As Republicans Aim To Eliminate Regulations On Predatory For-Profit Schools, Durbin & Cohen Introduce Legislation To Crack Down On The Industry
While congressional Republicans are using their reconciliation bill to eliminate protections for student veterans, Durbin and Cohen are introducing 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 reintroduced bicameral legislation that would help deter the for-profit college industry from aggressively recruiting veterans, service members, and their families. The Protecting Our Students and Taxpayers (POST) Act would reinstate the 85/15 rule, which would prohibit for-profit colleges from receiving more than 85 percent of their revenue from the federal government, including from Department of Veterans Affairs GI Bill and Department of Defense (DOD) Tuition Assistance benefits.
The current federal 90/10 rule is a provision in the law that bars for-profit colleges from deriving more than 90 percent of their revenue from federal sources. The other 10 percent needs to come from sources other than the federal government. The rule was instituted to prevent schools from becoming overly dependent on taxpayer dollars.
A previous loophole in the law allowed for-profit colleges to consider all federal benefits that were not administered by the Department of Education (ED)—such as DOD Tuition Assistance benefits and the Post-9/11 GI Bill—as private, non-federal revenue. This loophole allowed institutions to receive as much as 100 percent of their revenue from federal taxpayers, incentivizing for-profit colleges to prey on veterans and service members.
While this loophole was closed in the American Rescue Plan, House Republicans’ budget reconciliation bill would eliminate the 90/10 rule despite the nonpartisan Congressional Budget Office (CBO) estimating that the rule would save taxpayers $2 billion over 10 years. Eliminating the 90/10 rule would be a giveaway to predatory for-profit schools that have historically exploited veterans and service members, stranded students with worthless degrees and mountains of debt, and left taxpayers to pay the price.
“As congressional Republicans scheme about new ways to remove necessary protections for student veterans – including adding a provision to eliminate the 90/10 rule in their big, ugly bill – Congressman Cohen and I are introducing the POST Act to ensure that veterans are protected from the for-profit college industry,” said Durbin. “The POST Act would reinstate the 85/15 rule so that the for-profit college industry cannot take advantage of taxpayer dollars or student veterans. While Republicans want to allow for-profit colleges to siphon off federal student aid unchecked, I will always fight to hold for-profit colleges accountable for their predatory tactics that leave students drowning in debt with a near worthless degree.”
“The federal government supports a significant portion of financial assistance for higher education but it is critical that for-profit educational institutions rely on some private sources of revenue for tuition, books and fees. Our veterans and service members should not be hounded by high-pressure sales tactics like those used by the now-defunct Trump University just because they are eligible for assistance,” said Cohen. “I have been proud to work with Senator Durbin over several Congresses to get the public-private formula for higher education assistance right. This bill accomplishes that goal.”
To better protect students and our federal taxpayer dollars, the POST Act would:
- Reinstate the original federal revenue cap of 85 percent on for-profit colleges, creating an 85/15 rule. In the 2022-2023 school year, for-profit colleges received nearly $15 billion in federal student aid, and during that same school year, more than 126 for-profit colleges received more than 85 percent of their revenue from federal sources;
- Align the new 85/15 rule to the current 90/10 rule that was passed in the American Rescue Plan Act and the Department of Education’s regulations;
- Count institutional loans in the calculation of federal revenue sources;
- Eliminate a for-profit college’s eligibility to receive federal funding after one year of noncompliance instead of the three consecutive years it now takes; and
- Require a for-profit college that loses federal funding eligibility to meet all eligibility and certification requirements for a minimum of two years before regaining eligibility.
Along with Durbin, the POST Act is cosponsored by U.S. Senators Jack Reed (D-RI), Richard Blumenthal (D-CT), Elizabeth Warren (D-MA), Mazie Hirono (D-HI), Angus King (I-ME), Tina Smith (D-MN), and Jeff Merkley (D-OR).
The POST Act has earned the endorsement of The Institute for College and Access, Paralyzed Veterans of America, EdTrust, American Federation of Teachers, National Educational Association, Young Invincibles, National Association for College Admission Counseling, Consumer Action, National Consumer Law Center (on behalf of its low-income clients), National Association of Consumer Advocates, National Consumers League, and Consumer Federation of America.
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