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For-profit colleges tap GI Bill loophole for business

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For-profit colleges, including Carmel-based ITT Educational Services Inc., accounted for eight of the top 10 recipients of education benefits for U.S. military veterans in the 2012-13 academic year, according to a U.S. Senate report.

About $1.7 billion of Post-9/11 GI Bill funds went to for-profit schools that year, more than double the $640 million for the 2009-2010 year, according to the report released Wednesday by Sen. Tom Harkin, chairman of the Senate Health, Education, Labor and Pensions Committee.

Over the past four years, the top eight for-profit recipients received $2.9 billion, according to the report. The for-profit college industry is starting to show strains after years of scrutiny from federal and state agencies and the Obama administration over recruitment practices and student borrowing.

“While the Post-9/11 G.I. Bill was designed to expand educational opportunities for our veterans and servicemembers, I fear that it is expanding the coffers of the big corporations running these schools rather than preparing our service members and veterans for post-military employment,” Harkin, a Democrat from Iowa, said in a prepared statement.

The so-called “90/10 rule” limits a for-profit college to getting no more than 90 percent of its revenue from the government. However, veterans’ and military tuition programs are excluded from the cap, and the colleges have aggressively recruited from the military.

The top recipient in 2012-2013 was Apollo Education Group Inc.’s University of Phoenix with $272 million, followed by Pittsburgh-based Education Management Corp. at $163 million and ITT Educational, with $161 million.

Corinthian Colleges Inc., which said this month that it would sell or shut down its 107 campuses after the government limited access to student aid, received $63 million that year, according to the report. Corinthian, based in Santa Ana, Calif., serves about 72,000 students and is facing allegations in multiple states of falsifying job-placement and marketing data.

The University of Maryland system was the largest recipient of Post 9/11 GI Bill funding among public institutions in 2012-2013 with $50 million.

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  • Veterans deserve better
    As a proud IU alum, even if veterans don't choose IU, I would encourage them to choose any of our excellent public colleges and universities that offer fully accredited degrees at much lower costs. By making the most of their military/veteran financial aid, they can hopefully have plenty of funding while in school, and graduate with little or no debt.
  • This has been going for years...
    As a veteran and current military service member, I am witness to these "colleges" preying upon other veterans and service members. Most (not all) of the for-profit "colleges" are nothing but diploma mills that other worthless degress. They do nothing but bilk the government for money and leave the service members in debt with nothing to show for it. When will people wake up to the fact that some things (like education) are not best served by the market (i.e. for-profit companies)? It's time to crack down on these companies and put an end to this abuse.

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