Of the millions of people now taking college classes, about 13 percent are enrolled at for-profit schools, a steep increase over the small percentage 12 years ago. For-profit colleges, unlike public schools or private nonprofit universities, are often owned by shareholders or private equity firms.
Sen. Tom Harkin, D-Iowa, chairman of the Senate's Health, Education, Labor and Pensions Committee, has hammered the industry for months, releasing an 800-page report this summer that he said he hoped would lead to "bold legislative reforms."
"In this report, you will find overwhelming documentation of overpriced tuition, predatory recruiting practices, sky-high dropout rates, billions of taxpayer dollars spent on aggressive marketing and advertising, and companies gaming regulations to maximize profits," Harkin said. "These practices are not the exception. They are the norm. They are systemic throughout the industry, with very few exceptions."
This summer, 20 state attorneys general, led by Kentucky's, announced a settlement with a company that had set up a website that looked like the official Veterans Affairs site and provided information only on for-profit colleges such as Kaplan, Strayer, DeVry and Phoenix. The colleges were paying the company for leads on prospective students who had checked out the website.
The company had to turn over the website (www.gibill.com) and 18 other domain names to the Veterans Affairs Department as part of the settlement.
And last year, the VA and the Texas Veterans Commission yanked Westwood College from its approved list of colleges for veterans after repeated problems with high-pressure sales tactics and deceptive promises made to potential students.
The Iraq and Afghanistan Veterans of America set up a website to try to educate veterans on the issue, and the group has been lobbying Congress to change the law to tighten the oversight and accountability of for-profit colleges.
Beyond trying to help its members, Tarantino said, the organization sees a danger if Congress and taxpayers begin questioning what they are getting with the new GI Bill.
"We have already seen that as this fiscal climate grows tighter, people are suggesting subtle changes to reduce the benefit," he said. "If at some point a few years down the line, Congress is looking at the billions of dollars spent on a benefit that is not producing educated graduates, then they're going to cut the program."
Sen. Jim Webb, D-Va., a Vietnam veteran, authored the Post-9/11 GI Bill because the older version neither kept up with the rising cost of college nor provided a monthly stipend for living expenses. For those reasons, many veterans didn't take full advantage of their education benefits.
For veterans who served at least three years on active duty after 9-11, the law covers full tuition and fees for up to four years at the most expensive public institution in each state. It also provides money for books and a monthly housing stipend.
Additionally, many private nonprofit institutions, such as Texas Christian University, Texas Wesleyan University and Southern Methodist University, participate in a VA program in which they discount tuition and fees for student veterans.
Many veterans, though, are attending for-profit schools, and not just for-profit trade schools.
Gunderson, a University of Wisconsin graduate who took over leadership of the for-profit industry's trade group, said 91 percent of students at for-profit schools are "nontraditionals," meaning they are single parents, older adults returning to school, people with jobs and veterans.
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