Veterans transitioning back into civilian life depend on reliable training and education opportunities to secure family-sustaining jobs. (William Wiseman/U.S. Air Force)
As part of their budget reconciliation bill, House Republicans proposed new legislation aimed at dramatically reshaping the foundation of American higher education for the worse — raising costs for students, jeopardizing access to financial aid and dismantling consumer protections. As part of this package, Congress is poised to eliminate hard-won protections like the 90/10 rule, which safeguards veterans and other service members from deceptive college marketing schemes.
The 90/10 rule was created by Congress in the early 1990s to protect students and taxpayers from fraud and abuse in federal student aid programs. It aims to ensure for-profit colleges provide a quality education by requiring them to earn at least 10% of their revenue from sources other than federal aid. The idea being that if students or employers are willing to pay out of pocket, the program must be worth the cost.
A major problem with the 90/10 rule was that it did not count federal money given to veterans and service members, like the GI bill benefits, as federal aid. This sneaky loophole in the law incentivized several for-profit institutions to target their marketing to veterans and families receiving those benefits, which are excluded from the 10% nonfederal fund requirement. Colleges found they could bypass compliance with the 90/10 rule by choosing to enroll veterans over other students. Some institutions began gaming the system — adopting predatory and aggressive recruitment tactics, and utilizing a business model built on exploiting those who served our country. Student veterans were treated like dollar signs in uniform.
In 2023, the loophole was officially closed, largely thanks to the work of advocates in the consumer protection space. But now, a new proposal from House Republicans threatens to repeal the 90/10 rule entirely — opening the door for predatory for-profit colleges to once again exploit our veterans.
Unfortunately, veterans education benefits have long been a target for low-quality, predatory for-profit colleges and programs. These institutions often make use of misleading marketing and exaggerated job placement promises. They employ high-pressure, disgraceful sales tactics to lure veterans into cashing their federal checks. Before the 90/10 loophole was closed, documented cases of fraud, deceptive advertising and false hiring rates ran rampant among veterans and other marginalized students.
Studies show some of the lowest-quality schools received the most in GI Bill funding for over a decade, with eight of the top 10 schools receiving the most post-9/11 GI Bill funds accounting for 20% of all GI Bill payments, amounting to $34.7 billion. One study notes that seven of those 10 schools reported high numbers of student complaints as well as “federal law enforcement actions regarding allegations of deceptive advertising, predatory recruiting and fraudulent loan schemes.” Hundreds of veterans ended up with worthless degrees — or without a degree at all — while the colleges they attended walked away with millions.
Veterans transitioning back into civilian life depend on reliable training and education opportunities to secure family-sustaining jobs. But instead of supporting this important transition, Congress is paving the way for predatory institutions to take advantage of those who served our country. Eliminating protections like the 90/10 rule would be disastrous for veterans, reopening the floodgates to fraud, waste and abuse for a broken system that’s failed them before.
This isn’t just bad policy — it’s betrayal. It represents a wealth transfer from the backs of veterans to the bank accounts of politically connected, rich college executives. Because the people who stand to benefit from these rollbacks are the wealthy owners and investors behind for-profit colleges — many of whom have a long track record of exploiting veterans and taxpayers alike.
Veterans earned their benefits, and they shouldn’t have to fight to protect them. We need strong accountability measures that ensure veterans can receive a high-quality education that opens doors to greater economic prosperity for themselves and their families. Congress needs to preserve and strengthen the 90/10 rule and uphold their obligation to those who served our country with honor.
Madison Weiss is a senior policy analyst for Higher Education at the Center for American Progress.
