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California Association of Private Postsecondary Schools

Legislative Limits on For-Profit Schools Eyed

06/14/2013

MILITARY.COM. JUNE 13, 2013.  The chairman of the Senate Appropriations Committee expressed frustration on Wednesday with what he sees as the lack of positive movement by for-profit schools in its dealings with military personnel it recruits into online degree programs.

Sen. Dick Durbin, D-Ill., hit the for-profit education industry hard during the hearing, which included testimony from an Iraq War veteran that his for-profit employer considered Tuition Assistance for servicemembers “the military gravy train” for these schools.

Durbin said lawmakers will now try to force changes through appropriations rather than authorizations, which is the responsibility of the Senate Armed Services Committee.

“It’s not easy, but Sen. [Jack] Reed, who is No. 2 on Armed Services, and others, feel very strongly about this, and so we may be able to put something together,” Durbin told reporters after the hearing. Another key ally is Sen. Tom Harkin, D-Iowa, who two years ago with then-Sen. Jim Webb, D-Va., highlighted concerns over the for-profits schools.

“We’re going to be reauthorizing the Higher Education Act with [Senate Education Committee] Chairman Harkin this next year, so that’s a chance to get into this in more detail,” Durbin said.

Durbin said the government appropriates nearly $570 million annually for the Tuition Assistance program used by servicemembers to take online courses, and that he remains frustrated that for-profit schools continue their aggressive recruiting of troops, regardless of whether the servicemember is able to follow through on the study program.

According to government figures, 12 percent of all college students attend for-profit schools. For-profits receive 25 percent of all federal aid to education, but for-profits also account for 47 percent of all student loan defaults. Durbin also cited figures showing that for-profits spend on average about 22 percent on marketing and recruiting and only about 17 percent on instruction -- their actual mission. On average, the schools apply about 19 percent toward profits.

“What I worry about someone … who signs up for some worthless school, something where the diploma, if it ever happens, doesn’t take you anywhere,” Durbin said.

An Iraq War veteran who worked as a military student recruiter for a for-profit school in 2008 and 2009 told the committee that his employer relied heavily on Tuition Assistance for servicemembers and that putting “asses in classes” was the school’s internal mantra.

Christopher Neiweem said the school, DeVry University Online, seemed to care little about whether the military student succeeded or failed once enrolled, or what other obligations the student had. Advising deployed troops in Afghanistan and elsewhere to “sit out” a session and pick up again later drew rebukes from bosses, he said.

“Management scolded me,” he told the committee, “insisting ‘DoD does not pay your paycheck anymore. We do, and we must remain competitive.’ ”

DeVry officials were not at the committee hearing, but in a statement to Military.com said: “Veterans and active-duty military personnel choose DeVry University for the same reason as other non-traditional students -- we offer quality academics and student services with flexibility to meet their busy schedules.”

The for-profit schools were represented in general by the Association of Private Sector Colleges and Universities. Association President Steve Gunderson said that for-profit schools reach a segment of the population for whom traditional college is not possible, often because of cost.

In addition to servicemembers, 64 percent of students at for-profit schools are low income. Also, 31 percent are single parents and 46 percent are minorities.

Gunderson said he was once told that “there are good and bad schools in every element of higher education,” and that if he finds a for-profit school doing something wrong, he lets its officials know the association will not defend it.

But Durbin rejected the defense, saying public schools also have high numbers of low-income and minority students, but also have better records of degree completions and employment afterward. He also said the association’s accreditation system is largely meaningless, recalling that when one of the largest schools was caught attempting to defraud the government a few years ago, the association’s response was to warn the school not to engage in fraud again.

“That was the punishment,” Durbin said. “If your industry does not establish credible standards of excellence and quality, you are covering up for the bad guys. That’s what it boils down to.”