Durbin, Warren, Brown, Blumenthal Urge Departments of Education & Defense to Protect Student Borrowers From Predatory For-Profit Schools

Senators ask Secretaries of Education and Defense to act following Department of Veterans Affairs suspension of new G.I. Bill enrollments at University of Phoenix and Career Education Corporation

SPRINGFIELD – In the wake of the Department of Veterans Affairs’ (VA) decision to suspend new G.I. Bill enrollments at several institutions of higher education – including for-profit University of Phoenix and schools owned by Career Education Corporation –  U.S. Senators Dick Durbin (D-IL), Elizabeth Warren (D-MA), Sherrod Brown (D-OH), and Richard Blumenthal (D-CT) today sent letters to the U.S. Department of Education and U.S. Department of Defense urging each Department to take action to protect student loan borrowers and servicemembers. 

“Now that the VA has taken action to protect new student veterans from being put at risk by enrolling in these schools, what steps will the Department of Education take?” the Senators wrote to Secretary of Education Betsy DeVos.

“We urge you to take action to protect active duty servicemembers who may be considering using Department of Defense (DoD) Tuition Assistance (TA) funds to attend these institutions,” the Senators wrote to Secretary of Defense Mark Esper.

In August, the Federal Trade Commission (FTC) announced a $30 million settlement with Career Education Corporation over “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, the FTC announced a $191 million settlement with University of Phoenix over “deceptive advertising.”

Relying on evidence gathered by the FTC in its investigation of CEC  and University of Phoenix , the VA found “sufficient evidence to support a finding that these schools have utilized advertising, sales, or enrollment practices that are erroneous, deceptive, or misleading…” in violation of 38 U.S.C. § 3696(a).   This provision of federal law states that “the Secretary [of Veterans Affairs] shall not approve the enrollment of an eligible veteran or eligible person in any course offered by an institution” which engages in these practices.  The statute provides authority for VA to rely on the FTC’s investigatory expertise and findings in making determinations under this provision.

Full text of today’s letter to the Department of Education is available here. Full text of today’s letter to the Department of Defense is available here.

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