Statement on the Senate’s Move to Close the 90/10 Loophole in the Reconciliation Package

“We are grateful Congress is moving to finally remove the target from the backs of veterans and servicemembers by closing the 90/10 loophole, a bipartisan goal shared by many Members of Congress.  For too long, bad actor colleges have treated veterans and servicemembers ‘as nothing more than dollar signs in uniform.’

 

We are pleased — and not at all surprised — by the Senate Parliamentarian’s ruling.  The central purpose of the 90/10 rule has always been to protect taxpayer funds from artificially propping up otherwise failing private enterprises.  As the Supreme Court made clear in Cleland v. Nat’l College of Business, 435 U.S. 213, 220 (1978) about the rule’s predecessor, it is “based upon the rational assumption that if ‘the free market mechanism [were allowed] to operate,‘ it would ‘weed out those institutions [which] could survive only by the heavy influx of Federal payments.'”

 

For-profit college chains that are wholly dependent on taxpayer funds can easily meet the rule by improving their quality enough to attract employers and private-paying students. We look forward to seeing their improved quality.”