07.11.24

Durbin, Cohen Introduce Bicameral Legislation To Crack Down On For-Profit College Industry

Durbin and Cohen introduce bicameral legislation to reinstate the 85/15 rule to require for-profit colleges to bring in more revenue from non-federal college industry

WASHINGTON – U.S. Senate Majority Whip Dick Durbin (D-IL) and U.S. Representative Steve Cohen (D-TN-09) today introduced bicameral legislation that would help put an end to the for-profit college industry’s aggressive recruiting of veterans, service members, and their families.  The Protecting Our Students and Taxpayers (POST) Act would reinstate the 85/15 rule, which would prohibit for-profit colleges from receiving more than 85 percent of their revenue from the federal government, including from Department of Veterans Affairs GI Bill and Department of Defense (DOD) Tuition Assistance benefits.  

The current federal 90/10 rule is a provision in the law that bars for-profit colleges from deriving more than 90 percent of their revenue from federal sources.  The other 10 percent needs to come from sources other than the federal government.  The rule was instituted to prevent schools from becoming overly dependent on taxpayer dollars.

A previous loophole in the law allowed for-profit colleges to consider all federal benefits that were not administered by the Department of Education (ED)—such as DOD Tuition Assistance benefits and the Post-9/11 GI Bill—as private, non-federal revenue.  This loophole allowed institutions to receive as much as 100 percent of their revenue from federal taxpayers, incentivizing for-profit colleges to prey on veterans and service members.  Although, with Durbin’s support, this loophole was closed in the American Rescue Plan, more can be done to protect low-income students, students of color, veterans, and service members who too often are defrauded by for-profit colleges’ high-pressure recruitment tactics. 

“Congressman Cohen and I are introducing the POST Act to reinstate the 85/15 rule so that the for-profit college industry cannot take advantage of taxpayer dollars.  With this rule in place, we can better protect veterans, low-income students, and students of color who are targeted by for-profit schools,” said Durbin.  “I will always fight to hold for-profit colleges accountable for their predatory tactics of siphoning off federal student aid while leaving students with a near worthless degree.”

“For-profit colleges can receive up to 90 percent of their revenue from federal financial aid programs, such as student loans. Unfortunately, far too often, these schools fail in their duty to prepare graduates for jobs that would enable them to repay these loans, leaving taxpayers liable.  The loophole that was in place incentivizes bad behavior that weighs down our nation’s veterans and service members with huge debts while lining the pockets of for-profit investors. This is unacceptable and while reforms have been made, more needs to be done. For-profit colleges should be accountable to both the students they are supposed to educate and the taxpayers who keep them in business,” said Cohen.

Specifically, the POST Act would:

  • Reinstate the original federal revenue cap of 85 percent on for-profit colleges, creating an 85/15 rule;
  • Align the new 85/15 rule to the current 90/10 rule that was passed in the American Rescue Plan and the Department of Education’s regulations;
  • Count institutional loans in the calculation of federal revenue sources;
  • Eliminate a for-profit college’s eligibility to receive federal funding after one year of noncompliance instead of the three consecutive years it now takes; and
  • Require a for-profit college that loses federal funding eligibility to meet all eligibility and certification requirements for a minimum of two years before regaining eligibility.

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