Sen. Carper Highlights Harkin Report Showing Dramatic Growth in VA and DoD Education Funds Going to For-Profit Colleges

Press Release

Asks for GAO Investigation into DoD Ability to Guard Against Waste in Tuition Assistant Program

Recently, Sen. Tom Carper (D-DE) highlighted a new report released Thursday by Senate Health, Education, Labor and Pensions Committee Chairman Tom Harkin (D-IA) which shows a dramatic increase in Department of Defense (DoD) and Veterans' Affairs (VA) funds flowing into for-profit education companies. At the same time, the report explains that military service members and veterans are especially attractive to for-profit colleges because their DoD and VA education benefits do not count toward the so-called "90/10 rule," a regulation that prevents for-profit colleges from taking in more than 90 percent of their revenue from federal student aid money.

"Senator Harkin's report reveals a truly concerning aspect of education spending by the Department of Defense (DoD)," said Sen. Carper. "While for-profit colleges and universities have quadrupled the amount of funding they get from the DoD to provide education to our military, DoD has yet to increase oversight of this education program, leaving us with no indication of whether this increased cost to the taxpayers buys our military personnel the kind of high quality education they so richly deserve. I have asked the Government Accountability Office to investigate DoD's ability to effectively guard against waste in its Tuition Assistance Program and I plan to hold a hearing early next year on the findings of this investigation."

"Our government has made a commitment to this generation of Iraq and Afghanistan veterans to offer them the same opportunities for advancement through higher education that we provided to previous generations of veterans," said Sen. Harkin. "Given what we've already uncovered about the quality of education at many for-profit schools, I have serious concerns about whether the veterans who enroll at these schools are getting the education they deserve. This report raises serious questions about whether some for-profit education companies view providing education to our service members and veterans as incidental to ensuring a robust profit for their company and their shareholders."

"Chairman Harkin's report underscores the growing number of horror stories that I'm hearing from veterans about their experience with for-profit colleges,"said Donald Overton, Executive Director of Veterans of Modern Warfare. "Veterans are being aggressively recruited by these for-profit education companies, with no concern for whether they get the support or education they need to succeed."

WHAT MAKES VETERANS ATTRACTIVE TO FOR-PROFIT COLLEGES?

The Post-9/11 GI Bill has been in effect for only one year, but even in this brief window, it has become a new profit generator for for-profit education companies. The report shows that:

o Between 2009 and 2010, revenue from military educational benefits at 20 for-profit schools has increased 211 percent.

o While students at for-profits schools made up 23.3 percent of the first-year recipients of Post-9/11 GI benefits, they received $640 million, or 36.5 percent, of the benefits because for-profit tuition is much more expensive than other colleges and universities.

Individual for-profit colleges saw similarly precipitous growth in their funding from DoD and VA. The 30 schools receiving document requests from the Committee reported 23,766 students receiving military benefits of any type in 2006. That number increased to 109,167 students in 2009, and 100,702 students through only the first half of 2010.

Members of the military have become increasingly attractive to the for-profit education industry because their DoD or VA education benefits, which have increased dramatically in recent years, do not count toward the so-called "90/10 rule," a regulation that prevents for-profit colleges from taking in more than 90 percent of their revenue from federal student aid dollars.

WHY IS THIS A CONCERN FOR VETERANS, SERVICE MEMBERS, TAXPAYERS AND CONGRESS?

Over the course of this investigation, the report has found that while some for-profit colleges offer flexible education and training programs, many are expensive to attend, plagued by manipulative and deceptive recruiting practices, and have exceptionally high dropout rates. As discussed in Chairman Harkin's September 30th report, 57 percent of the students who enrolled at for-profit colleges between 2008-2009 dropped out, leaving the vast majority with a load of debt but no degree.

Though the Post-9/11 GI Bill education benefit package is generous, it can be depleted rapidly by the high tuition charged by for-profit colleges. If benefits are used up without completing a program, or on a program that fails to yield the promised diploma or job opportunities, the service member or veteran will not be able to reinstate or reuse their benefits.

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