Senators aim to protect GI benefits

What if the military gave every service member an expensive car as a reward for honorable service, but they could take delivery only at night and the headlights didn’t work? Many of those gift cars might end up damaged.

Something similar is happening to thousands of veterans leaving service with Post-9/11 GI Bill eligibility worth tens of thousands of dollars. The government is providing an extraordinary benefit but doing little to light the way for beneficiaries to use the program well and reach their destination.

Sen. Jim Webb, D-Va., chief architect of the Post-9/11 GI Bill, says it’s time for Congress to require better information on education options for veterans and to tighten standards for schools that market to those having GI Bill eligibility or access to military tuition assistance programs.

Last week Webb, along with Sens. Scott Brown, R-Mass., Thomas R. Carper, D-Del., Tom Harkin, D-Iowa, and Claire McCaskill, D-Mo. introduced S 2179, a bill to help protect valuable military education benefits.

The Military and Veterans Educational Reform Act of 2012 would require that education programs accepting GI Bill payments or military tuition assistance become “Title IV” eligible. That means they would have to be accredited by a Department of Education-approved accrediting agencies. New schools couldn’t begin accepting money from military-related plans unless undergraduate withdrawal rates were 33 percent or less. And DoE would conduct mandatory reviews of schools having high dropout rates, and could impose sanctions or penalties.

With 700,000 veterans already using Post-9/11 GI Bill benefits, Webb said there’s plenty of evidence they need more protection. In 2009, as the more generous GI Bill took effect, 15 publicly traded for-profit education companies spent $3.7 billion on marketing. A “disproportionate share” of that money enticed veterans “into poorly performing for-profit schools,” Webb said. New data from DoD show that for-profit colleges received half of $583 million in military tuition assistance dollars paid out in 2011.

Absent from Webb’s new bill is any language to reform the “90-10 rule” of the Higher Education Act, a centerpiece of previously introduced bills.

The 90-10 rule sets the proportion of payments for-profit colleges can accept from federal grants or loans. No more than 90 percent of school revenues can come from these sources. In other words, these schools must be of sufficient quality that at least 10 percent of revenue comes from students, or parents, willing to pay for the education offered with their own money.

In January, Hollister K. Petraeus, assistant director for service member affairs with the Consumer Financial Protection Bureau, reiterated her criticism that the current 90-10 law encourages for-profit colleges to see veterans “as nothing more than dollar signs” and that triggers “some very aggressive marketing techniques to draw them in.”

“Although there are some for-profit colleges that have solid academic credentials and a history of success for their graduates,” Petraeus said, “as a group, and compared with other institutions, for-profit colleges have higher prices, lower graduation rates and a poor gainful employment history.”

Webb made some of the same points in introducing his bill. But he told me S 2179 shouldn’t be seen as targeting for-profit colleges.

“This is not a condemnation of the for-profits. I want to be very clear about that,” Webb said. “This is really an effort to make sure institutions that receive federal money meet a standard, a measureable standard. I think we’ve got a pretty good bill to do that,” even absent 90-10 rule reform.