Congressman Cohen Applauds Veterans Education Provision included in American Rescue Plan

March 16, 2021
Press Release
Language is similar to bill introduced by Congressman Cohen and Senator Durbin

WASHINGTON – Congressman Steve Cohen (TN-09) today applauded that elements of his Protecting Our Students and Taxpayers (POST) Act were included in the American Recovery Plan Act that President Biden signed into law last week. Introduced with Senator Dick Durbin of Illinois, the measure will help put an end to the for-profit college industry’s aggressive recruiting of veterans, service members, and their families.  

The current federal “90/10” rule is a provision in the law that bars for-profit colleges and universities from deriving more than 90 percent of their revenue from the U.S. Department of Education’s federal student aid programs. The other 10 percent must come from sources other than the federal government. The purpose of this rule is to ensure that schools are not overly dependent on taxpayer dollars. 

Because of the way the law was written, veterans’ and active duty service members’ federal education benefits – such as G.I. bill education benefits and the Department of Defense’s tuition assistance funds – were allowed to be counted towards the 10 percent. As a result, for-profit colleges received large majority their revenue directly from federal taxpayers by enrolling large numbers of these students.  The law previously gave for-profit colleges a financial incentive to aggressively recruit and enroll veterans, service members, and their families.  The American Rescue Plan included language that changed the Higher Education Act’s provision to specify that for-profit schools must take in at least 10 percent of their funding from “nonfederal” sources, which would now prevent them from capitalizing on these sources of veteran and service member federal education funding.

Congressman Cohen made the following statement:

“I’m pleased provisions similar to those in the POST Act are in our forward-thinking American Rescue Plan and commend Senator Durbin for his work on the measure.  Previously, there was a loophole in current law that allowed unscrupulous colleges and diploma mills to receive additional federal funds by targeting veterans and service members. That loophole, eliminated in the measure passed last week, had incentivized bad behavior that weighed down our nation’s heroes with debt while lining the pockets of for-profit investors. For-profit colleges should be accountable to both the students they are supposed to educate and the taxpayers who keep them in business. Unfortunately, far too often, these schools fail in their duty to prepare graduates for jobs that enable them to repay these loans, leaving taxpayers to pay. Veterans groups have been calling for an end to this predatory loophole for years. We listened and we got it done.”

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