From: The Honorable Maxine Waters
Sent By:
alexandra.uriarte@mail.house.gov

Date: 4/3/2017

Reimplement 85/15 Rule!
*this is a language request*
Deadline: April 5 12pm

Dear Colleague,

I invite you to join me in signing the letter below and urging the House Appropriations Subcommittee on Labor, Health, Human Services and Education to re-implement the rule that limits the amount of Higher Education Act (HEA) Title IV funding for-profit
colleges and universities can receive to from 90 percent to 85 percent, known as the 85/15 rule. In 1992, I introduced an amendment to the HEA which implemented the 85/15 rule into law. Due to strong lobbying efforts by the for-profit college industry, the
law was weakened to allow for profit schools to receive up to 90 percent of their funding from federal sources.

However, decades of abuse and fraud from this industry merit the reimplementation of 85/15 ratio in order to begin to reign in this predatory behavior.

In recent years, 36 States Attorneys General and several federal agencies have filed lawsuits and launched investigations against large for-profit colleges that have squandered taxpayer dollars while defrauding students through manipulating graduation and
employment rates, utilizing illegal debt collection and recruitment practices and steering students into taking out burdensome loans they didn’t need.

If Congress does not act now to put a halt to the abuse the for-profit college industry has wreaked upon students and taxpayers to date, potentially thousands more students could be saddled with worthless degrees and insurmountable debt with no real hope
for their futures. Please join me in singing this letter, and once again holding for profit colleges accountable to our students.

Please contact Alexandra.Uriarte@mail.house.gov if you would like to sign on or have any questions about this letter.

 

April XX, 2016

The Honorable Tom Cole
Chairman
House Appropriations Committee
Subcommittee on Labor, Health and Human Services, Education
and Related Agencies

The Honorable Rosa DeLauro
Ranking Member
House Appropriations Committee
Subcommittee on Labor, Health and Human Services, Education
and Related Agencies

Dear Chairman Cole and Ranking Member DeLauro,

As you continue your work on the FY2018 Labor, Health, Human Services, and Education Appropriation bill, we strongly encourage you to fulfill the President’s request and include language that requires for-profit institutions of higher education to derive
not more than 85 percent of their revenue from federal sources under the Higher Education Act.

Over the last several decades, efforts to bring accountability to abusive for profit colleges and universities have been shamefully ignored as thousands of students have been defrauded and scammed for their educational federal aid. The best step forward
in helping curb these abuses is to decrease the amount of revenue that a for-profit college is eligible to receive from the federal government to 85 percent, or in other words, implement the “85/15” rule.

The 85/15 rule was first implemented in 1992 as a bi-partisan amendment to the Higher Education Act to prevent unscrupulous for profit colleges from enriching themselves at the expense of economically disadvantaged students while providing little or no education
in return. At the time, the for profit college scheme was slowly being exposed. These colleges would offer low quality education for high costs leaving students with large debts,  no new marketable skills and, therefore unable to secure meaningful employment.
Consequently, students often defaulted on their loans.

In response, the 85/15 rule was implemented based upon the premise that if a college offers a quality education at a competitive price, then investors other than the federal government, such as employers, scholarship providers or the students themselves
will be willing to pay for the attendance at the school. As one for-profit college explained, investment outside of the federal government is an “indicator of educational quality.” Therefore, 85/15 requires for profit colleges to increase the amount of outside
investment which will in turn increase the quality of the education offered.

In 1998, however, as a result of relentless lobbying efforts by the for-profit college industry, the 85/15 rule was weakened, and became the 90/10 rule, enabling fraudulent for profit colleges to receive even more federal dollars while failing to provide
students with the tools they need to obtain a profitable and fulfilling career.

The consequences of rolling back the 85/15 rule have been disastrous. While the whole for-profit college industry enrolls approximately 10 percent of the student body population, they currently receive more than 25 percent of Department of Education funds.
With these funds, these institutions have inflated job placement rates, engaged in illegal debt collection practices, employed illegal recruitment tactics primarily targeted at servicemen and women, and falsely advertised employment prospects of graduating
students. Currently, thirty seven attorneys general – both Republican and Democrat –  as well as the Department of Justice (DOJ), Federal Trade Commission, Securities Exchange Commission and the Consumer Financial Protection Bureau (CFPB), have  investigating
fraud and abuse within the for profit college industry over the last several years.

Addressing the crimes of these for-profit colleges after they have already failed our students and wasted tax payers dollars is simply too late.

Reinstating the 85/15 in its original form is a critical step in enhancing the quality of educational opportunities at for profit colleges and holding for profit colleges accountable. 85/15 will help end the predatory cycle of debt and fraud that for profit
colleges have imposed on our most vulnerable student populations.

For these reasons, we respectfully request the reimplementation of the 85/15 rule under the Higher Education Act. Thank you for considering this request and we look forward to working with you in the future to better serve our students and help provide them
quality educational opportunities.