For-Profit Colleges Get Half of Military Education Benefits

For-profit colleges are getting almost one of every two military Tuition Assistance dollars, according to data from the U.S. Department of Defense.

The for-profit college industry received $279.8 million of about $563 million spent last year on the program, according to analysis released today by the U.S. Senate Committee on Health, Education, Labor and Pensions. Public colleges received $163.5 million, while nonprofit private schools got $119.4 million.

Congress and states’ attorneys general have been reviewing sales practices and student debt loads at for-profit colleges, which get as much as 90 percent of their revenue from federal programs. Schools solicit troops partly because their government tuition programs are excluded from that 90 percent cap. Senator Tom Harkin, a Democrat from Iowa, has proposed legislation that would include those funds to remove the extra incentive for signing up soldiers.

“Today’s news that the DOD is paying more to for-profit colleges than public and nonprofit institutions is highly troubling,” the majority staff of the committee said in the report, which cited misrepresentation of programs and tuition costs, aggressive recruiting strategies and high drop-out rates as “significant problems” in the industry.

‘Significant Problems’

Six of the top 10 tuition assistance recipients are for- profits -- American Public Education Inc. (APEI), Bridgepoint Education Inc. (BPI), TUI Learning LLC, Apollo Group Inc. (APOL), Columbia Southern University and Grantham University -- according to the report.

Tuition Assistance lets active-duty members of the military take college classes, capped at $4,500 per year.

“We owe the men and women in our armed forces a tremendous debt,” Harkin, chairman of the Senate committee, said in a statement. “It is only fair that we do our part to help them succeed by cracking down on unscrupulous companies that are after their hard-earned benefits but not willing to provide them a good education in exchange.”

That veterans are selecting private-sector colleges is “hardly surprising,” with flexible class schedules that address their needs as parents, full-time workers and students, Steve Gunderson, president of the Washington-based Association of Private Sector Colleges and Universities, which represents for-profit colleges, said in an e-mailed statement.

“Our career-oriented schools provide veterans with access to training and skills-based education that allow our brave men and women to transition successfully into civilian life. ”

To contact the reporter on this story: Janet Lorin in New York at jlorin@bloomberg.net

To contact the editor responsible for this story: Lisa Wolfson at lwolfson@bloomberg.net

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