Legislation introduced in the Senate last week would eliminate what Sen. Dick Durbin, D-Ill., called "the powerful incentive" for-profit colleges have to recruit veterans and military service members -- a demographic that has become a lucrative source of federal funds for Downtown-based Education Management Corp.

EDMC -- which enrolls 151,000 students in a system of colleges and universities that includes The Art Institutes, Argosy University, Brown Mackie College and South University -- was the third-highest recipient of post-9/11 GI Bill benefits during the 2009-11 award years. According to an analysis of Veterans Affairs data conducted by the Senate Health, Education, Labor and Pensions Committee and released in September 2011, EDMC took in $173 million in post-9/11 GI benefits in that span.

The Senate HELP committee, chaired by Sen. Tom Harkin, D-Iowa, has been investigating the practices of for-profit colleges for a year and a half. Members have questioned outcomes for students enrolled at these schools, saying they have high student withdrawal and low student loan repayment rates.

The new legislation, which Mr. Harkin has co-sponsored, is "one of many important steps" the government plans to take to hold for-profit colleges accountable to taxpayers, he said.

"It will close a loophole that has made veterans and active duty military major targets of deceptive marketing and aggressive recruitment, rather than students treated with the respect their service deserves," he said.

Under federal law, for-profit colleges and universities may not receive more than 90 percent of their revenue from the U.S. Department of Education's student aid programs. The other 10 percent must come from sources outside the federal government.