Congressional Republicans and officials from the for-profit college industry have excoriated President Obama’s executive order meant to provide more college information to military veterans with ample federal education benefits, with one influential House Republican calling for a hearing on the order.
Obama on April 27 signed the order at the Fort Stewart Army post in Georgia, after years of complaints about for-profit colleges catering to military service members who have GI Bill benefits. For-profit schools receive about 90 percent of their funding from federally-backed student loans.
The executive order, lauded by many in higher education who have raised questions about the quality of for-profit college courses and the sector’s skyrocketing dropout rate, could allow military veterans to more easily calculate loan repayments on money needed outside of GI Bill benefits, along with a school’s policy on course credit transfers.
Around 250,000 military veterans, spouses, and children of veterans attend for-profit colleges, according to national statistics. Eight for-profit schools reaped more than $620 million in veterans’ educational benefits in 2010, according to a U.S. Senate report.
This is far from the Obama administration’s first clash with the for-profit education industry. After two years of rule making, the U.S. Department of Education in 2011 implemented “gainful employment” regulations, which would cut off a college’s access to federal student loans if its students fail to meet loan repayment benchmarks, among other stipulations.
Steve Gunderson, president of the Association of Private Sector Colleges and Universities (APSCU), called Obama’s executive order a “deeply unfortunate development,” adding that for-profit schools play a major role in helping veterans transition from the battlefield to civilian life.
“APSCU is disappointed that … the president decided to bypass the Congress to address these issues with an executive order,” Gunderson said.
Rep. Jeff Miller, chairman of the House Committee on Veterans’ Affairs, called Obama’s executive order “an unnecessary attack on the free market” and an act of “imperial fiat.” Miller said he would hold a congressional hearing on the president’s order May 16.
“As with most industries, the free market will police itself when consumers are equipped with factual information about goods and services they intend to buy,” Miller said. “This has the effect of weeding out the bad and rewarding the good. The education industry is no exception.”
Zaid Jilani, an outreach coordinator for ThinkProgress, a branch of the liberal think tank Center for American Progress, pointed out in a May 3 blog post on Republic Report that Miller—like many congressional representatives from both sides of the aisle—has been a recipient of campaign donations from the for-profit college industry during the 2012 election cycle.
The for-profit college industry is the third largest donor to Miller’s current campaign. The APSCU has given $1,000 to Miller’s re-election effort, along with Bridgepoint Education, DeVry Inc., Education Management Corp., and Westwood College.
Sullivan University in Kentucky, which came under national scrutiny in 2011 after Sullivan officials allegedly told employees to donate money to the opponent of Kentucky’s attorney general, has given $5,000 to Miller’s campaign.
“It’s not surprising that some in Congress jumped up so quickly to stand with predatory colleges against America’s men and women in uniform,” Jilani wrote. “As usual, it’s all about the money.”
Miller said Obama’s executive order was redundant. Prospective college students, he said, could visit the College Navigator website.
Powered by the National Center for Education Statistics, the site lets students examine school data, including ethnicity, gender, student indebtedness, costs, and private and federal financial aid availability.
Instituting federal rules ensuring military veterans are well informed before they choose a college or university, Jilani wrote, is sound policy amid government reports detailing high dropout rates and loan repayments among for-profit college students.
“When so much of the money for a sector comes from taxpayers, government has a duty to protect against waste, fraud, and abuse,” he wrote.
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