During IAVA’s Storm the Hill 2012, we asked Congress to protect the GI Bill by supporting legislation that would prevent predatory for-profit schools from aggressively targeting veterans. On Tuesday, the Attorneys General from 21 states asked Congress to do the same by closing the loophole in the 90-10 rule.
The 90-10 rule was created to allow the free market to regulate for-profit schools by preventing them from being entirely government funded. Its predecessor (the 85-15 rule) helped prevent abuses to the WWII GI Bill and we must take a stand now to protect the Post-9/11 GI Bill.
The 90-10 rule says that 90% of revenue for a for-profit school can come from government funds. Due to a loophole in the law, military and veterans benefits fall in the 10% of revenue that is supposed to come from private sources. This puts a target on every veteran’s back. Every veteran that a for-profit school recruits is worth nine more students using federal financial aid.
Although the 90-10 rule is sound policy based on 50 years of successful regulation that was upheld by the Supreme Court, the for-profit school industry is using veterans’ own Post-9/11GI Bill dollars to lobby congress against their interests. They are flooding millions of dollars to campaigns to ensure that these bills never see a vote.
Most for-profit colleges are valued participants in higher education. They provide veterans with a service that is not widely available in traditional non-profit universities, including online and vocational programs that offer highly technical degrees that are largely unavailable at traditional non-profit, public and private colleges. Unfortunately, it’s difficult to separate the good actors from the bad actors in for-profit education. Many for-profit schools are excessively expensive, plagued with high drop out rates, leave students with massive debt for worthless degrees and engage in very aggressive and sometimes deceptive marketing and recruiting practices targeted at veterans. Although less than 20% of veterans are attending for-profit schools, they are taking over a third of all GI Bill funds.
Clearly, this is a threat to the future of the GI Bill. As the deficit reduction becomes more of a priority in Washington, Congress will be looking to cut expensive benefits that do not provide enough of a return on investment. Congress already cut break pay and there are whispers of limiting future cost of living increases to the GI Bill. Drop out rates at for-profit schools are above 60% on average. Even though they account for 13% of all college students, they produce half of all loan defaults. We must act now to ensure that there is some measure of accountability in this industry. IAVA will continue to fight to protect the GI Bill. In 2012 we need to close the 90-10 loophole, and pass legislation that establishes a robust consumer education program.
You can help. Contact your members of Congress and urge them to cosponsor S. 2116 in the Senate and H.R. 4055 in the House. Time is running out on the 112th Congress and we must act now to ensure that veterans are able to safely use their GI Bill to receive the quality job training that they have earned.
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