Abuses by some for-profit schools put landmark veterans’ education program at risk

For-profit colleges and universities are part and parcel of the booming and increasingly accelerating private ownership of the educational means of production in the United States and abroad.  For-profit colleges and universities have managed to wrangle 12 percent of all college students in the United States.  This number includes one out of every four students of color in all colleges and universities, arguably making institutional racism a part of the for-profit industry’s well-targeted apartheid business plan. Shockingly, these colleges and universities also receive 25 percent of all federal aid for colleges and universities, and they are responsible for the lion’s share of student loan defaults — a whopping 50 percent of all college and university defaults (You can see graphics at: http://unitedrepublic.org/wp content/uploads/2012/01/HELP-Committee-Presentation.pdf).

‘Corruption’ and ‘for-profit colleges and universities’ are two concepts that go together like John Gotti and organized crime.  The recent controversy over the corporate diploma mills that offer a subprime education through taxpayer subsidies and feudalistic debt peonage on behalf of students is not so recent.  Actually, for-profit drive-by-colleges are the yersinia pestis of higher education and they have raised their heads at distinct times in history.  Where they are really pernicious is not simply in their targeting of working people and especially people of color, but in their almost heat seeking drone like accuracy in exploiting veterans, both active and returning, by trying to sell them an ‘educational product’ that is not only inferior, but also by ‘dissing’ the very people were forced into a back door draft. 

Many veterans have sited educational opportunities to go to college as one reason for enlisting in the military.  By this they mean both opportunities for gaining an education for gainful employment purposes but also an education for the development of their human potential.  The for-profit drive-by-colleges exploit these two necessities by providing for none of them.  Not only are the diplomas from such schools vapid and often not worth the paper they were ‘xeroxed’ from, but these schools hardly provide an education and certainly not an education in learning how to think critically.  This is the last thing that these colleges covet.

Some History of the For-Profits

The GI Bill, coming on the heels of World War II, was really the first time the federal government provided American citizens an opportunity to attend and participate in a higher education. Known and passed into law as The Servicemen’s Readjustment Act of 1944, the new law provided college (or high school or vocational education) for returning World War II veterans as well as one year of unemployment compensation). The bill was passed to avoid the problems that had occurred with the “Bonus March” that had occurred in 1932 and to also provide a stimulus for the depression economy.

The GI Bill was stupendously successful providing 7.8 million World War II veterans benefits under the GI Bill and 2.2 million of them participated in higher education and/or training programs. During the 1950s, the number of college students doubled. Getting a college education was no longer the providence of the elite and the rich.

As the experiment wound its way through the 1950s with a great deal of fanfare and success, access was expanded through the Civil Rights Act of 1965, most notably The Higher Education Act of 1965 (the HEA). The HEA was specific legislation attached to the Civil Rights Act that was codified into United States law on November 8, 1965, as part of President Lyndon Johnson’s Great Society domestic agenda. (For more on this law and Johnson, see here, here and here.)

It is important for a thorough understanding of the current material economic and political conditions underlying the growth of for-profit colleges and universities to point out that the GI Bill was superseded by the Veterans Adjustment Act of 1952. This new bill offered benefits to veterans of the Korean War that served for more than 90 days and had received an “other than dishonorable discharge”; but it did something more: unlike the predecessor GI Bill, the substantial difference between the 1944 GI Bill and the 1952 Act was that it altered the distribution of federal funds for tuition use at higher education institutions.

Under the original GI Bill federal monies had been sent directly to the institutions of higher education. Now, with the new Veterans Adjustment Act of 1952, federal monies would no longer be paid directly to the various institutions of higher education, but instead, veterans would directly receive a fixed monthly stipend. They would then use this to pay for their individual tuition, fees, books and living expenses. The decision to end direct tuition payments or to stop the direct distribution of federal funds to the myriad institutions of higher education came after a 1950 House select committee hearing that uncovered incidents of fraud by many educational institutions through overcharging of tuition rates. Some 258 unnamed educational institutions were mentioned in Appendix D of a 1950 Veterans Administration report to the Senate Committee on Labor and Public Welfare in what would be the first such incident of for-profit higher institutional fraud to plague the government, which would then set the stage for the present subsidized profit-extraction schemes by Wall Street. More investigations of the for-profit educational enterprise would occur in 1973, in the 1990s and now, once again, under the Obama administration and senate subcommittees.

In the late 1980s, after close to a decade of Reaganomics or neo-liberalism, massive deregulation of governmental policies were put into motion that were to affect favorable consolidation and growth in the for-profit educational industry. This led to the development of what we now see as large “higher educational or vocational chains” owned outright through corporate ownership. Wall Street was now becoming a huge player in the burgeoning industry. For-profit diploma mills issuing four-year degrees rose steadily as a result.

It was not until the “selection” of George W. Bush that for-profit, corporate, educational stocks really took off to the pleasure of Wall Street. Under the tutelage of Ron Paige, education secretary under Bush, regulations governing the for-profit educational industry were further eliminated in the interest of profit-taking purposes on behalf of corporate shareholders, CEO’s and Wall Street. Predatory recruitment practices by the for-profits that had been singled out for tight regulation earlier were now allowed to proceed with reckless abandonment. During this time, three million new students enrolled in higher education institutions and 10 percent of all of them were enrolled by the for-profit colleges and universities. The market was beginning to take shape and the profits had never flowed so quickly and so easily. Wall Street, sensing that it was profitable to financialize through privatization the educational sector in America, looked to the for-profit colleges and universities as a location to invest surplus capital to avoid stagnation and achieve capital maximization. What is now a $30-billion-dollar business began to take form and fully blossomed with results that would prove to be devastating for students and taxpayers (much of this history was taken from an article written for Truthout entitled, “Good For Wall Street, Bad for Students, February 11, 2012, http://truth-out.org/index.php?option=com_k2&view=item&id=6618:good-for-wall-street-bad-for-students-seiu-hosts-webinar-on-predatory-proprietary-colleges-and-universities).

Now the for-profit colleges and universities are ginned up on Wall Street and are sucking veteran bodies up faster than they were recruited.  This has led to rampant exploitation and has forced even the neo-liberal government to intervene.  Regualtions will not do the trick, as hsitory shows and as I have written elsewhere (http://archive.truthout.org/neoliberalism-and-for-profit-predatory-educational-industry-you-cant-regulate-a-criminal-enterprise6).  We need public policies that make it illegal to use taxpayer monies for for-profit education.   We need to ‘end welfare as we know it’ for a parasitic industry using our nation’s children and citizens as a host.

The following is from Sen. of VA., Jim Webb’s office, March 26, 2012 (Press_@webb.senate.gov). 

Washington, D.C. – Leading veterans service organizations (VSOs) are strongly endorsing Senator Jim Webb’s (D-VA) bipartisan legislation to protect the landmark Post-9/11 G.I. Bill from abuses by certain schools. Senator Webb, author of the Post-9/11 G.I. Bill, introduced the new legislation to require schools participating in educational assistance programs through both the Department of Veterans Affairs and Department of Defense to meet the same educational standards currently required for Title IV federal programs, such as Pell Grants. 

“This bipartisan legislation will preserve the greatest G.I. Bill our veterans have ever had,” said Senator Webb, who served as a combat Marine in Vietnam and later as counsel to the House Committee on Veterans Affairs. “Some for-profit institutions are providing our students a great education, but we owe it to taxpayers and our veterans to ensure that all schools are held to the same standards.”

Troubling statistics show that the cost to taxpayers to send a veteran to a for-profit school is more than double the cost of a public university and that eight of 10 educational institutions collecting the most V.A. benefits are for-profit schools.

For more information about the legislation, please click here.

What VSOs Are Saying about the Military and Veterans Educational Reform Act of 2012:

Fang A. Wong, National Commander of The American Legion, 3/13/2012:

“On behalf of the 2.4 million members of The American Legion, I would like to express support for S. 2179 the Military and Veterans Educational Reform Act of 2012, which includes numerous provisions aimed at protecting veterans from predatory recruiting practices increasingly utilized by some for-profit institutions. … This legislation works to counter some of these issues by requiring more transparency from institutions in terms of graduation rates, loan default rates, and other critical information, as well as requiring higher standards for the types of institutions which are eligible to receive G.I. Bill money.”

Vice Admiral Norbert R. Ryan, Jr., USN (Ret.), Military Officers Association of America, 3/14/2012:

“…Thank you for your leadership in sponsoring your bi-partisan bill, the ‘Military and Veterans Educational Reform Act of 2012’ (S. 2179) that would strengthen oversight of GI Bill and military educational assistance programs and upgrade support for our nation’s military and student veterans using these benefits.…The Military and Veterans Educational Reform Act takes the next step needed to preserve the integrity and credibility of the new GI Bill…. MOAA strongly supports the Military and Veterans Educational Reform Act of 2012 and we pledge our full support for its enactment this year.”

Tom Tarantino, Deputy Policy Director of Iraq and Afghanistan Veterans of America, 3/8/2012:

“This bill will help ensure that veterans are able make sound educational choices and can get the job training and education that they need to transition to the civilian workforce. Many returning veterans today do not have the tools they need to properly evaluate their college options so they can take full advantage of their G.I. Bill benefits. Some for-profit schools are deceptively recruiting veterans and then failing to provide them with the job training and education that they advertised. This puts the future of the New G.I. Bill in jeopardy. IAVA fought hard for passage of the Post-9/11 G.I. Bill in 2008, and we’re committed to ensuring all Iraq and Afghanistan veterans can take full advantage of their benefits. The Military and Veterans Education Reform Act of 2012 is critical to that mission.”

Bob Wallace, Executive Director of Veterans of Foreign Wars, 3/8/2012:

“The VFW believes that up front counseling and a centralized complaint process for reporting fraud, waste and abuse are key to protecting veterans’ G.I. Bill benefits. Senator Webb understands this and has made these two provisions cornerstones in his bill to help protect today’s student-veterans. We look forward to working with Senator Webb and the VA to make sure the most comprehensive and practical solutions are put in place.”

Patrick Bellon, Executive Director of Veterans for Common Sense, 3/12/2012:

“VCS supports the critical reforms contained in this bill. We must protect the integrity of our higher education system and the promise of the Post 9/11 GI Bill and DOD tuition assistance programs. These benefits are to help our service members and veterans succeed when they come home; we owe it to them to ensure that success to the best of our abilities.… Protecting our service members and veterans’ future should be our highest priority; the future of America depends on it. VCS supports the ‘Military and Veterans Education Reform Act of 2012’, and we hope the bill receives prompt hearings and a quick passage.”

Douglas K. Vollmer, Associate Executive Director of Paralyzed Veterans of America, 3/14/2012:

“This legislation makes significant progress in addressing many of the ills that have plagued the veterans and military educational benefits programs.  We appreciate your ongoing advocacy on behalf of veterans and military service members.… Because of provisions in current law, veterans and military families have become targets of opportunity for many unscrupulous for-profit colleges that offer elaborate promises of a high value education and swift entry into a well paid career.  What these schools fail to disclose in many cases are their high rates of default, difficulties experienced by students in transferring credits to four year non-profit institutions of higher learning and reluctance on the part of many employers to recognize their degrees.”

Heather L. Ansley, Vice President of Veterans Policy, VetsFirst, 3/16/2012:

“This legislation would make needed reforms to ensure that veterans and servicemembers receive the full benefit of their Department of Defense (DOD) and Department of Veterans Affairs (VA) educational benefits. Educational benefits, particularly for disabled veterans, are critical to helping them reintegrate into their communities.”

Michael Dakduk, Executive Director, Student Veterans of America, 3/26/2012:

“SVA fully supports the provisions of this legislation that will require any institution that educates veterans to be more transparent in terms of graduation rates, loan default rates, and other critical information. Additionally, the bill will provide student veterans with opportunities for in-depth academic counseling and a streamlined process for reporting colleges and universities that are failing to deliver a quality education. SVA fully supports S.2179 and recognizes this bill as critical to ensuring that the full return on the Post-9/11 GI Bill investment is realized.” 

News Coverage of the Military and Veterans Educational Reform Act of 2012: 

Webb Targets GI Bill Abuse by Schools

Bryant Jordan, Military.com

March 13, 2012 

Senators propose new rules to prevent colleges from exploiting veterans for benefits

Fox News

March 10, 2012  

More protection sought for post-9/11 GI Bill benefits

Tom Philpott, Stars and Stripes (Military Update)

March 15, 2012