Senator Richard Durbin (D-IL) is introducing legislation to limit the amount of federal funds for-profit colleges can derive from veterans.
According to an article by Gregory Karp in the Chicago Tribune:
Sen. Dick Durbin, D.-Ill., is scheduled to hold a forum on the issue in Chicago Monday and plans to introduce legislation later in the day that would eliminate the financial incentive for-profit colleges have to recruit veterans aggressively into pricey programs. It would also require schools to get more of their revenue from sources other than the federal government’s educational aid programs.
Military veterans are being aggressively recruited, critics claim, because of their lucrative forms of federal aid, such as GI Bill funds and Department of Defense tuition assistance benefits. That aid doesn’t count toward the 90-10 rule, which bars for-profit colleges and universities from deriving more than 90 percent of their revenue from the Department of Education’s federal student aid programs. The purpose of the rule is to ensure that for-profit schools, many of which are publicly held corporations, are not using taxpayer money as their sole source of revenue.
Under Durbin’s proposed change for-profit colleges would only be allowed to receive 85 percent of their revenue from federal financial aid. In addition, benefits provided through veterans and soldiers programs would count as money from federal student aid programs.
Karp noted that between 2006 and 2010 some 20 for-profit colleges saw their education benefits coming from the Veteran’s Administration and the Department of Defense increase by 683 percent, that’s more than $500 million.
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