Harkin Questions Whether For-Profits Deliver for Vets

Sen. Tom Harkin (D-Iowa), who has been battling with for-profit colleges that he says make huge profits at the federal trough, suggested today that the schools have been targeting returning Iraq and Afghanistan war veterans for their lucrative GI benefits.

Though he focused on the huge profits that some of the for-profits have amassed over the past year, he questioned whether the schools are providing the veterans with a meaningful education or just churning through their entitlements.

Harkin, speaking at a news conference as he released a new report from the Senate Health, Education, Labor and Pension (HELP) committee, said that the way the GI benefits are managed, they may be allowing for-profits to skirt regulations on the percentage of overall income that they may obtain from federal funds.

The head of the Association of Private Sector Colleges and Universities said Harkin is looking at the increases from the wrong end and should be pleased that so many of the group’s members have the capacity to provide education for the veterans and their families.

APSCU president Harris Miller said, “We have no argument that every military and veteran student seeking a quality higher education deserves just that. Any problems in the delivery of that education deserve to be addressed thoroughly and completely.”

The veterans benefits, mostly under the so-called Post 9/11 GI bill passed in 2008, are not administered through the Education Department and therefore are not included as “federal financial aid,” which includes Pell grants and federal loans. Thus, the GI money is not considered when calculating the amount of the schools’ income from federal funds, which is not supposed to exceed 90 percent.

In just its first year of operation, payments to all colleges under the new GI bill totaled $1.75 billion, about 37 percent of which went to the for-profits though they enrolled less than one quarter of all veterans receiving benefits.

But what Harkin found most troubling were the large increases in veterans payments the for-profits had amassed in just a one-year period. Veterans benefit payments at 20 for-profit education companies jumped 211 percent with the implementation of the Post 9/11 GI benefits. 

“Are they really getting their money’s worth?” Harkin asked. “Schools take the money and the taxpayers are out and our GIs don’t get the benefits they were promised.”

He noted that schools that are receiving the most payments are ones that have hefty dropout rates, high loan default rates and low repayment rates.

Donald Overton, executive director of Veterans for Modern Warfare, said that veterans who suffered Post Traumatic Stress Disorder or brain injuries were being enrolled in programs despite their limited ability to complete them.

He accused the for-profit colleges of simply seeing “a large pot of money” while the Department of Veterans Affairs lacked the capacity to track or monitor how the funds were being used or if they were being used wisely. There are no case managers at the department to assist veterans in their education pursuits.

Roger Betancourt, a veteran from Texas, said at the press conference that he was aggressively recruited by a Kaplan University representative who was his de facto “veterans adviser”; that the man called repeatedly urging him to enroll and promising that his GI benefits would cover his education costs and give him money to live on.

Betancourt said he resisted enrolling, insisting that his veterans benefit certification was in place before doing so, but when the representative said he had received the certificate, he agreed. He said the first course cost him nothing but he soon was told he owed Kaplan $2,300. 

He said even now, he cannot explain how the debt was accumulated.

Because he wasn’t able to pay the money, the debt was sent to collection and onto his credit record. Because it is still unpaid, he said he can’t get a loan to go to another college or collect any more GI benefits.

Overton said many other veterans have experienced similar problems at for-profit schools, even though benefits can last for 36 months and pay up to $485 a credit hour.  Because of the higher cost of for-profit schools, and the way they count credit hours – often for requiring year round attendance to complete a program – the benefits almost invariably fail to cover all the costs, even early in the course of study, and run out before a program is completed.

Some schools, Overton said, are now heavy-loading the benefits to cover the first part of a program, springing a balloon payment on students at the end of their terms.

Asked what he thought should occur, based on this report and previous studies the HELP committee has released about the large increases in enrollments at for-profit colleges and their low loan repayment rates, Harkin said:

“We will continue to investigate, continue to hold hearings and, I assume, it will lead to some kind of legislative changes.”

This “cries out for remedial action,” Harkin said. “We plan to do that next year.”


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