Commentary: POST Act would prevent for-profit schools from exploiting troops, veterans

Commentary: POST Act would prevent for-profit schools from exploiting troops, veterans

By: Sen. Dick Durbin    1 day ago

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For-profit colleges — notorious for predatory practices, misleading advertising and aggressive recruiting — enroll only about 9 percent of all post-secondary students in America but take in 17 percent of all U.S. Department of Education federal student aid funds. They are some of the most heavily subsidized private businesses in the country.

A federal law, known as the 90/10 Rule, is meant to ensure that for-profit colleges and universities are not overly dependent on the federal government for their operation and that others, besides federal taxpayers, have skin in the game. The law prohibits for-profit colleges and universities from deriving more than 90 percent of their revenue from federal taxpayers. The other 10 percent must come from nonfederal sources, like tuition payments or private donors.

But a loophole in the law treats only the Education Department’s federal student aid as federal funds; it doesn’t count billions in federal education investments through the Department of Veterans Affairs’ GI Bill and Department of Defense tuition assistance programs as federal revenue. As a result, the law actually incentivizes for-profit colleges and universities to aggressively recruit and target veterans, service members and their families By enrolling large numbers of these students, predatory for-profit colleges take in more than 90 percent of their revenue from federal taxpayers while still complying with the law.

Because of this loophole, 193 institutions, including some of the largest recipients of GI Bill benefits, received more than 90 percent of their revenue from federal taxpayers, according to data released last year by the Education Department — in response to a request by myself, Sen. Tom Carper of Delaware and 18 other Democratic senators. That amounts to $8 billion cumulatively.
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To protect veterans, service members, their families, students, and our taxpayer dollars, I have introduced the Protecting Our Students and Taxpayers, or POST, Act, which would reinstate the original ratio — 85/15 — and change the definition of what counts as federal revenue so that it includes all federal money, like GI Bill and TA funds.
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