Are the CEOs and Board Members of For-profit Schools Today's "Robber Barons?"

Should schools that profit from GI Bill-funded tuition be held more accountable?

Posted Jun 23, 2012

Today's returning warriors receive generous educational funding ("the new GI Bill") from a grateful nation. Dismal job prospects and financial incentives (e.g. enrolled veterans receive extra funding to cover cost of living expenses) compel many returning soldiers to immediately enter academic programs. Most of the returning veterans I work with have already enrolled in one of many "for-profit 'branded' schools." (Perhaps all institutions of learning are essentially "for profit" but when I use the term "for-profit schools," I am speaking specifically about the kind of schools that regularly advertise their programs on television commercials.) And, alarmingly, it seems that returning veterans receive little, if any, sound counsel on the wise use of these educational funds. 

Here is a fairly common case example to illustrate what I'm seeing with many of our returning veterans… 

Let's call our example veteran "Jim" (not his real name). Jim feels strongly pulled towards a career that involves helping others. With great optimism, he channeled his GI Bill funding into a for-profit academic program to pursue a certification in substance abuse counseling. The cost was exorbitant by any standard – credit for credit, the tuition he paid was greater than that of many private colleges with long traditions of offering very high-quality education. When he entered the program, Jim was not informed that completion of his desired certification would be based on completing hundreds of hours of (typically unpaid) supervised practicum work in addition to coursework. 

Highly motivated and intelligent, Jim achieved his goal of graduating with the highest grades in his cohort. However, although he was at the top of his class, his program provided virtually no support and took no responsibility for ensuring that he would be able to obtain a practicum placement. On his own, without the help of his program, he soon discovered that he was competing against students who had completed masters or even doctoral degrees seeking the same kinds of low-paid or unpaid placements in order to complete their degrees. Jim is now stuck in career limbo. The GI Bill funds he invested are spent and gone, and his job prospects are grim in this competitive market. 

In seeking positions within his chosen line of work, Jim has met with rejection upon rejection, even though he has much to offer to his prospective career. With each month that passes, he falls farther into depression. He questions whether he will be able to fit in as a civilian. Meanwhile, there is no accountability for the program that drained him of the majority of his GI Bill funding for a partial (in other words, practically useless) credential. 

Unfortunately, Jim's situation is not all that unusual. If we pan out from the specifics of his story, there are many troubling issues that surface when veterans attempt to transition from the military to similar for-profit schools. 

As highly lucrative businesses, these schools are designed to maximize profits. Full stop. For someone with GI Bill funding, there are virtually no obstacles to gaining entry on the front end of for-profit academic programs – one's ability to divert their educational funding to the institution seems to be all that is required for acceptance. On the back end, however, there may be significant obstacles to success when the certifications and credentials they award do not translate into paying lines of work. 

Based on the independent report of several veterans on my case load, many for-profit schools have strategic recruiting programs. I can't say for sure, but I wouldn't be surprised if their recruiters are paid on commission or given bonuses for increasing new student enrollment. If they are, and even half of the reports I hear are accurate, then an investigation into the recruiting techniques of such programs is likely to uncover a variety of troubling practices such as providing partial information to prospective students, making false promises about job placement prospects, and using other bait and switch tactics. 

The robust flow of new students, especially those with significant amounts of GI Bill funding creates a market with virtually no cap at all, as many of these institutions continue to expand their offerings through internet-based courses. By offering online courses, these "virtual" educational institutions can expand to any size, with no apparent accountability as to the quality of their instruction, or the hiring outcomes for their students. The market simply cannot support the swelling number of graduates these programs produce. Such expansions are justified under the banner of "making educationaccessible to all" but I wonder what the value of such education is if it does not lead to a decently paid job in one's field of study? 

Veteran students may be much more likely to fall through the cracks in "virtual" schools with relatively little classroom interaction. From a behavioral-environmental perspective, military veterans face the particular challenge of transitioning from a life where structure has been entirely imposed to an existence with little to no structural support. Without accountability, face time, and direct interaction with faculty members and fellow students in their academic programs, veterans may be precisely the population most likely to fall through the cracks in these programs. (And when they do, whatever GI Bill funding they had invested in their former educational programs is spent and gone). 

From a treatment angle, attending virtual schools is likely to prolong veterans' readjustment difficulties. It is only human to avoid what makes us uncomfortable. Given the choice, many veterans who have recently returned from overseas tours prefer some degree of separation from civilians, some privacy and perhaps even some relative anonymity. Unfortunately, avoidance of civilians only intensifies adjustment difficulties and heightens veterans' sense of alienation from non-military individuals. The more uncomfortable path – but the more beneficial one – may be enrollment in a program where a veteran spends significant face time with fellow students and instructors. 

Ultimately, the purpose of providing veterans with GI Bill funding is to assist our deserving soldiers in re-assimilating into society and finding professional success. For-profit schools are soaking up millions upon millions of dollars in GI Bill funding with no apparent accountability with respect to the career outcomes of their students. The system as it is now brings to mind the sub-prime mortgage fiasco - when banks were given free rein to prey on those without sufficient understanding of the risks of variable rate mortgages. 

Surely there should be some accountability? Perhaps someone should investigate some of the following questions...

1) How much GI Bill funding is paid to for-profit schools on an annual basis? 

2) What percent of those who enter for-profit schools (veterans and non-veterans) actually complete these programs? Based on comparative retention figures, should these schools have specific accountability measures for any profits they make based on veteran enrollees? 

3) How many GI Bill dollars have been lost when veteran students do not complete their intended courses of study? (I'm willing to bet that this figure would be staggeringly high.)

4) What percent of veterans who have expended their GI Bill funding to pay for tuition to these for-profit schools obtain gainful employment in positions for which they are trained within 1 year of graduating from their programs? What percent of non-veteran students find work in their fields within a year? 

5) What is the return on investment in terms of dollars invested in these programs and the subsequent salaries of those who have graduated from for-profit schools?