Something similar is happening to thousands of veterans leaving service with Post-9/11 GI Bill eligibility worth tens of thousands of dollars. The government is providing an extraordinary benefit but doing little to light the way for beneficiaries to use the program well and reach their destination.
Sen. Jim Webb, D-Va., chief architect of the Post-9/11 GI Bill, says it's time for Congress to require better information on education options for veterans and to tighten standards for schools that market to those having GI Bill eligibility or access to military tuition-assistance programs.
"We want to protect the benefit and make sure these people have the best chance to get a degree or get a qualification, not simply the stipend," Webb said in a phone interview.
Webb, along with Sens. Scott Brown, R-Mass., Thomas R. Carper, D-Del., Tom Harkin, D-Iowa, and Claire McCaskill, D-Mo., recently introduced a bill to help protect military education benefits.
The Military and Veterans Educational Reform Act of 2012 would require that education programs accepting GI Bill payments or military tuition assistance become "Title IV" eligible. That means they would have to be accredited by a Department of Education-approved accrediting agency. New schools couldn't begin accepting money from military-related plans unless undergraduate withdrawal rates were 33 percent or less. DoE would conduct mandatory reviews of schools having high dropout rates, and could impose sanctions or penalties.
The bill also would expand responsibilities of State Approving Agencies. GI Bill users can only use their benefits for courses approved by SAAs. VA pays for these review services. Webb's bill would require SAAs to do more, including outreach to veterans and service members and audits of schools with findings sent on to the Department of Veterans Affairs.
The new bill would require VA and the Department of Defense to develop a centralized complaints process to report misrepresentation, fraud, or abuse against educational institutions; provide one-on-one, in-person counseling, to the extent possible, to any veteran or service member using educational assistance; conduct a compliance review of a school if certain quality alarms are triggered.
Schools with 20 or more students that use VA or DoD educational assistance would have to provide support services to these students. And to increase transparency, the schools would have to disclose graduation rates, default rates and other information critical to prospective students who are seeking to find the best academic program to meet their needs.
With 700,000 veterans already using Post-9/11 GI Bill benefits, Webb said there's plenty of evidence they need more protection. In 2009, as the more generous GI Bill took effect, 15 publicly traded for-profit education companies spent $3.7 billion on marketing. A "disproportionate share" of that money enticed veterans "into poorly performing for-profit schools," Webb said. New data from DoD show that for-profit colleges received half of $583 million in military tuition assistance dollars paid out in 2011.
Absent from Webb's new bill is any language to reform the "90-10 rule" of the Higher Education Act, a centerpiece of previously introduced bills to end the feeding frenzy for GI Bill dollars by for-profit colleges. Webb is a co-sponsor but such bills haven't gone far.
The 90-10 rule sets the proportion of payments for-profit colleges can accept from federal grants or loans. No more than 90 percent of school revenues can come from these sources. In other words, these schools must get at least 10 percent of their revenue from students, or parents, willing to pay for the education offered with their own money.
The 90-percent ceiling now applies only to Department of Education grants and loans, not to Post-9/11 GI Bill payments or military tuition assistance. In fact, GI Bill payments count toward the 10 percent of funding that must come from non-DoE sources. So for every GI Bill student enrolled, for-profit colleges can enroll nine more students funded solely by DoE money.
In January, Hollister K. Petraeus, assistant director for service member affairs with the Consumer Financial Protection Bureau, reiterated her criticism that the current 90-10 law encourages for-profit colleges to see veterans "as nothing more than dollar signs."