For-profit schools targeted again over GI Bill payouts

For-profit colleges are under fire again on Capitol Hill, with veterans groups and advocates targeting the schools' access to military education funds.

On Wednesday, a trio of Democratic senators will introduce new legislation reclassifying GI Bill benefits as restricted federal dollars for purposes of education funding. Under current laws, schools cannot receive more than 90 percent of their tuition dollars from federal sources, but military education benefits are not counted against that cap.

Similar attempts to change the "90/10" rule have been made in recent years, as for-profit colleges have aggressively marketed to veterans of the Iraq and Afghanistan wars. Corporate lobbyists have defended the practice as a natural fit for the nontraditional students, while critics have called it a crass attempt to exploit their generous benefits.

On Monday, in advance of the new legislation, a coalition of 10 Democratic senators sent a letter to Veterans Affairs Secretary Bob McDonald petitioning to update his department's online school comparison tools with a "risk index," specifically looking at recent problems with some for-profit institutions.

"As you well know, some for-profit colleges lure veterans into deals that fail them and do not provide them with the education and the qualifications they think they are going to receive," the letter stated. "Ultimately, the victims are not just those veterans but also taxpayers because it is taxpayer money that often is lost."

The update would rate schools as high-, medium-, or low-risk, based on such factors as credit transfer policies and pending litigation. It also would likely create a political firestorm over how for-profit schools should be labeled, given the divided opinions among lawmakers on their worth.

In a statement, VA officials said McDonald "looks forward to responding to the members after VA has time to consider the issues raised, the potential change in policy, and how such information could be integrated" into the existing GI Bill comparison website.

But it's unlikely to gain support from conservatives on Capitol Hill, who thus far have pushed back efforts to change the 90/10 rule.

Monday marked the 71st anniversary of the passage of the original GI Bill, a benefit that saw a dramatic overhaul in 2009 with the implementation of the Post-9/11 GI Bill. That benefit awards full tuition costs at public universities, a housing stipend for full-time students and options to transfer the money to family members for troops who serve at least 10 years.

Since its inception, Post-9/11 GI Bill costs have topped more than $20 billion. Almost 1,800 colleges received parts of those payouts last academic year.

That included schools in the for-profit Corinthian Colleges chain, which was forced to sell off more than 100 campuses this year due to financial and legal troubles. The move left thousands of veterans attending classes on the GI Bill in academic limbo, and increased scrutiny on the non-traditional sector.

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