Editorial: Predatory schools using veterans as loophole

Published 1:30 am Tuesday, December 27, 2016

By The Herald Editorial Board

The educational benefits included in the Post 9/11 G.I. Bill were meant to help veterans get the education they need to transition to careers. But they are also helping to prop up poor-performing for-profit schools and colleges across the nation.

A recent report by the U.S. Department of Education shows how well schools are complying with a federal mandate to receive no more than 90 percent of their revenue from federal sources, mostly as student aid. The majority do comply, although 17 were above the 90 percent rate. But that number jumps to 200 schools when federal funds provided to student veterans by the Department of Veteran Affairs and Department of Defense are counted as federal funding.

The problem is they aren’t.

A loophole left in legislation in 1998 — when there was no war ongoing and schools were less likely to view veterans as a potential source of revenue — allowed for-profit schools and colleges to count those federal funds as if they were the same as a student’s own tuition payments, scholarships, employer assistance and other private sources, making it easier for schools to fit under the 90 percent cap.

The 90 percent cap, which originally was 85 percent when first created in 1992, was intended to weed the educational field of poor-performing schools that otherwise couldn’t compete by attracting support from private sources. Instead, some schools that are less-than-competitive, prop themselves up by going after veterans, sometimes with predatory practices that mislead students regarding costs, transferability of credits, graduation rates and the success of students in finding work after programs are complete.

“These benefits were created in recognition of the selfless sacrifices made by our veterans and servicemembers, not to make them a target for predatory businesses,” said outgoing U.S. Secretary of Education John B. King Jr.

Legislation was introduced in both House and Senate during the 114th Congress that would close the loophole and count G.I. Bill funding as a federal source. It also would reduce the funding cap to 85 percent.

Along with protecting the interests of veterans who are returning to school, as well as the fellow students at those schools, closing the loophole is in the interests of private, for-profit schools that are working to respect the rules and offer a good, affordable education to their students.

Washington state had no schools among the 200 listed in the Department of Education report. Among a number of art and design colleges and cosmetology and other schools, most were operating below 80 percent of their revenue from federal funding. Vancouver-based Charter College, which offers programs in health care, business and technology and has a campus in Lynnwood, operates with a little more than 77 percent of its funding from federal sources.

The legislation to close the loophole and reduce the cap to 85 percent should be reintroduced when the 115th Congress begins work in the new year.

This also demonstrates the need for a federal Department of Education that is headed by strong leaders with a desire to protect the interests of students at all levels of education.

President-elect Trump’s nominee for Secretary of Education, Betsy DeVos, should be asked during confirmation hearings whether she will continue the crackdown on predatory for-profit schools that the Obama administration continues to pursue, even in its final weeks.