A new push in Congress is reopening a long-running fight over how the federal government regulates for-profit colleges—and who those rules actually affect.
Senator Jim Banks of Indiana has introduced the PARITY Act, a bill aimed at rolling back changes to what’s known as the “90/10 rule.” That rule requires proprietary, or for-profit, colleges to receive at least 10 percent of their funding from non-federal sources. The idea, dating back to the early 1990s, is that schools should be able to attract some level of private investment or tuition if they’re delivering value.
The dispute centers on a 2021 update that expanded what counts as federal funding. Previously, the cap focused mainly on Title IV aid like federal student loans and grants. The Biden-era change added GI Bill benefits and other military education funds into that calculation. For career schools that enroll large numbers of veterans, that shift can push them closer to—or over—the 90 percent threshold.
Banks and his supporters argue that this creates an unintended bottleneck. By counting GI Bill funding as federal money, they say schools may limit how many veterans they admit in order to stay compliant. Backers of the bill, including several military-affiliated organizations, frame it as an access issue—arguing that veterans should not be treated as a liability in a school’s funding mix.
They also point out that the rule applies only to for-profit institutions, not to public or nonprofit colleges. That distinction has been a sticking point for years, with critics saying it creates uneven standards across the higher education system.
Opponents of rolling back the rule see it differently. Some consumer protection advocates and military groups have long argued that earlier versions of the policy left room for abuse.
Their concern is that excluding GI Bill funds from the cap gave certain schools a financial incentive to aggressively recruit service members, since those benefits didn’t count against the federal funding limit. Including them, in this view, closes that gap and reduces the risk of predatory practices.
This tension—access versus oversight—is not new. The rule has been adjusted multiple times under both Republican and Democratic administrations, often alongside broader efforts to address student debt, job placement outcomes, and accountability in higher education.
The PARITY Act doesn’t just revisit a technical definition. It reopens a fundamental question about how to balance opportunity for nontraditional students, including veterans, with safeguards meant to prevent misuse of federal education dollars. With both sides backed by organized groups and long-standing arguments, the debate is unlikely to resolve quickly.
