We Can’t Wait: President Obama Takes Action to Stop Deceptive and Misleading Practices by Educational Institutions that Target Veterans, Service Members and their Families

April 26, 2012

On Friday, President Barack Obama and First Lady Michelle Obama will visit Fort Stewart in Georgia where the President will sign an Executive Order to help ensure all of America’s service members, veterans, spouses, and other family members have the information they need to make informed educational decisions and are protected from aggressive and deceptive targeting by educational institutions. We have a sacred trust with those who serve and protect our nation. It’s a commitment that begins at enlistment, and it must never end.  That’s why President Obama is committed to ensuring veterans and service members have the chance to get a college education and can find work when they return from service.

Since the Post-9/11 GI Bill became law, there have been reports of aggressive and deceptive targeting of service members, veterans, and their families by educational institutions, particularly for-profit career colleges. For example, some institutions have recruited veterans with serious brain injuries and emotional vulnerabilities without providing academic support and counseling; encouraged service members, veterans, and their families to take out costly institutional loans rather than encouraging them to apply for Federal student aid first; engaged in misleading recruiting practices on military installations; and have not disclosed meaningful information that allows potential students to determine whether the institution has a good record of graduating service members, veterans, and their families and positioning them for success in the workforce.

Members of Congress have introduced legislation to address these issues, but the Administration believes we must do all we can administratively to protect veterans from these deceptive practices by improving the quality of information and services that these schools must provide.  These steps will help ensure that Federal military and veteran education dollars are well spent. Today’s Executive Order will apply to a variety of military and veteran education benefits, including the GI Bill, Tuition Assistance Program, and Military Spouse Career Advancement Account Program (MyCAA).

Today’s Executive Order will:

• Help Ensure Military and Veteran Students Have the Information They Need: The Executive Order will require that colleges provide more transparent information about their outcomes and financial aid options for students, which will help ensure that students are aware of the true cost and likelihood of completion prior to enrolling. According to the Senate HELP Committee, of the ten educational institutions collecting the most Post 9/11 GI Bill benefits between 2009 and 2011, eight were for-profit schools. Six of these schools had bachelor student withdrawal rates above 50 percent.  The Executive Order will require that the Know Before You Owe financial aid form, developed by the Consumer Financial Protection Bureau (CFPB) and the Department of Education (ED), is made available to every college student that participates in the Department of Defense’s (DoD) Tuition Assistance program (nearly 2,000 schools). The Executive Order will also direct the Department of Veterans Affairs (VA) to encourage all schools—roughly 6,000 in total—participating in the GI Bill program to provide the Know Before You Owe form.  This form provides students with critical information on tuition and fees, the availability of federal financial aid, estimated student loan debt upon graduation, and information about student outcomes like graduation rates. Further, the Executive Order will require that students are provided additional critical information, including school performance information over time, consumer protection information, and key financial aid documents, prior to the use of their benefits through the eBenefits portal.  The VA will publically post on their website if schools who receive GI Bill benefits agree to adhere to the Executive Order.

• Keep Bad Actors Off of Military Installations:  There have been numerous reports of some institutions of higher education aggressively and inappropriately targeting military students.  The Executive Order will require the Department of Defense to set forth rules for how educational institutions gain access to military installations in the first place, so that service members are not targeted by institutions known for a history of poor behavior in recruiting and marketing practices.

• Crack Down on Improper Online Recruiting Practices: The Executive Order will direct the VA to initiate a process to register the term “GI Bill,” so that external websites and programs are not deceptively and fraudulently marketing educational services and benefits to program beneficiaries. For instance, some companies have set up websites that suggest that veterans’ benefits are only available at a subset of schools.  The websites are also set up to resemble official government sites, and are marketed heavily at military installations and at separating service members.

• Provide Veterans with a Complaint System: The Executive Order will require VA, DoD, and ED, in consultation with the CFPB and Department of Justice, to create a centralized complaint system for students receiving military and veterans’ educational benefits. Currently, when military and veteran students feel that their school has acted fraudulently, they have no centralized system to file complaints, and federal agencies often lack access to information that will allow for follow-up enforcement or regulatory actions.

 Improve Support Services for Service Members and Veterans: The Executive Order will require that colleges participating in the military and veterans education benefit programs do more to meet the needs of military and veteran students by providing clear educational plans for students, academic and financial aid counseling services with staff that are familiar with the VA and DoD programs, and the ability of service members to more easily re-enroll and/or receive a refund if they must leave school for service-related reasons.

• Provide Students with Better Data on Educational Institutions: The Executive Order will require DoD, VA, and Ed to develop improved student outcome measures, such as completion rates for veterans, and a plan for collecting this data, which will be made available on Ed’s College Navigator website. Currently, retention and completion rates cannot be broken down by veteran or service member status.  Given the unique educational needs of veterans, active-duty service members, and their family members, it is important to provide them with a more accurate picture of what success looks like for students like them. The Executive Order will also require better reporting on the extent to which colleges rely on various types of federal benefits for operational support.

• Strengthen Enforcement of Student Protections: The Executive Order will require that VA and DoD strengthen the enforcement and compliance functions of the VA and DoD, so that, working in conjunction with the Department of Education, DOJ, and the CFPB, agencies (including law enforcement agencies with responsibility over fraud investigations) can effectively act on complaints of improper activity.