The powerful Republican chairman of the U.S. Senate’s education committee is backing a bipartisan bill aimed at for-profit colleges and their recruiting of students who are veterans of the U.S. military.
Senator Lamar Alexander of Tennessee this week told Bloomberg Government that he supports a bill that would count GI Bill and active-duty service-member tuition benefits as federal aid under the so-called 90-10 rule, which requires that for-profit colleges get no more than 90 percent of their revenue from federal sources.
“I appreciate the work Senators Carper, Cassidy, Lankford and Tester have done to take a highly partisan issue and create a bipartisan solution,” Alexander said in a written statement. “This is a responsible and reasonable step to ensure that all of our military and veteran students are attending quality institutions worth their time and money.”
Alexander is leaving the Senate next year. The former education secretary and university president is pushing hard to pass several bills on higher education. This package of legislation, which includes proposals with bipartisan support, would serve as a narrow update to the Higher Education Act. That law, which oversees federal financial aid, has not been reauthorized in 11 years.
The 169-page bill Alexander released in September would simplify the FAFSA and financial aid award letters, while opening up Pell Grant eligibility to students in prisons and allowing aid to flow to postsecondary programs that are shorter in length than is currently allowed under federal law.
Democrats haven’t backed his plan, however. A sticking point is the renewal of $255 million in annual federal funding for minority-serving institutions, including $85 million for historically black colleges and universities.
Senator Patty Murray of Washington, the top Democrat on the education committee, instead has pushed for the passage of a bill to renew the minority-serving college funding stream for two years. She also has insisted on instead considering a comprehensive bill to reauthorize the Higher Education Act.
Alexander’s move this week to back Carper’s 90-10 bill, a long-term priority among congressional Democrats, appears to be part of the ongoing negotiations over the minority-serving college funds and his package of higher education bills.
“I look forward to working with Senator Murray to include this in legislation to reauthorize the Higher Education Act in the coming weeks,” Alexander said.
Congressional Democrats have introduced at least eight bills during this Congress that would include veteran and military benefits in the 90-10 calculation. For example, the proposal House Democrats released last month to reauthorize the Higher Education Act would close what they called the 90-10 “loophole.”
The argument by Democrats and consumer advocates is that the exclusion of veteran and military student benefits from the 90 percent requirement “perversely incentivizes for-profit institutions to aggressively recruit students” who receive those benefits, in part so that colleges can pad their nonfederal revenue sources.
Consumer groups have long backed such a change. So do several membership organizations for veterans and service members, including the American Legion, Iraq and Afghanistan Veterans of America, the Military Officers Association of America, and Student Veterans of America, which in August called the change to 90-10 its top priority.
"Chairman Alexander's support for closing the 90/10 loophole is a game-changer for student veterans and military-connected students across the country and means Congress can and will remove the recruiting target from the backs of veterans and military-connected students," Carrie Wofford, president of Veterans Education Success, an advocacy organization, said in a statement.
The Enlisted Association of the National Guard of the United States has urged Congress to proceed cautiously with bills that would affect veterans and military students. Stephen Patterson, a spokesman for the group, said the Carper bill appears to be a move in the right direction.
“This bill represents somewhat of a compromise,” he said. “We’re pretty happy to see more of a bipartisan approach.”
Patterson praised the proposed legislation for dropping the Democrats’ bid to limit federal funding to 85 percent of for-profits’ revenue, as well its approach of gradually phasing in penalties for colleges that run afoul of the 90 percent cap.
Career Education Colleges and Universities criticized the bill, however. The trade group for the for-profit sector found in a recent analysis that 260 of its member colleges would shut down if veteran and service-member benefits counted toward the federal funding limit.
“It is incredibly disappointing to see a willingness on both sides of the aisle to restrict veterans' choice under the guise of protecting veterans,” said Michael Dakduk, the group’s executive vice president and co-chair of Veterans for Career Education. “In the event this bill advances, we agree with other veteran groups and veterans' service organizations that a waiver is needed to support student veterans at quality career, technical and trade schools negatively impacted by a change to 90-10.”
The American Public University System, which enrolls a large number of veterans and service members, on Tuesday called on Congress to study the issue further before moving forward with the bill.
“We and others have asked Senators to conduct a study first to determine what the possible adverse consequences could be on military students under the revised 90-10 calculation,” John Aldrich, vice president of military and corporate outreach for APUS, said in a statement. “We believe that it will lead to fewer institutions serving military students and fewer offering affordable pricing.”
Yesterday Alexander released a statement on the dispute over the minority-serving college funding.
He said a proposal by House Democrats to restore the funding was a “budget gimmick” that would struggle to pass the Senate and within months would create a new “funding cliff” for colleges that receive the funding.
“Two weeks ago, Senate Democrats blocked my bipartisan package of higher education proposals that included $255 million in permanent annual funding for historically black colleges and universities and minority-serving institutions,” said Alexander. “This package has plenty of time to become law because the U.S. Department of Education has notified these institutions that they have sufficient federal funding until Oct. 1 of next year.”