Already in the crosshairs of the Obama administration, for-profit colleges are facing a new challenge from congressional Democrats. Some lawmakers are asking questions about the steep rise in military tuition benefits going to high-cost proprietary schools.
In 2010, the nation’s top 20 for-profit colleges reaped $521 million in tuition through defense and veterans benefit programs, up from just $66 million in 2006, says Sen. Tom Harkin, D-Iowa, chairman of the Senate’s education committee. More than $280 million came from veterans benefits alone, including those available under the 2008 GI Bill that expanded educational benefits for active-duty military.
While the post-9/11 Veterans Educational Assistance Act of 2008 opened new benefits for service members, their spouses and children, Harkin says, “Serious questions have emerged about the share of the benefit pool going to for-profit schools with questionable outcomes.”
The military focus opens a new front in the debate over the for-profit sector, whose critics want to reform an industry that relies heavily on federal student aid for revenue. The Association of Private Sector Colleges and Universities denies that for-profit colleges are targeting service members and veterans, but it asserts that such schools offer appealing features for these individuals.
“Demand for private sector colleges and universities by members of the military has grown because of flexible and accelerated schedules, targeted programs and a focus on educating adults for specific careers,” says APSCU President Harris Miller.
Critics, however, say the sizable increase in defense dollars flowing to for-profits adds substantial additional cost to government while providing few benefits to the students. According to Harkin, 54 percent of for-profit students in 2008-09 left school without a degree within a year. At individual schools, withdrawal rates reach as high as 84 percent. For-profit schools also have the highest student loan default rates in the higher education industry.
Recent reports from Harkin’s committee have asserted that some for-profits engage in high-pressure marketing and recruiting tactics. He says questionable practices also may be taking place in recruiting military members.
