New Rules Aim to Crack Down on For-Profit Recruitment of Vets

For more on the growth of the for-profit college industry and its controversial recruiting tactics, watch our 2011 film Educating Sergeant Pantzke and our 2010 film College, Inc.

President Obama signed an executive order today aimed at cracking down on predatory attempts by for-profit educational institutions to recruit veterans and enlisted members of the military.

“We have a sacred trust with those who serve and protect our nation. It’s a commitment that begins at enlistment, and it must never end,” a White House press release states. During a speech at Fort Stewart, Ga., Obama told soldiers that the new rules will “make life a whole lot more secure for you and your families and our veterans and whole lot tougher for those who try to prey on you.”

The executive order, which is aimed at the “aggressive and deceptive targeting of service members, veterans, and their families by educational institutions, particularly for-profit career colleges,” includes the following:

• A new requirement that schools participating in the Department of Defense’s tuition assistance program disseminate a “Know Before You Owe” form to help prospective students better understand “critical information about tuition and fees.”
• Better control over which schools are given access to members of the military to prevent the “aggressively and inappropriately targeting military students.”
• A requirement that the Department of Veterans Affairs trademark the term “GI Bill,” preventing outside websites from using the term at will to market to prospective students.
•  A complaint system for students and requirements for schools to better understand and support the unique needs of veterans.
• An online way to provide more complete, centralized data on student outcome measures like graduate rates for those researching educational opportunities.

FRONTLINE’s 2011 film Educating Sergeant Pantzke uncovered troublesome recruiting tactics used by some for-profits. “Look, these veterans get this benefit one time; it’s a one-time shot,” Sen. Tom Harkin [D-Iowa] told us in an interview. “And if they don’t get a quality education that can really help them with their lives, they’ll never get it again.”

Sen. Harkin took the lead on a 2011 report by the Senate Health, Education, Labor and Pensions Committee [HELP] that found, of the top 10 schools receiving GI Bill money, eight were for-profits. In total, for-profits received 24 percent of these funds.

This increase is in part due to the passage of a robust new post-9/11 GI Bill in 2008 and what’s known as the “90-10” rule, which says that 10 percent of for-profit college and universities’ revenues must come from sources outside of federal student aid. However, GI Bill benefits can be counted towards the 10 percent, making them a lucrative source of revenue for the for-profits.

The president’s new executive order isn’t the only move by the U.S. government to put for-profit colleges in check. Earlier this year, Sen. Dick Durbin [D-Ill.] announced a proposed bill called the POST Act, which would redefine GI Bill benefits as federal funds. In addition, the 90-10 rule would be shifted to 85-15, and penalties for noncompliance would take effect after just one year, instead of the current two years.

Bonus: What’s it like to be on the other end of a for-profit pitch? Listen to audio of real calls from Westwood College recruiters in late 2008/early 2009.