William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021

Floor Speech

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Mr. TAKANO. Mr. Speaker, if there was a loophole in Federal law that led to a waste of taxpayer dollars and abuse of servicemembers and veterans, most of my colleagues would immediately spring into action to close that loophole and prevent waste, fraud, abuse, and the exploitation of our fellow Americans.

Well, that is exactly what for-profit schools are doing right now by exploiting a loophole in the law that caps the amount of Federal revenue that schools can receive. This loophole, known as the 90/10 loophole, excludes GI Bill and DOD tuition assistance benefits from the statutory limits on Federal revenue sources a for-profit school can claim.

Because of this, for-profits have used predatory tactics to aggressively recruit servicemembers and veterans, stealing their benefits and making millions in profit while providing them with low- quality education.

I have heard countless stories of this exploitation as chairman of the House Committee on Veterans' Affairs. Make no mistake, I will be taking decisive action to close this loophole for GI Bill benefits recipients. But first, closing this loophole for the DOD tuition assistance program is an important step to rid these Federal programs of this perverse incentive.

The DOD tuition assistance program, which pays up to $4,500 per year, has allowed servicemembers to pursue higher education at a reduced rate. Military education programs are extremely popular and have played an important role in educating millions of servicemembers.

In fiscal year 2017, over 255,000 servicemembers received nearly half a billion dollars in tuition assistance funding. However, because of the 90/10 loophole, many of our servicemembers have been aggressively targeted by for-profit schools looking to make up the difference in their funding. This loophole has incentivized predatory institutions to continuously deploy deceptive recruiting and marketing tactics to collect as much GI Bill and tuition assistance funding as possible.

So far, it has been lucrative. For every military student they can enroll, they can enroll nine more Title IV students in their low- performing programs.

This is not the free market at work. The fundamental basis of the 90/ 10 rule was to demonstrate that a real market exists for these educational programs and validate the quality and cost of these programs. This loophole lets these predatory schools cheat the free market and the government by collecting up to 100 percent of their revenue from Federal dollars.

This is a bipartisan issue and a bipartisan amendment. I ask that my colleagues stand up for our servicemembers and protect taxpayer dollars from predatory for-profit institutions that only view them as a benefit to their bottom line.

Ms. FOXX of North Carolina. Mr. Speaker, I claim the time in opposition to the amendment offered by the gentleman from California.

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Mr. TAKANO. Mr. Speaker, may I inquire as to how much time remains on my side.

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