Veterans coming home from Iraq and Afghanistan are enrolling at for-profit colleges and some of those companies operating on campus “appear to be taking advantage of a loophole.” That loophole lets the companies count GI Bill benefits as non-federal (non-taxpayer) money, according to a report released earlier today from Senator Tom Harkin, chairmen of the Senate Health, Education and Labor Pensions (HELP) Committee.
The report shows for-profit college companies received $1.7 billion in Post-9/11 GI Bill benefits during the 2012-2013 school year. That’s nearly a quarter of the benefits paid under the program the companies are pocketing. While overall enrollment in these institutions fell between 2009 and 2013, the report indicates the enrollment of veterans has “dramatically increased,” allowing those companies to cash in on the loophole Harkin identifies.
Also according to the report, “veterans are unusually attractive students for for-profit colleges [because] those eligible for Post-9/11 GI Bill benefits offer [them] a guaranteed stream of federal revenue.” Additionally, unlike students with federal student loans, veterans attending are not at risk of default because the U.S. government foots the bill.
Furthermore, while the Higher Education Act requires that at least ten percent of the revenue comes “from sources other than federal financial aid funds,” the Post-9/11 GI Bill does not count as federal financial aid under Title IV.
Read more: http://www.pbs.org/newshour/rundown/new-report-shows-nearly-2-billion-of-gi-bill-funds-go-to-for-profit-colleges/