90/10 Rule

Title IV of the Higher Education Act (HEA; P.L. 89-329, as amended by P.L. 105-244) authorizes programs that provide federal student financial aid to support student attendance at institutions of higher education meeting Title IV eligibility requirements. To participate in these programs, proprietary (for-profit) institutions must meet requirements included in Section 102 of the HEA, including requirements that proprietary institutions have been in existence for at least two years and derive at least 10% of school revenue from non-Title IV funds. This latter requirement forms the basis for the 90/10 rule.

Supporters of the 90/10 rule argued that the rule was necessary to stem fraudulent and abusive practices that had been identified at proprietary institutions.

Detractors of the new rule argued that requiring only proprietary institutions to obtain at least 10% of their revenue from non-Title IV sources could limit access to low-income students if proprietary institutions were forced to deny admission to students receiving Title IV funds to meet the required percentage of non-Title IV revenues.

My Issues:

1. If this rule is to provide for quality and value of education why do only for-profit schools have to abide by these rules?
2. If the government now also mandates gainful employment regulations which in effect act as tuition caps, how can they both tell a school how much to charge & penalize a school if their tuition is more than 90% covered by Title IV?

Example: if due to gainful employment a school may have its tuition for a program previously at $15,000 capped by the governments gainful employment regulation at let’s say $12,000 and the student qualifies for $11,000 in title IV funding that school would:

a)     Be forced to inform and provide the student all available eligible Title IV funding &

b)     Be in violation of the 90/10 rule at the $11,000 represents 91.6666% of the tuition

It seems clear that the Government is either dead set on crushing proprietary education or proving that the phrase government intelligence is in fact an oxymoron!

Why did I say conundrum?

conundrum definition: A paradoxical, insoluble, or difficult problem; a dilemma: “the conundrum, …

thats what 90/10 is when you add gainful employment…