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Trump's “Forever GI Bill” won't stop for-profit schools from preying on vets

Thousands of veterans might be getting their money back. But for-profit colleges are still a problem.

by Alexa Liautaud and Christina Sterbenz
Aug 17 2017, 11:32am

Thousands of veterans are getting back the money they spent attending two of the largest for-profit schools in the U.S., which abruptly closed after years of federal investigations over their practices.

The relief comes as part of President Trump’s widely supported “Forever GI Bill,” signed Wednesday after unanimously passing the Senate. While the bill expands existing education benefits for veterans, the Trump administration has also previously rolled back regulations on for-profit schools, which specifically target veterans for the federal money they provide.

Aside from eliminating the 15-year limit for new enlistees to claim their benefits, the “Forever GI Bill” includes another important provision: giving veterans their money back if a school is closed or a policy change forces them to stop their education. That means the thousands of former servicemen and women who attended ITT Technical Institute and Corinthian Colleges — which shut down in 2016 and 2015, respectively — will receive their tuition and fees back and can apply the money to attending another school.

“We’ve been getting calls for several years now, beginning with the collapse of Corinthian, from student veterans whose lives were put on hold,” Will Hubbard, vice president of government affairs for the nonprofit, told the Army Times. “Every day we wasted until it passed was another day that they had to wait.”

Last September, ITT Tech students at more than 130 campuses awoke to find their school closed, after the Department of Education’s determined the school no longer met federal standards for accreditation. About a year earlier, Corinthian shuttered its remaining 28 schools after millions of dollars in fines from the Department of of Education.

Jason Pepper, right, is helped to class at ITT Technical Institute in Nashville, Tenn., by his brother in law, David Swanson on May 2, 2007. Pepper was wounded in Iraq three years ago, causing both his eyes to be removed.

Despite Trump’s new protections for veteran students, his administration has also suspended Obama-era regulations that protected all students from fraudulent schools until further review.

Specifically, Secretary of Education Betsy Devos might end two key regulations: borrower defense repayment, which enabled student loan forgiveness if colleges misrepresent their programs, and gainful employment, which forced colleges to provide students with an education that allowed them to pay off their debt.

For-profit colleges love enrolling veterans, largely because of a provision in the Higher Education Act known as the 90/10 rule. The regulation prohibits for-profit schools from receiving more than 90 percent of their revenue from federal dollars, but in what’s often referred to as a “loophole,” financial aid given to veterans doesn’t count as part of that 90 percent.

If for-profit schools enroll enough veterans, they could essentially run entirely on federal money. And if any of those schools close because of fraud, the U.S. government would have a lot of money to pay back.