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It’s Official: President Obama Curbs For-Profit Colleges That Recruit Soldiers

By on May 1, 2012
Domestic, Ethics, For-Profit, Recruitment, Regulatory, Required, Retention Rates, Universities & Colleges

BrickArms M21 Sniper Weapon System prototype
Creative Commons License Photo Credit: Andrew Becraft via Compfight

As our post Friday predicted, President Obama signed an executive order while visiting Fort Stewart in Georgia late last week to prevent troops from being targeted by deceptive tactics from For-Profit colleges. The new order will force the colleges to provide information about student outcomes, financial aid and will create a central complain system for abuses. It also orders the Veterans Administration to trademark the term “G.I. Bill” and makes it more difficult for colleges to build web sites that resemble official government sites or to suggest that such sites over veterans’ benefits. The Federal Government continues to put the clamp down on For-Profit colleges. We applaud these efforts. It will force the For-Profits to improve their ethics in marketing and management… or die. Here’s the relevant portions of President Obama’s remarks and what various media reported on the new executive order:

President Obama said in his speech:

So as President, I’ve made sure to champion the Post-9/11 GI Bill.  And with that bill — and the Tuition Assistance program — last year we supported more than 550,000 veterans and 325,000 servicemembers who are pursuing a higher education.  (Applause.)  Because a higher education is the clearest path to the middle class.  That’s progress.  But we’ve got more to do.  We can’t be satisfied with what we’ve already done, we’ve got more to do.  We’ve got to make sure you’ve got every tool you need to make an informed decision when it comes to picking a school.  And that’s why Michelle and I are here today.

Right now, it’s not that easy.  I’ve heard the stories.  Some of you guys can relate; you may have experienced it yourselves.  You go online to try and find the best school for military members, or your spouses, or other family members.  You end up on a website that looks official.  They ask you for your email, they ask you for your phone number.  They promise to link you up with a program that fits your goals.  Almost immediately after you’ve typed in all that information, your phone starts ringing.  Your inbox starts filling up.  You’ve never been more popular in your life.  All of these schools want you to enroll with them. 

And it sounds good.  Every school and every business should be out there competing for your skills and your talent and your leadership — everything that you’ve shown in uniform.  But as some of your comrades have discovered, sometimes you’re dealing with folks who aren’t interested in helping you.  They’re not interested in helping you find the best program.  They are interested in getting the money.  They don’t care about you; they care about the cash.

So they harass you into making a quick decision with all those calls and emails.  And if they can’t get you online, they show up on post.  One of the worst examples of this is a college recruiter who had the nerve to visit a barracks at Camp Lejeune and enroll Marines with brain injuries — just for the money.  These Marines had injuries so severe some of them couldn’t recall what courses the recruiter had signed them up for.  That’s appalling.  That’s disgraceful.  It should never happen in America. 

I’m not talking about all schools.  Many of them — for-profit and non-profit — provide quality education to our servicemembers and our veterans and their families.  But there are some bad actors out there.  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.  They’re trying to swindle and hoodwink you.  And today, here at Fort Stewart, we’re going to put an end to it.  (Applause.)  We’re putting an end to it. 

The executive order I’m about to sign will make life a whole lot more secure for you and your families and our veterans — and a whole lot tougher for those who try to prey on you.  Here’s what we’re going to do.

First, we’re going to require colleges that want to enroll members of our military or veterans or your families to provide clear information about their qualifications and available financial aid.  You’ll be able to get a simple fact sheet called “Know Before You Owe.”  Know before you owe.  (Applause.)  And it will lay out all the information that you need to make your own choices about how best to pay for college.  

Second, we’re going to require those schools to step up their support for our students.  They need to provide a lot more counseling.  If you’ve got to move because of a deployment or a reassignment, they’ve got to help you come up with a plan so that you can still get your degree.  (Applause.)

Number three, we’re going to bring an end to the aggressive — and sometimes dishonest — recruiting that takes place.  We’re going to up our oversight of improper recruitment practices.  We’re going to strengthen the rules about who can come on post and talk to servicemembers.  (Applause.)  And we’re going to make it a lot easier for all of you to file complaints and for us to take action when somebody is not acting right.  

This is about making sure you succeed — because when you succeed, our country succeeds.  It’s that simple.  After all, at the end of World War II, so many Americans like my grandfather came home to new opportunities.  Because of the original GI Bill, by 1947, half of all Americans who enrolled in college were veterans.  And you know what, they did pretty well. 

They rose to become Presidents and Supreme Court Justices and Nobel Prize winners.  They went on to become scientists and engineers, and doctors and nurses.  Eight million Americans were educated under the original GI Bill.  And together, they forged the backbone of what would become the largest middle class that the world had ever seen.  They built this country.  They turned us into that economic superpower. 

Via WhiteHouse.Gov

The Savannah Tribune reports:

The president discussed deceptive practices by schools hungry for a share of the billions of dollars in federal educational subsidies for such people. During President Obama’s visit to Fort Stewart he signed an executive order to thwart these deceptive practices. The order requires schools to provide more precise and transparent information about their qualifications and financial aid programs, provide more counseling on these matters, strengthen regulations that dictate who can come on post and talk to service members. The executive order commands the Department of Veterans Affairs to trademark the term ”GI Bill,” to make it easier for the government to monitor and/or investigate forprofit groups that deceptively use the term to enroll veterans.

Lastly, The order directs the Department of Education, the Veterans Administration, and the Department of Defense to set up a centralized complaint system. The president termed this order “Know Before You Owe.” The president’s signing of the executive order was universally supported by most veterans groups such as the the American Legion, the Veterans of Foreign Wars (VFW), and Student Veterans of America, a coalition of student veteran organizations that represent colleges.

Tamar Lewin writes in The New York Times:

A loophole in federal law creates a strong incentive for aggressive recruiting of veterans by for-profit colleges. In an effort to ensure that the education provided is valuable enough that some students will pay part of the costs out of pocket, the “90/10 rule” requires that for-profit colleges get at least 10 percent of their revenues from a private source. But veterans’ and military benefits count toward that 10 percent, making service members especially valuable for the publicly traded for-profit college companies that get nearly 90 percent of their revenue from federal student aid.

While the executive order applies to all colleges and universities, the abuses have been concentrated among for-profit schools, which get a disproportionate share of military-related educational benefits. Of the $4.4-billion in post-9/11 G.I. Bill dollars paid to colleges and universities from 2009 to 2011, more than a third, about $1.65 billion, went to for-profit colleges, according to a Senate committee report released last fall.

Bradley Safalow, an analyst who follows the for-profit sector, said that most of the large publicly traded for-profit college chains — University of Phoenix, Kaplan, Corinthian, ITT, Bridgepoint and the like — would most likely face compliance problems if G.I. Bill and military tuition assistance were considered federal student aid under the 90/10 rule.

But only Congress can change the rule. In a press briefing, senior administration officials said the president was “open to legislation” revising the 90/10 rule. Senator Richard Durbin, an Illinois Democrat, has introduced legislation to change the 90/10 rule, lowering the threshold to 85 percent, and requiring colleges to count G.I. Bill benefits and military tuition assistance as federal student aid for the purposes of the rule. In addition, Senator Tom Carper, Democrat from Delaware, introduced a bill that would include military benefits as federal student aid, while keeping the balance at 90/10, and a companion bill is pending the House. No Republicans are co-sponsoring either bill.

Via The New York Times


 at The Washington Post reported:

The visit came as Obama concluded a week of courting young votersand their parents, touring university campuses to pressure Congress to pass a measure that would prevent student loan rates from doubling on July 1.

Obama spoke as the Republican-led House adopted a GOP-authored proposal to pay for lower student rates with money set aside for preventative care programs in the federal health-care overhaul. The White House has threatened a veto over the funding provision. An alternative measure in the Democratic-controlled Senate would pay for the extension by imposing new payroll taxes on some businesses with three or fewer shareholders

Obama has also been wooing the military in hopes of out-performing Democrats with the traditionally conservative group by highlighting his efforts to end combat action in Iraq and to support military families.

Via The Washington Post



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