For the second time in two months, the Trump administration has sided with the for-profit college industry over a key constituency: veterans. In May, the president vetoed a bipartisan bill promoting debt forgiveness for veterans who were defrauded by for-profit schools. Now, the Department of Veterans Affairs is allowing two repeat-offending schools access to GI Bill money.
Last year, the Federal Trade Commission laid enormous penalties on several colleges for deceptive advertising. One of the schools had been caught pretending to be affiliated with the Army in one of its online recruiting sites. Another, the University of Phoenix, agreed to pay $191 million for misleading students about job placements.
Reporting of deceptive practices triggered the VA to block the University of Phoenix, Perdoceo Education Corp. — in addition to Bellevue University and Temple University — from enrolling GI Bill students.
"The law says the secretary shall not approve GI bill money for schools that use deceptive recruiting," says Carrie Wofford with Veterans Education Success, an advocacy group.
That'd be a huge blow to the for-profit schools, which need GI Bill funding to take advantage of a legal loophole in what's called the 90-10 rule. The rule requires schools to get a minimum of 10% of their funds from sources other than government aid. The loophole says GI Bill funds don't count toward that 90% maximum quota of federal aid. University of Phoenix is the largest recipient of GI Bill funds in the 80-year history of the program.
After the FTC settlement, the VA announced in March that it would block the offending schools from enrolling GI bill students. But Wofford says intense lobbying by the for-profit school industry ensued, and on the eve of the July Fourth holiday, the VA lifted the ban.