For-Profits Unprofitable for GI's: Why Taxpayers Should Prohibit Use of Post 9-11 GI Bill Funding on 'For-Profit' Education

Since October 2009, Syracuse University -- with support from the National Science Foundation -- has been studying veterans' educational aspirations, with emphasis on technical fields and engineering. We have created the most comprehensive national dataset on servicepersons' educational goals and needs.

The Post 9/11 GI Bill is the largest expansion of veterans' benefits since the original post-World War II 1944 GI Bill. The 1944 bill helped make the United States a global technological powerhouse and superpower, delivered us our "greatest generation," and by its end in 1956, educated 8 million of 16 million veterans, resulting in 14 Nobel Prize winners, 91,000 scientists, 67,000 doctors, 450,000 engineers, and countless others. Although the Post 9/11 GI Bill is an investment in veterans, we as a nation reap the benefits.

Our interviews with active duty servicemembers and veterans have revealed many things: First, they are anxious about becoming students again, about whether their peers -- the average college student fresh out of high school -- can relate to their commitment to country. Second, they desire "military friendly" campuses, a cohort of veterans to relate to the hardships of being a student while being a spouse, a parent, recovering from PTSD, or making the transition back to civilian life. Third, the hostile response to veterans during recent campus debates over reinstalling ROTC programs has not inspired their confidence.

As a result, servicemembers often ask us, "Should I use my GI Bill educational benefits at for-profit, on-line schools?" We think the for-profit model can be problematic for several reasons: First, "for-profit educational management companies" use ad hoc credentialing strategies to gain market share. Second, 'for-profit' credits may not be eligible for transfer to regionally accredited schools (most traditional universities and colleges). And third, 'for profit' degrees may carry a lower market value than their nonprofit equivalents. Nonetheless, many service-members report that their first choice is to attend a 'for-profit,' a finding confirmed by a recent U.S. Senate Health, Education, Labor and Pensions Committee Report showing that nearly 30 percent of students using the GI Bill are attending 'for-profits'. Meanwhile, mounting evidence shows that although for-profit education may produce high returns for shareholders, it can subject students to increased risk of loan default, unethical recruitment practices, and higher degree costs and attrition rates.

And what about the implications for the nation? In 2010, the Department of Veterans Affairs spent $697 million on tuition at public universities and $640 million at for-profits, yet funded 203,790 students at public schools compared to 76,746 at 'for-profits.' The Senate Report also notes that government education benefits received by 20 for-profits increased from $66.6 million in 2006 to $521.2 million in 2010 - an increase of 683 percent. If the expansion of military benefits has made veterans targets for for-profits seeking to satisfy investor demands, the future U.S. economy, driven by a well-educated labor force, stands to suffer from collateral damage. It is noteworthy that no for-profit has managed to launch an accredited engineering program.

From the veteran perspective we have heard two views. On the one hand, veterans feel "taken advantage of" by for-profits and wary of the online programs they offer. The whole point of college, said one veteran, is to "interact with fellow students, engage with people of different backgrounds, take tests under pressure, experience the intangibles of personal growth and maturation that occur in a campus setting." This view sees for-profits as "making veteran isolation worse, not better." Alternatively we have heard, "my biggest gripe about the GI Bill is that I work full time, own two houses, am divorced, have two children, and have a job that requires a lot of traveling, so I'm basically forced into online courses, and the most I can do is 6 credits per semester." This view explains: "with the new GI Bill, I don't get the same housing entitlements, and I'm really not sure about the quality of these [for-profit] degrees." Clearly, credible university-based online degree programs need to be made available to veterans.

Given current U.S. fiscal constraints, we must ensure that we are getting the most out of our investments. Not only do we need to seriously reconsider whether for-profits give us the greatest return on our investment in the GI Bill, but whether they provide the quality education that our veterans deserve. The burden of Iraq and Afghanistan rests on less than 1 percent of our nation, cementing a divide between servicemember and society. The Post 9/11 GI Bill is one of our best means to ensure a strong economy and healthy middle class, while providing opportunities for citizens committed to public service. It would be a shame to allow for-profits to siphon off that potential, only to line their pockets at the expense of America's future best and brightest, and for the sake of providing a service which at best further isolates our veterans from their society and at worst undercuts the next generation of Nobel Prize winners, scholars, scientists, doctors, inventors, and engineers.