For-Profit colleges once again allowed to receive GI Bill money
September 09, 2020
Despite being notorious for defrauding students and targeting veterans, for-profit universities have once again been cleared to enroll veterans using GI Bill benefits to pay for their education by the Trump Administration. GI Bill benefits are critical for these schools because they help them qualify for a legal loophole called the “90-10 rule,” which caps the schools’ revenue from government aid sources at 90 percent.
In May of this year, President Trump vetoed a bipartisan bill that would have given debt forgiveness to student veterans who had been defrauded by for-profit universities. In early July, the Department of Veterans Affairs unblocked several schools that had previously been barred from receiving GI Bill funds.
The schools were hit with significant fines by the Federal Trade Commission after it was found they were using deceptive recruiting practices. One was falsely claiming to be affiliated with the Army in ads while another lied to students about guaranteed job placements. Reports of these fraudulent practices and more forced the VA to bar the University of Phoenix, Perdoceo Education Corp., Bellevue University and Temple University from enrolling GI Bill students.
The VA says that these schools have taken appropriate corrective action and can once again accept GI Bill money. The schools lobbied hard to reverse the ban, as veteran recruitment is a top priority for for-profit schools.
The University of Phoenix is the largest recipient of GI Bill funding in history. It and other for-profit schools like it, such as ITT Tech, have defrauded veterans out of their GI Bill benefits in the past and left them deeply in debt and with worthless degrees. That very thing happened to Veteran Tasha Berkhalter. She graduated from ITT Tech with a four-year degree in criminal justice that was not recognized by potential employers or other schools. She now struggles to pay her bills and lost her loan forgiveness chance when President Trump vetoed the bill in May.
Another related bill that seeks to curb how much these schools can profit from veterans and GI Bill money is similarly expected to fail.