Braxton Taylor
The education policy portion of Republicans’ “big, beautiful” Trump administration agenda bill could incentivize for-profit colleges to take advantage of veterans again years after a loophole used by scam schools was closed, veterans advocates are warning.
At issue is what’s called the 90/10 rule, which limits how much of a for-profit school’s revenue can come from federal student aid. In 2023, after years of lobbying from veterans advocates, a loophole in the rule that incentivized for-profit schools to target veterans was closed.
Now, a sweeping bill being pushed through Congress by Republicans would repeal the 90/10 rule altogether and replace it with a new system that advocates say would leave veterans vulnerable to scams once more.
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“The 90/10 rule is a modest market-viability requirement that ensures that the federal government isn’t the only source of a college’s revenues,” Barmak Nassirian, vice president for higher education policy at the advocacy group Veterans Education Success, said in an emailed statement to Military.com.
“Repealing it is nothing short of pure corporate welfare for subpar schools preying on students,” he said. “The repeal will hurt service members, veterans and military families; roll back years of bipartisan congressional work; and most importantly, cost the government an eye-popping $1.6 billion.”
Congressional estimates have placed the cost of repealing the 90/10 rule at $1.6 billion over 10 years.
Under the 90/10 rule, for-profit schools can get no more than 90% of their revenue from federal sources, with the other 10% supposed to come from student tuition or other non-government sources.
The idea is that by forcing schools to find at least some students willing to pay for their education out of their own pockets, the federal government can avoid paying schools that provide no educational value to students.
But prior to 2023, GI Bill benefits and the Defense Department Tuition Assistance program weren’t counted against the 90%. Numerous investigations found the loophole led to shady for-profit schools targeting veterans and service members with deceptive recruiting practices so they could get more than 90% of their revenue from federal student aid while failing to deliver on promised job prospects.
In 2021, Congress passed a law that clarified all federal funds — including GI Bill benefits and the Department of Defense Tuition Assistance program — had to be counted on the 90% side of the ledger, and the regulation formally implementing the law took effect Jan. 1, 2023.
Closing the loophole had bipartisan support at the time. But some powerful Republicans opposed the change, arguing that the 90/10 rule as a whole unfairly singles out for-profit schools.
Now, as Republicans push forward on a wide-ranging legislative package to enact President Donald Trump’s agenda, they are proposing to eliminate the entire 90/10 rule.
The education portion of the legislation “permanently repeals the 90/10 rule, which targeted one sector of higher education, in favor of creating a sector-neutral accountability plan,” a summary from House Education and Workforce Committee Republicans said.
That accountability plan is a complicated risk-sharing agreement that essentially puts colleges on the hook for repaying federal loans that students fail to repay. Republicans say the intention is to ensure schools have “skin in the game” over whether students are successful since how much schools owe would be based in part on how much their students earn, post-graduation.
But veterans groups are crying foul, saying the plan is undercooked and could create a new incentive for scam schools to target student veterans.
The bill’s “high-risk, complicated and untested model has not been properly studied or analyzed for reliability or basic functionality,” Nassirian of Veterans Education Success, which was a prominent voice in closing the 90/10 loophole, said in his statement. “Worse yet, it contains no safety net in the highly probable event that it simply fails to work.”
“Beyond its radical financing changes, it guts accountability, ties regulators’ hands and delays oversight for years — a perfect recipe for another cycle of rampant waste, fraud and abuse that will harm student veterans and taxpayers alike,” he said.
Meanwhile, the group Iraq and Afghanistan Veterans of America called the bill an “assault on veterans education.”
“The House of Representatives should be ashamed that they’re even entertaining the idea of reinstating this costly and wrongheaded policy that would threaten the future of veterans’ education,” IAVA CEO Allison Jaslow said in a statement this week. “This harmful language that is poised to be a part of the larger budget reconciliation package moving through the House of Representatives should be removed immediately unless members of Congress want to feel the wrath of the veterans community as we mobilize to defeat this bill.”
During the Education Committee’s debate on the bill earlier this week, Democrats offered an amendment to strike the repeal of the 90/10 rule from the bill.
“I have seen countless instances of our men and women in uniform being prayed on and targeted for the sheer benefit of the GI Bill,” Rep. Mark Takano, D-Calif., the ranking member of the House Veterans Affairs Committee, said at the Education Committee meeting Tuesday. “To my GOP colleagues: Is it too much to ask that these schools prove themselves in the marketplace, prove they offer real value to students, prove they aren’t simply propped up by taxpayers?”
In addition to the amendment to save the 90/10 rule, Takano offered an amendment to delay implementing the bill until the Education Department certifies the legislation won’t lead to fraud against veterans.
Both amendments failed on party-line votes.
Republicans argued the bill gives students more choices for their education by treating all types of schools the same and focuses on more meaningful accountability measures.
“Republicans always said that bad programs and institutions that offer them should be held accountable,” Rep. Burgess Owens, R-Utah, said at Tuesday’s committee debate. “Democrats should support the sector-neutral accountability system proposed in this bill before us rather than using the regulatory hammer to pick winners and losers.”
The education measure was advanced out of the committee and will be combined with measures from other committees, including the House Armed Services Committee’s $150 billion defense spending proposal, to create a mega-bill enacting Trump’s agenda.
Republicans are using a process known as reconciliation that allows the bill to pass in the Senate with a simple majority, rather than the 60-vote threshold needed for most legislation. That means the bill could pass without any Democratic support.
But the bill still faces some high hurdles to passing, including ongoing intra-GOP debates on tax and spending cuts. House Republicans have unofficially been eying Memorial Day as a deadline for the bill to pass the lower chamber.
Related: Education Department Closes Loophole Advocates Say Some Colleges Used to Scam Veterans
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