Published: March 2021

Support closing the 90/10 loophole to protect students during the COVID-19 pandemic

Thirty-six organizations wrote to Senate Majority Leader Schumer and Republican Leader McConnell in support of closing the 90/10 loophole in the American Rescue Plan of 2021. During the "Great Recession" student enrollment at for-profit colleges increased by close to 49 percent, driven in part by aggressive and deceptive recruiting practices. And the cycle - this time driven by COVID-19 - has already started to repeat: for-profit college enrollment has increased from 13 to 15 percent, while public college enrollment, particularly at community colleges, has declined as much as 20 percent. Closing the 90/10 loophole allows for the accounting of all taxpayer dollars that flow to for-profit colleges, and the ability to identify high-risk colleges that are overly dependent on federal subsidies, and that may be financially unstable during the pandemic. The loophole has particular consequences for veterans because it leads to well-documented and disproportionate deceptive and misleading recruiting tactics directed at veterans and servicemembers.

The COVID-19 pandemic, and the economic crisis that it has precipitated, makes it critical to address the 90/10 loophole now. The evidence is undisputed that economic downturns lead to surges both in recruiting by, and enrollment in, for-profit colleges. The explosive enrollment growth during the Great Recession, driven in part by aggressive and deceptive recruiting practices, was followed by the collapse of multiple high-risk for-profit colleges including Corinthian Colleges and ITT Tech. Those collapses left hundreds of thousands of students, disproportionately low-income students, women, and students of color, stranded with high debt and virtually worthless degrees.

The effect of closing the loophole is to help stop this pandemic-related enrollment surge at the small number of for-profit colleges that rely almost exclusively on federal dollars.

Closing the 90/10 loophole also better protects veterans and military-connected students by eliminating the incentive to disproportionately recruit these students with aggressive and sometimes deceptive recruiting tactics.

Lead Organization

The Institute for College Access and Success (TICAS)

Other Organizations

American Federation of Teachers | Americans for Financial Reform | Campaign for America's Future | Center for American Progress | American Federation of State, County and Municipal Employees | Center for Public Interest Law | Center for Responsible Lending | Children's Advocacy Institute | Consumer Action | Hildreth Institute | Housing and Economic Rights Advocates | Maine Center for Economic Policy | Maryland Consumer Rights Coalition | National Association for College Admission Counseling | National Association of Consumer Advocates | National Consumer Law Center (on behalf of its low-income clients) | National Education Association | New America Higher Education Program | New York State Association for College Admission Counseling | Partnership for College Completion | Project on Predatory Student Lending | Public Good Law Center | The Century Foundation | Student Defense | Student Borrower Protection Center } Student Veterans of America | The Education Trust | The Institute for College Access & Success | Third Way | UnidosUS | Veterans for Common Sense | Veterans Education Success | Young Invincibles

More Information

Click here to read the letter in full.

For more information, please visit TICAS.

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