Bill Tries, Again, to Curb For-Profit Colleges’ Share of GI Cash

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November 14, 2013

For the second time in two years, Congress is trying to close a loophole that allows for-profit colleges and universities to collect billions of federal dollars in tuition from veterans.

Over the past five years, veterans have spent nearly $30 billion on tuition and related higher-education costs, most of it at for-profit schools.

Much of that money comes from a post-9/11 GI Bill that provides veterans with significantly more tuition funding than it has in the past. It also excludes that funding from what’s known as the 90/10 rule, which prohibits schools from taking more than 90 percent of their funding from federal student aid. So schools can take as much of that money as they want without violating the law.

Introduced by Sens. Richard Durbin (D-Ill.) and Tom Harkin (D-Iowa) in the Senate last week, and in the House by Rep. Steve Cohen (D-Tenn.) this week, the bill would include the new GI Bill funding under the federal 90/10 rule, while also changing the rule to 85/15.

The bill aims to hobble schools that have taken advantage of veterans by encouraging them to sign up for costly programs that don’t provide them with the education or skills they need.

One of those veterans was Sgt. Chris Pantzke, who told his story to FRONTLINE in Educating Sgt. Pantzke. After his time in Iraq, Pantzke enrolled in a photography program that promised to help him with the coursework, as he suffered from PTSD. Instead, Pantzke says, the school took his money and let him fall flat.

Pantzke testified before Congress in July, saying he wanted to help other veterans who had been “railroaded” as he said he’d been.

It’s not clear if the bill will pass. Congress has passed 47 bills this year, and almost none are of any significant legislative weight.

The new bill also faces strident opposition from the for-profit college industry. The Association of Private Sector Colleges and Universities argues that limiting for-profit schools’ access to GI dollars could force some of these colleges to turn instead to focus on wealthier students who can pay the full bill.

Last week, the organization hired a veteran, Michael Dakduk, as vice president of Military and Veterans Affairs to “advance its commitment” to helping military and veteran students succeed. In his previous role as executive director of Student Veterans of America, Dakduk had advocated for legislation to adjust the 90-10 loophole.

On Wednesday the group provided FRONTLINE a statement from Dakduk saying the legislation would “harm postsecondary access and opportunity for not only active duty service members, veterans and their families, but new traditional students across the country.”

“The 90/10 Rule is not a measure of institutional quality, it is a measure of the socioeconomic position of the student population served,” he said.

The group also says the new bill is unnecessary, given other steps the government has taken to crack down on predatory marketing to veterans and to help veterans choose schools that fit their needs.


Sarah Childress

Sarah Childress, Former Series Senior Editor, FRONTLINE

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