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New Legislation in Coronavirus Relief Package Will End Loophole That Targeted Veterans

Tuesday, March 16, 2021

The extensive $1.9 trillion Coronavirus relief package was signed into law by President Biden on March 10, 2021. Among the bill’s vast provisions are new laws that will impact the way for-profit colleges and universities target veterans. 

Currently under federal law, for-profit schools can earn no more than 90% of their revenue from federal student aid. However, this law does not include funds from the VA as federal student aid. As a result, many colleges and universities have targeted veterans to satisfy the 10% they need to earn from non-federal aid. The loophole has allowed bad actor schools with poor student performance and education quality to remain open because of the revenue from veterans’ GI Bills. 

Jared Lyon, the president of Student Veterans of America stated that “For decades, the 90-10 loophole incentivized predatory schools to unfairly target student veterans and members of the military.” Advocates have been pushing to close this loophole for a long time and it has been in consideration for months as part of the relief package. 

Initially, the legislation was going to close the loophole outright, which would likely lead to school closures for those schools failing to satisfy the 10% without GI Bill revenue. Several Senate Republicans objected to that plan, stating concerns for disrupting veterans’ education plans by forcing school closures. A bipartisan group of lawmakers pushed new language through to extend the new rule making and compliance portions of the change. 

Republican representative Jerry Moran said that “We need to make sure we do this in the right way, make these changes in the correct way, and we need to ensure we put the policy back in the perspective of not politics, but the right answer.” “By providing a six-month delay before the start of a negotiated rulemaking process, Congress now has time to work together with our veteran service organizations and the higher education community on a bipartisan plan to deliver reasonable and needed protections for veterans and taxpayers alike.”

With these changes, the rule making process to amend the 90-10 rule will not start until October of 2021. Schools will not face any potential penalties until 2024 at the earliest. Officials have also estimated that 37 for-profit schools would feel the impact of the change, schools with currently enrolled veterans. The delay will allow them the chance to finish their degrees before the new rules are in place. 

Many advocates are grateful that these plans are finally moving forward, especially as the situation for veterans has worsened during the Coronavirus pandemic. During which time, for-profit schools have drastically increased their marketing budgets to target current and former service members. 

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