Are private, for-profit colleges unfairly targeting U.S. military veterans with deceptive, high-pressure sales tactics while bilking the American taxpayer in the process?
That’s what critics, including President Obama, are alleging.
Obama’s Justice Department as well as attorneys general in 18 states have opened investigations into the industry, reports independent journalist Sharyl Attkisson in her latest production of Full Measure.
More than 300,000 veterans get up to $21,000 a year in federal GI bill money.
In all 1,800 colleges, many of them for profit, have received more than $20 billion GI bill tax dollars, Attkisson reports.
“With so many billions in the mix it’s easy to see why some colleges use high-pressure and allegedly dishonest tactics, and now taxpayers are about to be on the hook for alleged misconduct by the schools,” she said.
U.S. Marine Brian Babcock is one veteran who feels he was cheated out of his GI Bill money by an overzealous and deceptive private university.
Babcock fought on the front lines of in Iraq, including the second battle of Fallujah.
After seeing a commercial on TV, he decided to use his GI bill grant to attend ITT Technical Institute with the goal of getting a criminal justice degree and becoming a police officer.
He told Attkisson that ITT promised his degree would be accepted practically everywhere.
The cost of the degree, $70,000, would far exceed his GI grant at the time, but ITT made it easy for him to borrow, to the point of helping him fill out paperwork for student loans. Then, after his third year, he was presented with a stark reality.
He said he applied at 25 to 30 police agencies and every one of them said they did not acknowledge degrees from ITT Tech.
“I was angry I’d spent all this money on student loans, and it turned out that the degree, if I had finished there, would have been pretty much useless,” he told Attkisson.
ITT Tech is a for-profit technical institute with more than 130 campuses in 38 states. ITT is owned and operated by ITT Educational Services Inc., a publicly traded company headquartered in Carmel, Indiana.
Babcock’s complaint is all too familiar to thousands of vets, Atkisson reports, who attended for-profit colleges, where students are more likely to drop out, default on loans, or graduate with overwhelming debt that didn’t produce a useful degree.
Of eight for-profits that get the most GI funds, seven have been targets of inquiries into possible violations, including deceptive or misleading recruiting, Attkisson reports.
Together they receive nearly $1 billion in tax dollars over two school years.
One of those companies was DeVry University, where Chris Niway was hired to recruit vets under the new GI bill. Assigned to “Team Camo,” Niway, a veteran himself, said he was urged by managers to use high-pressure sales tactics to sign up vets who often weren’t cut out for college.
If Team Camo dared to let vets suspend class, even if assigned to active National Guard Duty, management balked, he told Attkisson.
“The company didn’t care, they just wanted to make sure they stayed in their classes so the company would continue to be paid and they would continue to be on the enrollment rolls,” he said. “Management’s guiding wisdom was, to be frank, get their ass in class.”
DeVry officials declined to be interviewed on camera but released the following statement: “DeVry has a long history of serving veterans and military personnel, dating back to the 1940s and we offer quality academics and student services with flexibility to meet their busy schedules.”
The Department of Defense recently banned another for-profit, the University of Phoenix, from enrolling new service members, alleging a pattern of violating policies designed to protect military students.
Steve Gunderson, a former Republican congressman from Wisconsin who now heads up the Association of Private Sector Colleges and Universities, says for-profits are under assault from opponents and competitors.
“If anybody has a bad outcome and certainly if a veteran has a bad outcome, that’s a problem and we want to fix that,” he told Attkisson. “But I have never before seen a situation where a sector is the target of attacks for ideological reasons. I mean, there simply are people who do not believe the private sector ought to be involved in the design and delivery of education.”
He said there is no doubt in his mind there are schools in every sector of higher education – public or private, profit or nonprofit – that have engaged in inappropriate conduct, whether it be in the area of athletics or admissions.
Private for-profit schools have actually beat public colleges in one area, that being graduation rates, Attkisson reported.
With billions flowing to profits under investigation, Obama issued a warning at a Fort Steward Army base to any private colleges targeting the troops.
“They don’t care about you, they care about the cash,” he told them.
Sen. Dick Durban, D-Ill., has introduced bills to fight for-profit college fraud, “only to see the bills get watered down and voted down,” Attkisson said.
Durbin said the for-profit schools can afford to take chances because they don’t “have any skin in the game.”
Attkisson said taxpayers have the most skin in the game.
Corinthian Colleges Inc., a large chain of for-profit schools in North America, was shut down in May amid fraud accusations, which the college denied. More than $3.5 billion in student loans will be forgiven, putting taxpayers on the hook.
Gunderson said that if Babcock had not given up on his degree he would have had opportunities.
“There are many that would have hired him, maybe not the one that he wanted,” Gunderson said.
“I think it’s a shame that they prey on men and women who volunteered to protect this country and that earned a benefit with their service and then ITT and the other private schools are just trying to take that,” he told Attkisson.
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