Corporate, Domestic, Ethics, For-Profit, Investors, Legislation, Recruitment, Regulatory, Required, Retention Rates, Students, University & College - Written by on Thursday, March 1, 2012 6:00 - 0 Comments

Hungry Hippos: For-Profits Gobble Up Half of Military Education Benefits

by dunechaser via flickr under creativecommons

Prediction for 2012: More regulation and oversight of military education benefits.

Why? Half of all the military Tuition Assistance dollars currently go to a For Profit college, according to data from the US Dept. of Defense and a recent report from the U.S. Senate. Sen. Harkin continues to be a hound dog, barking at the For-Profits, sniffing out their activities and aiming to keep them honest. We applaud him for that! He is not alone, however. Holly Petraeus, wife of CIA chief Gen. David Petraeus, has also been vocal about For-Profits misleading military personnel. The military market is particularly ripe because it is excluded from the 90-10 rule that hampers For-Profits in the civilian sector. That rule could change as several lawmakers are pushing legislation to end the loophole

Janet Lorin at Bloomberg reports:

The for-profit college industry received $279.8 million of about $563 million spent last year on the program, according to analysis released today by the U.S. Senate Committee on Health, Education, Labor and Pensions. Public colleges received $163.5 million, while nonprofit private schools got $119.4 million.

Congress and states’ attorneys general have been reviewing sales practices and student debt loads at for-profit colleges, which get as much as 90 percent of their revenue from federal programs. Schools solicit troops partly because their government tuition programs are excluded from that 90 percent cap. Senator Tom Harkin, a Democrat from Iowa, has proposed legislation that would include those funds to remove the extra incentive for signing up soldiers.

Via Bloomberg

Six of the top 10 tuition assistance recipients are for- profits – American Public Education Inc. (APEI)Bridgepoint Education Inc. (BPI), TUI Learning LLC, Apollo Group Inc. (APOL) - which owns the University of Phoenix, Columbia Southern University and Grantham University — according to the report. Tuition Assistance lets active-duty members of the military take college classes, capped at $4,500 per year.

The Chronicle of Higher Education reported:

The report, which also highlights concerns about educational quality at for-profit colleges, shows that of the top 10 recipients of such assistance, six are for-profit college companies—American Public Education, Bridgepoint (the parent company of Ashford University), TUI Learning (the parent of Trident University), Apollo Group (the parent of the University of Phoenix), Columbia Southern University, and Grantham University—that together accounted for 41 percent of all tuition-assistance spending.

The report takes particular aim at for-profit institutions that promote themselves as “military friendly” but put relatively large proportions of their revenue toward marketing, student recruiting, and their own profits, and relatively small proportions toward instruction.

Notably, the report singles out Bridgepoint Education’s Ashford University, which is based in Iowa. Iowa is the home state of Sen. Tom Harkin, the Democrat who chairs the Health, Education, Labor, and Pensions Committee.

Bridgepoint, the third-largest recipient of military students’ tuition-assistance funds, spends 60 percent of its revenues on marketing and profit combined, the report says. On a per-student basis, that works out to $2,714 for recruitment, $1,522 for profit, and just $700 for education. A news release accompanying the report says an analysis of Bridgepoint’s spending by the committee’s majority staff found that Bridgepoint employs 1,700 recruiters but just one job-placement counselor, “while numerous students log complaints about the lack of support services.”

In a written statement, Bridgepoint officials did not address the report’s specific criticisms but said the company “remains fully committed to supporting all opportunities for members of the military and their families to earn a college education and to seek the bright future that education offers.”

The report comes as consumer advocates are paying increasing attention to the way colleges market to service members and veterans. It also plays into efforts by Senator Harkin and other members of Congress who have introduced bills to change a rule that may encourage colleges to recruit active-duty military students and veterans. Under the rule, benefits such students use to pay for college help the colleges avoid violating a federal requirement known as the “90/10 rule.”

Via The Chronicle of Higher Education

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