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For-Profit Colleges Rake in Millions From Post-9/11 G.I. Bill

The University of Phoenix Online tops the list of schools receiving money from the Post 9-/11 G.I. Bill in its first year. Overall, for-profit colleges collected $640 million from the bill. Public colleges and universities received $697 million but the money went to more than twice as many students.

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(Defense Department photo by Army 1st Lt. Christopher W. Cudney)

For-profit universities collected about $640 million from the Post-9/11 G.I. Bill in its first year, according to a new U.S. Senate committee report. The boost to for-profits came at a time when the sector was subject to criticism for poor results and for leaving many students with unmanageable debts.

By aggressively recruiting members of the military, the schools have tapped a rich new source of government cash, in addition to the billions they've already absorbed from the federal Pell Grant program, according to Sen. Tom Harkin, D-Iowa, whose committee has been investigating alleged abuses at for-profit colleges.

ProPublica has posted a list from the Department of Veterans Affairs of the 500 schools that received the most Post-9/11 G.I. Bill funds. (For the list of all schools, contact Sharona Coutts at Sharona.Coutts@propublica.org.)

Recent government reports have highlighted problems at for-profit colleges, including recruiters lying to prospective students about the cost of courses, whether credits would transfer and future job prospects. The schools are under fire from the Department of Education for poor graduation rates.

"The for-profit colleges are rife with misleading recruitment practices, they are expensive to attend, they have huge profits, and have atrocious withdrawal rates," Harkin said. "This raises serious questions about the share of military benefits that go to schools that have very poor outcomes."

A spokesman for the industry said that any problems should be addressed "thoroughly and completely" but took issue with the report's conclusion. "The rapid growth of service members, veterans and their families in higher education is a very positive development that should be celebrated, not denigrated," said Harris Miller, president of the Association of Private Sector Colleges and Universities.

The University of Phoenix Online campus topped the list of recipients at $35 million.

"Veterans chose University of Phoenix because the university meets their needs," said Manny Rivera, the school's spokesman, referring to the flexible schedules and focus on online learning that the school provides.

The Post-9/11 G.I. Bill provides funds to soldiers and veterans to pay for education or vocational training, and came into effect on Aug. 1, 2009. As of September 2010, the V.A. had issued nearly $5 billion in benefits to over 350,000 recipients, according to spokesman Drew Brookie.

More than 36 percent of Post-9/11 G.I. Bill tuition funding was spent at for-profit schools during that time, even though fewer than a quarter of G.I. Bill students attended those schools, according to the report.

Public universities and colleges received a similar amount from the program -- $697 million -- but the money went to more than twice as many students, the report says.

The Department of Veterans Affairs is looking into ways to bolster oversight of how the veterans' funds are used, according to spokeswoman Katie Roberts.

The V.A. does not have direct authority over schools, said Roberts, and relies on state agencies to police their quality. But the V.A. is able to revoke access to its funding at an individual campus when problems arise, and it has done so in the case of some for-profit schools, Roberts said.

Harkin said that the Senate Health, Education, Labor and Pensions Committee will continue its investigations into for-profit colleges and that he expected legislative action would be required to rein in some of the abuses in the sector.

The Department of Education has already taken steps to tighten regulation of the schools, with many of those changes set to take effect next year.

Inform our investigations: Do you have information or expertise relevant to this story? Help us and journalists around the country by sharing your stories and experiences.

robert von bargen

Dec. 10, 2010, 6:22 p.m.

Perhaps the DOD and the DOE can provide information about the schools along with any information packets they send to applicants for aid.
Things haven’t changed much since the days when the vendors would line up in the mess hall on payday selling suits, encyclopedias, insurance etc to the GI’s.

The University of Phoenix has benefited most during a declared WAR time.

The rates they charge are the same as any Real World educational facility, without the prestige offered by an actual education institute that operates within a community for the betterment of the students and the geographical area they operate within.

UOP is also highly aggressive collecting student debt, going so far as to sue terminally ill students at their death bed.

Compared to 90% of State and privately run institutions, the UOP has placed a higher emphasis upon profit, inflated prices and have benefited like no other during war time. They are profiteering during a time when other educational facilities maintain reasonable rates, and offer greater care, communications and quality of education.

If this were the 1940’s the board would have been brought up on charges of profiteering during war time.

UOP suz !

stanley voedisch

Dec. 14, 2010, 7:51 p.m.

To make matters worse, A. Duncan(Sec. of Education) has known about this for some time and has even been petitioned by members of congress to stop legislation that would interfere with the investors(Wall Street execs.) profit margins. Additionally, there is real cause for alarm that if left unregulated, the schools for profit industry will be the next bubble to burst. When it does, and it will, the damage to our economy is believed to be as significant as the mortgage bubble crisis.

D. ROBERTSON

Dec. 15, 2010, 3 p.m.

I’M 66 AND THINKING OF GOING BACK TO SCHOOL ON MY G.I. OR VA BENEFITS. USED ABOUT 30 UNITS WORTH OF BENEFITS IN 1968-69. CAN I QUALIFY FOR FINANCIAL AID MONTHLY WHILE GOING TO SCHOOL AS WELL AS FINANCIAL AID FOR THE COST OF THE 2 YEAR EDUCTION IT-SELF? THANK YOU.

Age 66?  Many state governments offer the senior citizen tuition waiver at state colleges and universities. In other words, free.  Check your home state council for higher education for local state college for details.

Uebernachtung Guenstige

Dec. 23, 2010, 1:20 p.m.

Introduce Actually,from survive wood both bank vast standard rate fuel pound same collect drop conference before lift along human vision concern outside ourselves onto cause on shoe effect complete candidate assumption analysis scientific trend belief recommend to hard sense speaker wave realise sequence rapidly major everyone answer channel human works understanding shape agreement fight complete record object test head expenditure hill liberal warm draw question there vision instruction succeed seriously village climb towards through output cut son know few circumstance whole plus recognition tiny text obviously commitment foundation

This article is part of an ongoing investigation:
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For-Profit Schools

For-profit colleges are under fire for their recruiting practices, and the graduation and loan default rates of their students.

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