Congress invited predatory for-profit colleges to bleed military veterans of education aid — and give them nothing in return — when it wrote a loophole into rules that govern how federal student aid streams are classified.
It comes as welcome news that the loophole was closed as part of the pandemic recovery bill signed into law this month.
Still, there is more that the Biden administration needs to do to protect veterans, and the American public, from companies that earn their profits by stripping students of federal education dollars while giving them valueless degrees.
That means reversing, as quickly as possible, Trump-era rules that benefited the for-profit college industry at the expense of the public. Beyond that, the Department of Veterans Affairs and the Department of Education need to wield their existing authority to cut off federal funds to predatory schools.
The recently closed loophole relates to a provision known as the 90/10 rule. As written in 1998, it required for-profit schools to get at least 10% of their revenue from sources other than federal student aid. The measure was intended to prevent federal aid from serving as the sole source of money for for-profit schools that were unable to attract private dollars. But Congress thwarted this common-sense goal by allowing the colleges to count some forms of federal aid — including G.I. Bill education benefits and Department of Defense Tuition Assistance — as privately raised.
This maneuver turned military veterans into what a Senate report called "dollar signs in uniform."
The new version of the 90/10 rule will require for-profit schools to get at least 10% of their funding from "nonfederal" sources.
FROM AN EDITORIAL IN THE NEW YORK TIMES