For-profit colleges under fire for targeting vets

Washington CorrespondentAugust 8, 2012 

  • For-profit colleges in North Carolina While none of the for-profit schools in the Democratic Senate committee report are based in North Carolina, several have local operations. University of Phoenix has locations in Charlotte and Raleigh. It serves approximately 30,000 North Carolina students, with more than half taking online courses. Education Management Corporation runs The Art Institute of Raleigh-Durham and The Art Institute of Charlotte. Kaplan Higher Education Corporation has a Charlotte campus that offers classes in allied health, criminal justice and information technology. Bridgepoint Education serves approximately 4,000 North Carolina students taking online classes. Sources: Senate Health, Education, Labor and Pensions (HELP) Committee; Federal Staff; company websites

— Howard Toller, a 27-year-old Iraq war Army veteran from Cary, admits the TV commercials lured him in to ITT Technical Institute, with former students speaking to the camera about state-of-the-art training, flexible class schedules and the ease of finding jobs after graduation.

It wasn’t until after Toller sunk much of his post-9/11 GI Bill benefits into the for-profit college that he learned, as a recent Senate Democratic committee report states, that the institution spends more money on marketing than instruction and that less than half of the students finish their associate’s degree.

“It was a dog-and-pony show,” Toller said in an interview. “They made me think that these guys have a good program. It’s not good at all. Nobody talked about how the credits are not transferrable.”

Veterans are turning heavily to for-profit institutions; the committee report found that eight of the top 10 colleges receiving post-9/11 GI Bill money from the Department of Veterans Affairs are for-profit institutions.

The for-profit college industry came under fire this year after the report found that taxpayers spent $32 billion last year on the industry. Fifteen of the largest for-profit colleges received 86 percent of their revenues from federal student aid programs, according to the report, issued by Sen. Tom Harkin, D-Iowa, chairman of the Health, Education, Labor and Pensions Committee.

Military vets ‘preyed upon’

The issue is playing out in military-heavy states such as North Carolina, which boasts one of the largest veteran and active duty populations in the country.

“They’re really preyed upon by some of these schools,” said retired Marine Col. Robert Songer, the former director of lifelong learning and education services at Camp Lejeune, N.C. “By the time they came to me it was usually too late. ... The schools sign them up for a Pell Grant (and) one, sometimes two student loans, and the student has no idea of this.”

In response to emailed questions, ITT spokeswoman Lauren Littlefield said that all students are told it is unlikely the credits will transfer, and that the information also is in the school’s catalog. Littlefield added that the school has no specific recruiting force or initiative for military personnel.

The schools have a strong incentive to enroll service members and veterans, in large part because of the “90/10 rule,’’ which puts a 90 percent cap on the amount of annual revenue a for-profit college may receive from federal student-aid programs. But veterans’ and military benefits don’t count toward that 90 percent, and instead are counted as nonfederal funding.

And so, critics say, the service members become particularly valuable for some for-profit colleges whose revenues consistently bump up against the cap.

The industry’s defense

The for-profit industry’s trade group, the Association of Private Sector Colleges and Universities, says the country’s military and veteran students have a right to choose the education that best meets their learning styles and the non-traditional student’s need for a flexible schedule.

“The reason we succeed is because veterans tell veterans, ‘This was really good for me and it would be really good for you,’ ” said executive director Steve Gunderson.

North Carolina’s two senators have staked their ground on either side of the debate.

Sen. Kay Hagan, a Democrat and a member of the Senate education committee, has been one of the most active voices against the for-profit college industry, introducing legislation that would prohibit all colleges from using taxpayer money on marketing, advertising and recruitment.

“Many of the for-profits colleges are using this money for anything but helping students succeed,” she said.

Burr: There’s good and bad

Sen. Richard Burr, the top Republican on the Veterans Affairs Committee, has charged Democrats with launching an assault against an industry that provides veterans with needed vocational skills and flexible schedules.

“For-profit institutions wouldn’t flourish if there weren’t people who wanted the services,” he said.

Burr acknowledged there some “bad apples” in the mix, but he said big government is not the answer. And he pointed to the successful programs at Universal Technical Institute, a for-profit institution based in Tempe, Ariz., that runs the Charlotte-area NASCAR Technical Institute, where Republican presidential candidate Mitt Romney is scheduled to speak Sunday.

Universal Technical Institute was treated more favorably by Harkin’s Senate committee report, which noted that the school spends far less on marketing than most for-profits and that half of the students receive their associate’s degrees or certificates. But the report also noted that UTI received $24.9 million in post-9/11 GI benefits from 2009 to 2011, averaging $22,767 per veteran, compared with an average of $4,642 per veteran at public colleges.

Bill Odell, vice president of corporate communications for UTI, said the committee tried its best to find anything to paint the school in a negative light.

But Odell said the committee can’t argue with the school’s 65 percent graduation rate and 85 percent employment rate.

“Our students graduate from school, and they get employed,” he said.

NASCAR Tech’s Campus President Jennifer Waber-Bergeron said Romney’s visit is an opportunity to showcase some of those positive stories left out of the federal debate.

Schools in politics

This is not the first time Romney has touted the benefits of for-profit colleges. In January, Romney praised Full Sail University in Florida for increasing competition and helping “hold down the cost” of education.” The school is one of the most expensive colleges in America, according to the U.S. Department of Education.

In April, President Barack Obama signed an executive order to help protect military families and veterans from aggressive and deceptive recruiting by higher education institutions, particularly for-profit colleges, seeking their military benefits. The order required colleges to provide more information about their student results and financial aid and directed the Veterans Affairs Department to register the term “GI Bill.”

The Iraq and Afghanistan Veterans of America last month launched a campaign warning new veterans and their spouses of “predatory for-profit” colleges that are targeting GI Bill benefits. Not all the schools are bad, said Tom Tarantino, the group’s chief policy officer, but he said there are pervasive bad practices across the industry that are not conducive to students finishing an education that leads to a job.

Attorneys general for 21 states – including North Carolina’s Roy Cooper, Jack Conway of Kentucky, Alan Wilson of South Carolina, Kamala D. Harris of California, Lawrence Wasden of Idaho and Lisa Madigan of Illinois – called on Congress in May to close a loophole they say encourages for-profit colleges to use “high-pressure recruiting tactics” on military veterans and their families.

Toller, the Army veteran and IAVA member from North Carolina, said he wanted a flexible schedule, but he said he also told the recruiter he hoped to eventually move on to get a four-year degree.

Regardless of whether his credits transfer, Toller said, he plans to attend Wake Technical Community College – a public school – next year.

Email: fordonez@mcclatchydc.com; Twitter: @francoordonez

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