Reps. Davis, Levin support student veterans, look closer at for-profit schools
By CHARLES T. CLARK | The San Diego Union-Tribune | Published: April 25, 2019
SAN DIEGO (Tribune News Service) — A joint congressional hearing Wednesday in San Diego highlighted how for-profit colleges are aggressively targeting veterans’ education benefits thanks to a “federal loophole.”
Two members of San Diego’s delegation — Reps. Susan Davis, D-San Diego, and Mike Levin, D-San Juan Capistrano — hosted a hearing at Grossmont College under the auspices of the Committee on Education and Labor and the Committee on Veteran Affairs, which are committees of the House of Representatives.
Veterans advocates say that there is a loophole in the longstanding federal rule that limits how much for-profit colleges can receive in revenues from federal student aid sources to 90 percent of all their revenues. Veteran education benefits, often called the GI Bill, are the exception to those limits, making veterans potentially more profitable students.
Veterans advocates and some Democrats said they’re optimistic that a remedy for the loophole could be signed into law this year as part of a deal to reauthorize the Higher Education Act, a federal law that governs education that hasn’t been updated since 2008. Prominent Republicans and Democrats in the House and Senate have said reauthorizing the law is a priority.
The for-profit institutions have been criticized for low graduation rates and in some cases closing abruptly. In March ` veterans advocacy groups said a recent wave of closures of for-profit schools affected more than 1,700 GI Bill recipients.
About 40 percent of all GI Bill funds go to for-profit schools, and these type of schools represent eight of the top 10 recipients of GI Bill funds from 2009 to 2017, Davis said.
“The connection between for-profit institutions and student veterans is unfortunately not a coincidence,” Davis said."For-profit institutions deliberately target student veterans because of loopholes in federal law that incentivize them to do so.”
Levin said the government has a responsibility to protect student veterans from unscrupulous institutions that seek to take advantage of the benefits they have earned.
Along with Davis and Levin, Democratic Nevada Rep. Susie Lee and Rep. Mark Takano, D-Riverside, chair of the House Committee on Veterans Affairs’ were on hand and heard testimony from experts who described the tactics employed by some predatory for-profit institutions and the consequences for veterans who are left in the lurch.
Robert Muth is Supervising Attorney of the Veterans Legal Clinic at the University of San Diego School of Law, which has supplied pro-bono legal assistance to hundreds of veterans military personnel. He said virtually all of the clinic’s clients had been lied to during the recruitment process.
He said schools have lied about graduation rates, employment rates, transferable credits, and accreditation. One client said a school tapped his GI benefits after he left the program.
For-profit schools typically spend significantly less on instruction than nonprofits do, and they spend more marketing, which accounts for 20 to 30 percent of their budget, said Robert Shireman, Director of Higher Education Excellence and Senior Fellow at The Century Foundation in New York.
He added that some profit schools include things that disadvantage students in their fine print when students enroll, including forced arbitration language which would ensure wronged students have to bring their complaint to the school first.
Shireman and other experts said for-profit institutions have less oversight externally, via federal regulation, and internally because they lack a board or governing entity that imposes demands on how the owner of a school can spend its money.
“The oversight is very different at for-profit institutions. There is no public body, no elected or appointed entity that actually controls that budget,” said Shireman. “The control of the pricing, spending, where any revenue generated above and beyond is spent... they have complete freedom.”