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Protect Veterans From Fraud Protect Veterans From Fraud
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Congress invited predatory for-profit colleges to defraud military veterans when it wrote a loophole into the rules governing federal education aid. The loophole, added to the Higher Education Act in 1998, encouraged the schools to take the education aid of Americans who had served the country while giving them valueless degrees — or no degrees at all — in return.Congress invited predatory for-profit colleges to defraud military veterans when it wrote a loophole into the rules governing federal education aid. The loophole, added to the Higher Education Act in 1998, encouraged the schools to take the education aid of Americans who had served the country while giving them valueless degrees — or no degrees at all — in return.
A bipartisan bill pending in the Senate would close this loophole. But Congress has a lot more to do if it intends to curb these fly-by-night schools — for instance, by forcing the Department of Veterans Affairs to use the authority it already has to stop education fraud.A bipartisan bill pending in the Senate would close this loophole. But Congress has a lot more to do if it intends to curb these fly-by-night schools — for instance, by forcing the Department of Veterans Affairs to use the authority it already has to stop education fraud.
Congress amended the Higher Education Act two decades ago as part of what has become known as the 90/10 rule. The rule requires for-profit schools to get at least 10 percent of their revenue from sources other than federal student aid. This common-sense effort was intended to prevent the federal aid program from becoming the sole revenue source of inferior schools that could not attract private support. But Congress undermined the rule by allowing for-profit schools to essentially count some federal aid — including G.I. education benefits and Department of Defense tuition assistance — as privately raised. Congress amended the Higher Education Act two decades ago with what has become known as the 90/10 rule. The rule requires for-profit schools to get at least 10 percent of their revenue from sources other than federal student aid. This common-sense effort was intended to prevent the federal aid program from becoming the sole revenue source of inferior schools that could not attract private support. But Congress undermined the rule by allowing for-profit schools to essentially count some federal aid — including G.I. education benefits and Department of Defense tuition assistance — as privately raised.
Not long after World War II, sham schools sprang up to cheat veterans of their G.I. Bill benefits, with fake courses, false attendance records and the like. One federal report published during the 1950s concluded that hundreds of millions of dollars had been “frittered away on worthless training.” Another 1950s report estimated that of the more than 1.6 million veterans who had attended for-profit schools, only one in five had completed the course of study.Not long after World War II, sham schools sprang up to cheat veterans of their G.I. Bill benefits, with fake courses, false attendance records and the like. One federal report published during the 1950s concluded that hundreds of millions of dollars had been “frittered away on worthless training.” Another 1950s report estimated that of the more than 1.6 million veterans who had attended for-profit schools, only one in five had completed the course of study.
These 70-year-old complaints are still being echoed in lawsuits and enforcement actions aimed at for-profit schools all over the United States. On Dec. 10, for example, the Federal Trade Commission reached a $191 million settlement with the for-profit University of Phoenix to resolve charges that the school falsely promoted its educational benefits and used deceptive marketing materials that “targeted active-duty service members, veterans and military spouses.” And a year ago, Career Education Corporation, another for-profit college operator, agreed to forgo more than half a billion dollars in debt owed by former students to settle charges in 48 states and Washington, D.C., that it had preyed upon students with deceptive practices.These 70-year-old complaints are still being echoed in lawsuits and enforcement actions aimed at for-profit schools all over the United States. On Dec. 10, for example, the Federal Trade Commission reached a $191 million settlement with the for-profit University of Phoenix to resolve charges that the school falsely promoted its educational benefits and used deceptive marketing materials that “targeted active-duty service members, veterans and military spouses.” And a year ago, Career Education Corporation, another for-profit college operator, agreed to forgo more than half a billion dollars in debt owed by former students to settle charges in 48 states and Washington, D.C., that it had preyed upon students with deceptive practices.
The Department of Veterans Affairs, which has broad powers to combat fraud, has come under withering criticism for failing to protect veterans and service members from such practices. A 2016 analysis by Yale Law School’s Veterans Legal Services Clinic hammered the department for sitting on its hands even though it has the authority to “approve, disapprove and suspend G.I. Bill funds for educational institutions engaged in deceptive recruiting practices.” Beyond that, the Yale team found, the V.A. has “declined to support — or has even undercut” — state-level efforts to protect veterans from unscrupulous or noncompliant schools.The Department of Veterans Affairs, which has broad powers to combat fraud, has come under withering criticism for failing to protect veterans and service members from such practices. A 2016 analysis by Yale Law School’s Veterans Legal Services Clinic hammered the department for sitting on its hands even though it has the authority to “approve, disapprove and suspend G.I. Bill funds for educational institutions engaged in deceptive recruiting practices.” Beyond that, the Yale team found, the V.A. has “declined to support — or has even undercut” — state-level efforts to protect veterans from unscrupulous or noncompliant schools.
A 2016 federal statute requires programs receiving G.I. Bill money to meet state licensure and certification requirements. Nevertheless, a 2018 report from Veterans Education Success, a nonprofit that provides legal help to veterans, found that, owing to inaction by the V.A. and its state agents, degree programs that did not qualify students for state licensure in their fields of study were still receiving G.I. Bill money.A 2016 federal statute requires programs receiving G.I. Bill money to meet state licensure and certification requirements. Nevertheless, a 2018 report from Veterans Education Success, a nonprofit that provides legal help to veterans, found that, owing to inaction by the V.A. and its state agents, degree programs that did not qualify students for state licensure in their fields of study were still receiving G.I. Bill money.
The bipartisan Senate bill aimed at closing the 90/10 loophole stands a good chance of succeeding where similar bills, supported only by Democrats, have repeatedly failed. The Senate also ought to pass the Protect the G.I. Bill Act, which cleared the House by unanimous vote in November. Among other things, it would clamp down on deceptive recruiting and protect students from fake law schools that are not approved by the American Bar Association.The bipartisan Senate bill aimed at closing the 90/10 loophole stands a good chance of succeeding where similar bills, supported only by Democrats, have repeatedly failed. The Senate also ought to pass the Protect the G.I. Bill Act, which cleared the House by unanimous vote in November. Among other things, it would clamp down on deceptive recruiting and protect students from fake law schools that are not approved by the American Bar Association.
Servicemen and women — and the taxpayers who fund their educations — deserve at least that much.Servicemen and women — and the taxpayers who fund their educations — deserve at least that much.
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