Advocates push Senate to drop changes in 90/10 rule for vets benefits

In a letter sent Wednesday evening to Senate Majority Leader John Thune, R-S.D., and Minority Leader Chuck Schumer, D-N.Y., the groups noted that the provision concerning a repeal of the 90/10 rule could also cost the federal government as much as $1.6 billion, making the move concerning on a fiscal level as well as a ethical one.

“Our organizations spent a decade with bipartisan lawmakers to solve this problem,” the letter stated. “That progress shouldn’t be undone.”

At issue is the 90/10 rule, which covers how colleges must account for how much federal financial aid funding they take in.

By law, colleges and universities must have at least 10% of their revenues derived from non-federal sources in order to qualify for federal benefits. The idea behind the regulation is to ensure that for-profit institutions aren’t funded solely by federal monies, but instead also include significant investment by students interested in furthering their education.

But for years, GI Bill benefits and Defense Department Tuition Assistance programs were not counted as federal dollars for the 90/10 calculation, despite being taxpayer-funded benefits.

As a result, schools could target veterans or troops receiving federal education payouts to boost their government funding well beyond the 90% cap.

Four years ago, as part of an emergency funding bill during the Covid-19 pandemic, lawmakers closed that loophole, reclassifying the GI Bill money and other military education programs as federal funding in the 90/10 calculations.

But the Republican-backed reconciliation bill — which includes changes to tax rates, Medicaid spending and a host of other federal program reforms — would revert to the pre-2021 rules on college accounting for federal aid. GOP committee members argued the change was needed to reduce regulations and promote more affordable options for student veterans.

Officials from the Congressional Budget Office estimated the 90/10 reversal could cost as much as $1.6 billion over the next decade.

“Congress designed the [rule] to be a market viability test to protect taxpayers from artificially propping up a failing college of such low quality that no employer or private-paying student is willing to pay for it,” the letter stated. “We urge you to vote ‘no’ on repealing the common-sense rule.”

Democratic lawmakers have been pointing to the rule change as one of many flaws in the Republican backed bill, which passed only party lines in the House.

Senate lawmakers are expected to take up work on the massive budget measure when they return from recess next week. Chamber leaders have said they hope for a floor vote on the bill before the congressional July 4 recess.