For-profit colleges target military veterans
- The Department of Education is negotiating changes to the regulations for for-profit colleges.
- The changes could hurt military veterans, a highly coveted subset of students for the industry.
- A funding gap makes veterans very profitable for for-profit colleges.
The Ministry of Education has started negotiations for change the regulations in connection with for-profit college industry in December, a decision that some advocates say will hurt students.
“This proceeding blocks a regulation that has been carefully researched and carefully crafted to protect students and taxpayers from the well-documented abuses of some career colleges … These students, as before, will be veterans, single mothers , people of color, immigrants, and the forgotten Americans that President Trump has promised to fight for, ”David Halperin, an attorney who writes on for-profit academia, said at the meeting.
The regulation in question is a provision called “paid employment,” which requires student borrowers to pay no more than 30% of their discretionary income in student loan payments. It was created to address for-profit colleges that charged high tuition fees but left graduates with poor career prospects or low-paying jobs.
Military veterans are particularly vulnerable to loosening of regulation due to a lack of funding.
For-profit institutions are governed by a federal provision called the “90-10” rule which states that for-profit colleges cannot receive more than 90% of their income comes from federal student aid from the Department of Education (ED).
But funds from the US Veterans Affairs Office (VA), a federal agency, do not count in the 90% category. This means, in theory, that if a for-profit business receives all of the 90% ED and the remaining 10% VA, it could be operating entirely with federal money.
For-profit colleges particularly covet veterans registration for this reason, which can lead to aggressive and sometimes deceptive recruiting tactics.
“This loophole creates an incentive to see the military as nothing more than ‘dollar signs in uniform’,” said the US Senate Committee on Health, Education, Labor, and Pensions written in a 2014 report, issued following a two-year survey of the sector.
The report denigrated for-profit colleges for the abuse and the share of GI Bill money they receive. He also revealed that of the top 10 institutions receiving GI Bill dollars, eight were for-profit schools. ITT Tech, which closed in 2016, placed third on the list, according to the report.
The Obama administration cracked down on the for-profit industry, instituting rules such as paid employment, to hold schools accountable for providing students with useful degrees.
But despite this push, a recent analysis from the nonprofit Veterans Education Success found that the for-profit industry still relies heavily on VA funds, and that veteran students of some for-profit organizations are increasing even while non-military students are decreasing.
The New York Times, who writes frequently about abuse in the for-profit industry, once again called out the schools in an op-ed on targeting veterans.
“Despite efforts by Congress, the Obama administration, and state attorneys general to end predatory practices by for-profit colleges, veterans, and the military who rely on GI Bill and Department of Defense funding to attend school are still the target of an industry infamous for putting people in debt with unnecessary degrees, ”the editorial board wrote.