Senate bill aims to protect student veterans from 'predatory' for-profit colleges

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Photo credit Office of the Secretary of Defense Public Affairs

Senators introduced a bill aimed at protecting student veterans from "predatory" for-profit colleges, closing a loophole that they say led to schools targeting vets and service members. 

The Protect Veterans’ Education and Training Spending (Protect VETS) Act aims to close the so-called 90/10 loophole, a provision of the 90/10 law that excludes Department of Veterans Affairs and Defense Department education funding such as the Post-9/11 GI Bill from being counted as "federal funds." This led some for-profit schools to "exploit" that provision, using "aggressive recruitment practices and deceptive marketing" to enroll as many service members and vets as possible, according to Senators Jon Tester, D-Mont., Tom Carper, D-Del., James Lankford, R-Olka., and Bill Cassidy, R-La.

The bill would close that loophole, counting VA and Defense Department funds as federal dollars and requiring for-profit schools' funding to be made up of at least 10 percent non-taxpayer dollars. 

“Predatory for-profit schools are exploiting the 90/10 loophole, taking advantage of the system and our veterans,” Tester, ranking member of the Senate Veterans’ Affairs Committee, said in a statement. “Our bipartisan bill puts forward a commonsense solution that will close this loophole and hold money-grubbing institutions accountable while saving taxpayer dollars. Congress has a responsibility to put our men and women in uniform — and their benefits — first. That’s why I’ll be fighting tooth and nail to help keep the wolves at bay, so veterans get the education they deserve.”

The bill would: 

  • Close the 90/10 loophole by counting Defense and VA funds on the 90 percent side of colleges' 90/10 formula instead of the 10 percent side; 
  • Require schools to provide updated 90/10 data in their annual reports to Congress;
  • Move to a system of tiered penalties for schools that violate the 90/10 Rule. Beginning in the 2022-23 school year, penalities for schools violating the rule will escalate over a three-year period will include not allowing any new veterans or service members using their benefits to enroll, a total enrollment cap and an eventual loss of access to federal funding for at least two years;
  • Provide an appeals process for high-quality colleges for relief from those penalties;
  • Add a caution flag to the GI Bill Comparison tool if a college violates the rule; 
  • Apply the new rule for a limited time to for-profit schools if they convert to nonprofit status. 

Tester said the bill was inspired by "too many veterans and service members who have exhausted their hard-earned benefits at now-defunct schools" and that the measure will "protect military and veteran students, as well as taxpayers from bad actors in the for-profit educational sector while also providing a fair process for good schools to continue serving military and veteran students."

Reach Abbie Bennett: abbie@connectingvets.com or @AbbieRBennett.
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