Holly Petraeus, assistant director of the U.S. Consumer Financial Protection Bureau’s office of service member affairs, said veterans have been subjected to questionable practices.
“Many veterans have been subjected to highly questionable recruitment practices, deceptive marketing, and substandard education instruction in some of the schools they attend, particularly for-profit schools,” said Holly Petraeus, assistant director of the U.S. Consumer Financial Protection Bureau’s office of service member affairs.
In Nevada, a Department of Veterans Affairs official said she had encountered many patients with traumatic brain injury who were persuaded to sign up for classes at for-profit colleges “and didn’t even remember doing so,” Petraeus said. “That didn’t stop the colleges from pressing them for full payment even though they were not regularly attending classes.”
In Kentucky, an active-duty military spouse received multiple calls a day from what she thought was a military-affiliated college. When she enrolled, however, she found it was not military related and later could get no help when trying to access online classes. “She failed the class due to lack of access but was charged the full fee anyway,” Petraeus told the Senate Homeland Security and Governmental Affairs Committee.
For-profit schools value veterans and active-duty military, these critics say, because a loophole in federal law allows them to count GI Bill and military education benefits as “non-federal” aid to meet a critical federal requirement.
Under this provision, the so-called 90-10 rule, for-profits can take no more than 90 percent of their revenue from federal programs such as Pell Grants and other U.S. Department of Education aid programs.
But since the rule was written before passage of the Post-9/11 GI Bill, veterans and military education benefits don’t count toward the 90 percent limit, critics say. As a result, veterans help for-profits meet the requirement that 10 percent of for-profits’ funding come from non-federal sources.
