Democrats Propose Increased Restrictions on For-Profit College Revenues
Credit: Bonnie Cash / Getty Images- A new bill proposes making it harder for for-profit colleges to rely on federal dollars.
- It would change the existing 90/10 rule into the 85/15 rule.
- These figures refer to the revenue for-profits can generate through federal financial aid.
- The 2024 POST Act is the seventh attempt by U.S. Sen. Richard Durbin to reintroduce the 85/15 rule.
A newly proposed bill aims to further restrict how much of a for-profit college’s revenue can come from the federal government.
U.S. Sen. Richard Durbin, a Democrat representing Illinois, introduced the Protecting Our Students and Taxpayers (POST) Act this month. If passed, the law would require for-profit colleges and universities to generate at least 15% of their revenue from nonfederal sources, up from the current 10% minimum known as the 90/10 rule.
The 90/10 rule aims to ensure for-profit institutions don’t become overly reliant on federal dollars, Durbin said in a statement.
U.S. Rep. Steve Cohen, a Democrat representing Tennessee, introduced companion legislation in the House of Representatives.
“With this rule in place, we can better protect veterans, low-income students, and students of color who are targeted by for-profit schools,” Durbin said. “I will always fight to hold for-profit colleges accountable for their predatory tactics of siphoning off federal student aid while leaving students with a near worthless degree.”
A spokesperson for Career Education Colleges and Universities (CECU), a trade organization representing for-profit colleges and universities, told BestColleges that Durbin’s bill would be an unnecessary overreach.
“This nonsensical attempt to change the 90/10 rule to 85/15 unfairly targets for-profit institutions and does nothing to measure educational quality,” CECU said in a statement.
“90/10 is purely a measure of the amount of public subsidies received by an institution. For-profit institutions pay taxes and do not rely upon supplemental taxpayer funding to offset operational expenses in the same way as public institutions.”
This bill comes over two years after President Joe Biden’s Department of Education (ED) closed a long-standing loophole in the 90/10 rule.
Previously, GI Bill benefits were not counted as federal dollars through the 90/10 rule. Because of this, some accused predatory for-profit colleges and universities of targeting student veterans and providing low-quality education in a ploy for GI Bill funds.
That loophole closed in mid-2023 after a surprising collaboration with the for-profit college industry.
Durbin’s proposal wouldn’t just be a harsher restriction on for-profit colleges and universities, but a return to an earlier version of the rule. Congress initially instituted an 85/15 rule with the 1992 Higher Education Act but changed the restriction to 90/10 during the 1998 reauthorization of the Higher Education Act.
Durbin has long fought for a return to the 85/15 rule.
He first introduced a version of the POST Act in January 2012. This marks his seventh time proposing this legislation. While it has stalled repeatedly in Congress, former President Barack Obama proposed changing the 90/10 rule to the 85/15 rule through his 2017 budget proposal.