For-profit Colleges

I have come to the Senate floor a number of times over the past year to speak about my concerns about the rapid growth of for-profit colleges. I believe some for-profit colleges are quality institutions, but I also believe many are taking advantage of Federal taxpayer dollars and doing more harm than good for unsuspecting students. In no area is this issue more important than when it comes to our veterans.


A few years ago, I proudly joined Senator James Webb of Virginia, who said to me when he came to the Senate 5 years ago: I want to pass a new GI bill. It is my No. 1 priority. And he did it. Thank goodness, he did. This is a man--a veteran of the Vietnam conflict who served in the U.S. Marines and later as Secretary of the Navy--who knows what he is talking about when it comes to veterans. He helped put together the modern GI bill, and I am proud to have voted for it, as many of us did.


When we passed that bill, we provided veterans with improved benefits to go to college. Veterans can receive up to $17,000 a year to cover the cost of tuition, fees, housing, and supplies at the college of their choice. Veterans can also access private schools through the Yellow Ribbon Program, which allows the VA to pay a portion of private school tuition under agreements with these schools.


A lot of students are using the GI bill to attend for-profit colleges which are far more expensive than their public counterparts and even more expensive than many private not-for-profit universities. There is a rapid growth in veteran enrollment in these for-profit schools. For-profit schools cost an average of $14,000 a year compared to $2,500 a year at public 2-year colleges and $7,000 at public 4-year universities.


In the first year of the post-9/11 GI bill implementation, the Veterans' Administration spent $697 million on students attending public schools and $640 million on students attending for-profit schools--almost the same. But we educated far more students for our money in public schools--203,000 students at public schools compared to 76,000 at for-profit schools, which charge two or three times as much for tuition and obviously educate one-half to one-third of what the public schools educated.


The top five for-profit recipients of the post-9/11 dollars received over $320 million from the Department of Veterans Affairs last year: ITT received $79 million; Apollo, which is the University of Phoenix, $76.9 million; Education Management Corporation, $60.5 million; Career Education Corporation, $58.2 million; and DeVry, $47.9 million.


There are reports of for-profit colleges aggressively targeting military servicemembers and veterans with expensive ad campaigns and hundreds of recruiters. One prominent for-profit college has 452 recruiters focusing on recruiting veterans out of the military. Another employs 300. Why do they want these students? Because when they bring the students in under the GI bill, they get compensated at higher levels by the Federal Government. We have a limit that says that none of these for-profit schools can take more than 90 percent of their revenue out of the Federal Treasury. That is money that comes in through Pell grants and Federal college loans. When it comes to the GI bill, we raised the 90 percent. So these schools that argue: We are just in the private sector, just little businesses, get more than 90 percent of their revenue from the Federal Government. They are the most heavily subsidized private businesses in America. It is time for us to ask, Are the taxpayers getting their money's worth? Are the veterans getting their money's worth?


It is troublesome when these schools spend so much money on recruiting students instead of educating them. I am concerned. The current system allows for-profit colleges to earn millions of dollars from taxpayer-funded programs while providing a low-quality education to students. We need to put the brakes on for-profit colleges that are targeting veterans to reap profits from taxpayers' dollars.