Attorneys General: Congress Must Stop For-Profits from Exploiting Service Members and Veterans

Share this

Last month, a group of 21 state attorneys general and the top consumer advocate for the state of Hawaii sent a letter to Congress urging members to fix a loophole (called the 90/10 rule) that incentivizes for-profit colleges to exploit American service members and veterans. Under current law, for-profit colleges are required to derive at least 10 percent of their revenue from non-federal sources, but they can count veterans’ benefits and military tuition assistance dollars as non-federal funds. This loophole, “is creating high-pressured enrollment tactics that are directly targeting our veterans who are returning from battle and their families,” says Jack Conway, attorney general of Kentucky.

The AG's letter is not the first time the 90/10 rule has come under scrutiny. In March, Sen. Tom Carper (D-Del.) held a hearing on the topic after the Government Accountability Office released a report detailing abuses in recruitment and enrollment by for-profits. Sens. Dick Durbin (D-Ill.) and Tom Harkin (D-Iowa) have introduced the POST Act, which, among other things, classifies veterans’ education benefits and military tuition assistance as federal money. At the Consumer Financial Protection Bureau, Holly Petraeus has advocated changing the 90/10 rule as part of her work on behalf of service members.

The 90/10 rule was intended to protect students by requiring that institutions show, if only minimally, that they offer an educational product people are willing to pay for without federal assistance. The rule also was designed to protect taxpayers by promoting accountability for how federal government funds are spent. Unfortunately, categorizing Department of Defense benefits for our service members as non-federal funds, though they clearly come from the federal government, undercuts both of these goals and has created an opportunity to exploit those who put their lives on the line for our country. They and American taxpayers deserve better. Fixing the 90/10 rule, as the attorneys general urge, is an important step toward ensuring veterans get the high-quality education they earned through their military service, and that taxpayers’ dollars are used responsibly.

— Jim Davy