Press Releases

Reps. Shalala, Houlahan, Cisneros and Moulton Introduce Bill to Protect Veterans’ Education Benefits from Predatory For-Profits

Washington, June 19, 2019 | Joseph.Puente@mail.house.gov (2022253931)

WASHINGTON, DC – Today, U.S. Representatives Donna Shalala (D-FL), Seth Moulton (D-MA), Chrissy Houlahan (D-PA), and Gil Cisneros (D-CA) introduced the Defending All Veterans in Education (DAVIE) Act of 2019. DAVIE closes the GI Bill loophole in federal law that allows for-profit colleges to take advantage of veterans and servicemembers.

Currently, for-profit colleges must operate under a 90/10 rule that requires these schools to receive no more than 90% of their revenue from federal student aid. However, veteran educational assistance through the GI Bill and DOD erroneously falls into the 10 percent of revenue that must come from non-federal sources.

“Current federal laws permit bad actors in the for-profit education industry to take advantage of our veterans,” said Rep. Shalala. “It is unacceptable and un-American that some for-profit institutions continue to use our veterans’ hard-earned benefits to line their own pockets. We need to ensure veterans and GI Bill recipients do not fall victim to the predatory recruitment tactics of low-quality institutions that see them as little more than the profits they provide. My bill protects our veterans from these dishonest schemes.”

The DAVIE Act would close this loophole by reclassifying GI Benefits as federal student aid that must count towards the 90 percent portion of the 90/10 rule. In addition, the bill adjusts the ratio to 80/20 to ensure that these institutions are truly sustainable and able to earn revenue through other sources, such as employers, scholarship endowments, or students willing to pay tuition.

Recent years have seen a collection of for-profit college closures that disproportionately affect veterans. ITT Tech, Career Education Corporation, and Education Management Corporation received $2.5 billion from GI benefits before they closed. More recently, the closures of Argosy University and the Art Institutes left over 1,700 GI Bill beneficiaries saddled with debt, non-transferrable credits, and lacking a degree.

For-profit institutions prey on veterans by making false promises about the quality of education they offer. However, even when GI Bill recipients manage to graduate from these schools before they close, they often find that their degrees are not respected and they do not have the skills they need to transition to civilian life.

“Scamming America’s veterans to make a quick buck is about as unpatriotic as it gets,” said Rep. Moulton. “I'm a capitalist, but for-profit colleges and universities have shown they're grossly incapable of regulating themselves. It is long-past time for Congress to step in so veterans receive college degrees, not huge bills, when they use their GI Bill benefits.”

“It is unacceptable that for-profit educational institutions are allowed to prey upon the hard earned benefits of our veterans with empty promises of a quality education and skills for a successful civilian life,” said Rep. Cisneros. “As a Navy veteran and education advocate who benefited from the G.I. Bill, we need to ensure our veterans receive the best education possible and are not taken advantage of simply because they are eligible for this great benefit they earned through their sacrifice for our country.”

“These brave men and women served our country,” said Rep. Houlahan. “There is no excuse for any educational institution to partake in disingenuous and predatory schemes that harm our veterans who are looking to build their lives as civilians. I remember leaving the Air Force, returning to school to continue to gain marketable skills, and then transitioning back to civilian life. What these colleges are doing goes against our American values, and I’m proud to co-lead this legislation that will protect our veterans.”

“When unscrupulous institutions look to make a quick dollar off of servicemembers and other military-connected students, we must seek restoration for those students, and we must ensure accountability to prevent others from being ensnared by false claims and predatory practices,” said Lt. Gen. Dana T. Atkins, President and CEO of the Military Officers Association of America (MOAA).

“AMVETS proudly supports DAVIE, because it would help strengthen the GI Bill and protect veterans from predatory institutions that in recent years have taken their hard-earned benefits and absconded. These veterans were often deprived of both college degrees and the financial means to continue their education. AMVETS looks forward to working with Rep. Shalala to help pass this important legislation and enhance education opportunities for veterans,” said AMVETS National Executive Director Joe Chenelly.

The DAVIE Act has been endorsed by the Military Officers Association of America (MOAA), Association of the Unites States Navy (AUSN), American Veterans (AMVETS), High Ground Veterans Advocacy, Florida Veterans for Common Sense (FLVCS), Military Child Education Coalition (MCEC), Military Veterans Advocacy (MVA), The American Legion, TREA: The Enlisted Association, Wounded Warriors Project, and Veterans for Common Sense (VCS).

Text of the DAVIE Act can be found here.

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