Senate Report: Veterans Disproportionately Affected by For-profit School Closures

Policy
Posted By Derek Johnson on November 16, 2016 at 12:37 pm
Senate Report: Veterans Disproportionately Affected by For-profit School Closures

When ITT Tech closed, many higher education reformers cheered. Poor performing for-profits and nonprofits had skated by for years, taking in billions in federal funds while delivering very little in the way of returns to their students. The decision by the Department of Education to revoke the authority of ITT Tech’s accreditor and then eventually deny the school itself access to future federal student aid dollars was viewed as a win for education consumers and kicked off a wave of anger and introspection by the for-profit industry.

But when a school closes – even a nonperforming one –it causes tremendous disruption to current and former students, many of whom restructured their lives and borrowed tens of thousands of dollars to enroll. Military veterans using their educational benefits tend to suffer the most from these disruptions. That was the conclusion of a minority staff report commissioned by U.S. Sen. Tom Carper, D-DE, ranking member on the Senate Homeland Security and Governmental Affairs Committee.

According to the Department of Veterans Affairs, ITT Tech was one of the largest recipients of GI Bill education benefits, taking in $917 million from 2009-2015. As a result, thousands of veterans were affected by the closure. And for a variety of bureaucratic and legislative reasons, these students have fewer options for recourse than their civilian counterparts.

Why veterans were affected adversely

“The impact of these school closures on veterans and their families has been significant,” Carper said in a press release. “Nearly 9,000 veterans—including over 6,800 at ITT Technical Institutes—were actively pursuing their education at schools that have shut their doors since fiscal year 2013. Because transferring credits to another school can prove difficult, school closures put veterans at risk of exhausting their benefits before they are able to graduate.”

Carper has been a critic of predatory practices by for-profit colleges, in particular opposing what he calls the industry’s practice of targeting military members. He is a former Navy captain and Vietnam War veteran and frequently highlights the plight of returning veterans who enroll in for-profit schools hoping to learn new skills but wind up with near-worthless degrees, exhausted education benefits and significant debt.

Earlier this year he held a press conference on Capitol Hill along with veteran organizations to call for legislation to end the 90/10 loophole, which allows for-profit schools to take in more federal dollars than the law allows by enrolling military veterans.

Carper calls for action

In September shortly after ITT Tech closed, Carper took to the floor of the Senate to implore President Obama and the Department of Education to ensure that in holding for-profit schools accountable, military veterans were not left behind.

“Mr. President, when I think about the men and the women who volunteered to serve our country during a time of war, it is unfathomable to me that this is the position we would leave them—at a defunct college, without a plan to help them get their benefits back, and without a way to pay their rent or their mortgage next month,” Carper said.

Military veterans make up a significant portion of the student population at for-profit colleges, in part due to the fact that their GI Bill education dollars technically do not count as government revenue. Matt Mitchell, a veteran of the Air National Guard, once worked as a recruiter for ITT Tech and said there was a particular level of excitement and urgency whenever a veteran walked in the door.

“The veterans that were coming through the doors were widely misled as to what they were getting into,” Mitchell said. “They were told they would get jobs, that their credits would transfer, things of that nature. It simply wasn’t true.”

Decision hailed but also criticized

Although the decision to deny ITT Tech access to future federal funding was broadly hailed by higher education experts as a long overdue example of accountability for poor performing for-profit schools, the Department of Education was criticized for seemingly not doing enough to help current students deal with the fallout.

In a GoodCall piece profiling ITT Tech students in September, many expressed panic, bewilderment and confusion about what to do in the wake of the closure. The Department of Education did publish a post on its blog shortly after announcing the decision that outlined various options for students, but critics contend it could have done more.

The staff report argues that options are even more limited for student veterans. For example, while civilian students using federal student aid at ITT Tech and Corinthian Colleges were able to apply for loan forgiveness, the report found there are no such protections for veterans using their GI Bill benefits, which come from the Department of Veterans Affairs and operate under a different set of rules than traditional student aid.

The report called for congressional action to give the secretary of Veterans Affairs the authority to restore GI bill benefits, continue to provide housing benefits for veterans who suffered through school closures and deny schools with poor outcomes access to military education benefits in the future. In his floor speech, Carper also said that closing the 90/10 loophole would reduce the incentive for poor-performing for-profit schools to target veterans and their GI Bill benefits.

“Mr. President, the 90/10 loophole has directly led to this ongoing nightmare for the student veterans at Corinthian, at ITT Tech, and at countless other schools failing to deliver on the promise of a high-quality education,” Carper said. “Mr. President, Congress must act. We must act to restore the dream of a high-quality college education for our nation’s veterans. It’s well past time to address this situation. Enough is enough.”

Derek Johnson
Derek Johnson is a writer, journalist and editor based out of Virginia. He received a Master’s degree in Public Policy at George Mason University and a bachelor’s degree in Communication from Hofstra University.

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