Education Law

For-Profit Schools Target Military Members & Vets

Whether you've completed your last tour of duty and got discharged, or you're an active service member looking ahead to the day when your service requirement is met, you may be thinking about going to school to get the education and training you need for your post-military career.

One of your options is a for-profit school, rather than a traditional four-year college or university. But, like non-military students, you need to be cautious when choosing this type of school.

What Are For-Profit Colleges?

For-profit colleges and schools are run like businesses to make money. Their profits come from fees charged to students and billions of dollars in federal loans and grants given to their students. Typically, they promise fast-tracked, quality educations with rewarding careers and job-prospects at the end of the road.

Many Schools Don't Make the Grade

Unfortunately, as dozens of lawsuits and investigations have shown, many students don't get valuable educations or jobs. They claim the schools lied about or exaggerated job prospects and starting salaries. In 2010, an investigation by the US Government Accounting Office (GAO) investigation of 15 for-profit schools found widespread fraud and deception, such encouraging students to lie about their financial need and giving false information about job prospects.

For-Profit Colleges and New GI Bill Students

A huge source of tuition and students for for-profit schools are veterans and active-duty military members. The Post-9/11 GI Bill (GI Bill) offers generous and attractive benefits, with amounts equal to the highest public in-state undergrad tuition rates. For-profit schools want a piece of that action - and they're getting it.

In 2010, for-profit schools received $521 million in federal military tuition assistance, and 25 percent of all money paid out of the GI Bill. In the same year, Senator Harkin reported (PDF) on widespread fraud and abuse by some for-profit schools targeting veterans, active service members and their family members.

Senator Harkin continues his investigation in late 2011.

Why Target the Military?

Those who criticize for-profit schools with questionable tactics and reputations say they focus on military students because of the money involved. For example, federal law (called the "90/10 rule") requires that at least 10 percent of any for-profit school's funding must come from sources other than federal student financial aid.

Money schools get from students using GI Bill benefits counts toward that 10 percent. So, military students mean not only more profits, but also helps the schools follow the law.

On top of that, military students are attractive because, effective October 2011, the GI Bill:

  • Covers tuition and fees, up to $17,000, for non-college degree programs, such as barber or cosmetology schools
  • Gives a housing allowance, up to $673.50 per month, for veterans, reservists and others (but not members in active service) who are enrolled in online schools or "distance learning"
  • Gives students, including active-duty service members and their spouses, $1,000 per month to pay for books and supplies

With these and other benefits, it's easy to see why for-profit schools actively recruit veterans and military members.

Students Beware

Many for-profit schools argue that they provide military personnel with the chance to get an education, with online courses and flexible programs not seen in traditional public four-year schools. And it's true that some for-profit schools do provide quality educations and helpful job-placement services.

Like any other student considering a for-profit school, though, you need to be careful:

  • Familiarize yourself with some of the complaints made by former students and employees at some these schools
  • Learn about the new rules these schools must follow and make sure they're following them
  • Research the schools - what are their graduation and job-placement rates? Don't take a recruiter's word on them

Your drive to get an education or training is commendable. Do what you can to make the right choice so you don't waste your valuable GI education benefits.

Questions for Your Attorney

  • What should I do if I think a recruiter for a for-profit school isn't being honest about the school's success rate?
  • I signed an enrollment contract at a for-profit school but now I've changed my mind. Can I get out of the contract
  • What would I need to prove to win a lawsuit against a for-profit school if my education is essentially worthless and I can't find a job?
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