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Does Your Veteran Status Make You a Target?

May 21, 2012 Jennifer Williamson, Distance Columnist | 0 Comments

You’re a veteran interested in attending college. So you go onto a website that looks like it’s affiliated with the GI Bill or the government. You fill out a questionnaire detailing your background, contact information, and educational interests. And within a few days, you’ll receive phone calls and emails—sometimes hundreds—from schools soliciting your interest.

Most of these schools are for-profit. And the website you visited wasn’t affiliated with the government. It was a lead-generation site working for the for-profits, carefully designed to look purely informational. For-profit schools see dollar signs in recruiting veterans—and their GI Bill money.

The for-profit education industry has come under scrutiny in recent months for its high tuition rates and allegedly low education standards. Critics of the industry point out that graduates of for-profit institutions default on their loans at a rate of 15% compared to a rate of 7.2% for nonprofit institutions. Some for-profits have been found to offer misleading information about their graduate employment rates.

Military Students

For many students, new restrictions are set to make college a bit more difficult to pay for.

Even so, most of the revenue earned by for-profit colleges comes from federal student aid. The colleges frequently charge high tuition rates—much higher than what you’d find at a community college, often held up as the nonprofit equivalent—because the government will pay the difference between those high rates and what low-income students can afford. In the past, before the scrutiny, for-profit colleges could simply ask for the tuition they wanted—and get it from the federal government.

The rules have recently changed, however. The 90-10 rule, a rule designed to ensure that for-profits don’t make all their money from taxpayer-funded programs, states that for-profit colleges can only derive 90% of their revenue from federal grants and loans. However, tuition assistance from the GI Bill and the Department of Defense programs don’t count toward that 90%--even though these are also taxpayer-funded. This makes veterans extremely attractive targets for recruitment—much more so than non-veteran students who do not have access to these funds.

For-profits get a lot of tuition money under the GI Bill and other military benefits programs. In 2009, for example, for-profit colleges brought in only a little less money from military programs as nonprofit colleges did—even though veteran enrollment numbers at for-profit colleges are only about a third of what they are with nonprofits. A change to the rule has recently been proposed—allowing for-profits to receive only 85% of their tuition from federal aid, and counting military tuition benefits within that 85%.

But until that bill passes, veterans will remain active targets for for-profit recruitment. Here are a few things to bear in mind when searching for colleges.

Not all for-profits are questionable

Some have records of success, and it’s worth investigating every college thoroughly before making a decision. Talk to recent graduates about how their financial aid situation was treated, how employers perceive their online degree, and whether the educational experience was a positive one. Don’t rely on information given to you by the school or its representatives, as schools have sometimes been found not to be up-front about this information.

Find out ahead of time if your credits will transfer

If your plan is to attend a for-profit school and then transfer to a nonprofit, always check with the school you plan to transfer to in determining how it will handle your for-profit credits. Even if your for-profit school is accredited by a regional body (see more information on accreditation here, you may have trouble transferring.

Talk to hiring managers in your desired field

How do people perceive for-profit degrees in the industry you plan to enter? If you can, talk to the people who do the hiring to find out their perspective. Again, take what the college itself tells you in this area with a grain of salt.

Know the comparable tuition at nonprofit schools

For-profits frequently charge as much as an exclusive Ivy-League school—yet they often position themselves as an alternative to a community college. Know how much your local community college would charge in tuition for the same program. Even better—find out if that community college offers online degrees as well that are also flexible and friendly to veterans.

Choosing a school isn’t easy—and it’s especially hard when you’re bombarded with marketing messages from colleges that have an ulterior motive in recruiting you. Research carefully to determine which school is the best for you—and remember that for-profit schools are never your only option.


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