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For-profit colleges lose incentive to target vets under bills

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For-profit colleges would lose a financial incentive to enroll soldiers and veterans under U.S. Senate and House bills aimed at curbing what sponsors call aggressive marketing of subpar programs.

For-profit colleges such as Apollo Group Inc. can get as much as 90 percent of their revenue from federal financial-aid programs.

Carmel-based ITT Educational Services Inc., one of the country's largest for-profit education providers, received $99 million in veterans' education benefits in the most recent academic year, according to a Senate report. 

Eight for-profit college companies received about $626 million in veterans’ education benefits in the most recent academic year. The eight include Phoenix-based Apollo Group Inc., which owns University of Phoenix, the largest chain by enrollment; and Pittsburgh-based Education Management Corp., the second-biggest.

Apollo received $133 million in veterans’ education benefits, the report said.Education Management got $113 million.

Schools solicit troops partly because their government-tuition programs are excluded from that cap. Under bills being introduced Wednesday by two Democrats, Delaware Senator Thomas Carper and California Congresswoman Jackie Speier, that money would count toward the limit.

Richard Durbin of Illinois, the No. 2 Senate Democrat, and Tom Harkin, the Iowa Democrat who’s chairman of the Senate education committee, sponsored a similar bill in January that would lower the total amount colleges could receive from government programs to 85 percent.

The law should be changed to protect taxpayers and current and former military members, according to a summary of the Senate bill. For-profit colleges and John Kline, the Minnesota Republican who chairs the House education committee, have said such aid restrictions would reduce educational access for veterans who have been neglected by traditional schools.

“We have a responsibility to our taxpayers, our service members and our veterans to make sure that when our warriors start their new career as students, that they aren’t subjected to unfair or abusive practices while using the benefits they worked so hard to earn,” Carper, who chairs the Senate subcommittee on federal financial management, said in a prepared statement.

Congress enacted the cap on federal aid to for-profit colleges as an antifraud provision, so that students — or employers who paid for their continuing education — were investing some of their own money in the tuition. Before 1998, the law had an 85-percent cap.

Congress, the Education Department, Justice Department and state attorneys general are scrutinizing the sales practices and student-loan default rates of for-profit colleges, which received almost $32 billion in federal grants and loans in the 2009-2010 school year.

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  • Face It
    The facts are there for all to see. There are private companies that milk the federally funded education system by dumping butts into the seats of their schools. On the reverse side, the agencies that monitor these various schools does a very poor job of verification and control of these "fly by night" schools. While it is true that qualified and well managed operations, such as ITT do provide qualified training, the system that s currently in place is broken, and the Congress and Senate is helping the industry police itself.

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  1. These higher rates Co. e about only because physicians are now hospital employees. otherwise physicians couldn't charge these rates and share the windfall with the hospital. Community/rural hospitals probably not buying physicians practices and thus weren't getting the windfall anyway.

  2. The incentive for poor people to get themselves off public assistance and "no longer be poor" is even with help...they're STILL POOR! Being poor, even with some assistance, isn't all that pleasant. (I speak from experience) It's a stubborn myth that poor people, who are on public assistance, are sitting in the lap of luxury. You should try living on just those "freebies" that you mentioned and see how meager they actually are. By the way, I didn't mean you had to buy/own a puppy...just pet one. :)

  3. As near as I can tell the minority has ZERO constitutional obligation to offer a quorum to the majority. A requirement for quorum was inserted into the constitution so that tyrannical majorities could not simply shove through odious and objectionable legislation (which is exactly what they did.) By allowing a tyrannical majority to charge fines against the minority for exercising their constitutional prerogative to deny quorum the court as made a mockery of constitutional governance in the state of Indiana.

  4. The voters elected the Reps to make a vote not walk out on the vote. They had to the right to exercise their opinion and vote "no" to the bill. Let me ask you this if you walked out of your job for 5 straight weeks would you get paid? Would you even have a job to go back to? If any elected official walks out on the people they should be arrested for stealing tax dollars from the public. They were elected to do a job and not leave when the job gets stuff.

  5. I have been to several of their locations in Pennsylvania and always go in for 1 item and leave with a basket full of things. I'm very happy they decided on Indiana, now if only they would put the other store in eastside.

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