Hillary takes aim at for-profit colleges

Democratic presidential candidate Hillary ClintonHillary Diane Rodham ClintonMedia circles wagons for conspiracy theorist Neera Tanden The Hill's Morning Report - Presented by The AIDS Institute - Senate ref axes minimum wage, House votes today on relief bill Democratic strategists start women-run media consulting firm MORE will urge a crackdown on for-profit schools when she appears at a veterans event on Thursday in Nevada.

A Clinton aide told The Hill in advance of her visit to the Reno branch of the Veterans of Foreign Wars that she will call for an end to a policy that she believes allows for-profit colleges to target service members.


The policy, known as the “90/10 rule,” ensures that colleges and universities don’t make more than 90 percent of their revenue from federal financial aid. The remaining 10-plus percent of revenue must come from other sources, or else the school loses access to a significant chunk of that federal student loan funding. 

But veterans’ benefits, including those through the new Post-9/11 GI Bill, don’t count toward that 90 percent limit. So schools can rack up as much revenue as possible by accepting veterans, something critics decry as a loophole.

That, a Clinton aide said, makes veterans “attractive targets for for-profit schools” looking to maximize revenue.

“Many schools have developed aggressive and deceptive marketing campaigns aimed at getting as many veterans enrolled as possible. And they are succeeding,” the aide said.

“Closing the 90-10 loophole will help to protect our veterans from these schemes.”

Democratic proposals on Capitol Hill have long offered this fix, but none have made it to the White House. Delaware Democratic Sens. Tom Carper and Chris Coons asked the Department of Education in April to reexamine the policy on the heels of the collapse of the for-profit Corinthian Colleges, which the senators said made $186 million from veteran students on the Post-9/11 GI bill.

Corinthian Colleges shuttered this year after an almost $30 million fine from the Department of Education over accusations that it misled students on job prospects. 

Sen. Bernie Sanders (I-Vt.), Clinton’s chief rival for the Democratic presidential nomination, also signed onto that letter. President Obama’s 2016 budget calls for the same change.

While the rule applies to all colleges and universities, a Senate Health, Education, Labor and Pensions study from 2012 found that 80 percent of all funds given to schools from the new GI bill go to for-profit schools. 

But for-profit schools argue that they shouldn’t be penalized for providing expanded access to education for veterans. 

Sen. Johnny Isakson (R-Ga.) told Military.com in February that the federal government “shouldn’t be limiting educational opportunities for our veterans and service members." 

The Republican National Committee criticized Clinton's previous remarks on for-profit colleges as "hypocritical" in a blog post Wednesday. The RNC noted her husband, former President Clinton, served as the honorary chancellor for Laureate International Universities, one of the top for-profit colleges in the world. 

Bill Clinton left that paid role in April, weeks after Hillary Clinton announced her bid, according to a report by Bloomberg. The report adds that Laureate donated between $1 million and $5 million to the Clinton Foundation. 

At the Nevada event, Clinton will also push to shore up the Military Lending Act, to protect troops from predatory lending. The Pentagon had announced regulations in 2014 to increase those protections, but the issue has been caught in a legislative battle in the defense budget. 

The initial House Armed Services draft bill included a measure to delay those regulations, but a measure from Rep. Tammy Duckworth (D-Ill.) passed to remove those barriers. Rep. Steve Stivers (R-Ohio) is leading an effort to bring the measure back.

Rep. Mike Conaway (R-Texas) told The Hill back in May that there could easily be “unintended consequences” that could target legitimate business, “drying up sources of credit for folks at the bottom end of the economic scale.” 

—Updated at 7:18 p.m.