Continuing Education, Corporate, Domestic, For-Profit, Gainful Employment, Investors, Legislation, Recruitment, Required, Student Loans, Students, University & College - Written by on Sunday, September 25, 2011 7:00 - 0 Comments

Sen. Harkin Wary That Veterans Are Major Cash Cows To For-Profit Colleges

Military recruits to online colleges appears to be a greater focal point now. This article by Bloomberg News indicates that military students are exempt from the 90-10 rule, which limits For-Profit colleges from having more than 90% of tuition funding coming from government programs. Bloomberg reports that Apollo Group Inc.’s University of Phoenix and seven other schools reaped about $1 billion in education benefits from U.S. veterans in the past school year according to a Senate report. Those schools hauled in roughly 25% of Post 9/11 GI Bill education funds in the 2010-2011 school year. Bloomberg reports that ”the University of Phoenix alone received $210 million, almost three times as much as a year earlier” according to Sen. Tom Harkin, D-Iowa. The big question is whether the 90-10 Rule should apply to soldiers and veterans or not? What do you think? Please comment below.

The so-called “90/10 rule” limits for-profit colleges to getting no more than 90 percent of their revenue from government programs. Tuition from veterans and military programs are excluded from the cap, and college companies have “aggressively” recruited beneficiaries, Harkin said. Democratic Senator Thomas Carper of Delaware will hold a hearing on the rule later today.


“We have to try to see what we can do to get better information to GI’s so they have a better information base,” Harkin said. “They need to know what’s out there, instead of just being sucked in by aggressive recruiting.”


The piece quotes a soldier at a hearing, who felt misled by an online college. It also quotes Brian Moran, interim president of the Association of Private Sector Colleges and Universities, a Washington-based industry group, who defended the 90-10 exception for veterans.

“The 90/10 restriction does nothing to measure quality outcomes and, by including military benefits in the 90 percent, places an unwarranted barrier in the way of students seeking a career-focused education,” Moran said.

 John Lauerman in the Boston bureau of Bloomberg explains the regulatory context of this debate:

 The Education Department issued regulations this year called “gainful employment” that would cut off federal student aid to for-profit colleges whose students struggle the most to repay government loans. Education companies have fought the rules and the association has filed a lawsuit against them.

Harkin and Carper said the regulations will protect students and should be allowed to stand.

The Defense Department increased oversight of online courses this year after Harkin and Carper investigated program quality and aggressive recruitment practices of active-duty military members and veterans at for-profit colleges, which frequently offer Web-based classes. About 22 percent of Apollo Group’s 2010 spending was on marketing, Harkin said today.

 He also gives the scope of the industry’s enrollment and profits from veterans:

The Post-9/11 GI Bill sent $4.4 billion to almost 6,000 institutions educating veterans who served since the Sept. 11, 2001 attacks in New York and Washington, Harkin said in a statement. Veterans taking courses from for-profit colleges cost taxpayers $10,900 a year, about twice as much as those in public universities, where costs average about $4,900, according to the statement.

ITT Educational Services Inc., second to Apollo in receiving veterans’ education benefits, got $178 million in the 2010-2011 year, more than twice the $79 million of a year earlier, the Senate report said. Education Management Corp., the subject of a U.S. investigation of recruitment practices, was third with $173 million in program funds last year.

The highest-ranking public college in program funds was the University of Maryland, with $51 million for the year. Its University of Maryland University College provides classes on military bases. Both public and for-profit colleges need to improve their services for veterans, Carper said.

Read more:

Here’s a link to the report from Sen. Harkin’s office:


The military newspaper Stars & Stripes covered the issue as well:

Veterans groups and lawmakers have been targeting for-profit schools for months, charging them with scooping up veterans’ education benefits without providing a real college education. Corporate officials have countered that their schools offer an alternative to the traditional brick-and-mortar colleges that are virtually inaccessible to many veterans with full-time jobs and troops deployed overseas.

Last school year, for-profit universities collected more than $30 billion in federal student aid, not including totals from GI Bill payouts. While the schools enroll only about 10 percent of the total number of students attending college, they account for half of all federal student loan defaults.

In a letter to Senate leaders, AMVETS officials called practice of targeting veterans for their GI Bill benefits shameful.

“This huge surge by many for-profit colleges in seeking out veterans for enrollment is not out of compassion, concern or appreciation for their service to our country, but rather a way to circumvent the ‘90-10’ federal funding rule,” wrote Christina Roof, deputy legislative director for the group.

Here’s what Kris Kirkham writes over at The Huffington Post

Online questionnaires used to generate leads for recruiters almost always ask whether prospective students or their spouses are veterans or active-duty military personnel.

The Association of Private Sector Colleges and Universities, which represents for-profit colleges, acknowledged in a statement that tuition at most for-profit schools is more than at public universities. But the group noted that veterans are attending for-profit colleges because many of their programs offer schedules that are better suited for them.

By crowdive via Flickr under Creative Commons

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