The 90/10 rule, a provision of the Higher Education Act, regulates the amount of revenue that for-profit schools can receive from federal student aid. The rule aims to ensure that the federal government is not the sole source of a college’s revenue, thereby preventing schools from profiting solely from federal aid.
The current 90/10 rule requires for-profit schools to obtain at least 10% of their revenue from non-federal sources. However, prior to 2023, a loophole allowed for-profit schools to obtain up to 90% of their revenue from federal student aid. This loophole was closed in 2023 after years of lobbying by veterans advocates, who argued that it allowed scam schools to target veterans with deceptive recruiting practices.
Now, a sweeping bill being pushed through Congress by Republicans would repeal the 90/10 rule altogether and replace it with a new system that veterans groups say would leave veterans vulnerable to scams once more.
What’s at Stake
- Repealing the 90/10 rule would cost the government an estimated $1.6 billion over 10 years.
- Under the new system, for-profit schools could receive up to 100% of their revenue from federal sources, potentially creating an incentive for scam schools to target veterans.
- Veterans groups argue that the new system lacks safety nets and accountability measures, making it more vulnerable to waste and abuse.
Background on the 90/10 Rule
The 90/10 rule was established as part of the Higher Education Act to regulate the amount of revenue that for-profit schools can receive from federal student aid. Prior to 2023, the rule only required that schools obtain 10% of their revenue from non-federal sources.
However, in 2021, Congress passed a law that clarified that all federal funds, including GI Bill benefits and the Department of Defense Tuition Assistance program, must be counted against the 90% side of the ledger. This change took effect on January 1, 2023.
Why Republicans Want to Repeal the 90/10 Rule
Republicans argue that the 90/10 rule unfairly singles out for-profit schools and that repealing it would give students more choices for their education by treating all types of schools the same.
They propose a new system that would tie schools’ repayment of federal loans to the amount their students earn post-graduation. This system is intended to ensure that schools have “skin in the game” over whether students are successful.
Veterans Groups’ Concerns
- “The 90/10 rule is a modest market-viability requirement that ensures that the federal government isn’t the only source of a college’s revenues,” said Barmak Nassirian, vice president for higher education policy at Veterans Education Success.
- “Repealing it is nothing short of pure corporate welfare for subpar schools preying on students,” he said.
- “The repeal will hurt service members, veterans and military families; roll back years of bipartisan congressional work; and most importantly, cost the government an eye-popping $1.6 billion.”
“The new system is undercooked and could create a new incentive for scam schools to target student veterans,” said Nassirian. “Worse yet, it contains no safety net in the highly probable event that it simply fails to work.”
Iraq and Afghanistan Veterans of America’s Concerns
“The House of Representatives should be ashamed that they’re even entertaining the idea of reinstating this costly and wrongheaded policy that would threaten the future of veterans’ education,” said IAVA CEO Allison Jaslow.
“This harmful language that is poised to be a part of the larger budget reconciliation package moving through the House of Representatives should be removed immediately unless members of Congress want to feel the wrath of the veterans community as we mobilize to defeat this bill.”
Education Committee Debate
During the Education Committee’s debate on the bill earlier this week, Democrats offered an amendment to strike the repeal of the 90/10 rule from the bill.
“I have seen countless instances of our men and women in uniform being prayed on and targeted for the sheer benefit of the GI Bill,” said Rep.
news is a contributor at FeePress. We are committed to providing well-researched, accurate, and valuable content to our readers.
