[Congressional Record Volume 140, Number 64 (Friday, May 20, 1994)]
[Extensions of Remarks]
[Page E]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: May 20, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
 THE INTRODUCTION OF LEGISLATION TO AMEND THE 85/15 RULE OF THE HIGHER 
                             EDUCATION ACT

                                 ______


                           HON. PATSY T. MINK

                               of hawaii

                    in the house of representatives

                          Friday, May 20, 1994

  Mrs. MINK. Mr. Speaker, on July 1, thousands of students stand to 
lose their student financial assistance and be forced to leave school 
because their post-secondary institution will no longer be eligible to 
participate in Federal financial assistance programs.
  The Department of Education estimates that up to 50 percent of all 
for-profit trade and technical schools will lose their eligibility 
because of the 85/15 rule established in the Higher Education Act 
Amendments of 1992.
  The 85/15 rule, which is scheduled to go into effect on July 1 of 
this year, requires that proprietary institutions obtain no more than 
85 percent of their revenues from Federal financial assistance programs 
in order to retain eligibility for such programs.
  The purpose of the 85/15 rule was to assure that proprietary schools 
were not overly dependent on Federal funds. However, the regulations 
promulgated by the U.S. Department of Education require proprietary 
schools to count student and parent loans as Federal funds, which means 
that more than 50 percent of these schools will no longer be eligible 
to participate in Federal student financial assistance programs.
  While the Federal Government provides a guarantee for student loans, 
the loan capital is obtained from private sources. Furthermore, parents 
and students are required to repay these loans. These loans should not 
be counted as Federal funds.
  Today, I along with 17 colleagues have introduced legislation which 
will exclude loans from being considered as revenues derived from 
Federal financial assistance programs for the purposes of calculating 
whether a school has met the 85/15 rule.
  To allow hundreds of trade and technical schools and career colleges 
to close their doors is inconsistent with our efforts in the recently 
passed School-to-Work Opportunities Act, which focuses on skill 
training, and current efforts to expand education and training for 
individuals on welfare. Proprietary institutions provide valuable 
training and educational services for those individuals that do not go 
onto college and nontraditional students who are already in the 
workplace, or reentering the work force, and want to gain the skills 
necessary to get a better job.
  I urge my colleagues to support this legislation and help keep the 
doors of educational opportunity open to low-income individuals in our 
Nation.

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