The Protect VETS Act closes 90/10 loophole, requiring for-profit schools to secure at least 10 percent of their revenues from non-taxpayer dollars
(U.S. Senate) – Closing out the week of Veterans Day, U.S. Senators Jon Tester (D-Mont.), Tom Carper (D-Del.), James Lankford (R-Okla.), and Bill Cassidy (R-La.) introduced the Protect Veterans’ Education and Training Spending (Protect VETS) Act of 2019 to protect student veterans from predatory for-profit institutions. 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 requiring for-profit schools to secure at least 10 percent of their revenues from sources other than taxpayers.
A loophole in the 90/10 law excludes Department of Veterans Affairs (VA) and Department of Defense (DOD) education funds, like the Post-9/11 GI Bill and Tuition Assistance from being counted as federal funds. Therefore, some for-profit schools have exploited this 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.
“Predatory for-profit schools are exploiting the 90/10 loophole, taking advantage of the system and our veterans,” said Senator Tester, Ranking Member of the Senate Veterans’ Affairs Committee. “Our bipartisan bill puts forward a commonsense solution that will close this loophole and hold money-grubbing institutions accountable while saving taxpayer dollars. Congress has a responsibility to put our men and women in uniform— and their benefits— first. That’s why I’ll be fighting tooth and nail to help keep the wolves at bay, so veterans get the education they deserve.”
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.
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 servicemembers 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, commonsense 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.
Tester has been continuously working to modernize and strengthen education benefits for veterans and their families. In September, he introduced the Post-9/11 GI Bill Transferability Entitlement Act to ensure that every veteran with at least 10 years of service is able to transfer their educational benefits to dependents. He has also been fighting to cut down on excessive bureaucracy through his bipartisan G.I. Bill Work Study Improvement Act of 2019, which streamlines the processing and administration of VA benefits through the VA Work-Study Allowance Program. The program allows student veterans— whether on campus, at VA facilities or at other veteran-centered organizations— to earn money at a second job while getting an education.
The bill text can be found HERE.
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