Durbin Statement on Committee Report Revealing Questionable Business Practices in For-Profit College Industry

Statement

U.S. Senator Dick Durbin (D-IL) today released a statement after reviewing a new report by the majority staff of Chairman Tom Harkin's (D-IA) Senate HELP Committee shows that for-profit colleges are collecting billions of taxpayer dollars from veterans using their Post-9/11 GI Bill benefits. The report found that although overall student enrollment has decreased at each of the eight top for-profit Post-9/11 GI Bill beneficiaries, their enrollment of veterans has dramatically increased--anywhere from 61 to 657 percent--during the same period.

"On too many basic measures of value, for-profit colleges fail to meet minimum standards. The recent collapse of Corinthian Colleges should serve as a warning to students to think twice before enrolling in these schools and to taxpayers who are subsidizing these schools often up to 90% of their total revenue," said Senator Dick Durbin (D-IL), author of the Protecting Our Students and Taxpayers (POST) Act, which would include Post-9/11 GI Bill funding in the current federal 90/10 rule. "By leaving open a loophole that allows Post-9/11 GI bill funding to go unaccounted for, we are incentivizing for-profit education companies to aggressively market to and enroll veterans. The results laid out in Chairman Harkin's report show that unfortunately these predatory tactics are working. We need to close this loophole."

The investigation released today shows that taxpayers are paying twice as much for a veteran to attend a for-profit college as a public college. For-profit colleges received $1.7 billion in Post-9/11 G.I. Bill benefits in the 2012-2013 school year, nearly as much as the total cost of the program just four years earlier. Eight of the top ten recipients of Post-9/11 G.I. Bill federal funds are large, publicly-traded companies that operate for-profit colleges. Those companies have received $2.9 billion in taxpayer dollars to enroll veterans in these schools over the past 4 years, including 23 percent--or $975 million--of all Post-9/11-G.I. Bill benefits in 2012-13.

"More and more veterans are enrolling in high cost for-profit programs of questionable quality, while the share of veterans enrolling in community colleges and state universities is shrinking," Harkin said. "While the Post-9/11 G.I. Bill was designed to expand educational opportunities for our veterans and servicemembers, I am concerned that it is primarily expanding the coffers of the big corporations running these schools. It is evident that more needs to be done to ensure that veterans and servicemembers, who have sacrificed so much for our nation, are receiving a quality education--and that taxpayer dollars aren't wasted on shoddy programs.

"This report, including the findings that $186 million of veteran benefits were squandered and thousands of veterans will be impacted by the failure of Corinthian Colleges, must be a wake-up call for anybody concerned about our nation's veterans," Harkin added. "Eight institutions, nearly all of which are under investigation by federal and state law enforcement for questionable business practices, received almost a quarter of all Post-9/11 G.I. Bill dollars last year. It is clear that all stakeholders, and especially Congress, must take action to better protect our nation's military families."

"Today's report should be a wake-up call to the federal government. It's a serious problem that Post-9/11 G.I. Bill dollars are often inflating these companies' revenues instead of actually providing a meaningful education to the men and women who earned those benefits. The Post-9/11 G.I. Bill should benefit our veterans and their families--not companies like Corinthian that's gotten $186 million in G.I. Bill funds but is now undergoing bankruptcy proceedings," said Senator Chris Murphy, a member of the HELP Committee. "The bottom line is that the federal government can't sit back and let some for-profit colleges get away with deceptive practices that rob our veterans of their education and military benefits in order to pad profits. We need to act now."

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