The so-called 90/10 rule says that for-profit colleges can’t derive more than 90% of their revenue from federal financial aid. In the wake of the collapse of ITT Tech, which had to shutter after the government clamped down on its access to federal funds, the DeVry chain of for-profit schools says it will cap the amount of federal aid it receives at levels below what the rules require.
According to an announcement by the DeVry Education Group, the company will limit federal financial aid funding to only 85% of its revenue. This figure will include funds from the Department of Veterans Affairs and military tuition assistance. That’s important to mention, because those two funding sources are not currently included in the 90/10 calculation.
DeVry says the change will apply to all six of the school brands it operates, and that it plans to meet the 85% goal by the end of fiscal 2017.
Amid sagging enrollment, high-profile school closings and bankruptcies, increased regulatory scrutiny, and lawsuits filed by the government and consumers, the future looks hazy for the for-profit college industry. DeVry has not been immune.
In 2015, the school closed 14 campuses in the U.S. and moved students at those schools to its online learning program.
Then the Federal Trade Commission sued DeVry in Jan. 2016, accusing the school of deceiving prospective students about their employment potential after graduation.
That lawsuit led the Veterans Affairs folks to suspend DeVry’s participation in the VA’s “Principles of Excellence” program.