Cohen, Durbin, Harkin: Congress Should End Loophole that Encourages For-Profit Colleges To Target Veterans & Servicemembers

Press Release

Congressman Steve Cohen (TN-09) today introduced legislation in the U.S. House of Representatives that would help put an end to the for-profit college industry's predatory marketing campaigns and aggressive recruiting of veterans, servicemembers and their families. The Protecting Our Students and Taxpayers (POST) Act, which U.S. Senators Dick Durbin (D-IL) and Tom Harkin (D-IA) have also introduced in the Senate, would eliminate the loophole that allows these proprietary companies to receive more than 90% of their revenue from the federal government.

"For-profit colleges can receive overwhelming majorities of their revenue --up to 90%--from federal sources such as student loans," said Congressman Cohen. "Too often, these schools fail in their duty to adequately prepare graduates for jobs that will allow them to repay those loans, leaving taxpayers to foot the bill. Even worse, a loophole in current law allows unscrupulous colleges to receive even more federal funds by enrolling veterans and servicemembers. This loophole encourages bad behavior that weighs down our nation's heroes with mountains of debt and few career prospects while lining the pockets of wealthy for-profit investors with taxpayer money. Simply put, this is unacceptable. We are entrusted with spending our monies efficiently and wisely, but too many for-profit colleges do not meet that test. I am glad to be working with Senators Durbin and Harkin to close this loophole, encourage for-profit colleges to provide better educations, and protect American taxpayers."

"In the United States, for-profit colleges account for a disproportionate share of the students who have trouble paying back their loans (a measure of value in education)," said Senator Durbin. "They enroll only about 12% of all college students yet account for almost half of all student loan defaults. By law, for-profit college companies are allowed to receive no more than 90% of their revenue from federal financial aid programs. This high threshold 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. But there's another catch. Money from the new Post 9/11 GI Bill and from Department of Defense tuition assistance programs isn't counted which leaves hundreds of millions of taxpayers' dollars virtually unregulated. Consequently, these schools aggressively target veterans and servicemembers who too often don't receive the quality of education they deserve. We can't let this continue."

"The Department of Defense's Tuition Assistance program and the Post-9/11 GI Bill are intended to help servicemembers and veterans--who have sacrificed so much for our country--obtain a quality education," Senator Harkin said. "Instead, because of a loophole in the law, some for-profit colleges use predatory and deceptive tactics to target servicemembers and veterans for enrollment in order to tap into the benefits they and their families receive. Our servicemembers and veterans deserve better, and this common-sense bill will help protect taxpayer dollars and put the focus back on giving these men and women the degree and skills they need to build a brighter future."

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