For-Profits Increase Veteran Enrollment, Post 9/11 GI Bill Benefits Revenue

Overall enrollment of student veterans at the biggest for-profit colleges has increased, as well as the portion of revenue these institutions receive from Post 9/11 GI Bill benefits, according to a new report from U.S. Senate Health, Education, Labor and Pensions Committee's majority staff.

The committee, chaired by long-time critic of the proprietary sector Sen. Tom Harkin (D-IA), tracked Post-9/11 GI Bill spending since the program's creation, in 2008, The Chronicle of Higher Education reported.

Enrollment of veterans at for-profits grew to 30 percent of the total last year from 23 percent in 2009, the report found, despite the fact that the sector's overall enrollments increased. The percentage of veterans attending a public institution declined, from 62 percent to 50 percent. Total spending on the Post-9/11 GI Bill increased to $4.17 billion from $1.75 billion during that period.

Of the top 10 institutional recipients of Post-9/11 GI Bill funds in 2012-13, eight were publicly traded for-profit chains. Those companies received nearly a quarter of all the money spent on Post-9/11 GI Bill benefits. The $1.7 billion in Post-9/11 GI Bill benefits that the eight companies received in 2012-13 was almost as much as the total cost of the program in 2009-10.

The report says that the companies appear to be "increasingly dependent" on veterans because the Post-9/11 bill's benefits help colleges comply with regulations forbidding them to receive more than 90 percent of their revenue from federal grants and loans. Under current law, federal military benefits do not count toward that 90 percent. In his omnibus bill to reauthorize the Higher Education Act, Sen. Harkin proposes changing the 90/10 rule to an 85/15 one – meaning for-profit colleges could get no more than 85 percent of funding from federal sources. In addition, the legislation would count GI Bill benefits in the percentage formula.

The report also points out that several of the companies that receive the most GI Bill benefits are facing investigations by state and federal agencies, and that at four of them – ITT, Corinthian, Education Management, and Career Education – 35 percent to 57 percent of their programs would fail the proposed "gainful employment" rule, which is intended to ensure that students can afford the debt they incur when attending career-focused programs.


Related Links

Is the New G.I. Bill Working?: For-Profit Colleges Increasing Veteran Enrollment and Federal Funds

The Chronicle of Higher Education