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Veterans are getting short shrift as for-profit colleges close down, report says

By DANIELLE DOUGLAS-GABRIEL | The Washington Post | Published: October 22, 2016

WASHINGTON — When for-profit giants Corinthian Colleges and ITT Technical Institutes shuttered, thousands of veterans from the wars in Iraq and Afghanistan lost more than $1 billion in federal education funding that they can never get back. And as the men and women who have served in our military try to finish up their degree, they risk exhausting what's left of those benefits before graduation, according to an investigation by the staff of Sen. Thomas Carper, D-Del.

Carper and other members of Congress are urging their colleagues to provide the Veterans Affairs Department authority to restore GI Bill benefits for students who attend schools that permanently close. Despite bipartisan support for helping vulnerable veterans, legislation introduced in recent years has stalled.

"It is unfathomable to me that these brave men and women, who volunteered to serve their country in a time of war, are now being left in the lurch by some of the largest recipients of Post-9/11 GI Bill taxpayer dollars," said Carper, a 23-year veteran of the Navy and Naval Reserves. "This is shameful."

Enacted in 2009, the post-9/11 GI Bill has provided more than $65 billion for tuition, books and housing to 1.6 million veterans and their families. Recipients can only use the benefits for 36 months of vocational or college education. If a veteran used GI Bill benefits to cover tuition at ITT Tech for two years, she would not have enough benefits left to finish up a bachelor's degree.

Nearly 7,000 veterans were pursuing degrees at ITT Tech before it closed in September. ITT Tech, like other for-profit colleges, aggressively recruited veterans because their benefits served as a stable source of revenue. Money from the GI Bill is also exempt from a law that restricts the share of federal student aid funding for-profit colleges can collect, known as the 90/10 rule.

A Senate Education Committee report found that for-profit colleges received $1.7 billion in new GI Bill benefits, a quarter of the total amount of money doled out from the program in the 2012-2013 academic year. By the time it closed, ITT had received more than $917 million in new GI Bill benefits since the program was established, according to the Carper report.

Carper's staff found that nearly 9,000 veterans have lost their GI Bill benefits as a result of the closure of ITT Tech, Corinthian and 70 other schools that have shut their door since July 2013. Given the precarious position of for-profit schools in light of heightened regulatory scrutiny and depressed enrollment, the industry will likely see more closures in the near future. As a result, Carper is urging Congress to allow VA to require schools that pose financial risks to set aside funds to reduce to cost of restoring benefits to veterans.

"The VA and Congress need to do more on the front end to hold bad actors accountable and ensure that we're not continuing to send our veterans to schools delivering poor outcomes and destined for financial collapse," Carper said.

The lobby of Everest College in Santa Ana, Calif., on June 24, 2014. The for-profit Corinthian Colleges, parent company to Everest and another schools, was shut down in 2015.
DON BARTLETTI, LOS ANGELES TIMES/TNS

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