Veterans groups are redoubling their efforts to restrict how much money for-profit colleges can accept from student veterans’ tuition payouts after indications that the industry is becoming even more reliant on their education benefits to stay in business.
On Thursday, a group of Democratic senators reintroduced legislation to close the “90/10 loophole” in federal funding rules for for-profit education institutions. Under current laws, schools cannot receive more than 90 percent of their tuition dollars from federal sources, but military and veterans’ education benefits are not counted against that cap.
Bill sponsor Sen. Tom Carper, D-Del., said that incentivizes those companies to target veterans and servicemembers, even if their degree programs are of questionable value.
“Some for-profits are good,” he said. “And some are awful. And some of them shouldn’t be in business, and go out of business, taking with them the hopes and dreams of thousands of veterans. They end up with an education that is worthless and squander their GI Bill benefits.”
“This has to stop,” he said.
A new report from the advocacy group Veterans Education Success (VES) released Thursday shows an increase in schools at the edge of that 90/10 ratio, and a sharp rise in the amount of Defense Department and Veterans Affairs dollars they take in.
In fiscal 2011, 325 for-profit schools saw more than 85 percent of their funding come solely from federal sources, but that didn’t include nearly $1.2 billion in defense education and GI Bill benefits. Two years later, 566 for-profit schools exceeded that 85 percent mark and took in more than $1.4 billion in VA and Defense Department benefits money.
“For-profit colleges are increasingly relying on veterans, servicemembers and military family members to pump up enrollment while they lose (other) funds,” said Tanya Ang, director of policy and outreach for VES.
Industry advocates have argued that a change in the rules is unnecessary and that the attraction to their programs is related to flexibility of study rather than misleading tactics.
And Republican lawmakers have largely agreed with them. Advocates have failed to gain significant traction on the loophole issue in recent years, even as costs related to veterans education benefits continue to climb.
Between the start of the 2009 school year and the end of classes in 2014, for-profit schools collected roughly $8.1 billion in post-Sept. 11 GI Bill benefits alone, more than 40 percent of the program’s total cost.
But supporters hope that changes to expand eligibility for veterans education benefits and a new sense of fiscal restraint on Capitol Hill in recent years will stir support for the reforms. Thirty veterans groups are backing Carper’s proposal, up significantly from similar efforts just a few years ago.
“We live in an era of scarcity when it comes to federal dollars,” said Sen. Richard Blumenthal, D-Conn. “We can never skim or scrounge at the expense of our veterans. But no one should profit at their expense, and at the expense of taypayers, in using these dollars in the way these for-profits are.”
The full VES report is available on the group’s website.