For years, for-profit colleges have been required to derive at least 10 percent of their revenue from sources other than certain designated types of federal student financial aid or risk losing access to federal student aid funds. In other words, only 90 percent of a for-profit college's revenues could come from certain federal financial aid funds (called “Title IV” funds, which included Pell Grants and federal student loans). The colleges were expected to get the remaining 10 percent of their revenues from other sources.

Until 2023, that 10 percent could come from military educational benefits provided under the GI Bill, as well as some other federal sources that were not covered by the 90 percent rule. This led to many for-profit schools aggressively recruiting former military service members to make up the difference so that the schools were effectively relying almost entirely on federal student financial aid funds for all of their revenues.

As of 2023, however, all federal education funds, including military benefits, are included in the 90 percent revenue limit. This means that for-profit colleges will now have to derive at least 10 percent of their revenues from sources other than federal education funds.

Student Issues With For-Profit Schools

The rule change is likely to increase financial pressures on for-profit schools that rely heavily on military educational benefits to contribute to their 10% revenue requirement. They will now have to find non-federal sources to supply that 10% of their revenue or risk losing access to federal student financial aid that presently may represent up to 90% of their revenue. As a result, schools may be much stricter with students who are delinquent with their tuition payments or may make unrealistic promises as part of the student recruiting process.

If you are a student at a for-profit school who is being pressured by the school as a result of past-due tuition payments, or if you believe that your school has made you promises about your education that it is not meeting, you need to speak with an LLF National Law Firm Attorney.

The LLF National Law Firm Can Help

Our Attorneys have years of experience helping thousands of students from around the country who have had to deal with a wide range of for-profit school-related issues. Whether you are facing a disciplinary investigation or hearing arising from alleged academic or behavioral misconduct, or your school is taking aggressive action to collect student debt from you, the LLF National Law Firm Team can advise you on your rights and can help you respond in a forceful and effective manner. When you're dealing with a for-profit college, it might seem like the school holds all the cards. But we know the rules, know how to play the school's game, and can we help you gain the winning hand.

Contact us at 888.535.3686 today or reach out to the LLF National Law Firm Team online. You need a powerful advocate on your side, and our team is here for you!