Is the New GI Bill Benefiting For-Profit Colleges Instead of Veterans?

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 Charles Haig, of Flourtown, Pa., listens during a town hall meeting held by Sen. Arlen Specter, D-Pa and U.S. Secretary of Veterans Affairs Eric Shinseki to answers some veterans' questions and to discuss the new G.I. Bill's Yellow Ribbon Program for post Sept. 11 veterans at Drexel University, Monday, Aug. 17, 2009, in Philadelphia. (AP Photo/Tom Mihalek)

Charles Haig, of Flourtown, Pennsylvania, listens during a 2009 town hall meeting held by Sen. Arlen Specter, D-PA and US Secretary of Veterans Affairs Eric Shinseki to answers some veterans' questions and to discuss the new G.I. Bill's Yellow Ribbon Program for post Sept. 11 veterans. (AP Photo/Tom Mihalek)

Few public programs have become as iconic as the Servicemen’s Readjustment Act of 1944 — the G.I. Bill. It offered returning World War II veterans educational opportunities, unemployment benefits and cheap loans to start businesses or purchase homes or farms. It’s widely credited with helping to build a large and vibrant American middle class.

According to the Department of Veterans Affairs, “By the time the original GI Bill ended on July 25, 1956, 7.8 million of 16 million World War II Veterans had participated in an education or training program.”

In 2008, Congress passed a new G.I. Bill for veterans who had served at least three years during the post-9/11 “War on Terror.” The new bill focused on education — it lacked the other provisions of its World War II predecessor.

But it’s unlikely that the new G.I. Bill’s investment in educating today’s vets will have the same impact as the 1944 version. That’s because a lot has changed in America’s higher education system since the post-war years. Over the past four decades, there has been exponential growth in for-profit colleges, which are marketing their programs to veterans and grabbing an outsized share of the $10 billion dollars that the government spends educating veterans each year.

In 2012,  a 2-year investigation by the Senate Committee on Health, Education, Labor and Pensions found that the for-profit sector was aggressively recruiting new students, only half of whom would complete their degrees. According to the report, “the vast majority of the students [at for-profit colleges] left with student loan debt that may follow them throughout their lives.” At the same time, the schools were vastly profitable, and in 2009 paid their executive officers average annual salaries of $7.3 million.

The committee concluded that “in the absence of significant reforms that align the incentives of for-profit colleges to ensure colleges succeed financially only when students also succeed, and ensure that taxpayer dollars are used to further the educational mission of the colleges, the sector will continue to turn out hundreds of thousands of students with debt but no degree, and taxpayers will see little return on their investment.”

On yesterday’s PBS NewsHour, Aaron Glantz of the Center for Investigative Reporting looked at how for-profit colleges, many with spotty track records, “have netted a growing amount of money from a new generation of vets” taking advantage of the New G.I. Bill.

Glantz:

In California alone, the Center for Investigative Reporting found nearly 300 schools banned from receiving state financial aid that still got G.I. Bill money, even schools with no academic accreditation at all, beauty schools, auto repair programs, and dog training academies, together, more than $600 million.

The biggest beneficiary is the for-profit University of Phoenix, which fails to graduate most of its students, according to the U.S. Department of Education.

Nationally, it took in nearly a billion dollars from the G.I. Bill over the last five years. The University of Phoenix has been especially successful at attracting veterans in San Diego, a port city with a high concentration of veterans.

Every year, soldiers and sailors here retire from active duty and turn to the G.I. Bill as they transition to civilian life.

You can watch the program or read the entire transcript at PBS.org »

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  • Anonymous

    Of course these “colleges” are screwing us and them. Why are we allowing them to stay in business?

  • Joe Robles Jr

    Of course. Most young veterans who join the enlisted military know nothing of the way college works (I was one of them). So when they get out of active duty, these so called for profit counselors, harass these veterans via phone, email, and letters. I believe when you go your TAP’s workshop, a mandated end of duty briefing to assimilate veterans to civilian life, they (or someone) ask you to fill out some paperwork and that information goes to these for profit colleges. They’re picking off these veterans fresh out of the military. They’re not counselors by any stretch, they’re salesmen. I’m glad I never let them trick me into their scam and went to an actual university.

  • Jim

    Ask your Republican Congressman.

  • Anonymous

    Echos of real estate lending horrors? A means of indenturing servants? Profitization? We see the same scenario with public schools, K – 12, losing funding to Privateers, anti government, anti social home schoolers, and faith based ‘institutions’ with much the same return on investment as these ‘New’ GI Bill recipients. Free Dumb.