For-profit colleges cash in on veterans

For-profit colleges are cashing in on veterans with GI Bill benefits and active-duty service members with education benefits, charges a new report by Sen. Tom Harkin, chairman of the Senate Health, Education, Labor and Pensions Committee.

Between 2006 and 2010, combined Defense Department and Veterans Affairs education benefits received by 20 for-profit education companies increased from $66.6 million to a projected $521.2 million, an increase of 683 percent, the report says.

. . . Because of high tuition charged at for-profit schools, students receiving Post-911 GI Bill benefits at the schools received 36.5 percent of the money distributed, even though they account for just 23 percent of the bill’s beneficiaries.

Veterans may not be “getting the education they deserve,” Harkin said, who accused for-profit companies of using veterans as “cash cows.”

The dollars from military benefits, the report alleges, allow for-profit schools to “evade” a federal rule that no more than 90 percent of their revenues come from federal Title IV money, such as Pell Grants. GI Bill and Defense Department aid, however, is exempt from that rule, something that Democratic lawmakers have pledged to seek to overturn and the for-profit college industry opposes.

The for-profit college sector faces proposed Education Department regulations that would cut off federal aid to programs whose students have trouble repaying their loans.

With generous educational benefits to spend, military personnel, veterans and their families are attractive for colleges. For-profit colleges actively recruit by locating campuses near military bases, hiring specialized staff to work with military students and discounting tuition. In addition, for-profit colleges offer flexible scheduling, accelerated degrees and a wide array of online classes, which are especially popular with students who may be called up or transferred in mid-course.

Most veterans use their GI Bill benefits at for-profit career colleges and community colleges, according to the Veterans Department. Of the 15 most popular programs, seven offer classes online.

For those seeking a bachelor’s degree, for-profit education may be a poor choice: Four-year graduation rates are low, though that’s partly because the for-profits enroll so many high-risk students. However, for-profit success rates are high for students seeking vocational certificates and two-year degrees. The completion rate is 60 percent at for-profit institutions, compared to only 22 percent at community colleges.

While researching a story on middle-skill careers requiring a certificate or associate degree, I talked to Brian Bosworth of FutureWorks and James Rosenbaum, a Northwestern sociologist. Both said, unsolicited, that many for-profit career colleges do an excellent job of designing career programs for adult students. “They’re highly structured, with no electives,” so students don’t waste any time, said Rosenbaum. “They always create degree ladders,” so students can earn a certificate, then an associate degree and potentially a bachelor’s. “Students get frequent payoffs.”

For-profit graduates also get help finding jobs, said Bosworth. That’s rarely true for community college graduates.

POSTED BY Joanne Jacobs ON December 10, 2010

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