Republican Indiana Sen. Jim Banks introduced a bill on Monday to overturn a rule he says has been manipulated by Democrats to unfairly targets career schools and military students.
The Promoting Access and Revenue Integrity Through Institutional Transparency (PARITY) Act would repeal a rule in the Higher Education Act that requires at least 10% of funding for proprietary schools to come from non-federal sources. The rule originally qualified only typical federal student aid in the 90% cap, but was updated under the Biden administration to include GI Bill funding.
The rule also does not apply to public or nonprofit schools.
“Right now, the rules single out vocational and career schools while letting other colleges play by a different set of standards,” Banks said in a statement. “That’s not fair when these programs are helping meet critical workforce needs and keeping our economy moving.”
A letter of support obtained first by Daily Caller News Foundation notes that multiple military groups are behind the bill, arguing that the existing rule unfairly targets career and technical schools. Furthermore, while the original rule only intended to cap Title IV funds, or Federal Direct Loans, allowing schools to consider students on GI Bills part of their 10% non-federal sources, a 2021 update tucked into the American Rescue Plan changed this definition. The rule change effectively forces career schools to limit the number of military and veteran students they admit, Banks and other bill supporters argue.
“Democrats have saddled generations of young Americans with student debt by reinforcing elite university cartels,” Terry Schilling, president of the American Principles Project, said in a statement to the Daily Caller News Foundation. “This legislation expands opportunities for veterans, parents, and all Americans to access affordable and innovative programs that improve the lives of their students, rather than acting as gatekeepers for the DEI bureaucrats and progressive ideologues who want to monopolize the career pipeline.”
In its letter, the National Defense Committee pointed out that if the rule were applied fairly to all higher education institutions, 80% of public two-year colleges and 40% of public four-year colleges “would be out of compliance.”
Some military groups, however, argued in favor of the Biden-era rule that closed what they said was a “loophole” that allowed schools to maliciously target military students for funding.
“This gives for-profit colleges an incentive to see service members as nothing more than dollar signs in uniform, and to use aggressive marketing to draw them in and take out private loans, which students often need because the federal grants are insufficient to cover the full cost of tuition and related expenses,” Holly Petraeus, head of service member affairs at the US Consumer Financial Protection Bureau, said in a 2011 op-ed.
The 90/10 rule was originally adopted in 1992, then as an 85/15 rule. The rule posits that “if a proprietary [institution of higher education] is of sufficient quality, it should be able to attract a specific percentage of revenues from non-Title IV sources,” and says the cap is necessary in “reducing fraud, waste, and abuse.”
The Obama administration also sought to strengthen the rule, adding a requirement for schools to prove they “prepare students for gainful employment” following graduation, and adjusting regulations under the Borrower Defense to Repayment allowing students to have their loans forgiven by a for-profit institution if they prove the program used “misleading, deceitful, and predatory practices.”
“Under the Obama and Biden administrations, higher education policy was contorted into a hammer to drive competition in higher education into the ground,” the Consumer Action for a Strong Economy (CASE) wrote in a letter of support for the bill. “Officials in those camps loathed school choice, and they weaponized the federal rulebook to single out and punish career colleges, while propping up public and private universities—which were, and are, hemorrhaging students.”
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