Community Update from Congresswoman Donna Shalala

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Community Update from Congresswoman Donna Shalala
Community Update from Congresswoman Donna Shalala
Congresswoman Donna Shalala

Last month marked the 75th anniversary of the enactment of the G.I. Bill. As we celebrate the 4th of July this year, we honor the role that service members have played in our country since the birth of this nation and recommit to supporting them as they transition to civilian life.

Veterans of World War I received little more compensation than a train ticket home. The Great Depression hit these veterans hard, and in 1932, a group marched to Washington to demand the bonuses they had earned. Unfortunately, Congress didn’t act until the veterans of World War II began to return home. It was then that President Franklin D. Roosevelt signed the G.I. Bill into law on June 22, 1944. The original bill, which expired in 1956, provided millions of veterans with education support, home loan benefits, and unemployment pay. The Post-9/11 G.I. Bill, signed into law in 2008, provides veterans who served after September 11, 2001 with additional education benefits.

This anniversary of the G.I. Bill serves as a time for us to usher our commitment to supporting our veterans into a new era. As we celebrate the foundational liberty of our nation, we must never forget those who continue to defend the freedom and rights that we first declared on July 4 of 1776. In honor of this date and those who continue to serve our nation, I want to update you on a piece of legislation I recently introduced in the House: the Defending All Veterans in Education (DAVIE) Act of 2019.

The DAVIE Act will close a loophole in the Post-9/11 G.I. Bill related to a federal policy known as the 90/10 Rule. Under this policy, for-profit colleges can receive federal student aid only if they are able generate at least 10 percent of their revenue from sources other than the federal government. However, G.I. Bill benefits are erroneously counted on the 10 percent side of the ratio, even though they are federally funded.

The 90/10 ratio is supposed to be a measure of school quality, prohibiting federal tax dollars from supporting institutions that cannot earn significant revenue from sources outside the government, such as employers, scholarship endowments, or students who are willing to pay tuition. This loophole in the law has created predatory for-profit institutions that are almost entirely dependent on the federal government to thrive, apportioning tax payer dollars on both sides of the 90-10 ratio and taking advantage of service members.

American veterans should not be treated as cash cows by profit-seeking entities. While only 27 percent of G.I. Bill students are enrolled in for-profit institutions, these schools take in almost half of total G.I. Bill funds. From 2009-2017, eight of the top ten recipients of Post-9/11 G.I. Bill tuition and fee payments were for-profit institutions.

For-profits, including ITT Tech, Career Education Corporation, and Education Management Corporation, took in a combined $2.5 billion from G.I. Bill benefits before they closed their doors in the last decade. Another recent wave of closures at Argosy University and The Art Institutes affected more than 1,700 G.I. Bill recipients. When these schools shuttered, enrolled veterans surrendered their G.I. Bill benefits. Many were stranded in debt with no degree and no opportunity to transfer their credits to a legitimate institution of higher learning.

The DAVIE Act will close the for-profit loophole in the Post-9/11 G.I. Bill and change the ratio from 90/10 to 80/20. These measures will protect veterans from the predatory recruitment tactics of for-profit schools that offer low-quality, high-cost programs and often leave veterans saddled with debt and worthless degrees. As we celebrate the 75th anniversary of the G.I. Bill, I’m proud to take a stand to strengthen and protect veterans’ education benefits.

In addition, I want to remind you that we are now in the midst of hurricane season. I recommend reading the National Hurricane Center’s guide on hurricane preparedness: https://www.nhc.noaa.gov/prepare/ready.php.

I also encourage you to download ReadyMDC, Miami-Dade County’s new app that provides residents with up-to-the-minute weather information.

I want to hear from you about the issues affecting our community. Be sure to save the date for these upcoming Town Hall meetings:
● Coral Gables — July 31
● City of Miami — August 28
● Richmond Heights — October 3
● Coconut Grove — October 1

Specific time and location information can be found on my website at https://shalala.house.gov/calendar/.

As always, don’t hesitate to stop by our district office if you need assistance with an issue or want to share your concerns about a policy matter. We’re located at 7700 N. Kendall Drive, Suite 605, Miami, FL 33156, and we’re open Monday through Friday from 9am until 5 p.m. Give us a call if you need help with a federal agency, applying for a federal grant, or requesting a U.S. flag to be flown over the Capitol. You can visit our website at https://shalala.house.gov/services or give us a call at 305-668-2285 or 202-225-3931.

Be sure you stay up-to-date with the latest developments from our office on Facebook, Twitter, and Instagram: @RepShalala.

Sincerely,
Donna


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1 COMMENT

  1. I am the President of several proprietary career colleges in Louisiana and Florida. Although we do not target veterans, we do serve them. About 3% of our enrollment use Veteran’s benefits. Over the past 5 years, we have enrolled 304 students with Veterans Benefits. Of that number, 193 graduated and 25 were still in school yielding a graduation rate of 63.5% and a retention rate of 71.7% – which is excellent.

    As for success, in one of our typical metro areas, our college has a graduation rate of 55%, the local HBCU has a graduation rate of 29% and the local Community College has a graduation rate of only 9% (from collegescorecard.ed.gov). Now, you tell me which college is providing a better service to the community?

    First of all, I don’t believe the inclusion of Veteran’s Benefits as non-federal income is a “loophole” – the law was written that way. Veteran’s benefits are earned by our brave men and women who should be allowed to use those benefits at the school that best fits their needs. Most of our veterans are smart enough to be able to choose where to pursue their education with their earned benefits without the federal government arbitrarily limiting their choices solely based on the ownership structure of the school.

    Second, I believe that about 95% of all higher education institutions (public, non-profit, and for profit) would survive without government funding. All public institutions are highly subsidized by local and state governments and the majority of students nationwide are using some form of Federal Student Aid, mainly Pell Grants and Student Loans. So singling out a small sector of higher education and subjecting it to regulations that virtually no college or university could comply with is just plain wrong.

    Might I suggest that the 90/10 rule is direct evidence of the “law of unintended consequences?” For sure, there were schools that aggressively recruited Veterans because of the 90/10 rule, but it was the 90/10 rule that led to this. It was also the 90/10 rule that led to high tuition, excessive borrowing by students (including private loans), venture capital investment, publicly-traded school corporations and a host of other ills.

    It is time for the 90/10 rule to go away. At a minimum, if the 90/10 rule existed no more, within a few years competitive market forces would drive tuition down at proprietary career colleges resulting in less student debt. And isn’t that what we should all be about? – delivering high-quality, affordable tuition.

    So what to do to curb abuses in all of higher education? OUTCOMES!!! All postsecondary education should be affordable, accountable and transparent. All students should know the answers to the following basic questions before enrolling in any postsecondary education:
    1. How much will it cost me to graduate from this program?
    2. What percentage of students that start this program graduate?
    3. Of the recent year’s graduates, what percentage of them are employed in their field?
    4. Of the recent year’s graduates, what are they earning?

    The College Scorecard website, produced and maintained by the Federal government, has come a long way since inception and has become a great source of this information on each institution. In the near future, the College Scorecard is scheduled to include this information on a program-level basis. This is the direction we should all be working toward.

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