State attorneys general representing 21 states are commending the U.S. Department of Education (DOE) proposed improvements to the 90/10 Rule.
Massachusetts Attorney General Maura Healey and Minnesota Attorney General Keith Ellison recently spearheaded a letter to DOE Secretary Miguel Cardona regarding proposals prohibiting for-profit schools from receiving over 90 percent of their revenue from federal student aid.
Per the letter, the attorneys general are advocating the DOE adopt stronger regulations to protect borrowers from improper conversions by for-profit schools to nonprofit status.
“We are proud to have worked with the Department to reach a consensus on these important regulatory changes that help clarify the 90/10 Rule process, prevent borrower abuse, and protect our veterans and servicemembers from predatory practices,” Healey said. “We look forward to continuing our mutual work to support students and taxpayers.”
The DOE regulations would protect borrowers from loopholes plaguing the 90/10 Rule while eliminating financial incentives for schools to aggressively target military members.
“We commend ED’s goal of preventing schools from attempting to use high-cost institutional financing to meet 90/10 revenue requirements,” the attorneys general wrote. “As our states’ chief civil law enforcers, we have substantial experience in addressing complaints concerning high-cost institutional loans made by for-profit schools to finance tuition and fees. It is important that ED’s proposal prevents schools from including interest from institutional lending as revenue under the Rule. This follows Congressional intent to only include revenue that pays for tuition and fees and ensures that schools are not incentivized to charge exorbitant interest on their institutional financing.”