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Public Affairs

Veterans and For-Profit Education: The “Malicious” Narrative

Recent veterans, by many objective measures, are not doing well. The unemployment rate for post-9/11 veterans is nearly 10%. The Veterans Administration has a backlog of 400,000 medical claims. Perhaps most jarringly, no one even knows what the graduation rate is for veterans using Post-9/11 GI Bill benefits. Some estimate the graduation rate is as low as 12% -- and even if that estimate is very low, it’s still clear veterans are not graduating at the rate they should.

There are two prevailing narratives as to why veterans aren’t succeeding in college and the workplace:

  1. There is a communications issue that is thorny but bridgeable. Veterans have relevant skills and applicable experience, but need to learn to translate those assets to the civilian world.
  2. Schools – particularly for-profit colleges – are maliciously using veterans to get at the veterans’ loosely regulated GI Bill dollars, saddling vets with debt, wasting veterans’ time and U.S. taxpayer dollars, and usually not even getting veterans through to graduation.

If recent government action is any sign, the second narrative is ascendant. For-profit schools should settle in for a long barrage of negative articles, political castigation and, perhaps, regulation.

The Obama Administration just set up a new online complaint system, allowing GI Bill (and Military Tuition Assistance) recipients to complain when their school doesn’t live up to their needs. There can be no mistaking the underlying animosity the administration feels for schools, particularly for-profits. One of the quotes in the press release makes that abundantly clear:

“This launch marks a critical step in an ongoing interagency effort to stop those who engage in fraud and misrepresentation targeting our service members and veterans,” said Stuart F. Delery, Assistant Attorney General for the Civil Division of the Department of Justice.  “Individuals who report concerns will not only be able to resolve their personal issue, but also help protect fellow service members and veterans from the same misconduct.”

Words and phrases like “fraud,” “misrepresentation,” “targeting,” and “protect fellow service members and veterans from the same misconduct” belie a clear belief that the for-profit education industry has malicious intent. Such language should be highly troubling for the for-profit education industry.

The federal entities taking part in this project should also give for-profit institutions great pause; the agencies implicitly levelling charges against them are a who’s who of the most powerful agencies, including:

  • The Department of Defense
  • The Veterans Administration
  • The Department of Justice
  • The Department of Education
  • The Federal Trade Commission
  • The Consumer Financial Protection Bureau

These are powerful entities with a strong political incentive to find wrongdoing. They are likely to both find that wrongdoing through this online complaint system and deal with any issues in a very public manner. Congressmen, community activists, journalists, and a host of others will likely follow suit. Clearly, the remaining years of the Obama administration will be difficult ones for the for-profit education industry.

It’s not only the federal government that is coming after for-profits. While state attorneys general have been coming after for-profits for years, the AGs are now orchestrating their efforts far better than they have in the past. 32 AGs have teamed up with the Consumer Financial Protection Bureau to investigate student-lending practices across a number of for-profit institutions. In many instances, these complaints against for-profits do not stand up to any rigorous scrutiny, but the fact remains that for-profit institutions are going to need to spend time, money, and political capital fighting these accusations.

For-profit institutions are no strangers to controversy, of course. They have been the subject of countless investigative stories and Congressional reports. This time, though, they’ll be taking fire from all sides, and even their allies may not stand up for them. Worse yet, they have a determined opposition that doesn’t just believe they are making fixable mistakes – they believe the for-profit colleges are actively malicious.

For-profit colleges should gird themselves for a bumpy three years.


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