House Republicans are advancing legislation to repeal a key protection aimed at shielding student veterans from predatory practices by for-profit colleges, a move that has sparked sharp criticism from Democrats and veterans advocates.

The controversial provision is tucked into a larger congressional reconciliation bill that includes sweeping cuts to education funding—totaling $330 billion over the next decade.

At the heart of the debate is the repeal of a rule governing how for-profit institutions calculate their federal funding, specifically how they count military education benefits like the GI Bill and Department of War Tuition Assistance.

Known as the “90/10 rule,” the law requires for-profit colleges to derive at least 10% of their revenue from non-federal sources to qualify for federal financial aid programs.

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The rationale behind the rule is to ensure these institutions are viable in the open market and not solely reliant on taxpayer dollars.

However, for many years, GI Bill funds and other military education benefits were excluded from the definition of federal dollars, creating what critics called a “loophole.”

This allowed institutions to count those benefits toward the 10% non-federal threshold, even though they were taxpayer-funded. As a result, schools had a financial incentive to target veterans aggressively in order to continue maximizing federal aid.

That loophole was closed in 2021, following years of advocacy from veterans groups and bipartisan lawmakers.

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The change reclassified military education benefits as federal dollars in the 90/10 calculation, aligning them with the intent of the original rule and limiting predatory recruitment of veterans.

Now, just three years later, Republicans on the House Education and Workforce Committee have voted to roll back that rule.

“The closing of this loophole was widely celebrated as a bipartisan success in 2021,” said Rep. Mark Takano, D-Calif., the top Democrat on the House Veterans’ Affairs Committee.

“Congress deemed that holding predatory for-profits accountable was necessary to safeguard federal education benefits and ultimately protect both taxpayers and students.”

GOP members argue that the reinstated exemption for military benefits is necessary to reduce regulatory burdens and provide veterans with more educational options.

They contend that for-profit schools can offer flexible, career-oriented programs that serve veterans well.

“Rather than using the regulatory hammer to pick winners and losers, we should encourage all colleges to focus on student success,” said Rep. Burgess Owens, R-Utah, during committee debate.

But that perspective drew strong rebukes from Democratic lawmakers, who emphasized that the rule’s repeal would once again expose veterans to manipulative recruitment practices.

They highlighted a long history of for-profit institutions luring veterans into low-quality programs simply to meet revenue thresholds, often leaving students with debt and without degrees.

“Unscrupulous institutions were using this to exploit student veterans,” said Rep. Suzanne Bonamici, D-Ore. “Now Republicans want to eliminate the rule altogether, removing a vital consumer protection and giving for-profit colleges free rein to continue to prey on students.”

Veterans advocacy organizations have also condemned the proposed rollback. Allison Jaslow, CEO of Iraq and Afghanistan Veterans of America, issued a forceful statement criticizing lawmakers who supported the provision.

“The House of Representatives should be ashamed that they’re even entertaining the idea of reinstating this costly and wrongheaded policy that would threaten the future of veterans’ education,” Jaslow said.

The Veterans Affairs Department currently disburses more than $8 billion in education benefits annually—funds that could again be funneled disproportionately to for-profit institutions if the rule is repealed.

An amendment introduced by Democrats to strip the repeal language from the bill failed along party lines.

While the reconciliation bill still faces hurdles—including potential revisions from House leadership or the Senate—veterans groups have pledged to raise public awareness and pressure lawmakers to preserve the current rule.

Advocates argue that protecting military education benefits from abuse is not only a matter of financial accountability but also a moral obligation.

“This isn’t just about dollars and cents,” Rep. Takano said.

“It’s about keeping promises to veterans who’ve served our country and deserve access to education that sets them up for success—not schemes that take their benefits and leave them with nothing.”

Republican leaders have stated their intention to pass the full reconciliation bill by mid-June. As debate continues, the fate of the 90/10 rule—and the safeguards it provides to veterans—remains uncertain.

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