Veterans fight back: Unscrupulous for-profit colleges are bilking them of their GI benefits

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When Congress passed the Post-9/11 GI Bill in 2008, the intention was to give Iraq and Afghanistan-era war veterans the same educational and job opportunities the original GI Bill provided for the "Greatest Generation" after World War II. I was fortunate to be one of the almost 9 million WWII veterans who received those GI Bill benefits. Its impact on the nation was so substantial that it effectively created the American middle class.

Unfortunately, the new GI Bill has been cynically exploited by predatory players in the for-profit college industry, often leaving veterans and their families in dire financial straits and with little to show for it.

Seeing a potential huge revenue source, many of these for-profit colleges moved quickly to gain access to GI Bill funds. The amount of veterans' educational benefits received by 20 for-profit education companies skyrocketed from $66.6 million in 2006 to about $520 million in 2010, about one-third of all GI benefits, according to a recent report by the U.S. Senate Health, Education, Labor and Pensions Committee. And the trend continues to accelerate, jumping by 211 percent between 2009 and 2010 alone.

These colleges use high-pressure sales tactics to ensnare veterans, promising them a high-quality education and a "guaranteed job," and urging them to sign up on the spot. Many of the veterans are unaware that tuition is nearly five times the average cost of a public college -- up to $35,000 a year. They lock themselves into long-term commitments, turn over their GI education benefits and sign up for student loans to cover the difference.

Many of these for-profit colleges operate with questionable academic credentials and lack accreditation accepted by other institutions. They provide veterans with next to nothing in return for those high prices. More than two-thirds of all students attending for-profit colleges don't graduate and their credits generally don't transfer. Veterans are left empty-handed -- no degree, few, if any, transferable credits, no GI benefits left and a mountain of student loan debt.

Now veterans' advocates are starting to fight back. They have launched an effort to better inform soldiers and veterans, push federal and state legislation to curb abuses, create a fund to partially reimburse veterans for lost benefits and take legal action to recover wasted funds.

A new Web site -- www.knowbeforeyouenroll.org -- provides veterans with college selection tips and questions they should ask, and directs their complaints to organizations that can resolve them. It also includes testimonials that allow veterans to learn from their predecessors' mistakes.

Next month, the Veterans Student Loan Relief Fund, an organization set up to help otherwise financially responsible veterans who have been defrauded or misled by for-profit colleges, will provide 11 recipients who have incurred financial difficulties as a result of excessive loans with awards of up to $5,000. Applications are now being accepted for a new round of grants (http://sms.scholarshipamerica.org/veterans-student-loan-relief).

California Gov. Jerry Brown recently signed a bill that closes various loopholes for-profit colleges use to mislead veterans. Drafted and promoted by consumer advocates at the Children's Advocacy Institute based at the University of San Diego Law School, the new law is expected to serve as a model for other states and Congress.

Finally, more than 20 state attorneys general are mounting efforts to crack down on for-profit colleges' predatory recruitment and other practices.

Reforms are needed to require better data collection to track dropout and job placement rates and to tie eligibility for federal financial aid to positive outcomes.

Congress should also take a look at the "90/10" rule, which states that for-profit colleges must obtain at least 10 percent of their revenue from sources other than traditional federal student aid programs. Recruiting soldiers helps the for-profits meet that quota, but it does little for the veterans.

Not all for-profit schools take advantage of veterans; there are some with good track records of success. But veterans need to know which ones do. By shining a light on this issue, information can be provided that veterans need to avoid becoming victims of fraud, and public officials need to pass laws that will stop the shameful practices too many for-profit colleges employ.

Let's make this the last Veterans Day that our heroes from Iraq and Afghanistan are victimized by the predatory practices of for-profit colleges. By doing so, we will make real the Post-9/11 GI Bill's promise of educational opportunity.

opinion_commentary

Jerome Kohlberg, a founding partner of Kohlberg Kravis Roberts and a limited partner of the private equity firm Kohlberg & Co., is chairman of the Initiative to Protect Student Veterans.


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