President Joe R. Biden signed a $1.9 trillion coronavirus relief bill last week, and in doing so, made a policy change long awaited by veteran students and their advocates – closing the 90/10 loophole.
The 90/10 rule, a part of the Higher Education Act, ensures for-profit colleges get at least 10% of their revenue from sources outside of government aid. But because of the wording, student aid from the U.S. Department of Defense – like Tuition Assistance or GI bill money – didn’t count as federal education funds.
That encouraged these institutions to heavily market to veterans and active service members, increasing their reliance on government funds and giving for-profits little incentive to innovate or improve education quality for consumers, their critics argue.
Now, schools will have to to attract at least 10% of their revenue by other means as the rule intended. The change will go into effect in 2023.
“The schools have now been put on notice,” said Veterans Education Success Vice President Tanya Ang. “… The hope is that the schools [will] actually really use this time to change and address and fix their marketing, outreach and quality and stop targeting veterans for their GI Bill dollars.”
The closure of the loophole was tucked into the American Rescue Plan Act of 2021, with a provision introduced in the U.S. House of Representatives by Democrats Rep. Mark Takano, chairman of the veterans’ affairs committee, and Rep. Bobby Scott, chairman of the education and labor committee. It was followed by a bipartisan deal struck in the Senate on March 5 by Democratic senators Tom Carper and Bill Cassidy and Republican senators James Lankford and Jerry Moran, ultimately approved by Senate Health, Education, Labor and Pensions Committee Chair Patty Murray and Ranking Member Richard Burr.
The veteran community has “spoken with such a strong and unified voice on this,” said Yan Cao, a fellow at the Century Foundation who researches higher education with a focus on for-profit colleges. “That force has really driven a bipartisan recognition that veterans are getting ripped off, that they care and that the loophole should be closed.”
