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When President Bush asked former Senate majority leader Bob Dole and me to lead a bipartisan commission to investigate problems in our military’s health care system, I knew we needed to act quickly and effectively. More than 29,000 troops had reportedly been wounded as the Iraq war headed into its sixth year. Thousands of those returning wounded warriors entered Walter Reed Army Medical Center and other VA medical facilities with the hopes of recovering and transitioning back into civilian life. What they encountered, however, were bureaucratic hurdles and limits to the care they deserved. An investigation found that our wounded warriors were recovering in moldy, rodent-infested rooms with crumbling walls and insufficient care. Thousands more saw a disorganized benefits program that failed to prioritize a seamless transition of medical records or adequately provide out-patient care.
When these stories were published, the American people made it clear to Congress, the Pentagon, and the White House that they expected nothing less than the best possible care for the military men and women who courageously served our nation. Senator Dole and I had a responsibility to the President and the nation, but more importantly, to our returning warriors. Our obligation to ensure the recovery and safety of those brave soldiers would not be compromised by an inefficient bureaucratic system or loopholes in federal policy.
This coming Saturday, June 22, 2019, marks the 75th anniversary of the Servicemen's Readjustment Act of 1944, better known as the GI Bill. This landmark law provided college tuition assistance to a generation of veterans and was a major contributor to America's economic prosperity in the years following the World War II. Similarly, the Post-9/11 GI Bill, passed in July 2008, provides education benefits for servicemembers who have served on active duty since September 10, 2001. In the spirit of the original law, the Post-9/11 GI Bill provides qualified veterans with financial support for higher education, a monthly housing allowance, and up to $1,000 a year for books and supplies. I strongly support these policies that have helped millions of veterans earn college degrees and secure high-quality post-military employment.
Unfortunately, the Post-9/11 GI Bill has also failed thousands of American veterans in the last 11 years by allowing low-quality, for-profit educational programs to take their GI benefits and leave them with little in return. A loophole has enabled bad actors to siphon billions in Post-9/11 GI Bill and DOD tuition assistance funds away from veterans, saddling them with non-transferable college credits, worthless degrees, and crippling debt.
The for-profit loophole relates to a federal law known as the “90/10 Rule.” Under this law, for-profit colleges can receive federal student aid, such as Pell grants or federally funded student loans, only if they are able to generate at least 10 percent of their revenue from sources other than the federal government. The 90/10 ratio was intended to be a measure of school quality, prohibiting federal tax dollars from supporting institutions that cannot earn the minimum revenue from sources outside the government, such as employers, scholarship endowments, or students who are willing to pay full tuition. Under current law, GI Bill benefits fall outside the scope of the 90/10 Rule, meaning student veterans are just another way that for-profits can access additional federal aid. This loophole in the law has created institutions that are almost entirely dependent on the federal government.
Recent data released by the VA and DOD found that if post-9/11 GI Bill benefits were counted as federal aid under the 90-10 rule, the number of for-profit schools in violation of the rule would increase from 17 to over 200. While only 27 percent of GI Bill students are enrolled in for-profit institutions, for-profits take in almost half of total GI Bill funds. From 2009 to 2017, eight of the top ten recipients of Post-9/11 GI Bill tuition and fee payments were for-profit schools. These for-profit companies collected $34.7 billion from the federal government. American veterans should not be treated as cash cows by profit-seeking entities.
For-profits, including ITT Tech, Career Education Corporation, and Education Management Corporation, took in a combined $2.5 billion in GI Bill benefits before they closed their doors in the last decade. Another recent wave of closures at Argosy University and The Art Institutes affected more than 1,700 GI Bill recipients. When these schools shuttered, enrolled veterans surrendered their GI Bill benefits. Many were stranded in debt with no degree and questions regarding the transfer of their credits to a legitimate institution of higher learning. In one instance, DeVry University promised Navy veteran Eric Luongo an education that would land him a solid job in graphic design — and cost him nothing out-of-pocket. What he received was a degree that employers didn’t respect and more than $100,000 in student loan debt.
A for-profit college has, by definition, a fiduciary duty to its shareholders to maximize profits. Success is determined by the amount of tuition revenue brought in and profits made-- not by the quality of education provided to students. The for-profit sector has been riddled with substantiated claims of fraud and abuse since the expansion of taxpayer funded educational aid to students for college, beginning with the GI Bill. In fact, research demonstrates that the for-profit college sector is the only sector in higher education that increases tuition when additional federal student aid becomes available.
Research also shows that when a for-profit institution shuts down, veteran students do not forego college. Instead, they enroll in their local public colleges, which cost three times less than for-profit institutions and offer higher-quality degree programs. In fact, recently released data from the Department of Education demonstrates that as students shifted from low-quality for-profit colleges to higher quality institutions, borrowing and default rates declined.
Passing legislation that closes the GI Bill loophole and lowers the 90/10 Rule to a more accountable ratio will not limit post-secondary options for student veterans. Rather, it will help ensure that veterans have options where they are best-served and not viewed as mere dollar signs. We must also ensure that any federal student aid be classified as such, otherwise we allow further loopholes to be exploited by predatory institutions.
Veterans issues have historically drawn large, bipartisan support. This debate cannot, and must not, be politicized. It is incumbent upon us as elected officials to put forth an accountability system that distinguishes bad actors from good actors, looks out for the American tax payer, and protects our veteran community.
This is personal for me – every generation of my family has served in our military. I also know the value of a good education; I have seen it firsthand in my four decades as an educator and college president. Our veterans deserve better than a government that allows bad actors in our education system to take advantage of their service and sacrifice.
Donna E. Shalala is a freshmen congresswoman from Florida’s 27th congressional district and a member of the House Committee on Education and Labor. She previously served as secretary of health and human services under the Clinton administration and as president of the University of Miami.
Editor’s note: This is an Op-Ed and as such, the opinions expressed are those of the author. If you would like to respond, or have an editorial of your own you would like to submit, please contact Military Times managing editor Howard Altman, haltman@militarytimes.com.
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