Waters to seek tightening of for-profit colleges' revenue rule

The top Democrat on the House Financial Services Committee said Thursday that she plans to introduce legislation soon to alter what for-profit college critics call a loophole in the law that encourages the industry to aggressively recruit student veterans.

Rep. Maxine Waters (D-Calif.), said her proposal would alter the "90/10" rule, which means for-profit colleges can't get more than 90 percent of their revenue from federal student aid. She wants to change the ratio to "85/15."

"Both changes are long overdue," said Waters, while testifying during the House Education and Labor Committee's "Members Day."

"We've got to be tougher," said Waters, while also encouraging the committee to include these changes as part of its work to reauthorize the Higher Education Act.

Waters said in 1992, she successfully introduced legislation that limited the funds to "85/15," but the law was later amended to the current "90/10" figure. She said she introduced legislation in 2011 to change how the veterans benefits are calculated.

Rep. Bobby Scott (D-Va), the committee chairman, told Waters in response that the changes are something the committee is "strongly considering."

Scott said making such changes would not adversely hurt for-profit colleges that are doing a "good job."

"Those that are not doing a good job will be fearful," Scott said.

Waters — a long-time critic of the for-profit college industry — also expressed frustration at Education Secretary Betsy DeVos' handling of issues surrounding the industry, which consumer advocates have said make it easier for bad actors to prey on students but which the department has said is about treating schools more fairly.

"I'm hopeful that Ms. DeVos will learn a lot about the for-profit industry and correct some of the mistakes that she's made," Waters said. "I'm not going to consider her an absolute enemy. I'm going to consider that she just doesn't know any better at this time."

Next Article Previous Article