For-Profit Colleges Under Scrutiny, Again


July 25, 2013

When FRONTLINE viewers last saw Sgt. Chris Pantzke, he was struggling to deal with the fallout from signing up for courses at a for-profit college that he couldn’t complete.

This week, he took his story to Capitol Hill, testifying before a Senate committee hearing to determine how best to protect service members and veterans from predatory for-profit colleges and universities. Pantzke wanted to tell his story, he said, because “I’m not the only one that’s being railroaded by these people.”

Service members have spent more than $30 billion on higher education in the past five years, and much of it on for-profit schools.

That’s due in part to the Post 9/11 GI Bill, which dramatically increased the amount of federal money veterans can receive to further their education, but also because of the so-called 90/10 law, which allows universities and colleges to take no more than 90 percent of their funding from federal student aid.

The new GI Bill isn’t included in the 90 percent law, which means that schools can take as much of that new money as they want without worrying about running afoul of the law.

That’s made them attractive candidates for school recruiters, some of whom see service members as “nothing more than dollar signs in uniform,” said Holly Petraeus, assistant director of the office for service member affairs at the Consumer Financial Protection Bureau, in Tuesday’s testimony before the Senate Subcommittee on Homeland Security and Governmental Affairs.

That’s what happened to Pantzke, as we reported in June 2011’s Educating Sgt. Pantzke:

Pantzke withdrew from the Art Institute of Pittsburgh in 2011. He’s now trying to learn photography on his own and polishing his archery skills in the hopes of competing in the Paralympics. His wife is finishing up her degree in medical billing. Once she’s working full-time, they can start paying off both of their student loans, which now run in the tens of thousands of dollars.

Since the film was first broadcast, there have been several changes to crack down on such aggressive targeting of service members and their families by educational institutions. President Barack Obama signed an executive order in April 2012 ordering several changes, some of which have already been implemented by the Department of Veterans’ Affairs.

In June 2012, the Kentucky Attorney General Jack Conway and 14 other state attorneys general sued one company, QuinStreet, Inc., accusing it of using the website to provide misleading information to veterans to persuade them to enroll in for-profit programs. The company quickly settled, agreeing to turn over the domain to the Department of Veterans Affairs, which now uses it to aid veterans in choosing educational programs.

The VA has also put together a handbook listing factors for veterans to consider when choosing a school, such as employment possibilities and graduation rates, Curtis Coy, the deputy under secretary for economy opportunity at the Department of Veterans Affairs, told the committee.

And the VA, which has copyrighted the term “GI Bill” so that institutions can no longer use it in deceptive ways, is setting up a complaint portal for veterans to log grievances with particular institutions, in accordance with the executive order. “We work very hard in the VA to ensure that veterans are informed consumers and provide them with as much information as possible,” Coy said.

On Tuesday, the Senate committee, led by Sen. Thomas Carper (R-Del.), was considering whether to remove GI Bill funds from the 90/10 equation in order to remove the incentive for schools to take advantage of veterans. (A similar bill was proposed last year, but didn’t get far.)

Steven Gunderson, the president and chief executive of the Association of Private Sector Colleges and Universities, told the committee that for-profit schools, many of which operate online, are better equipped to serve nontraditional students, such as single parents, veterans and low-income minorities. Losing GI Bill money or other federal funding could force these schools to focus instead on middle and upper-income students, he said.

The association has adopted best practices to improve the way it works with military and veteran students, including providing clear information on school policies to avoid misleading or aggressive recruiting practices, and tracking data on veterans to better assess their needs, Gunderson said.

But in her testimony, Petraeus recounted several recent stories of military members she had met that had experiences similar to Pantkze’s. In one case, a woman from a VA regional office in Nevada who worked with veterans with traumatic brain injury and post-traumatic stress disorder said that they had been persuaded to sign up for classes at for-profit colleges, and had no memory of doing so. Still, the colleges still pressed for full payment. Recruiters even tried to get some of them to enroll in master’s programs even though they couldn’t do the work. She said the tactics amounted to “tormenting veterans.”

“The GI Bill should provide the opportunity to build a better future,” Petraeus said, adding that military education benefits “should not be channeled to programs that do not promote — and may even frustrate — this outcome.”

Sarah Childress

Sarah Childress, Former Series Senior Editor, FRONTLINE

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