SAN DIEGO (CN) – U.S. Representatives Susan Davis and Mike Levin – chairs of House subcommittees on education and labor and Veterans’ Affairs – hosted a joint hearing Wednesday on how to protect student veterans from for-profit institutions in light of enforcement and oversight rollbacks by the Trump administration.
Davis, who chairs the Subcommittee on Higher Education and Workforce Development, and Levin, who chairs the Veterans’ Affairs Subcommittee on Economic Opportunity were joined by fellow Democrats – Rep. Mark Takano, the Veterans’ Affairs chair, and Rep. Susie Lee – for a hearing on protecting student veterans from predatory practices by for-profit educational institutions.
Prior to the start of the hearing, Takano said “broken promises” to veterans regarding their benefits is the “single greatest threat” to volunteer military service.
To prevent breaking promises, Takano said the Obama administration implemented the gainful employment rule, requiring institutions that receive federal funding to help veterans find gainful employment after college.
“It is unconscionable the Trump administration has suggested eliminating the rule,” Takano said, noting a rollback of the requirement would cost billions of dollars.
The panel heard from experts who work on legal and advocacy issues related to GI benefits, a Marine Corps veteran and student, and the chancellor of community colleges in California.
Robert Muth, academic director of the Veterans Legal Clinic at the University of San Diego School of Law, said “virtually all” of the clients at the legal clinic attended for-profit schools where they were lied to about everything from job placement rates for graduates to being told a school was accredited when it was not.
In a particularly egregious case, Muth said the Veterans’ Administration determined a school should never have been approved to collect GI benefits for a disabled student veteran and forced the student to pay back the benefits by garnishing his disability benefits.
That student is still going through the appeals process two years later, Muth said.
Muth said that’s why the VA needs to go after the for-profit schools to recover GI benefits that should have never been paid out rather than sticking veterans with the price tag.
“If we don’t solve it before a veteran enrolls in the first place, then we have to pay for it on the back end and either the taxpayer is on the hook or the individual veteran is, and neither option is acceptable,” Muth said.
The difference in accountability and oversight of for-profit institutions compared to the standards public and nonprofit schools have to meet was a major problem highlighted by the experts.
Robert Shireman, director of Higher Education Excellence and a senior fellow at The Century Foundation working on education policy, said because for-profit institutions have no public body that controls the budget, pricing, spending and revenue generated they “have complete freedom with that money.”
“It creates the dynamic where the less you spend on that education, the more the owner of that college can pocket for themselves,” Shireman said.
He added the different rules on how public and nonprofit schools versus for-profit schools can use their money “is what causes the behavior to be so different and is why the bulk of abuses is at for-profit institutions.”
The congress members agreed the 90/10 rule – which they called a “loophole” that allows for-profit schools to get up to 90% of their revenue through federal financial aid programs for higher education – should be eliminated.
In an interview following the hearing, Rep. Levin said the “loophole” is “simply untenable to have for-profit institutions taking advantage of veterans.
“It’s stunning to understand the extent to which for-profit institutions are no longer being held to account by [Education Secretary] Betsy Devos,” Levin said.
“Some of the checks and balances that existed in the Obama administration have been done away with and it’s time that we restore the basic oversight responsibility of the Department of Education and respective agencies and individuals responsible,” Levin added.
Levin said Veterans Affairs would hold another hearing in the San Diego region in August.