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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. With Pence running the ship good luck with a new government building on the site. He does everything on the cheap except unnecessary roads line a new beltway( like we need that). Things like state of the art office buildings and light rail will never be seen as an asset to these types. They don't get that these are the things that help a city prosper.

  2. Does the $100,000,000,000 include salaries for members of Congress?

  3. "But that doesn't change how the piece plays to most of the people who will see it." If it stands out so little during the day as you seem to suggest maybe most of the people who actually see it will be those present when it is dark enough to experience its full effects.

  4. That's the mentality of most retail marketers. In this case Leo was asked to build the brand. HHG then had a bad sales quarter and rather than stay the course, now want to go back to the schlock that Zimmerman provides (at a considerable cut in price.) And while HHG salesmen are, by far, the pushiest salesmen I have ever experienced, I believe they are NOT paid on commission. But that doesn't mean they aren't trained to be aggressive.

  5. The reason HHG's sales team hits you from the moment you walk through the door is the same reason car salesmen do the same thing: Commission. HHG's folks are paid by commission they and need to hit sales targets or get cut, while BB does not. The sales figures are aggressive, so turnover rate is high. Electronics are the largest commission earners along with non-needed warranties, service plans etc, known in the industry as 'cheese'. The wholesale base price is listed on the cryptic price tag in the string of numbers near the bar code. Know how to decipher it and you get things at cost, with little to no commission to the sales persons. Whether or not this is fair, is more of a moral question than a financial one.

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