Congress urged for-profit predatory colleges to bleed military veterans out of education aid – and give them nothing in return – when it created a loophole in the rules that govern the classification of federal flows student aid. It’s good news that the loophole has been firm as part of the Pandemic Recovery Bill enacted this month.
Yet the Biden administration must do more to protect veterans and the American public from corporations that earn their profits by depriving students of federal education dollars while giving them worthless degrees.
It means reversing, as quickly as possible, the rules of the Trump era that benefited the for-profit college industry at the expense of the public. Beyond that, the Department of Veterans Affairs and the Department of Education must exercise its current authority to cut federal funds to predatory schools.
The loophole recently closed is in a provision known as the 90/10 rule. As written in 1998, it required for-profit schools to get at least 10 percent of their income from sources other than federal student aid. The measure was intended to prevent federal aid from serving as the sole source of money for for-profit schools that were unable to attract private dollars. But Congress thwarted this common-sense goal by allowing colleges to view certain forms of federal aid – including GI Bill education benefits and Department of Defense tuition assistance – as being waived. private way.
This maneuver turned military veterans into what a Senate report called “dollar signs in uniform.Predatory schools, some of which later collapsed over allegations of fraud, have misrepresented themselves to attract as many veterans as possible. So many servicemen were left behind when schools failed Congress had to pass legislation restore education benefits to GI Bill users who had enrolled in programs that no longer existed.
The new version of the 90/10 rule will require for-profit schools to obtain at least 10% of their funding from “non-federal” sources. One problem with the new provision is that it does not come into effect until 2023, which could allow for more exploitation. This requires the Biden administration to better monitor at-risk or genuinely fraudulent schools.
Despite its documented history of fraud, the for-profit industry has found an open door to the education department headed by the recently deceased secretary, Betsy DeVos. Under his leadership, the ministry was prosecuted for serving the interests of industry and attacking student borrowers who were legally entitled to have their loans canceled because for-profit schools had defrauded them.
The Biden administration’s Education Secretary Miguel Cardona took a big step this month by abolishing a DeVos rule that significantly limited loan cancellation for defrauded students. Under the new more reasonable policy, tens of thousands of borrowers will have their student loan debt eliminated. It is a life-saving development for young men and women who have been deprived of jobs, apartments and the credit market due to their outstanding debts.
The Department of Education should immediately begin the process of reversing Ms. DeVos’ havoc on the a paid job rule, which was supposed to cut off access to federal student aid for job training programs that buried students in crippling debt while not preparing them for jobs. A strong and fully enforced rule is essential to a regulatory system that holds for-profit schools accountable for the damage they too often cause.