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Obama Targets For-Profit College’s Predatory Recruiting of Service Members, Veterans

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President Barack Obama and first lady Michelle Obama visit Warriors Walk at Fort Stewart, Ga., on Friday before speaking to troops, veterans and military families at the Third Infantry Division Headquarters.

CREDIT: AP Photo / Carolyn Kaster

President Obama will sign an executive order today aimed at cracking down on predatory practices by higher education institutions that target military service members, veterans, and their families.

The White House writes in a release:

Since the Post-9/11 GI Bill became law, there have been reports of aggressive and deceptive targeting of service members, veterans, and their families by educational institutions, particularly for-profit career colleges. For example, some institutions have recruited veterans with serious brain injuries and emotional vulnerabilities without providing academic support and counseling; encouraged service members, veterans, and their families to take out costly institutional loans rather than encouraging them to apply for Federal student aid first.

The for-profit college industry—a clear target of the order—has been exploiting the Post-9/11 G.I. Bill for years, with many institutions taking advantage of a loophole that allows them to count federal money doled out through the program separately of other federal education funding.

(Called the “90/10 rule,” the regulation was created in 1998 and requires that for-profit schools get at least 10 percent of its revenue from non-Title IV funds, which encompass most student loan and financial aid dollars. Funds from the G.I. Bill, however, don’t count and allow some school to take in more than 90 percent of their revenue as taxpayer dollars.)

It’s no secret that many for-profit colleges leave students saddled with massive amounts of debt, even though a huge number fail to complete their degrees and those who do are often unprepared for post-college work in their field.

(Screw U: How For-Profit Colleges Are Ripping Off Students and Taxpayers)

The president’s executive order will crack down on how schools can recruit and advertise to service members and veterans, including trademarking the term “G.I. Bill” and placing restrictions on which institutions can recruit at military locations.

Politico reports:

Eight of the top 10 institutions receiving Post-9/11 GI Bill benefits between 2009 and 2011 were for-profit colleges, and six had withdrawal rates above 50 percent, meaning that much of the federal money flowing into their coffers never led students to a degree. And service members and military spouses are also disproportionately enrolled at for-profit institutions, which enroll about 10 percent of post-secondary students nationwide.

In a statement, Sen. Tom Harking (D-Iowa), who has been advocating for cracking down on the for-profit industry, praised the president’s actions.

“I went to school on the G.I. Bill and know how important these benefits are for veterans’ success,” he said. “I applaud President Obama’s leadership in protecting this generation of veterans against fraud and abuse and ensuring they receive the same quality education that my generation did.”

Former Rep. Steve Gunderson (R-Wis.), who now leads the for-profit lobbying group Association of Private Sector Colleges and Universities, criticized the order on Friday, telling Politico that for-profit colleges “proudly serve military and veteran populations.”

The president will sign the order, which is part of his “We Can’t Wait” effort intended to act on issues not receiving Congressional action, at Fort Stewart in Georgia. He will be accompanied by First Lady Michelle Obama, Assistant Director of the Consumer Financial Protection Bureau Holly Petraeus, and student veterans and their family members.

Petraeus, who leads the CFPB’s Office of Servicemember Affairs and is married to CIA Director Gen. David Petraeus, has been outspoken on the need for reform on veterans’ education. Last year, she wrote a piece in the New York Times about military personnel “finding themselves under a siege from for-profit colleges” and called for greater regulation of G.I. Bill funds.

“Today’s veterans are eager to earn post-secondary degrees—and to replicate the example of the generation that returned from World War II and fueled our prosperity,” Petreaus wrote. “But their desire for learning is too often exploited by unscrupulous for-profit colleges.”

Brian Stewart is the Communications Director at Generation Progress. You can follow him on Twitter @brianstewart.

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