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Thomas R. Carper

11/14/2019 | Press release | Distributed by Public on 11/14/2019 12:09

Carper, Lankford, Cassidy, Tester Introduce First Ever Bipartisan Senate Bill to Protect Student Veterans by Closing the 90/10 Loophole

Protect VETS Act safeguards military and veteran students' hard-earned GI Bill benefits, holds predatory institutions accountable and saves taxpayer dollars

Bipartisan legislation supported by key veterans and military service organizations

WASHINGTON, D.C. - On the week of Veterans Day, U.S. Senator Tom Carper (D-Del.), led a group of bipartisan senators - Senators James Lankford (R-Okla.), Bill Cassidy, M.D. (R-La.) and Jon Tester (D-Mont.), Ranking Member of the Senate Committee on Veterans' Affairs - in introducing the Protect Veterans' Education and Training Spending (Protect VETS) Act of 2019. The Protect VETS Act is the first bipartisan bill introduced in the Senate that would protect military and veteran students by closing the 90/10 loophole and require for-profit schools to secure at least 10 percent of their revenues from sources other than taxpayers.

More than two decades ago, Republican President George H.W. Bush signed a bipartisan bill into law that limited how much federal funding for-profit schools may receive from taxpayers. Now called the 90/10 rule, this limit requires for-profit schools to obtain at least 10 percent of their revenues from non-federal sources. However, a loophole in the law excludes Department of Veterans Affairs (VA) and Department of Defense (DOD) education funds, like the Post-9/11 GI Bill and Tuition Assistance (TA), from being counted as federal funds. Some for-profit schools have exploited this 90/10 loophole by using aggressive recruitment practices and deceptive marketing to enroll servicemembers, veterans and other GI Bill beneficiaries. The Protect VETS Act would close the 90/10 loophole by counting VA and DOD funds as federal dollars.

Specifically, the Protect VETS Act would:

  • Close the 90/10 loophole by counting VA and DOD educational funds on the 90 percent side of the 90/10 formula rather than the 10 percent side.
  • Require proprietary schools to provide updated 90/10 data in their annual report to Congress.
  • Move to a system of tiered penalties for schools that violate the 90/10 Rule. Beginning the 2022-2023 school year, the penalties for violating the 90/10 Rule escalate over a three-year time period: (Year 1) no new VA and DOD student enrollments (this provision is modeled on existing VA regulations that protect the GI Bill); (Year 2) a total enrollment cap; and (Year 3) loss of access to federal funding for at least two years with the possibility of regaining eligibility after two years.
  • Provide an appeal process that grants high-quality proprietary institutions relief from penalties. This limited appeal process gives schools additional time to comply with the 90/10 Rule if they are serving military and veteran students and taxpayers well.
  • Add a caution flag to the GI Bill Comparison Tool when an institution violates 90/10. This would better allow prospective or current military and veteran students to readily identify potential bad actors.
  • Apply the new 90/10 Rule for a limited time to for-profit schools after they convert to non-profit status.

'My own life was changed because of the GI Bill. After returning from three tours of duty in Southeast Asia during the Vietnam War, I was able to use my Vietnam-Era GI Bill benefits at the University of Delaware to pursue a master's degree. Like many veterans before me, including my dad, my career wouldn't have been possible without the GI Bill. I am deeply grateful to the people of this country for investing in me, and my desire to make sure that all our servicemembers receive a quality education that allows them to pursue their dreams is personal to me,' said Senator Carper. 'Unfortunately, for too long, bad-actors in the for-profit sector have exploited a loophole in the system - known as the 90/10 loophole - and taken advantage of our veterans and their generous education benefits. To be clear, not all for-profit schools are bad actors. In fact, many are doing a good job. However, I believe that one veteran misled or mistreated by a for-profit school is one veteran too many. In response, I believe it's long past time for Congress to heed the advice of our nation's Veterans Service Organizations and close the 90/10 loophole. Our commitment to care for our veterans is a sacred obligation and ensuring their hard-earned GI Bill benefits are safeguarded is part of that sacred obligation. The common sense and bipartisan reforms in the Protect VETS Act will finally close the 90/10 loophole and help better protect military and veteran students, while also saving taxpayer dollars.'

'Our veterans have served our nation selflessly, and we made a promise to assist them as they transition to civilian life after service,' said Senator Lankford. 'This bill puts reasonable protections in place that are fair to veterans, taxpayers, and schools. This bill is a bipartisan solution to put the best interest of our veterans first while also recognizing that the majority of for-profit post-secondary institutions, but unfortunately not all offer quality programs that accommodate the needs and unique skill sets of our veterans and servicemembers. Most importantly, the bill continues to fulfill a promise we made to those who have served and protected our nation and our freedoms. I look forward to working with my colleagues to ensure this commonsense and bipartisan bill is enacted into law.'

'The Protect VETS Act holds institutions accountable,' said Dr. Cassidy. 'Veterans deserve to know that their GI benefits lead to a quality education.'

'For-profit schools are exploiting the 90/10 loophole, allowing bad actors to take advantage of the system and our veterans,' said Senator Tester. 'This bipartisan bill will close this loophole, save taxpayer dollars, and ensure our country's men and women in uniform get the education they earned- without unnecessary financial headaches.'

Since 2009, more than 1.7 million service members, veterans and their families have used the Post-9/11 GI Bill to finance their higher education. Unfortunately, some of the largest recipients of Post-9/11 GI Bill funds have closed down after years of delivering poor outcomes to students and taxpayers. Two now-shuttered for-profit colleges, ITT Technical Institutes and Corinthian Colleges, received over $1 billion in Post-9/11 GI Bill benefits before suddenly closing their doors, leaving nearly 7,000 student veterans and every American taxpayer in the lurch. In 2016, following the closure of ITT Technical Institutes, Senator Carper released a report highlighting how school closures harm veterans using the GI Bill to pay for their education.

Many for-profit institutions provide quality education and training programs for veterans and servicemembers, and allow access to an education for non-traditional students. However, over the years there have been some bad actors in the sector resulting in too many veterans and service members that have exhausted their hard-earned benefits at now-defunct schools. In response, a broad coalition of Veterans Service Organizations (VSOs) and other advocacy groups are rallying behind this bipartisan, common-sense effort to protect military and veteran students, as well as taxpayers, from bad actors in the for-profit educational sector while also providing a fair process for good schools to continue serving military and student veterans.

'The VFW supports the Protect VETS Act, and applauds Senator Carper and his steadfast efforts to eliminate financial loopholes in higher education that could be used to prey upon student veterans. Senator Carper, a VFW Life Member, has worked tirelessly to bring about protections for veterans, military members, and their families during their pursuit of higher education,' said Pat Murray, Deputy Director for Veterans of Foreign Wars' (VFW) National Legislative Service. 'The VFW would like to thank Senator Carper, along with his colleagues Senators Cassidy, and Lankford for their bold bipartisan actions to protect the interests of student veterans.'

'The American Legion takes no issue with online learning or alternatives to traditional college education. But we do take issue with companies that separate veterans from their hard-earned benefits while failing to provide quality education and training. We are proud to see Republican and Democratic Senators put politics aside to stand up for our veterans and close the loophole that allows unscrupulous institutions to target the GI Bill, and call on the rest of the Senate to join Senator Carper in sponsoring the Protect VETS Act,' said James W. 'Bill' Oxford, National Commander of The American Legion.

'For too long, bad actor schools have used a loophole in the 90-10 rule to evade and undermine a cap on federal financial aid by aggressively targeting student veterans, service members, families, and survivors for their earned educational benefits,' said Jared Lyon, National President and CEO of Student Veterans of America. 'This bipartisan, common sense proposal marks a watershed moment in a years-long effort to close this abusive loophole. SVA supports this legislation and will continue to work with all sides to finally close this loophole and put the needs of students before profits.'

'We are thrilled to finally have a real chance to close the 90-10 loophole and remove the target from the backs of veterans and servicemembers,' said Carrie Wofford, President at Veterans Education Success. 'Closing the 90-10 loophole has been a priority for the nation's leading military and veteran service organizations for a decade. This bipartisan compromise bill makes that priority a real possibility. We're very grateful for the leadership by Senators Carper (D-DE), Cassidy (R-LA), Lankford (R-OK) and Tester (D-MT) in introducing this common-sense bipartisan solution.'

'TAPS is grateful to Senators Carper, Lankford and Cassidy for introducing the first bipartisan 90/10 legislation that not only addresses the 90/10 loophole but focuses on the conversion process of schools from for-profit to non-profit status,' said Ashlynne Haycock, Deputy Director of Policy and Legislation for Tragedy Assistance Program for Survivors (TAPS). 'Closing the loophole has long been a priority for TAPS, and we look forward to seeing this much needed legislation passed into law to best protect veterans, survivors, and all military connected students.'

'It is important to protect the interests of military-connected students with commonsense policy, and MOAA is committed to defending the GI Bill from any attempt to diminish the promise it offers to our servicemembers and their families using the program to advance their education; closing the 90-10 loophole is an important and necessary step in keeping the promise,' said Lt. Gen. Dana Atkins, President and CEO of the Military Officers Association of America. 'Thanks Senators Carper, Lankford and Cassidy for addressing this issue in a bipartisan fashion.'

'For far too long, predatory for-profit institutions of 'higher learning' have lined the pockets of their top administrators and investors in cahoots with the 90/10 loophole ignored by most Senators and Representatives - until now,' said John Rowan, National President of Vietnam Veterans of America (VVA). 'With the enactment of this legislation, the open cash spigot will finally be turned off.'

'The Post-9/11 GI Bill is one of the most popular veteran benefits available. An incredible 93% of Iraq and Afghanistan Veterans of America's (IAVA) veteran members surveyed reported that they have either used their GI Bill benefits, intend to use them or will transfer them to a dependent. However, the GI Bill is still being exploited by underperforming and bad acting schools who take advantage of veterans' benefits and often leave veterans stuck with unnecessary debt and a subpar education,' said Jeremy Butler, CEO of Iraq and Afghanistan Veterans of America (IAVA). 'Closing the 90/10 loophole has been a critical part of IAVA's work to defend the GI Bill from bad actors and we are proud to support this important legislation.'

'For too long, military-connected students have been heavily pursued by bad-actor institutions for access to earned educational benefits through the Department of Defense (DoD) and Department of Veterans Affairs (VA) due to a loophole in the classification of funds,' said the National Military Family Association. 'The National Military Family Association (NMFA) is encouraged to see a bipartisan approach to closure of the 90/10 loophole through the Protect VETS Act. The Act provides a thoughtful transition period for institution compliance while ensuring military-connected students receive a quality education they deserve.'

In May 2019, the following 37 organizations signed a letter of support for closing the 90/10 loophole: Air Force Sergeants Association, Army Aviation Association of America, The American Legion, AMVETS, Armed Forces Retirees Association, Association of the United States Army, Association of the United States Navy, Blue Star Families, Chief Warrant and Warrant Officers Association, Fleet Reserve Association, High Ground Veterans Advocacy, Iraq and Afghanistan Veterans of America, Ivy League Veterans Council, Jewish War Veterans of the USA, Military Child Education Coalition, Military Officers Association of America, Military Order of the Purple Heart, Non Commissioned Officers Assn. of the United States of America, National Military Family Association, San Diego University Veterans Law Clinic, Service to School, Student Veterans of America, Service Women's Action Network, Swords to Plowshares, Tragedy Assistance Program for Survivors, Travis Manion Foundation, The Military Chaplains Assn. of the USA, The Mission Continues, The Retired Enlisted Association, United States Army Warrant Officers Association, U.S. Coast Guard Chief Petty Officers Association & Enlisted Association, Veterans Education Success, Veterans for Common Sense, Veterans Student Loan Relief Fund, Vets First, Vietnam Veterans of America.

The bill text can be found here.