Durbin, Takano, Levin Statement On Department Of Veterans Affairs Action To Protect Student Veterans At For-Profit Colleges

WASHINGTON – U.S. Senate Democratic Whip Dick Durbin (D-IL), U.S. Representative Mark Takano (D-CA-41), Chairman of the House Committee On Veterans’ Affairs, and U.S. Representative Mike Levin (D-CA-49), Chairman of the Veterans’ Affairs Subcommittee on Economic Opportunity, today issued the following statement after the U.S. Department of Veterans Affairs (VA) announced it would halt new G.I. Bill enrollments at for-profit University of Phoenix and former Career Education Corporation (CEC) schools—Colorado Technical University and American Intercontinental University—resulting from evidence that the institutions engaged in predatory practices:

“The financial incentive for for-profit colleges to prey on veterans and service members is well documented. Today’s action by the Department of Veterans Affairs protects new G.I. Bill enrollees from being defrauded or misled. The men and women who served our country in uniform deserve a Department that will put them first. That’s what happened today.

“In addition, we encourage VA to ensure G.I. Bill recipients currently enrolled at these schools have the appropriate resources available to continue their education, or transfer to other institutions, without causing interruption to the critical housing benefits on which they rely to house themselves and their families,” said Durbin, Takano, and Levin. 

In December, Durbin and Takano led a letter to Secretary of Veterans Affairs Robert Wilkie urging the VA to protect student veterans in the wake of Federal Trade Commission (FTC) settlements with for-profit University of Phoenix (UOP) and then-Career Education Corporation (CEC) for unfair, deceptive, and abusive practices. 

In August 2019, the FTC announced a $30 million settlement with CEC, which enrolls more than 7,500 veterans using Post-9/11 GI Bill benefits at its American Intercontinental and Colorado Technical University brands and took in more than $60 million in G.I. Bill funds in Fiscal Year (FY) 2018. The FTC found that CEC and its subsidiaries used “an illegal and deceptive telemarketing scheme”—wrongfully obtaining consumer information and “falsely representing that its schools were affiliated with or recommended by the military.”

In December 2019, the FTC announced a $191 million settlement with University of Phoenix over “deceptive advertising.”  The FTC found that UOP “falsely touted their relationships and job opportunities with companies such as AT&T, Yahoo!, Microsoft, Twitter, and the American Red Cross” in an effort to attract students.  According to VA, University of Phoenix—the largest recipient of Post-9/11 G.I. Bill benefits since the program’s creation—enrolls 22,365 veterans and took in more than $150 million in G.I. Bill funds in Fiscal Year 2018.

Federal law, specifically 38 U.S.C. § 3696(a), states that “the Secretary [of Veterans Affairs] shall not approve enrollment of an eligible veteran or eligible person in any course offered by an institution which utilizes advertising, sales, or enrollment practices of any type which are erroneous, deceptive, or misleading either by actual statement, omission, or intimation.”  The statute also specifically provides authority for VA to rely on FTC for purposes of making determinations under section 3696(a).