Higher education loophole closed to protect veterans from being ‘nothing more than dollar signs’

A loophole in the 90/10 rule allowed for-profit colleges to use G.I. Bill benefits to receive additional federal student aid for veterans and turn higher profits.

The American Rescue Plan Act closed the loophole, and U.S. Rep. Abigail Spanberger, who voted for the legislation, applauds new regulations to increase protections for veterans and servicemembers from deceptive recruitment practices.

November is Military Family Month.

According to a press release, the loophole in the 90/10 rule in the Higher Education Act permitted for-profit colleges to use federal military education benefits to offset a cap on federal student aid that the schools otherwise must handle. The law requires for-profit colleges to obtain at least 10 percent of revenue from non-federal sources, but the 90/10 loophole allowed the colleges to count federal dollars outside of the federal student aid system, including G.I. Bill benefits. For every $10 in federal benefits for veterans and servicemembers, a school could receive $90 in U.S. Department of Education (DOE) aid without securing any private investment.

“For far too long, for-profit colleges have seen our veterans and servicemembers as nothing more than dollar signs,” Spanberger said in the press release. “Congress enacted the 90/10 rule to ensure that for-profit colleges offered an education for which students were willing to pay. But this loophole has allowed many revenue-earning schools to survive only by an influx of federal payments — and do so on the backs of our Veterans and servicemembers. I was proud to vote for the American Rescue Plan Act to hold accountable schools that care more about turning a profit than preparing students for success, and I applaud the Department of Education for moving to put an end to these predatory practices — because all Americans who have served our country in uniform deserve a high-quality education.”

The American Rescue Plan Act was signed into law by President Joe Biden in March 2021. Last week, according to the press release, the U.S. DOE announced final regulations to implement change. Institutions of higher education will no longer be permitted to count federal military education benefits toward the 10 percent requirement of revenue. w regulations will prevent for-profit colleges from aggressively targeting veterans and servicemembers with marketing and recruitment.