This Veterans Day, Help a Vet Avoid a GI Bill Scam

Predatory for-profit colleges are coming after veterans.

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Veterans and active service members can use federal benefits that ease the burden of applying, paying for and completing their degrees.

This Veterans Day, one way you can honor your neighbors, friends or cousins who have returned from serving in Iraq and Afghanistan is to help them avoid a scam.

The G.I. Bill is America's chief "thanks" to those who have given the most to their country; it is a ticket to the American Dream for most veterans – a chance to earn a college degree and the skills needed for the civilian workforce and a better future for themselves and their families.

But veterans coming home from Iraq and Afghanistan are being targeted by very aggressive and deceptive salesmen for low-quality, high-cost, for-profit colleges that have a financial incentive – because of a bizarre loophole in federal law – to deceive veterans in order to get access to the G.I. Bill.

[See a collection of political cartoons on Afghanistan.]

Education salesmen turned whistleblowers explain what's going on inside the massive call centers where for-profit college salesmen are under constant pressure to sign up veterans:

  • "We're selling you that you're gonna have a 95 percent chance that you are gonna have a job paying $35,000 to $40,000 a year by the time they are done in 18 months," Brooks College (CEC) salesman Eric Shannon told CBS' 60 Minutes. "We later found out it's not true at all."
    • "Get asses in classes" through "the military gravy train," even if service members are not ready or are being deployed to heavy fighting zones, DeVry University instructed its salesmen, according to Christopher Neiweem, a veteran of Operation Iraqi Freedom and DeVry salesman, who was assigned specifically to target military students. Neiweem told Congress he was instructed to pose as a "military advisor" affiliated with the Pentagon. Following his testimony, four additional DeVry military salesmen wrote Congress to say they were told to do the same.
      • "Everything here is about the numbers. You make your numbers, or you are out of a job," recruiters at Colorado Technical University – housed in an office building with no classrooms and no professors, but row upon row of salesmen – told the New York Times. Salesmen from Ashford and Westwood reported the same.
        • "You'd probe to find a weakness," said Brian Klein, a former admissions employee at Argosy University Online, one of four major colleges operated by EDMC, whose recruiters filed a whistleblower lawsuit against EDMC, which the U.S. Department of Justice has joined on behalf of deceived students and taxpayers. "You basically take all that failure and all those bad decisions, and you spin it around and put it right back in their face as guilt, to go to this sh*tty university and run up all of this debt."
        • [See a collection of political cartoons on defense spending.]

          You can hear for yourself how aggressive and deceptive the recruiting phone calls are. PBS Frontline reporters recorded the calls, as part of research for a documentary about veterans tricked by Art Institutes and other for-profit colleges.

          Listen to veterans:

          • "I believe that the University of Phoenix is using deceptive practices in order to lure students into the school, the enrollment counselors tell students that they should be complete with their course of studies in a short period of time fully knowing how long it is going to take ... I have talked with other students at the University of Phoenix and this appears to be a common tactic used by University of Phoenix enrollment counselors."
            • Another military student who was billed by the University of Phoenix for a class he never took wrote: "As a marine of 19 years, I've served in Desert Storm, Somalia, and Operation Iraqi Freedom x2. You cannot imagine the emotional battle this has taken on me after dealing with this for nearly TWO years!! An education institution such as yours earns millions of dollars each year, and yet you punish those who are willing to risk their lives and fight for your freedoms, you should be ashamed."
              • Jonathan Ngowaki, a Marine Corps radio operator in Afghanistan, said a for-profit college signed him up for a $15,000 loan without his knowledge: "I went into the military so I wouldn't have college debt, but now I have this debt and I have a family and it's taken that money away from my family. It's all about the money. It's all a money game. It really bothers me."
              • [See a collection of political cartoons on the economy.]

                "I think it is a sin," Republican Rep. Walter B. Jones of North Carolina, a member of the Armed Services Committee, told the New York Times. "Here we are telling these young men and women they can get a higher education, and they get cheated."

                "There are some bad actors out there," President Obama explained at Fort Stewart in Georgia, as he signed an executive order to combat the scam. "They'll say you don't have to pay a dime for your degree, but once you register they'll suddenly make you sign up for a high-interest student loan. They'll say that if you transfer schools, you can transfer credits, but when you try to actually do that, you suddenly find out that you can't. They'll say they've got a job placement program, when, in fact, they don't. It's not right."

                Why is this happening? Because of a loophole in federal law. Congress failed to specifically name the G.I. Bill when listing federal education aid, and this oversight allows for-profit colleges to count the G.I. Bill and military tuition assistance as private, non-federal dollars to help them avoid a 90 percent cap they face on federal aid. (Twenty-two state attorneys general wrote Congress that this practice was a violation of the intent of the federal cap, if not the actual letter of the law.)

                This loophole "gives for-profit colleges an incentive to see service members as nothing more than dollar signs in uniform, and to use aggressive marketing to draw them in," Holly Petraeus, the assistant director for service member affairs at the Consumer Financial Protection Bureau, explained.

                [See a collection of political cartoons on the budget and deficit.]

                "For-profit schools see our active-duty military and veterans as a cash cow, an untapped profit resource," Senate Education Chairman Tom Harkin, D-Iowa, who led a Senate investigation into this scam, said. "It is both a rip off of the taxpayer and a slap in the face to the people who have risked their lives for our country."

                Pain-based recruiting is the method salesmen use to target veterans and other students, as shown in internal corporate documents. They're specifically taught to emotionally manipulate vets into signing up, because, as the corporate documents acknowledge, nobody would make a "rational" decision to attend since community colleges and public universities offer lower cost, higher quality, accredited degrees.

                A veteran and staffer at VFW tested the system. He told National Public Radio, "Within three to four days, I got in excess of 70 phone calls and I got well over 300 emails" from for-profit colleges.

                "All they hear from these schools is, 'This won't cost you a thing,'" explained Robert L. Songer, a retired Marine colonel who is the lead education adviser at Camp Lejeune in North Carolina. Songer said for-profit colleges hound Marines at Camp Lejeune to enroll in classes of limited educational value and even sign them up for high-interest-rate loans. He cited numerous complaints he received from Marines.

                Some for-profit colleges even promise veterans a career as a lawyer, plumber, electrician or medical expert - but veterans find out after graduation they aren't eligible to get a license.

                [Check out the U.S. News rankings of best colleges for veterans.]

                Sadly, the deception is widespread. Every single one of 15 large for-profit colleges deceived federal undercover officers about the quality of education, cost and likely job and salary for graduates. Four colleges engaged in actual illegal fraud. The undercover officers then registered as students at those colleges, and found the "education" of such low quality that students were encouraged to cheat and received top grades for submitting photos of celebrities in lieu of a required essay.

                Some examples of the deception:

                • Corinthian (owner of Heald, Everest, and Wyotech) illegally used military seals to entice military and veteran students to enroll and misled them about job prospects – for which Corinthian was sued last month by the California Attorney General.
                  • Kaplan owns an unaccredited law school, whose graduates cannot take the bar exam (outside of California, which doesn't require any law degree). A Kaplan law student told the U.S. Senate "The Dean [of Kaplan] apparently didn't know or forgot to mention this little problem."
                    • Kaplan also was caught by local TV news in Charlotte, N.C. running an unaccredited dental assistance program whose graduates would never be eligible to get the job, and who said Kaplan lied to them about this key fact.
                      • Many for-profit colleges go on military bases to try to sign up service members. Ashford University even signed up a Marine with traumatic brain injury convalescing in a military hospital. "U.S. Marine Corporal James Long knows he's enrolled at Ashford University," Businessweek reported. "He just can't remember what course he's taking."
                        • Career Education Corp (owner of Briarcliffe, Sanford Brown, American Intercontinental, U. Colorado Technical U and Cordon Bleu) had to pay $10.5 million for egregious lies this summer to prospective students about their job prospects.
                          • Westwood had to pay $4.5 million for lying to prospective students about the tuition, Westwood's job placement rates and for signing students up for both federal loans and Westwood private loans at exorbitant interest rates – even veterans who had the G.I. Bill.
                            • Sanford Brown lied to its students about its unaccredited programs in health fields.
                              • The University of Phoenix had to pay the federal government $78.5 million in 2009 and another $9.8 million a few years earlier, for violating a law that tries to protect students from recruiter lies by forbidding schools from paying recruiters by the number of students they enroll.
                              • [Read the U.S. News Debate: Is a College Degree Still Worth It?]

                                The University of Phoenix takes in more G.I. Bill dollars than any other college or university in the country, but spends less on education (under $900 per student) than almost any other college in the country, instead setting aside more than $1 billion for profit and another almost $1 billion to the call centers and other marketing and recruiting. (Compare this to more than $11,000 spent on instruction, per student, by the public University of Arizona.) University of Phoenix has more than 8,000 recruiters promising a bright future to prospective students, but zero job placement staff, in the latest government data. Because of the low quality education, the University of Phoenix has one of the worst withdrawal rates of schools receiving G.I. Bill funds. (50 percent withdrawal by its bachelors degree students and 66 percent withdrawal by its associate students, compared to 13 percent withdrawal at the University of Maryland and 26 percent at the University of Texas – the only two public universities among the 10 schools receiving the most G.I. Bill dollars.)

                                In addition to lawsuits being led by 32 state attorneys general, a Senate investigation uncovered some key facts:

                                • For-profit colleges have skyrocketed their recruitment of veterans and military students, increasing by more than 200 percent in just one year.
                                  • Eight of the 10 schools receiving the most G.I. Bill dollars are now for-profit colleges. The University of Phoenix alone took in more than $200 million in the two most recent years for which government data is available.
                                    • Those eight for-profit colleges take in $1 billion dollars in G.I. Bill funds, but almost half of veterans dropped out within the first year.
                                      • For-profit colleges cost taxpayers twice the tuition of public colleges and universities
                                        • For-profit schools collected more than one-third of all G.I. Bill funds, but trained only 25 percent of veterans, while public colleges and universities received only 40 percent of G.I. Bill benefits but trained 59 percent of veterans.
                                        • [Check out the U.S. News rankings of best online programs for veterans.]

                                          While public universities and non-profit colleges sink the vast majority of their funds into educating students, for-profit colleges set aside very little to education – only 17 percent on average. The rest goes to profit (20 percent, on average), to TV ads and call centers to recruit more students (also more than 20 percent, on average) and to CEO salaries of, on average, $8 to 9 million per year, but with some making up to $20 and $40 million dollars (compared to the non-profit college president's average of less than $400,000).

                                          You can look up each of the biggest brand-name for-profit colleges to see the government data – how much money they take in, how little they spend on education compared to CEO salaries, call-centers, and profit, and how their students fare, including how few graduate and how few get jobs.

                                          So what can you do?

                                          • If a college is hassling you, or a veteran you know, to sign up, watch out. If a school sounds too good to be true, it probably is. Beware of promises about high salaries and job placement. Many for-profit schools lie about their job placement numbers and real tuition. Watch out for schools that pressure you to sign up the same day. Check out these top 10 tips for veterans on choosing a college or the U.S. Federal Trade Commission's new "8 Questions for Veterans to Ask when Choosing a College."
                                            • If you, or a veteran you know, was duped by a for-profit college, there's a private fund at Iraq & Afghanistan Veterans of America to help you recoup some of your losses.
                                              • Alert the government to bad actors. File a complaint with your state attorney general and the U.S. Federal Trade Commission. Soon, the U.S. Department of Veterans Affairs and Department of Defense should have a complaint system up and running.
                                                • Call on the VA to do a better job of protecting vets (it continues to send G.I. Bill dollars to the worst actors – even those successfully sued by state attorneys general and the Justice Department – without even a review).
                                                  • Ask Congress to protect veterans from corporate scams, including by closing the 90/10 loophole.
                                                  • (Full disclosure: I received three awards from major veterans organizations while serving in the U.S. Senate, including the 2012 Freedom Award from The Military Coalition, an umbrella group of top veterans and military service organizations, for helping to expose this scam and working for an Executive Order and law. And I joined with veterans advocates to establish a non-profit dedicated to protecting veterans from predatory for-profit college scams.)

                                                    • Read Susan Milligan: On Veterans Day, Supporting the Troops In Every Way Possible
                                                    • Read Ford O'Connell: 5 Things Republicans Need to Learn From Virginia and New Jersey
                                                    • Check out U.S. News Weekly, now available on iPad