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For-Profit Schools See Veterans as 'Nothing More Than Dollar Signs in Uniform'

A new report from the Department of Education shows that nearly 200 colleges are profiting from a legal loophole that allows them to target veterans for G.I. bill money

University of Phoenix building

Many schools are explicitly targeting members of the military, whose recruits tend to be poorer than the general population, for their own profits. (Photo: Getty Images)

Nearly 200 for-profit colleges around the country are skirting federal law, a report released last week by the Department of Education finds, by targeting U.S. military veterans for their G.I. bill tuition funds.

Federal law requires that for-profit schools abide by a 90/10 funding ratio, meaning that federal funds must account for no more than 90 percent of the school's income, and 10 percent must be derived from other sources. But because the law doesn't count G.I. bill tuition payments as federal funds—the bill only explicitly counts Department of Education funding—private for-profit schools are able to use public money to fuel nearly all of their operations and profits.

Indeed, it seems many schools are explicitly targeting members of the military, whose recruits tend to be poorer than the general population, for their own profits.

"Some of the worst actors don't even pretend they're not targeting veterans as a source of income," said Will Hubbard, vice president of government affairs at Student Veterans of America, to Stars and Stripes. "These schools say they're chosen by veterans. And the numbers show that isn't the case. It's undeniable at this point."

The problem has existed for years. And despite even a 2012 executive order from President Barack Obama intended to cut down on deceptive marketing to veterans, because of the loophole many dubious institutions continue to directly target veterans for their G.I. bill money.

Holly Petraeus, assistant director for servicemember affairs at the Consumer Financial Protection Bureau, observed back in 2011 that the loophole "gives for-profit colleges an incentive to see service members as nothing more than dollar signs in uniform, and to use aggressive marketing to draw them in and take out private loans, which students often need because the federal grants are insufficient to cover the full cost of tuition and related expenses."

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