Cracking Down on Military Money and For-Profit Colleges

Carper

Last week Sen. Tom Carper of Delaware (right) and Rep. Jackie Speier of California, both Democrats, introduced companion bills in their respective chambers to limit the amount of amount of financial aid money for-profit colleges can derive from soldiers and veterans.

According to a press release by Senator Carper’s office:

The bill, the Military and Veterans Education Protection Act (MVEP), would modify the current 90/10 financial aid formula used by for-profit colleges to ensure federal funding utilized through the Department of Veterans Affairs’ (VA) Post-9/11 G.I. Bill and the Department of Defense’s (DOD) Tuition Assistance program is counted as federal dollars rather than as private dollars.

Under current rules, for-profit colleges are not allowed to derive more than 90 percent of their revenues from federal financial aid. But veterans’ benefits and payments from the military’s tuition assistance program don’t count as federal financial aid. Because of this, many critics argue that for-profit schools are deliberately enrolling unprepared soldiers and veterans into their programs. Enrolling soldiers and veterans not only allows for-profits to avoid sanctions for making too much money off traditional financial aid, it also enables them to enroll more traditional students.

As Adam Weinstein wrote in Mother Jones last year the federal government’s military education money “has… become a cash cow for for-profit schools like Capella, DeVry, ITT Tech, Kaplan, and the University of Phoenix, eager to capitalize on vets coming back from Iraq and Afghanistan.”

This new effort follows a bill introduced by Illinois Democrat Sen. Dick Durbin in January to change the 90/10 formula. Under Durbin’s proposed change, for-profit colleges would only be allowed to derive 85 percent of their revenue from federal financial aid.

Since 2008, for-profit colleges have seen a 600 percent increase in income derived from military education programs. [Image via]

Daniel Luzer

Daniel Luzer is the news editor at Governing Magazine and former web editor of the Washington Monthly. Find him on Twitter: @Daniel_Luzer