Congressman Cohen and Senator Durbin Reintroduce POST Act

WASHINGTON – Congressman Steve Cohen (TN-9) and Senator Dick Durbin of Illinois have introduced the Protecting Our Students and Taxpayers (POST) Act to adjust the percentage of federal support going to for-profit educational institutions. 

Congressman Cohen made the following statement:

“The federal government supports a significant portion of financial assistance for higher education but it is critical that for-profit educational institutions rely on some private sources of revenue for tuition, books and fees. Our veterans and service members should not be hounded by high-pressure sales tactics like those used by the now-defunct Trump University just because they are eligible for assistance. I have been proud to work with Senator Durbin over several Congresses to get the public-private formula for higher education assistance right. This bill accomplishes that goal.”

Senator Durbin made the following statement:

“As congressional Republicans scheme about new ways to remove necessary protections for student veterans – including adding a provision to eliminate the 90/10 rule in their big, ugly bill – Congressman Cohen and I are introducing the POST Act to ensure that veterans are protected from the for-profit college industry. The POST Act would reinstate the 85/15 rule so that the for-profit college industry cannot take advantage of taxpayer dollars or student veterans.  While Republicans want to allow for-profit colleges to siphon off federal student aid unchecked, I will always fight to hold for-profit colleges accountable for their predatory tactics that leave students drowning in debt with a near worthless degree.”

While public and private nonprofit colleges have various revenue streams outside the federal government sources, for-profit colleges leach off of taxpayer dollars.  The federal 90/10 rule is a provision in law that bars for-profit colleges from deriving more than 90 percent of their revenue from federal sources.  The other 10 percent must come from non-federal sources.  The purpose of this rule is to ensure that for-profit colleges are not overly dependent on federal taxpayers for their operation and that there is “skin in the game” from non-federal funding sources.  

A previous loophole in the law allowed for-profit colleges to exclude all federal benefits that were not administered by the Department of Education — such as Department of Defense (DOD) Tuition Assistance and Department of Veterans Affairs (VA) Post-9/11 GI Bill — as private, non-federal revenue sources.  This loophole allowed institutions to receive all of their revenues from federal taxpayers — incentivizing for-profit colleges to prey on veterans and service members.  Although this loophole was closed in the American Rescue Plan Act in early 2021, more can be done to protect low-income students, students of color, veterans, and servicemembers who too often are defrauded by for-profit colleges’ high-pressure recruitment tactics.  

House Republicans’ budget reconciliation bill would eliminate the 90/10 rule despite the nonpartisan Congressional Budget Office estimating that the rule would save taxpayers $2 billion over 10 years.  Eliminating the 90/10 rule would be a giveaway to predatory for-profit schools that historically have exploited veterans and servicemembers, stranded students with worthless degrees and mountains of debt, and left taxpayers holding the bag. 

To better protect students and our federal taxpayer dollars, the POST Act would:

• Reinstate the original federal revenue cap of 85 percent on for-profit colleges, creating an 85/15 rule.  In the 2022-2023 school year, for-profit colleges received nearly $15 billion in federal student aid, and during that same school year, more than 126 for-profit colleges received more than 85 percent of their revenue from federal sources;
• Align the new 85/15 rule to the current 90/10 rule that was passed in the American Rescue Plan Act and the Department of Education’s regulations;
• Count institutional loans in the calculation of federal revenue sources;
• Eliminate a for-profit college’s eligibility to receive federal funding after one year of noncompliance instead of the three consecutive years it now takes; and
• Require a for-profit college that loses federal funding eligibility to meet all eligibility and certification requirements for a minimum of two years before regaining eligibility.

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