Rep. Susan Davis continued her effort to strengthen accountability standards of for-profit colleges by offering an amendment that would close a loophole that encourages these institutions to recruit veterans and service members.
“There are a number of incidents of for-profit colleges aggressively recruiting our veterans, our service members, and their families for their Tuition Assistance and G.I. benefits,” said Davis. “We talk about wanting to protect taxpayers — and we do that with my amendment — but we also need to protect our students, many being veterans.”
For-profit colleges now account for 20 percent of the associate degrees issued in the United States, but critics contend some colleges burden students with high debt and leave them with worthless degrees. Corinthian Colleges, a large for-profit group that was sued by the state of California, recently announced bankruptcy.
A rule known as the “90/10 Rule,” requires a for-profit school to obtain at least 10 percent of its revenue from a source other than Title IV education funds, the primary source of federal student aid.
Since Tuition Assistance and the G.I. Bill are not defined as Title IV they count toward the 10 percent requirement, similar to private sources of financing. Davis’s amendment would close this loophole requiring TA and G.I. assistance to be considered as federal funding under the rule.
Because of the loophole, service members and veterans can be particularly vulnerable because for-profit schools have a strong incentive to enroll service members and veterans, who then need to take out private loans, as federal assistance doesn’t always cover the full cost of tuition. This can subject the student to a large debt without the high-quality education they were expecting.
The committee rejected Davis’ latest amendment, but Davis has continued to address this issue. In May, she urged the Department of Education to create a strong “gainful employment” rule to ensure students attending for-profit schools become job-ready and financially secure.
Davis’ 53rd District includes La Mesa, Lemon Grove, Spring Valley and parts of San Diego, El Cajon, and Chula Vista.
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