Published on 2012/06/01

For-Profit Colleges’ Military ‘Loophole’ Must Close

Goldie Blumenstyk of the Chronicle of Higher Education reported that the attorneys general for 21 states have called on Congress to close a loophole which they say are allowing for-profit institutions to use “high-pressure recruiting tactics” on military veterans.

The attorneys general, joined by a chief consumer-affairs official for a 22nd state, sent letters to the leaders of the House and Senate committees on education and veterans affairs. They argued that the “90/10” rule should be changed to include GI Bill and other education benefits for veterans in the 90-perent cap on the amount of annual revenue q for-profit college may receive from federal student-aid programs.

Under the current 90/10 rule, colleges are allowed to exclude veterans’ benefits and military tuition assistance from their 90% cap; such funds are included within the 10% nonfederal side of the calculation.

According to the letter, the current provisions allow for-profit colleges to count hundreds of millions of dollars in veterans’ benefits as nonfederal funds.

“Perversely,” the letter said, “schools are actually using the military benefits to leverage even more Title IV funds, since each $1 they obtain from DoD or VA sources allows them to obtain an additional $9 in Title IV funding.”

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