Indiana Sen. Jim Banks filed legislation this week to scrap a federal funding rule that critics say forces career and technical colleges to turn away military students, a restriction that applies to no other type of school in America.
The bill, called the Promoting Access and Revenue Integrity Through Institutional Transparency Act, the PARITY Act, would repeal a provision in the Higher Education Act that requires proprietary schools to draw at least 10 percent of their revenue from non-federal sources. That mandate, known as the 90/10 rule, was tightened under the Biden administration in 2021 to count GI Bill benefits as federal money for the first time, the Daily Caller News Foundation first reported.
The practical effect: career schools that serve large numbers of veterans and active-duty service members now risk losing eligibility for all federal student aid if too many of their students use military education benefits. No public university or private nonprofit college faces the same constraint.
The rule traces back to 1992, when Congress adopted what was then an 85/15 standard. The theory, as a Congressional Research Service report described it, was that "if a proprietary [institution of higher education] is of sufficient quality, it should be able to attract a specific percentage of revenues from non-Title IV sources," thereby "reducing fraud, waste, and abuse." The threshold was later loosened to 90/10.
For decades, only traditional Title IV federal student aid, Pell Grants, federal loans, counted toward the 90 percent cap. GI Bill benefits and other military education funding did not. That changed with the 2021 update, which reclassified military education dollars as federal revenue for purposes of the cap.
The reclassification created a perverse incentive. A career school enrolling large numbers of veterans could suddenly find itself over the 90 percent threshold, not because it was defrauding anyone, but because its students were using benefits they earned through military service. To stay in compliance, such schools would have to limit veteran enrollment or find ways to generate more private-pay revenue.
Banks framed the disparity in blunt terms. In a statement, the Republican senator said:
"Right now, the rules single out vocational and career schools while letting other colleges play by a different set of standards. That's not fair when these programs are helping meet critical workforce needs and keeping our economy moving."
Multiple military organizations have lined up behind the PARITY Act. A letter of support from the National Defense Committee, first obtained by the Daily Caller News Foundation, argued that the existing rule unfairly targets career and technical schools while giving traditional colleges a pass.
The letter included a striking data point: if the 90/10 rule were applied equally to every higher education institution in the country, 80 percent of public two-year colleges and 40 percent of public four-year colleges "would be out of compliance." In other words, the very schools that progressive policymakers protect from the rule depend on federal money far more heavily than many of the career schools the rule punishes.
That double standard is the heart of the conservative case against the regulation. Career colleges, welding programs, nursing schools, truck-driving academies, coding bootcamps, compete with traditional universities for students. The 90/10 rule, as updated, tilts the playing field against them by treating earned military benefits as a liability rather than an asset.
The broader pattern of the Biden administration using regulatory power to reshape education policy without full congressional authorization has drawn sustained criticism from Republicans. Banks's bill is the latest effort to reverse that approach through legislation.
The 2021 update did not emerge from nowhere. The Obama administration had already moved to tighten oversight of for-profit schools by adding a requirement that proprietary institutions prove they "prepare students for gainful employment" following graduation. The same administration adjusted Borrower Defense to Repayment regulations, allowing students to seek loan forgiveness from a for-profit institution if they could prove the program used "misleading, deceitful, and predatory practices."
Supporters of those earlier rules pointed to genuine abuses. Holly Petraeus, then head of service member affairs at the Consumer Financial Protection Bureau, wrote in a 2011 op-ed that the pre-2021 version of the rule already gave for-profit colleges a reason to target military students:
"This gives for-profit colleges an incentive to see service members as nothing more than dollar signs in uniform, and to use aggressive marketing to draw them in and take out private loans, which students often need because the federal grants are insufficient to cover the full cost of tuition and related expenses."
Petraeus's concern was real in 2011. But the Biden administration's response, folding GI Bill money into the cap, did not solve the aggressive-marketing problem she described. It created a new one: schools that genuinely serve veterans well now face a funding penalty for doing so.
Consumer Action for a Strong Economy, known as CASE, put the matter more sharply in its own letter of support for the PARITY Act:
"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."
Terry Schilling, president of the American Principles Project, connected the legislation to a broader fight over who controls the career pipeline. In a statement to the Daily Caller News Foundation, Schilling said:
"Democrats have saddled generations of young Americans with student debt by reinforcing elite university cartels. This legislation expands opportunities for veterans, parents, and all Americans to access affordable and innovative programs that improve the lives of their students, rather than acting as gatekeepers for the DEI bureaucrats and progressive ideologues who want to monopolize the career pipeline."
That framing resonates with a Republican base increasingly skeptical of traditional four-year universities, their costs, their ideological monoculture, and their spotty record of preparing graduates for the workforce. Career and technical schools offer a different model: shorter programs, lower tuition, direct paths to jobs in trades, healthcare, and technology.
Congress has shown a growing appetite for institutional accountability across multiple fronts. Lawmakers have confronted massive fraud in Medicare hospice programs and pushed for consequences when federal agencies fail to enforce their own rules. The PARITY Act fits that pattern, but instead of adding new regulation, it removes a regulation that its sponsors say punishes the wrong people.
The bill's path through the Senate remains uncertain. No co-sponsors were named in the initial reporting, and no committee hearing has been scheduled. But the coalition behind it, military groups, consumer organizations, school-choice advocates, suggests Banks is building the kind of outside pressure that can move legislation even in a closely divided chamber.
Whether enough Democrats would cross the aisle to support repeal is an open question. The party's institutional allies in traditional higher education have long defended the 90/10 rule as a consumer protection measure. Repealing it would mean trusting career schools to compete on quality without a federal revenue test, a proposition that sits comfortably with free-market conservatives and uneasily with the regulatory establishment.
The political dynamics around Biden-era policies that persist into the current political environment continue to generate friction on the right. Banks's bill is a test of whether Republicans can translate that friction into concrete legislative rollbacks.
Meanwhile, the members of Congress who championed the 2021 update have yet to explain why a veteran's earned education benefit should count against the school that enrolls him. That silence is worth noting. The same lawmakers who routinely praise military service voted to make that service a financial burden on the institutions veterans choose to attend.
Accountability in Congress has taken many forms this session, from expulsion efforts against indicted members to oversight hearings on agency misconduct. The PARITY Act represents a quieter but no less consequential form of accountability: forcing a reckoning with a rule that penalizes schools for serving the people who served their country.
The 90/10 rule, as rewritten in 2021, tells career schools that enrolling too many veterans is a compliance risk. It treats GI Bill benefits, earned through military service, as a mark against the institutions that accept them. And it applies to no public university, no Ivy League campus, and no community college in the country.
If a rule only targets one category of school, exempts every competitor, and punishes institutions for enrolling veterans, it is not consumer protection. It is market rigging with a government stamp.
