Dems want to tighten limits on federal aid to for-profit colleges

A number of Senate Democrats want to require for-profit colleges to get a greater percent of their revenue from non-taxpayer dollars.

Democratic Sens. Elizabeth WarrenElizabeth WarrenHillicon Valley: Apple rolls out coronavirus screening app, website | Pompeo urged to crack down on coronavirus misinformation from China | Senators push FTC on price gouging | Instacart workers threaten strike Democratic Senators urge FTC to prevent coronavirus price gouging Democratic senators call on FDA to drop restrictions on blood donations from men who have sex with men MORE (Mass.), Dick DurbinRichard (Dick) Joseph DurbinLegal immigrants at risk of losing status during coronavirus pandemic Senate rejects GOP attempt to change unemployment benefits in coronavirus stimulus bill Senators pen op-ed calling for remote voting amid coronavirus pandemic MORE (Ill.), Richard Blumenthal (Conn.) and Jack ReedJohn (Jack) Francis ReedOvernight Defense: Stimulus bill has .5B for Pentagon | Money would be blocked from border wall | Esper orders 60-day freeze for overseas troop movements Senate panel switches to 'paper hearings' amid coronavirus pandemic Rand Paul's coronavirus diagnosis sends shockwaves through Senate MORE (R.I.) are backing legislation that would require for-profit colleges to get 15 percent of their revenue from non-federal sources. 


Currently for-profit institutions can get 90 percent of their revenue from taxpayer dollars and 10 percent from non-payer sources, in what is known as the 90-10 rule.

Durbin said that the ratio "allows far too much federal money to funnel to an industry that often provides a greater return on taxpayer investment to its administrators and investors than it does to its students."

The legislation would also require that federal aid for veterans and military benefits—including the G.I. bill and tuition assistance from the Pentagon—is classified as federal aid under the 90-10 rule.

Currently for-profit institutions can count that aid as non-taxpayer dollars, which Warren argued allows veterans and troops to be "targeted" by "predatory for-profit colleges."

“The POST Act will tighten the rules and help protect veterans by closing the loophole that permits for-profit schools to prey on our service members," she added. 

The legislation would also increase penalties for institutions, including that for-profit colleges would lose access to federal student aid programs after not complying with the new 85-15 rule for a year. 

Durbin has repeatedly criticized for-profit colleges from the Senate floor this year, suggesting that they are targeting veterans and service members. That criticism intensified after 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. John McCainJohn Sidney McCainJuan Williams: Biden's promises on women are a big deal Ernst calls for public presidential campaign funds to go to masks, protective equipment President Trump is right — Now's the time for 'all hands on deck' MORE (R-Ariz.), however, shot back at Durbin during a fiery floor speech last month, saying that the Illinois Democrat has a "well-known record" of not supporting troops and a "vendetta against for-profit universities."