The Department of Veterans Affairs announced it will lift restrictions on five schools it blacklisted over "deceptive" and "misleading" enrollment practices earlier this year.
The University of Phoenix, Colorado Technical University, American InterContinental University, Bellevue University and Temple University all “have utilized advertising, sales or enrollment practices which are erroneous, deceptive or misleading” in violation of the law, VA officials wrote to lawmakers in an email obtained by Connecting Vets in March when VA notified schools it intended to suspend program approvals and GI Bill payments.
As VA moves to lift those restrictions, advocates are arguing it could be entering murky legal waters.
New students can again use GI Bill benefits to enroll at the five schools -- worth a potential $200 million annually for the schools, all told.
But Veterans Education Success, a Washington, D.C.-based veteran advocacy organization, argues VA is violating federal law by moving forward.
Federal law prohibits VA from signing off on students using the GI Bill for enrolling at schools proven to use "advertising, sales or enrollment practices of any type which are erroneous, deceptive or misleading, either by actual statement, omission or intimation."
VA's decision "renders the federal statute governing GI Bill meaningless," the group said in a statement to Connecting Vets.
"The only winners today are the schools that used their money and political influence to evade the law and harm veterans,” Carrie Wofford, president of Veterans Education Success, said in a statement. “The GI Bill statute specifically requires VA to protect student veterans, but the Trump Administration has chosen to defy that law. We do however appreciate the staff at Veterans Benefits Administration who tried to follow the law and protect student veterans.”
Two years ago, a VA Inspector General report warned the department could waste $2.3 billion in "improper (GI Bill) payments to ineligible colleges," over the next five years, including those ineligible because of deceptive hiring practices. Investigators found that 29 of the 35 ineligible, or potentially ineligible colleges were for-profit schools, but their report did not name the schools.
In March, VA put the five schools on notice -- the department planned to suspend approval of new GI Bill enrollments after it found "sufficient evidence" the colleges used "erroneous, deceptive or misleading" enrollment and advertising practices aimed at student veterans and other students using the GI Bill.
There were more than 16,000 GI Bill students enrolled across the five universities and campuses between Aug. 1, 2019 and Feb. 20, 2020, VA spokesman Randal Noller told Connecting Vets.
Later, in May, VA issued a directive requiring the schools enact certain reforms to become eligible to enroll GI Bill students again, including changing advertising staff, hiring independent third-party auditors for marketing and refunding tuition. By the end of the month, VA had walked back or softened its requirements. The department eventually only required the schools to cease prohibited actions and ensure they are following the law, rather than make substantive changes or reforms.
VA officials offered few explanations or specifics for its decision to lift restrictions on the five schools.
VA Press Secretary Christina Noel told Connecting Vets "after careful review" VA had decided the schools had "taken adequate corrective actions to avoid suspension of new GI Bill student enrollments."
Those corrective actions included: cooperating with VA reviews, providing restitution to impacted students, changes to marketing practices and personnel, changes to leadership, renewed annual training for staff, improved oversight of communications with students.
"VA will continue to act in the best interest of our nation's service members, veterans and taxpayers," Noel said. "We look forward to working with these schools to ensure they fulfill the requirements for GI Bill enrollments."
For-profit colleges and universities have increasingly come under fire in recent years for alleged predatory behavior, particularly toward GI Bill students.
Two of the five schools VA considered blacklisting -- the University of Phoenix and Colorado Technical University -- were among schools receiving the most GI Bill money, but spending the least percentage of that cash on student instruction.
In December, the Federal Trade Commission levied a $50 million fine against the University of Phoenix, ordering it to forego $141 million in student debt collection because of false advertising aimed at student veterans. The University of Phoenix receives the most GI Bill money of any other school, with $150.6 million in 2018 from more than 22,780 students in 2018, according to the latest VA data.
For-profit schools also have been accused of exploiting what advocates and lawmakers refer to as the "90/10 loophole." For-profit schools become eligible to receive federal student assistance if the schools receive at least 10 percent of their funding from sources other than the federal government. Since the GI bill is not classified as federal aid, for-profit schools can use those students' payments to qualify to receive more federal money.
So far, efforts to close that loophole in Congress have not been successful, though several legislative efforts remain alive in committee.
Veterans Education Sucess blamed the influence wielded by the schools for VA's decision.
“Today’s news is disappointing at best, but not surprising given how much money and political power these schools have,” Veterans Education Success Vice President Tanya Ang said.