For-Profit Colleges, Vulnerable G.I.’s - By Hollister Petraeus
MILITARY personnel and their families are finding themselves under siege from for-profit colleges. A number of these schools focus on members of the armed forces with aggressive and often misleading marketing, and then provide little academic, administrative or counseling support once the students are enrolled.
Vast sums are involved: between 2006 and 2010, the money received in military education benefits by just 20 for-profit companies soared to an estimated $521.2 million from $66.6 million.
The government provides two important educational benefits to service members: the Tuition Assistance program for service members on active duty, and the G.I. Bill, which is mostly used for education after military service.
Today’s veterans are eager to earn post-secondary degrees — and to replicate the example of the generation that returned from World War II and fueled our prosperity. But their desire for learning is too often exploited by unscrupulous for-profit colleges.
The schools have a strong incentive to enroll service members and veterans, in large part because of the “90-10 rule” created by the 1998 amendments to the Higher Education Act. Put simply, the rule says that a for-profit college must obtain at least 10 percent of its revenue from a source other than Title IV education funds, the primary source of federal student aid. Funds from Tuition Assistance and the G.I. Bill are not defined as Title IV funds, so they count toward the 10 percent requirement, just like private sources of financing.
Therein lies a problem. For every service member or veteran (or spouse or child, in the case of the post-9/11 G.I. Bill) enrolled at a for-profit college and paying with military education funds, that college can enroll nine others who are using nothing but Title IV money.
This gives for-profit colleges an incentive to see service members as nothing more than dollar signs in uniform, and to use aggressive marketing to draw them in and take out private loans, which students often need because the federal grants are insufficient to cover the full cost of tuition and related expenses.
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Related previous posts:
Party Ends at For-Profit Schools
Bad Education
Steve Eisman's Ira Sohn Conference Presentation and Speech
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