Congress Closes Loophole That Made Veterans a Target of For-Profit Schools

The change won’t be effective until 2023, a delay that Carrie Wofford, the president of Veterans Education Success, an advocacy group, called “a bitter pill to swallow.” But the delay was necessary to reach a bipartisan deal. “It was the right decision,” she said.

Career Education Colleges and Universities, the trade group of for-profit schools, said it supported the change.

“We are thrilled to finally see a bipartisan consensus develop around the controversial 90/10 rule,” said Jason Altmire, the group’s chief executive. The delay, he said, “will allow time for a fair, rational and permanent solution for an issue that has been driven by partisan politics for far too long.”

For-profit schools are already preparing. This week, American Public Education, which operates a collection of schools and training programs explicitly marketed to former service members, told investors on an earnings call that it would have enough time to adjust its business model in various ways, including through acquisitions, to stay compliant.

Although for-profit schools have long been criticized for skirting federal rules, the revision takes a target off service members’ backs. “Schools might find ways to get around the rule, but at least they won’t be financially incentivized to pursue veterans,” Ms. Wofford said. “That’s a big win.”

Ms. Berkhalter said she was delighted that future veterans would be protected from the kind of financial harm she suffered. After leaving the Army in 2005, she enrolled at ITT and earned a bachelor’s degree in criminal justice. She came close to landing her dream position — a case management role at a mental health treatment center — but when the employer discovered that her degree was from ITT, the offer vanished.

ITT consumed her $75,000 in G.I. Bill funds and still left her with nearly $100,000 in student loan debt. Ms. Berkhalter hopes to have her federal loans eliminated through an Education Department program that is intended to wipe out the debt of students who were victims of fraud. Her application languished during the Trump administration, as Education Secretary Betsy DeVos strongly opposed the program and resisted approving applicants’ claims.

Ms. Berkhalter hopes the Biden administration will be more forgiving. “I’m excited for all those service members ahead who will be helped by this,” she said. “But they still need to do something about those of us who have been going through this for so long.”

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