June 22, 2016

For Immediate Release

Contact: Carrie Wofford | (202) 422-6338

Veterans and Advocates Join Sen. Carper on Capitol Hill, Urge Congress to Close “90/10 Loophole”

Closing loophole would protect G.I Bill funds and service members’ education programs from predatory for-profit colleges

Washington, D.C. – Veterans who were deceived by predatory for-profit colleges flew to Washington to join veterans’ advocacy groups and U.S. Sen. Tom Carper (D-DE) to implore Congress to close a loophole in federal law that leaves America’s veterans vulnerable to aggressive, predatory marketing and recruiting practices by for-profit colleges and career programs.

“When I returned from Southeast Asia, the G.I. Bill made it possible for me to go to business school at the University of Delaware,” said Sen. Carper. “Our vets returning home from across the world today deserve the same – if not better – opportunities than I received all those years ago. While not all for-profit colleges are bad actors, one veteran mistreated is one veteran too many, and closing the 90/10 loophole helps us ensure that those who sacrificed for our country can pursue and attain the high-quality, affordable education they have earned.”

As it stands now, federal law requires for-profit colleges to obtain 10 percent of their revenue from sources other than taxpayer-funded federal student aid. But the law is silent on G.I. Bill benefits and Defense Department education programs. Some bad actors in the for-profit industry are exploiting this “90-10 loophole” by aggressively recruiting veterans and service members for their GI Bill and DOD education dollars, rather than obtaining 10 percent of their revenue from non-federal sources.

“It is long past time to close the egregious 90/10 loophole. This loophole started as a mere oversight by Senate staff in the 1990s, but has put a dollar sign squarely on the backs of America’s service members and veterans,” said Walter Ochinko, policy director for Veterans Education Success.  “It incentivizes predatory for-profit colleges to aggressively pursue the G.I. Bill and DOD education programs, misleading veterans and service members about every aspect of the shoddy colleges – the true cost, the accreditation, the education, and graduates’ job prospects. Liberated from aggressive recruiting, veterans will be able to make an informed choice about where to spend their hard earned GI Bill benefits.”

Numerous investigations over the years have revealed widespread waste, fraud and abuse at these for-profit career colleges, including deceptive and aggressive recruiting of students; false or inflated job placement rates; and dismal completion rates. Some schools have gone so far as to enroll people who are homeless, enroll students without their consent, and use tactics that invoke “pain” and “fear” to pressure students into enrolling.

Mark Glougouski, a military veteran from Pennsylvania, obtained two associate’s degrees from Colorado Technical University (CTU) that he deems “worthless.” The college also enrolled him in the wrong degree program, and then convinced him to pursue a bachelor’s degree in Business Management without mentioning the financial repercussions.

“They basically blamed my ‘being misinformed’ for their screw up then lied me into another program they said would make me more competitive,” he said. “Instead, I exhausted my G.I. Bill benefits before I could finish my bachelor’s degree. I have two associates degree that are worth less than the paper they’re printed on and no money left to further my education. I also have $64,000 in student loan debt thanks to CTU’s incompetence.”

Veteran Matthew Mitchell from Baton Rouge, Louisiana, faced a similar fate at Brown Mackie, where he was told its nursing program was accredited and that he would be eligible to work at the VA — neither of which was true. The school also promised it would pay for his nursing licensure exams, only to rescind the offer, citing a “policy change.”

“The total cost for an associate’s degree in nursing from a horrible school like Brown Mackie was almost $50,000,” he said. “The education I received was substandard and very few for-profit schools will accept transfers and allow me to continue my education, which will most likely force me to repeat courses. But since I have over $16,000 in loans and I’ve exhausted my GI bill benefits, that seems unlikely.”

Two other student veterans will share similar stories about their experiences at ITT Technical Institute and DeVry.

Legislation to close this loophole and eliminate the for profits’ incentive to target veterans is currently before Congress. “The Military and Veterans Education Protection Act,” sponsored by Sen. Carper (D-DE) and Sens. Dick Durbin (D-IL) and Richard Blumenthal (D-CT), would count the G.I. Bill and military education benefits that come from the Department of Veterans Affairs or the Department of Defense toward the 90-percent limit on the federal share of a school’s revenue.

“Education is the best tool that veterans have to transition home – to readjust to civilian life and develop the skills to find a new career,” said Tom Porter, legislative director for Iraq and Afghanistan Veterans of America (IAVA). “IAVA is committed to ensuring that every veteran can take advantage of their full earned benefits. That means refusing to allow predatory for-profit colleges from targeting new GI Bill benefits and failing to deliver on promised quality education. And it also means opposing cuts to Post-9/11 GI Bill funding. The women and men who served put it all on the line to defend us, we need to defend their GI Bill.”

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About Veterans Education Success

Veterans Education Success (VES) is a veteran advocacy organization whose mission is to advance higher education success for veterans, servicemembers, and military-connected students and to defend the integrity and promise of the GI Bill and other federal education programs for veterans and servicemembers. VES offers policy expertise to policymakers and conducts non-partisan research on issues of concern to student veterans, including student outcomes and debt levels. VES also offers free legal services, advice, and college and career counseling to servicemembers, veterans, their survivors, and families using federal education benefits, and helps veterans participate in their democracy by engaging with their Congressional representatives. Additional information is available at www.vetsedsuccess.org.