Five years ago last week, the Post-9/11 GI Bill was signed into law to honor those who served and sacrificed by giving them a shot at a better future and a chance at the American dream.
The bill provides veterans returning from Iraq and Afghanistan with education benefits to earn college degrees, thereby helping them compete in the civilian job market and start successful careers. It was modeled after the original post-World War II GI Bill, which sent tens of thousands of veterans to college and helped launch the rise of America’s middle class.
But the intent of the GI Bill is being undermined by unscrupulous for-profit colleges that see it more as a revenue stream for them than as a stepladder for veterans.
For-profits have been targeting veterans aggressively, spending millions of dollars on advertising and marketing, and maintaining a visible presence on military bases to enroll veterans before they are deployed or after they get back. They promise a high-quality education and “guaranteed jobs,” enticing veterans to use all their education benefits, then sign up for tens of thousands of dollars in federal student loans. But veterans are often left debt-ridden, holding useless degrees, or no degrees at all, and non-transferable credits.
A for-profit college costs up to eight times more than a community college and 20 percent more than a flagship public university, rivaling private, nonprofit universities such as Harvard and Yale. Many of these schools are not properly accredited. Some veterans are left ineligible for required licensing exams (for jobs as lawyers, nurses and other health workers, electricians, plumbers and more). For-profits dedicate only 17 percent of their revenue to education, on average, setting aside up to one-third as pure profit and one-third to recruiting and marketing. As a result, they have dramatically high dropout rates. For-profits account for half of the nation’s student loan defaults (even though they have only 13 percent of American students). Their practices have been the subject of 32 state attorney general investigations, a U.S. Justice Department investigation, two U.S. Government Accountability Office investigations and a U.S. Senate investigation.
Although Congress and the Obama administration have taken steps to better inform veterans about their educational choices, they need to take more aggressive action to stop the abusive practices altogether.
Congress should eliminate the “90/10 loophole,” which for-profits have manipulated to skirt federal law that caps how much of their revenue can come from federal sources at 90 percent.
The for-profits somehow assert that GI benefits and federal loans and grants are not federal dollars and do not count. This enables them to put more and more taxpayer dollars — intended to help veterans — into their pockets. As government leaders have pointed out, this turns veterans into “dollar signs in uniform.”
Congress can use the appropriations process to restrict colleges from using the GI Bill and other federal education aid to pay for their private marketing or advertising — an effect that would be felt only by the for-profits that receive nearly all of their revenue from federal coffers. Federal education aid was never intended to be set aside by for-profits for their TV ads and aggressive call centers; they should use their own funds to pay for those.
The Federal Trade Commission should tackle the for-profits’ deceptive marketing and recruiting, given that the FTC’s mission is to prevent business practices that are deceptive or unfair to consumers.
Finally, we applaud the U.S. Department of Education’s recent decision to issue rules implementing Congress’ requirement that for-profit programs lead to “gainful employment,” and we urge the department to make sure its new rules ensure students can actually get good jobs when they graduate. A career college is supposed to lead to a career.
The added scrutiny of for-profit practices has prompted the industry trade group, the Association of Private Sector Colleges and Universities, to launch a multimillion-dollar PR and lobbying campaign to improve its image. The first step was the release of a “white paper” highlighting guidelines for serving military and veteran students to ensure their success, which was more of a “whitewash” of their unprincipled practices.
This effort threatens to overwhelm the work of veterans advocates and blunt further action by Congress and the administration.
But our nation’s leaders need to stand with our veterans, uphold the intent of the Post-9/11 GI Bill and protect the education benefits they have earned and the taxpayer dollars that fund them.
Matthew Boulay is the director of the Veterans’ Student Loan Relief Fund.