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.
Where's the list of colleges or technical schools having the highest dropout rates? Who is explaining the advantages and pitfalls of enrolling in for-profit schools versus community colleges or public universities? What schools charge steep tuition rates and yet have poor academic records?
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 Tuesday.
Last week, Webb introduced Senate Bill 2179, a bill to help protect valuable 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 agencies. New schools couldn't begin accepting money from military-related plans unless undergraduate withdrawal rates were 33 percent or less. And the Department of Education would conduct mandatory reviews of schools having high dropout rates, and could impose sanctions or penalties.
SB2179 also would require the Veterans Administration 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 any veteran or service member using educational assistance; and conduct a compliance review of a school if certain quality alarms are triggered.
Schools with 20 or more students who use VA or Department of Defense 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 the Defense Department 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. 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 be of sufficient quality that at least 10 percent of revenue comes from students, or parents, willing to pay for the education offered with their own money.
In January, Hollister 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" and that triggers "some very aggressive marketing techniques to draw them in."
"Although there are some for-profit colleges that have solid academic credentials and a history of success for their graduates," Petraeus said, "as a group, and compared with other institutions, for-profit colleges have higher prices, lower graduation rates and a poor gainful employment history."
Webb made some of the same points in introducing his bill. But he told me SB2179 shouldn't be seen as targeting for-profit colleges.
"This is not a condemnation of the for-profits. I want to be very clear about that," Webb said. "This is really an effort to make sure institutions that receive federal money meet a standard, a measureable standard. I think we've got a pretty good bill to do that," even absent 90-10 rule reform.
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