Reed Seeks to Protect Veterans & Prevent Misuse of GI Bill Benefits

Press Release

In an effort to ensure that veterans and taxpayers aren't being taken advantage of by substandard, for-profit schools, U.S. Senators Jack Reed (D-RI), Richard Blumenthal (D-CT), Thom Tillis (R-NC), and several of their colleagues today introduced the Career-Ready Student Veterans Act of 2015. This bipartisan bill would provide stronger consumer protection measures for veterans by prohibiting schools lacking appropriate programmatic accreditation from receiving G.I. Bill benefits.

A recent report by Reveal from the Center for Investigative Reporting found that the G.I. Bill was being exploited to pay for expenses at unaccredited or unlicensed schools, including a religious college in Oklahoma associated with promoting hate crimes and an institute on human sexuality in California that claims to be in possession of child pornography. The report noted that over 2,000 unaccredited institutions nationwide have reportedly received more than $260 million in G.I. Bill benefits between 2009 and 2014.

"The G.I. Bill was designed to help veterans get an education, support their families, and succeed in civilian life, not as a cash-cow for sub-par, for-profit institutions. We need to protect the G.I. Bill and strengthen it. That means closing loopholes that are being used to exploit it and ensuring these funds are properly spent," said Senator Reed, a member of the Appropriations Subcommittee on Military Construction, Veterans Affairs, and Related Agencies who helped pass the 21st Century G.I. Bill in 2008. "We need to ensure there is more transparency and accountability in this program. Our veterans should have access to the information they need to make informed decisions so they can get a quality education that meets their career goals."

Last month, Reed and several colleagues sent a letter urging VA Secretary Robert McDonald to investigate allegations that a number of questionable unaccredited educational institutions have received G.I. Bill benefits, despite federal regulations to prevent it.

Cosponsors of the Career-Ready Student Veterans Act of 2015 include: U.S. Senators Sherrod Brown (D-OH), Tom Carper (D-DE), Bill Cassidy (R-LA), Chris Coons (D-DE), Dick Durbin (D-IL), Dianne Feinstein (D-CA), Kirsten Gillibrand (D-NY), Jeff Merkley (D-OR), Chris Murphy (D-CT), Charles Schumer (D-NY), and Jeanne Shaheen (D-NH). And the bill is supported by the Iraq and Afghanistan Veterans of America (IAVA), the Veterans of Foreign Wars (VFW), the Military Officers Association of America (MOAA), Student Veterans of America (SVA) and Veterans Education Success.

Earlier this year, Senator Reed and a group of more than 20 U.S. Senators introduced the Military and Veterans Education Protection Act of 2015 to close the so-called "90-10 loophole" that allows for-profit schools to avoid having to secure at least 10 percent of their revenue from non-federal sources.

The 90-10 rule prohibits for-profit colleges from receiving more than 90% of their operating revenue from federal student aid money, such as Stafford loans and Pell grants. However, current law leaves open a loophole that allows for-profit institutions to count military and veteran educational assistance, such as the G.I. Bill, as non-federal revenues. Some bad actors in the for-profit industry are exploiting this 90-10 loophole by aggressively recruiting veterans and G.I Bill tuition dollars, rather than obtaining 10 percent of their revenue from non-federal sources. The Military and Veterans Education Protection Act would require G.I. Bill benefits that come from the U.S. Department of Veterans Affairs and military education benefits offered through the U.S. Department of Defense to count toward the 90-percent limit on the federal share of a school's revenue.

"Closing the 90-10 loophole is a common sense step toward holding for-profit schools accountable and ensuring they aren't exploiting students and taxpayers," said Reed.

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