Congresswoman Jackie Speier

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Reps. Speier, Takano, and Jones Introduce Bipartisan Bill to Protect Veterans and Servicemembers from Predatory For-Profit Colleges by Closing the “90/10 Loophole”

November 5, 2015
Press Release
“The existing law encourages for-profit colleges to target and prey on servicemembers and veterans,” said Speier. “For these colleges, it’s all about the money and not about the quality of education. The generous GI Bill has created a perverse incentive for for-profit colleges to target and market excessively to vets. Marketers from the University of Phoenix have even confessed that they were required to ‘surreptitiously’ enter military bases to reach wounded servicemembers. That’s appalling. The winners here are for-profit colleges, because taxpayers pick up the tab, and the people who lose are veterans who served in Iraq and Afghanistan, only to be robbed of their chance to earn a real degree and to find themselves without genuine career prospects. As one servicemember explained, ‘I joined the military at 19 and got out at 27. You get out of the Marine Corps and you think people are being honest with you. You don’t think people are there to pull the wool over your eyes.’”

The “90/10 loophole” has led to aggressive, high-pressure sales tactics targeting veterans. As Holly Petraeus of the Consumer Financial Protection Bureau noted, “This gives for-profit colleges an incentive to see service members as nothing more than dollar signs in uniform, and to use aggressive marketing to draw them in.” Seven of the eight top for-profit recipients of Post-9/11 GI Bill funds are currently under investigation for deceptive and misleading recruiting or other possible violations of state and federal law. In the last month alone, the Department of Defense banned the University of Phoenix (#1 recipient of G.I. Bill funds) from U.S. military bases, and ITT Tech (#2 recipient of G.I. Bill funds) has come under federal investigation and stopped new student enrollment at several campuses. The Military and Veterans Education Protection Act would close this “90/10 loophole” in order to protect military and veteran students, as well as taxpayers, by ensuring that for-profit schools obtain at least 10 percent of their revenues from non-federal funding sources.

“Veterans and servicemembers deserve educational opportunities that advance their skills and career goals, not the interests and revenue targets of for-profit corporations,” said Takano. “Fixing the 90/10 loophole will remove the incentive that encourages for-profit colleges to aggressively recruit veterans’ and servicemembers, which is often done without regard for the financial burden many programs place on students and taxpayers.”

“Our veterans have put their lives on the line to defend our freedom and have made so many sacrifices,” said Jones. “For-profit educational institutions that take advantage of our veterans and Defense Department education funds are guilty of a double wrong: robbing veterans of a chance at a true education, and stealing from the taxpayer. It’s high time Congress closes the 90-10 loophole so that our veterans can get the quality education they deserve.”

"After serving our country, our nation's veterans have earned the right to attain a high-quality, affordable education here at home with the help of the Post-9/11 G.I. Bill," said Carper. "While not every for-profit college is a bad actor, one veteran mistreated is one veteran too many. We need to use common sense here. It doesn’t make sense for taxpayers to send veterans to for-profit schools that can be 100 percent subsidized using taxpayers’ dollars. Closing the 90/10 loophole is a common sense approach that demonstrates we’re serious about improving education outcomes for our veterans and that we’re serious about protecting taxpayers."

The Military and Veterans Education Protection Act is endorsed by the Iraq and Afghanistan Veterans of America (IAVA), Student Veterans of America (SVA), Veterans Education Success, National Guard Association of the United States (NGAUS), Paralyzed Veterans of America, VetJobs, VetsFirst, Vietnam Veterans of America, Military Officers Association of America (MOAA), Blue Star Families, American Federation of Teachers (AFT), National Education Association (NEA), The Institute for College Access & Success (TICAS), The Education Trust, National Association of Independent Colleges and Universities (NAICU), Young Invincibles, National Association for College Admission Counseling.

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