A group of 20 U.S. senators, including Minnesota’s Al Franken, sent a letter to Department of Education Secretary Arne Duncan last week asking him to assist in closing a loophole that allows for-profit colleges to count GI Bill benefits as nonfederal funding in their revenue breakdowns.
It’s called the 90/10 rule. It’s intended to cap federal funding for for-profit colleges at 90 percent of their revenue. The other 10 percent needs to come from sources other than the federal government. But right now, tuition assistance for service members and the GI Bill are not included in the calculation.
The letter raises concerns that active-duty service members and veterans have been targeted by some for-profit colleges because of the attractiveness of access to their GI Bill funding.
Among the top for-profit recipients of Post-9/11 GI Bill funds, seven of the eight companies are currently under investigation for deceptive and misleading recruiting or other possible violations of state and federal law.
According to a 2013 analysis from the Department of Education obtained by the Center for Investigative Reporting, 133 for-profit colleges received more than 90 percent of their revenues from taxpayers when Department of Defense and Veterans Affairs benefits were counted as federal education assistance. Another 292 institutions received more than 85 percent.
President Obama’s 2016 budget proposes closing the 90/10 loophole, but the letter asks that the Department of Education include the amount and percentage of institutions’ revenues that are received from all federal educational programs. That data currently is not public.
Last year, Minnesota Attorney General Lori Swanson sued the Woodbury-based Globe University and its sister school, the Minnesota School of Business, accusing the schools of using high-pressure sales tactics to mislead criminal-justice and other students about their job prospects after graduation. Many of them were veterans using their GI Bill benefits.