For-Profit Colleges Collect Highest Amounts Of GI Bill Funds

As for-profit colleges have faced growing scrutiny from enforcement agencies, so they have also tapped into a growing source of revenue: Post-9/11 GI Bill funds for veterans. The industry collected $1.7 billion in these taxpayer-backed benefts in 2012-2013, up from $640 million in 2009-2010, according to a Senate report.

The report, released by Sen. Tom Harkin (D-Iowa), follows up on a previous Senate investigation of the industry that cited “overpriced tuition, predatory recruiting practices, [and] sky-high dropout rates.” This time around, Harkin’s Health, Education, Labor and Pensions (HELP) Committee finds that of the top 10 schools receiving Post 9-11 GI Bill dollars, eight of those schools are for-profits. Seven of those for-profits are currently under state or federal investigation.

“While the Post-9/11 GI Bill was designed to expand educational opportunities for our veterans and servicemembers, I am concerned that it is primarily expanding the coffers of the big corporations running these schools,” Harkin said in a statement.

The findings arrive amidst the largest-ever collapse in the for-profit school sector -- the shutdown of Corinthian Colleges Inc. The Santa Ana, California-based company is being investigated by multiple state and federal agencies, and earlier this month hammered out a deal with the Department of Education to sell 85 of its campuses and close 12 others.

Still, the company has reportedly continued to recruit students on military bases, prompting additional warning from Sen. Dick Durbin (D-Illinois). Student Veterans of America, an advocacy group, recently named three Corinthian brands to a “not recommended” list. Meanwhile, state officials in California and Virginia placed temporary suspensions on G.I. Bill benefits going to Corinthian-owned schools.

Publicly-traded Corinthian collected $63 million in Post 9/11 GI Bill funds last year, up from $22 million in 2009-2010, according to Harkin’s report.

The companies that received the highest amounts last year included Apollo ($272 million), Education Management Corp. ($163 million), ITT ($161 million), DeVry ($132 million) and Career Education Corp. ($79 million).

No federal data exists on college completion rates, or performance, of veterans using Post 9/11 education benefits. But based on company data previously provided to the HELP Committee, the report lists “serious concerns” about whether the majority of students at for-profit schools are finishing degrees and landing good jobs.

In 2008-2009 “as many as 60 percent of the total students who enrolled in some of the companies receiving the largest amounts of GI Bill benefits left the school within a year of enrolling and without a degree or diploma,” the report states.

Some lawmakers, including Sen. Durbin, would like to tighten funding regulations in order to protect veterans from aggressive marketing tactics. Under the “90/10” rule, for-profit schools can’t earn more than 90 percent of their revenue from federal student aid -- but through a loophole, Post 9/11 GI Bill benefits don’t count as part of the federal funding limit.