SALON

Friday, Apr 27, 2012 5:21 PM UTC

Obama’s GI Bill fight

Can the White House fix a screwed-up system that leaves veterans at the mercy of for-profit college scams?

By

Topics: Education, ,

Obama's GI Bill fightPresident Obama (Credit: AP)

The multiple incarnations of the GI Bill are widely considered some of the most effective pieces of social welfare legislation ever passed by the U.S. Congress. Since World War II, millions of veterans have been able to attend college and graduate school via direct tuition assistance from the federal government. The education received by the initial wave of World War II veterans is believed to have played a key role in the massive economic boom of the 1950s and 1960s.

So how, then, did we get to where we are today, with GI bill education-related financial aid embroiled in the for-profit college mess?

The answer hinges on a classic case of unintended consequences. But first, cue President Obama.

On Friday, Obama continued his efforts to keep education front and center during his reelection campaign. This time around, the focus was on the military: specifically, the abusive, bordering-on-fraudulent practices employed by for-profit “diploma mill” colleges to boost military enrollment.

From the Associated Press:

The Obama administration wants to trademark the term “GI Bill” in an effort to shield veterans and military families being swindled or misled by schools that target their federal education benefits.

President Barack Obama is signing a wide-ranging order on Friday that partially addresses growing complaints about fraudulent marketing and recruiting practices aimed at military families eligible for federal education loans under the GI Bill.

And therein lies an interesting story. As Salon reported last week, the for-profit college industry generates the vast majority of its revenue from federal student loans. Indeed, if it weren’t for a law passed in 1998 requiring that at least 10 percent of a for-profit college’s revenues come from sources other than federal loans — the so-called 90/10 rule — the percentage might go all the way up to 100. And that’s exactly what makes military students so attractive to the for-profit sector. Military educational benefits do not fall under the same category as federal loans under the 90/10 rule.

As Holly Petraeus, the assistant director for service member affairs at the Consumer Financial Protection Bureau, and wife of retired general David Petraeus, explained in a New York Times Op-Ed last September ,the law creates a huge incentive for for-profits to enroll military veterans:

For every service member or veteran (or spouse or child, in the case of the post-9/11 G.I. Bill) enrolled at a for-profit college and paying with military education funds, that college can enroll nine others who are using nothing but Title IV money.

This 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.

One of the most egregious reports of questionable marketing involved a college recruiter who visited a Marine barracks at Camp Lejeune, N.C. As the PBS program “Frontline” reported, the recruiter signed up Marines with serious brain injuries. The fact that some of them couldn’t remember what courses they were taking was immaterial, as long as they signed on the dotted line.

Abuses such as these explain why the Obama administration has been attempting to increase oversight and accountability in the for-profit college sector, against Republican opposition every step of the way. But they also raise a larger question.

Right now, Republicans and Democrats are squabbling about how to pay for an extension of low interest rates on student loans. As I write these words, House Republicans have barely passed a bill, 215-195, that will pay for the extension by taking money from Obamacare. The White House has threatened to veto the GOP maneuver. It’s a classic political squabble, with both sides reluctant to raise interest rates on student loans during an election year, but each determined to squeeze as much political advantage as possible out of the bickering.

But the real problem with student loans goes much deeper. When the government subsidizes the private sector, which is what is happening when federal student loan money flows straight to for-profit colleges, it not only creates incentives for fraud, but also encourages the for-profit schools to keep raising their tuition prices.

Under the terms of the current incarnation of the GI Bill, veterans who attend an in-state public school get their full tuition paid free and clear. Wouldn’t it be smarter to take a leaf out of that book on a much more systemic scale? America’s system of public universities is still one of the wonders of the world, even as state funding support has steadily declined. Think how much better it could be with meaningful federal support, and a GI bill that covered all Americans, and not just the military.

Of course, to pull something like that off, we’d  have to raise taxes and mobilize real bipartisan consensus. So that’s not happening anytime soon. We’ll have to content ourselves with picking at the margins — trademarking the name “GI Bill” for example, or fighting life-or-death struggles over interest rate adjustments.

Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21. More Andrew Leonard.

Next Article

Related Stories

More Related Stories

Featured Slide Shows

The week in 10 pics

close X
  • Share on Twitter
  • Share on Facebook
  • Thumbnails
  • Fullscreen
  • 1 of 11
  • Lisa Montgomery embraces her nephew Thursday after a tornado tore apart her home in Cleburne, Texas. The twister killed six people and destroyed entire swaths of the North Texas town.
    Credit: AP/LM Otero

  • Jack McMahon, the defense attorney for abortion doctor Kermit Gosnell, speaks outside the Criminal Justice Center in Philadelphia Tuesday. His client was convicted of killing three babies in his clinic, and will serve multiple life sentences.
    Credit: AP/Matt Rourke

  • A photo taken Monday captures Vice President Joe Biden's response to a Milwaukee second-grader's innovative proposal to end America's epidemic of gun violence. This guy!
    Credit: AP/Jenny Aicher

  • Sen. Rand Paul, R-Ky., flanked by a grouper-eyed Michele Bachmann, addresses the IRS' admission that it targeted Tea Party groups in advance of the 2012 election. In an op-ed for CNN Thursday, the Kentucky senator slammed the president for his faux outrage.
    Credit: AP/Molly Riley

  • Ousted IRS chief Steven Miller is sworn in on Capitol Hill Friday. Miller testified before the House Ways and Means Committee on the extra scrutiny the agency gave conservative groups applying for tax-exempt status.
    Credit: AP/J. Scott Applewhite

  • Attorney General Eric Holder pauses as he testifies on Capitol Hill before the House Judiciary Committee Wednesday. Holder is under fire, among other things, for the Justice Department's gathering of phone records at the Associated Press.
    Credit: AP/Carolyn Kaster

  • O.J. Simpson sits during an evidentiary hearing at Clark County District Court in Las Vegas, Nev., Thursday. Simpson, who is currently serving a nine-to-33-year sentence in state prison for armed robbery and kidnapping, is using a writ of habeas corpus to seek a new trial.
    Credit: AP/Las Vegas Review-Journal/Jeff Scheid

  • Major Tom to ground control: On Sunday astronaut Chris Hadfield recorded the first music video from space, a cover of David Bowie's "Space Oddity."
    Credit: AP/NASA/Chris Hadfield

  • When it rains it pours. President Barack Obama speaks during a news conference Thursday with Turkish Prime Minister Recep Tayyip Erdogan, inexplicably inspiring an #umbrellagate Twitter meme.
    Credit: AP/Jacquelyn Martin

  • A smoke plume rises high above a road block at the intersection of County A and Ross Road east of Solon Springs, Wis., Tuesday. No injuries were reported, but the the wildfire caused evacuations across northwestern Wisconsin.
    Credit: AP/The Duluth News-Tribune/Clint Austin

  • Recent Slide Shows

  • Share on Twitter
  • Share on Facebook
  • Thumbnails
  • Fullscreen
  • 1 of 11

Related Videos

Comments

 5 Comments

Comment Preview

Your name will appear as username

You may use these HTML tags and attributes: <a href=""> <b> <em> <strong> <i> <blockquote>

follow salon

Most Read

Popular on Reddit

links from salon.com

vote
Oklahoma senator: Tornado aid “totally different” from Sandy aid
3120 points3121 points | 2641 comments
vote
Anyone Regret Slashing National Weather Service Budget Now?: With GOP-backed cuts to forecasting agency, experts warn future storms will go undetected and more lives lost
1111 points1112 points | 591 comments
vote
Oklahoma senator wants to offset tornado aid with other cuts
151 points152 points | 61 comments
vote
New campaign compares gun control to anti-LGBT discrimination
29 points30 points | 11 comments
vote
Horrifying new trend: Posting rapes to Facebook " In Chicago this weekend, prosecutors announced three teenaged boys will tried as adults for aggravated criminal sexual assault after allegedly raping a 12-year-old girl — and posting a video of the attack on Facebook."
33 points34 points | 15 comments

From Around the Web

Presented by Scribol
listener_new_rect The Listener: So long, Sookie Stackhouse

Recommendations