CECU: STATE 90/10 LAWS DO NOT SUPERSEDE FEDERAL LAW
CECU | Career Education Colleges and Universities
May 10, 2021
Arlington, Va. — Career Education Colleges and Universities (CECU) today sent a letter to the Maryland Higher Education Commission (MHEC) recommending that MHEC interpret Maryland state 90/10 laws to be consonant with the new federal 90/10 law, as amended by the American Rescue Plan Act of 2021. Such an interpretation would ensure that proprietary institutions in Maryland are not required to comply with two different 90/10 rules, as the Maryland definition of “federal funds” is potentially divergent from the federal definition.
The letter, which was co-signed by several schools that would be directly affected by the Maryland law, outlines why efforts to further regulate proprietary schools via stringent state 90/10 laws may be prohibited under federal law. CECU also demonstrates why the Maryland law would be preempted by federal law if MHEC takes an alternative interpretation. Although this letter specifically pertains to the new Maryland law, the message of federal preemption applies to any state that may be considering legislative changes affecting proprietary schools.
“State regulations that conflict with and are duplicative of federal law do not advance any legitimate purpose,” said CECU President and CEO Dr. Jason Altmire, “States should not be regulating on matters that deal entirely with federal education programs, as Congress is better situated to make such policy decisions. We hope this action will dissuade other states that may be inclined to adopt harmful federal market revenue rules that have nothing to do with academic quality and lack a sufficient state nexus.”
The full letter is available here.
BACKGROUND
In May 2020, the Veterans’ Education Protection Act was enacted into law in the state of Maryland. The law purported to close the 90/10 “loophole” by including “federal funds” in the numerator of the 90/10 equation. Under the new law, if an institution does not comply with this requirement, the institution would be prohibited from enrolling new Maryland residents beginning in 2023.
