: It Is Time For Congress To Close Loophole That Encourages For-Profit Colleges To Target Veterans & Service Members

Durbin, Cohen: It Is Time For Congress To Close Loophole That Encourages For-Profit Colleges To Target Veterans & Service Members

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Members Introduce Bicameral Legislation To Reinstate The 85/15 Rule To Require For-Profit Colleges To Bring In More Revenue From Non-Federal Sources

WASHINGTON – U.S. Senate Democratic Whip Dick Durbin (D-IL) and U.S. Representative Steve Cohen (D-TN-09) today introduced bicameral legislation that would help put an end to the for-profit college industry’s aggressive recruiting of veterans, service members, and their families. The Protecting Our Students and Taxpayers (POST) Act would prohibit for-profit colleges and universities from receiving more than 85 percent of their revenue from the federal government and change the calculation of federal revenue to include all federal funds, including Department of Veterans Affairs GI Bill and Department of Defense Tuition Assistance benefits.

The current federal 90/10 rule is a provision in the law that bars for-profit colleges and universities from deriving more than 90 percent of their revenue from the U.S. Department of Education’s federal student aid programs. The other 10 percent needs to come from sources other than the federal government. The purpose of this rule is to ensure that schools are not overly dependent on taxpayer dollars.

Because of the way the law is written, veterans’ and active duty service members’ federal education benefits – such as G.I. bill education benefits and the Department of Defense’s tuition assistance funds – do not currently count toward the 90 percent. As a result, for-profit colleges can receive an unlimited percentage of their revenue directly from federal taxpayers by enrolling large numbers of these students. The law gives for-profit colleges a financial incentive to aggressively recruit and enroll veterans, service members, and their families to their programs.

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