Sending Office: Honorable Steve Cohen
The Protecting Our Students and Taxpayers Act
SUPPORTERS: Military Officers Association of America, Paralyzed Veterans of America, Veterans Education Success, The Education Trust, U.S. PIRG, The Institute for College Access and Success (TICAS), Student Veterans
of America, National Association of College Admission Counseling, American Federation of Teachers, American Association of State Colleges and Universities, Young Invincibles
Please join me as an original cosponsor of the bicameral Protecting Our Students and Taxpayers (POST) Act. Current law prohibits for-profit colleges and universities from deriving more than 90% of their revenue from the U.S. Department of Education’s federal
student aid programs. The other 10% is required to come from sources other than the federal government. The purpose of this rule is to ensure that schools are not overly dependent on the federal government for their operation and that others, besides federal
taxpayers, have skin in the game.
However, a loophole in the law treats federal education investments through the Department of Veterans Affairs GI Bill and Department of Defense Tuition Assistance (TA) program as non-federal revenue. As a result, the law incentivizes for-profit educational
institutions to aggressively recruit and target veterans, service members and their families. By enrolling large numbers of these students, many predatory for-profit colleges obtain more than 90 percent of their revenue from federal taxpayers while still
complying with the law.
According to data released by the Department of Education, without the loophole, 193 institutions, including some of the largest recipients of GI Bill benefits, received more than 90 percent of their revenue from federal taxpayers – $8 billion cumulatively.
Further, without the loophole, more than 563 institutions received more than 85 percent of their revenue from federal taxpayers – $12.6 billion cumulatively.
To better protect students and our taxpayer dollars, the POST Act would re-instate the original ratio – 85/15 (it was loosened to 90-10 in 1998) and change the definition of what counts as federal revenue so that it includes all federal funds like GI Bill
and TA funds. Even so, under the current rule, for-profit colleges took in $21.4 billion in Title IV funds in 2014 – 17 percent of all Title IV aid – despite only enrolling nine percent of college students.
The POST Act would do the following:
- Require for-profit schools to derive at least 15 percent of their revenue from non-federal sources
- Expand the definition of federal sources to include military (Tuition Assistance and MyCAA) and G.I. Bill education assistance
- Count institutional loans (schools can now use Title IV funds from one student to lend to another) in the calculation of federal revenue sources
- Eliminate a school’s Title IV eligibility after one year of noncompliance instead of the three consecutive years it now takes
I hope that you will join me as a co-sponsor of this important legislation, whose companion will be led by Senator Durbin. If you would like to sign on to the bill or have any questions, please contact Merrilee Rogers at
Merrilee.Rogers@mail.house.gov or 5-3265.
Member of Congress
e-Dear Colleague version 2.0