Obama protects GI Bill users; new laws needed to do more

May 3, 2012

by Tom Philpott

President Obama’s high-profile signing Friday of an executive order to protect Post-9/11 GI Bill users from predatory practices of for-profit schools is viewed by veterans’ service organizations as a big step, but also a first step, toward curbing abuses within the U.S. education industry.

Before grabbing his signing pen, the president warned an audience of soldiers and service families at Fort Stewart, Ga., of "bad actors out there"who aggressively market substandard education plans to veterans and service members with valuable GI Bill benefits and tuition assistance dollars.

"They’ll say you don’t have to pay a dime for your degree but once you register, they’ll suddenly make you sign up for a high interest student loan," Obama warned in his speech. "They’ll say that if you transfer schools, you can transfer credits.　 But when you try to actually do that, you suddenly find out that you can’t…They’re trying to swindle and hoodwink you. And today, here at Fort Stewart, we’re going to put an end to it."

Not quite all that, say veterans’education advocates. Though they praise the White House for using existing executive authorities to better protect military and veterans’education benefits, vet groups say the job won’t be done until harder-won corrective legislation is passed. The executive order does draws new attention and momentum to that effort.

The order reflect many initiatives veterans groups have been pushing for since January, which also has resulted in a variety of new bills being introduced before the White House raced into the lead. The order directs the departments of Defense, Veterans Affairs and Education to establish "principles of excellence" for educational institutions target the military community to "strengthen oversight, enforcement and accountability."

The order notes that some schools have recruited veterans with "serious brain injuries or emotional vulnerabilities" without providing academic support or counseling. Some have pushed veterans into costly institutional loans rather than cheaper federal loans. Others refuse to disclose performance data such as graduation rates.

To address these issues, the executive order requires:

More transparency -- To accept GI Bill or military tuition assistance money, schools will have to provide applicants with completed "Know Before You Owe" financial aid forms developed by the Consumer Financial Protection Board and Department of Education. The forms show tuition and fees, availability of federal financial aid, estimated student loan debt upon graduation and "outcome" measures like graduation rates.

The VA will post on its website a list of schools receiving GI Bill benefits that agree to adhere to these requirements. New legislation would be needed to punish non-compliant schools more effectively, officials said.

Installation Ban –DoD will set new rules for allowing educational institutions to gain access to military bases, banning those found to have used deceptive recruiting or marketing practices.

Curb Misleading Online Recruiting –VA is seeking trademark protection for terms like "GI Bill" and "military-friendly" to prevent for-profit schools from using them on what appear to be government-endorsed websites that lure enrollees. The government has trademarked other terms to protect consumers including "Social Security" and "Medicare." Websites of for-profit schools, or paid to draw students to them, are said to include GIBill.Com, GIBenefits.com, GIBillAmerica.com and MilitaryGIBill.com.

Veterans’ Complaint System -- VA, DoD and the education department will create a centralized complaint system for students using military and veterans’educational benefits. There is none now, which hampers federal agencies from follow-up enforcement or regulatory actions.

Data on Educational Institutions –The same departments are to develop student outcome measures for participating schools. That data will be available to make comparisons using Ed’s College Navigator website.

Improved Support -- Colleges participating in military and veterans’education must do more to meet student needs, providing them with clear educational plans, academic and financial aid counseling, and improving their ability to re-enroll, or get refunds, if they leave for service-related reasons.

Veterans groups and military associations had pressed the White House and Congress to "pull together an interagency effort." The president’s order appears to do that, said Bob Norton, deputy director of government relations for Military Officers Association of America. "In other words, don’t just pin it on the VA, because they are not educators. They provide funding. We need to have the departments of Education, VA and DoD, and to the extent enforcement is necessary we need Justice in there as well."

A senior White House official said GI Bill and military tuition assistance dollars spent last year totaled $9 billion. So the president felt obligated to toughen oversight not just to protect veterans’benefits but also taxpayers.

"There are things you could do that would go even further, obviously, on like the 90-10 rule. But from the president’s perspective, we identified a set of issues where we could use his executive authority to really get at the heart of a lot of what’s going on right now," the official explained.

The "-10 rule"of the Higher Education Act has a loophole that encourages for-profit schools to market aggressively to GI Bill beneficiaries. That hole is untouched by the executive order and remains a top priority for veterans’ groups. The rule directs for-profit colleges to draw no more than 90 percent of revenues from Department of Education student grants or loans. In other words, courses must be of sufficient quality that at least 10 percent of payments come out of the pocket of students or their parents.

The Post-9/11 GI Bill law of 2008 effectively gutted the 90-10 rule as a quality measure. It allows schools that attract GI Bill dollars to count those monies against the 10 percent of revenue that must be collected from non-education department sources. So every GI Bill enrollee, in effect, allows in nine students with tuition and fees covered by other federal grants and loans.

While the executive order "adds much needed transparency" for student veterans to find the right school, said Paul Rieckhoff, founder of Iraq and Afghanistan Veterans of America, "we also need to ensure that the loophole that rewards schools to target veterans is closed once and for all. Our community needs the president’s and Congress’ continued leadership…to reform the 90-10 rule."

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