New report from the U.S. Department of Education highlights abusive schools that target veterans for recruitment, often for worthless degrees.
WASHINGTON—A new report released today from the Department of Education (ED) has found 17 institutions of higher learning (IHL) to be in violation of the “90/10 rule”, a ratio which is meant to limit how reliant an institution can be on federal financial aid. The rule requires that for-profit institutions must not derive more than 90% of their revenue from federal financial aid sources, meaning at least 10% of revenue must come from other avenues, such as students paying out of pocket. Notably, GI Bill funding and Department of Defense (DOD) Tuition Assistance do not count toward the 90%, in what is known as the 90/10 loophole.
Veterans should never be ripped off and defrauded out of their one shot at the GI Bill and its ticket to the American Dream.
– John Rowan, President of Vietnam Veterans of America
The report was released alongside new analysis which shows that nearly 200 for-profit schools would also be found in violation of the rule if revenue from the Department of Veterans Affairs (VA) and the Department of Defense were counted as financial aid.
The report and analysis are one portion of a broader effort to place more scrutiny toward abusive institutions which target veterans for recruitment, often for worthless degrees. Since at least 2012, Democrats in both chambers of Congress have pushed frequently for changes to be made to close the 90/10 loophole, and to start considering payments from DOD Tuition Assistance programs and GI Bill payments from VA as federal financial aid.
Veteran Service Organizations (VSOs) and advocacy groups wasted no time in addressing the report’s findings and analysis.
“Veterans should never be ripped off and defrauded out of their one shot at the GI Bill and its ticket to the American Dream,” said John Rowan, President of Vietnam Veterans of America (VVA). Organizations like VVA have made protection of younger generations of veterans the focus of their legislative and advocacy efforts.
This stance has brought larger VSOs together with veteran advocacy groups like Iraq and Afghanistan Veterans of America (IAVA) and High Ground Veterans Advocacy, in support of proposed changes to the 90/10 loophole. Potential action by Congress to cut GI Bill funding is one major factor in the concern.
“The GI Bill is key to the future success of the military,” said Kristofer Goldsmith, founder of High Ground Veterans Advocacy. “Today’s recruits are motivated by educational opportunities. We must ensure that educational benefits are not taken advantage of, or we risk having them chipped away by Congress.”
IHL’s like Southern Careers Institute in Austin, TX serve as some of the worst offenders in the industry, and exhibit outcomes endemic to the for-profit world of higher education. The Austin campus alone is over 98% dependent on federal financial aid, according to the ED report. According to VA’s GI Bill Comparison Tool, SCI has 22 veterans enrolled in the Austin campus. Veterans enrolled at SCI have a 0% graduation rate. Southern Careers Institute declined to comment for this story.
The 90/10 rule was originally devised as a way to ensure that IHL’s provided educational programs that were of high quality, and were provided by stable institutions. Significant portions of students would, in theory, be willing to pay for high quality educational programs out of pocket, rather than having U.S. taxpayers pay vast sums to for-profit educational institutions.
We must ensure that educational benefits are not taken advantage of, or we risk having them chipped away by Congress.
– Kristofer Goldsmith, founder of High Ground Veterans Advocacy
Yet in 2012, a 2-year investigation by the U.S. Senate Committee on Health, Education, Labor, and Pensions concluded that taxpayers were spending up to $32 billion per year on for-profit education through financial aid. While proposals to close the 90/10 loophole have repeatedly died in Congress, the report from ED is a sign of renewed focus on the issue in the waning days of the Obama Administration. The attempts to close the loophole may have been unsuccessful thus far, but support for limiting the practices is highly placed.
“These [GI Bill and DOD education] benefits were created in recognition of the selfless sacrifices made by our veterans and servicemembers, not to make them a target for predatory businesses,” said U.S. Secretary of Education John B. King Jr.
It remains to be seen whether efforts to limit overreliance on GI Bill and DOD education benefits will be a priority of the Trump Administration and the 115th Congress.
Michael D. Connolly, Lima Charlie News
Michael Connolly is a former Army Staff Sergeant who served in the Infantry, completing two combat tours to Iraq. He currently serves as the Director of Military and Veterans Affairs for the Smith School of Business at the University of Maryland-College Park. Michael is a member of the Truman National Security Project Defense Council. He graduated with an M.S. in Political Science from the University of Nebraska at Omaha.
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