In an effort to protect taxpayers and college students, Congress instituted the 90/10 Rule in the Higher Education Act, saying that proprietary (for-profit) schools must derive 10 percent of their school revenue from non-Title IV funds (funds other than federal student loans and grants). The 90/10 Rule resulted from bipartisan concerns to stem fraudulent and abusive practices of for-profit institutions. The rule has curbed these practices, but has also created a loophole whereby for-profit schools can continue abusive practices targeting student veterans.
Student veterans who use the GI Bill, though, are victims of the “90/10 loophole”. Even though the GI Bill is a federally funded program, it is not counted under the 90/10 Rule, which has made student veterans vulnerable. For-profit schools deceptively target student veterans, bringing in sizable funds through the GI Bill, then offer low quality programs with no safeguards for when these schools shut down. As a result of these predatory practices, student veterans have inadvertently given for-profit colleges more taxpayer funded GI Bill funds than the public sector or non-profit sector.
To safeguard our veterans, Swords to Plowshares supports the Military and Veterans Education Protection Act. This legislation was developed as a response to the increasingly predatory nature of for-profit institutions and is meant to protect current service members and veterans from schools who only see them as a source of revenue. The legislation includes the GI Bill and other VA educational funds under the 90/10 Rule and by doing so forces these institutions to rely on other sources of non-VA funding. Institutions in violation of the 90/10 Rule for two years are not eligible to receive Title IV funds for the following two years, stripping for-profits of most of their funds and creating an effective deterrent from engaging in predatory practices.