For-profit schools would be required to meet new standards covering everything from drop-out rates to transparency, under a proposal by senators who claim the colleges are exploiting members of the U.S. military for their government education benefits.
Sen. Jim Webb, D-Va., introduced the bill this past week, claiming the Post-9/11 GI Bill and the education benefits it provides are "at risk" because of concern over abuses.
"Some for-profit institutions are providing our students a great education, but with the significant federal dollars being spent, we owe it to taxpayers and our veterans to carefully monitor and provide adequate oversight," Webb said in a statement.
Webb is among a group of senators who say the federal government needs to step in, as studies show for-profit colleges raking in veterans' benefits with, according to critics, questionable results.
Sen. Tom Harkin, D-Iowa, chairman of the Committee on Health, Education, Labor and Pensions, has led the campaign on Capitol Hill against certain corners of the for-profit college industry.
A report last month from committee Democrats showed about half of the military's tuition assistance dollars were going toward for-profit colleges.
Another report in late 2010 looked at 20 such education companies, and claimed the amount of Veterans Affairs and Defense Department benefits they received soared from $67 million in 2006 to $521 million in 2010.
The proposal from Webb would apply to all schools — not just for-profit colleges — that receive education dollars through the Veterans Affairs and Defense departments. It would require the schools to be properly accredited and have an undergrad withdrawal rate at 33 percent or below.
The bill would require many schools to offer support services to military students, and require the federal government to provide those students one-on-one education counseling. It also would require schools to disclose graduation rates, loan default rates and other information to prospective students.
Harkin, as well as Sen. Scott Brown, R-Mass., and others, co-sponsored the proposal.
For-profit educational leaders claim the schools provide America's veterans with opportunities at success that fit their needs. For-profit colleges cover everything from technical schools to online universities and have become a booming industry.
"Today, almost 200,000 veterans achieve access to post-secondary education opportunities through private sector colleges and universities," Steve Gunderson, president of The Association of Private Sector Colleges and Universities, said in a statement earlier this week. "The flexibility and focus of our academic delivery often fits the family and academic needs of these veterans."
Harkin and other Democratic senators also recently sent a letter to the Department of Veterans Affairs urging the department to trademark the phrase "GI Bill" — claiming some recruiters for for-profit schools were using the phrase on their websites to "wrongly imply" that the benefits can only be used at those institutions.