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Congresswoman Maxine Waters Introduces HR 3764, the “Ensuring Quality Education for Veterans Act” to Protect Veteran Students from Predatory Practices at For-Profit Institutions

December 22, 2011
Press Release

Today, Congresswoman Maxine Waters introduced the "Ensuring Quality Education for Veterans Act," which would protect student veterans from bad actors within the for-profit college industry. The bill would include veterans' benefits under the 90/10 rule of the Higher Education Act of 1965, thereby removing an incentive for unscrupulous actors in the for-profit education industry to exploit the nation's veterans. The 90/10 rule requires for-profit colleges to receive at least 10 percent of their revenue from nonfederal sources and up to 90 percent from federal sources to be eligible to receive federal student aid. Currently, G.I. bill benefits from the Department of Veterans Affairs and Defense do not technically count under the 90 percent category, under the 90/10 rule of the Higher Education Act of 1965, allowing schools to count the money toward the non-federal 10 percent of revenues.

"This "loophole" has caused a free for all within the for-profit college industry resulting in the direction of a substantial amount of staff, time and resources towards recruiting veterans to their institutions,"  Rep. Waters said. "With an influx of our veterans coming home, we must do what we can to protect them from this predatory behavior by some of the bad actors within this industry."  

An analysis by the Senate Committee on Health, Education, Labor and Pensions found that in the 2009-2011 award year, for-profit schools collected more than one third of Post-9/11 G.I. bill benefits yet they only educate a quarter of our veteran students. In the first two years of the Post 9/11 G.I. benefits bill disbursements, the eight top recipients were for-profit instructions and they received collectively a grand total of $846 million in federal tax-payer financed student grants during the 2009-2011 award year. 

"With the increase of federal dollars allotted to fund veteran higher education programs, veterans have naturally become an attractive recruit for some for-profit colleges." said Rep. Waters.

According to internal documents from major publically-traded for-profit institutions, these schools have employed guerilla-like recruitment tactics designed to enroll veterans, active-duty military personnel and dependents and capitalize on billions in veteran education benefit dollars. Once enrolled, these men and women often do not receive the quality education they were promised and graduate without the skills or education they need in order to transition from military to civilian life. Overall, only 22 percent of all first-time, full-time students at for profit-colleges actually complete their bachelors' degrees, compared with 55 percent at public institutions and 65 percent at nonprofit schools, according to the National Center for Education Statistics.

"I believe that we must do all we can to ensure that our veterans receive a quality education. My bill would protect our veterans, military-personnel, their families and tax-payers from the predatory practices that some for-profit institutions use simply to obtain higher profits and to appease investors," Rep. Waters said.

The Ensuring Quality Education for Veterans Act would also require the Secretary of Education to notify the Secretary of Defense and Veteran Affairs when a proprietary institution fails to meet requirements within the 90/10 rule and therefore becomes ineligible to participate in federal defense and veteran affairs educational assistance programs until they come back into compliance.