Home  »  Finding A School   »   Using the GI Bill with For-Profit Colleges

Using the GI Bill with For-Profit Colleges

The GI Bill is a valuable benefit earned through service. It offers financial support for higher education, making it a powerful tool for transitioning to civilian life and building a brighter future. However, the rise of for-profit colleges complicates higher education for veterans.

These institutions, driven by profit rather than educational outcomes, may employ aggressive marketing tactics and make enticing promises.  Not all for-profit schools are predatory, but plenty have engaged in predatory practices in the past as we will examine below. Veteran students, beware.

Read next: Yellow Ribbon College Guide

What USA Today Says

According to a January 31, 2023 article by USA Today, “Only about 40% of students who attended a for-profit university say their degree was worth the cost…”

That was based on USA Today polling data. According to the State of California Department of Justice, “Be careful and do your homework before enrolling in a ‘for-profit’ college or career training college. The for-profit college and career training industry is not part of the public school system; they operate schools to maximize profits for their investors.“

While not all for-profit colleges are predatory, some highly visible scandals involving such schools may inform your decision to apply or not to apply.

The State of California DOJ site adds, “For-profit schools have been accused of fraud, abuse, and predatory practices targeting the poor, veterans and minorities by offering expensive degrees that often fail to deliver promised skills and jobs.“

Understanding the For-Profit Model

As mentioned above, for-profit institutions operate as businesses, unlike non-profit colleges and universities. The profit-driven approach can make itself known in various ways, including aggressive recruitment tactics, inflated tuition fees, and questionable educational quality.

Some for-profit colleges employ aggressive and deceptive recruiting practices, targeting veterans and other vulnerable populations. This has earned for-profit schools a bad reputation, and there are multiple examples.

The Government Accountability Office (GAO), a federal watchdog agency, conducted an undercover investigation in 2010 that revealed issues at 15 for-profit colleges.That’s just one example.

These institutions were found to use deceptive or questionable marketing tactics, including misrepresenting program costs, exaggerating job placement rates, and even encouraging applicants to commit financial aid fraud.

One of the most common tactics is to prey on the desire for a quick and easy path to a well-paying job. Recruiters may use high-pressure sales tactics and make unrealistic promises about career prospects. They may also downplay the importance of academic rigor and focus on the ease and convenience of their programs.

For instance, some for-profit colleges have been accused of using misleading job placement statistics. Some count graduates working in unrelated fields or even part-time jobs as successful placements, creating a false impression of their program’s effectiveness.

Read next: Yellow Ribbon College Guide

Exorbitant Tuition Fees and Student Debt

For-profit colleges may charge higher tuition fees than comparable public or non-profit institutions. This can lead to students accumulating substantial debt, even with the assistance of the GI Bill. A 2012 report by the Senate Health, Education, Labor, and Pensions (HELP) Committee found that aomw for-profit colleges derive most of their revenue from federal student aid programs, including the GI Bill.

This heavy reliance on federal funds makes some wonder if these institutions prioritize student outcomes or maximizing profits.

Graduates of for-profit colleges often face higher debt and lower earning potential compared to their counterparts from public or non-profit institutions.

Education Quality

Perhaps the most concerning aspect of some for-profit colleges is the quality of education they provide. Studies have shown that students attending for-profit colleges may experience higher student loan default rates and more unfavorable employment outcomes compared to those attending public or non-profit institutions.

One Department of Education report found that a number of for-profit college students were “more likely” to default on student loans than public or non-profit institutions. This suggests that the education and training provided by some for-profit colleges may not adequately prepare students for the workforce.

Some for-profit colleges have been accused of offering programs with little or no market value. These schools may offer degrees with limited job prospects or provide training not recognized by employers, leaving veterans with a worthless degree and a mountain of debt.

Examples of For-Profit College Scandals

The history of for-profit colleges includes scandals and controversies. Here are a few notable examples:

• Corinthian Colleges: This for-profit giant collapsed in 2015 amid allegations of predatory lending, deceptive marketing, and falsified job placement data. The company was found to have engaged in widespread fraud, targeting low-income students and veterans with high-pressure sales tactics and misleading promises.
• ITT Technical Institute: Another major for-profit chain, ITT Tech, shut down in 2016 following investigations by state and federal agencies. The company was accused of misleading students about program costs, job placement rates, and financial aid eligibility. It was also found to have engaged in predatory lending practices, leaving students with mountains of debt and worthless degrees.
• University of Phoenix: This online for-profit giant has faced multiple lawsuits and investigations. It was accused of deceptive advertising, misleading students about program costs and graduation rates, and engaging in high-pressure sales tactics. In 2019, the University of Phoenix agreed to pay $191 million to settle charges by the Federal Trade Commission (FTC) that it used deceptive advertisements to lure students.
• Full Sail University: This for-profit multimedia school has been criticized for its high tuition costs, aggressive recruiting tactics, and questionable educational value. Concerns have been raised about the lack of credit transferability and the high debt-to-income ratio of its graduates. Former students have alleged that Full Sail misrepresented job placement rates and program outcomes, leaving them with substantial debt and limited career prospects.

These are just a few examples of issues within the for-profit college industry. These cases highlight the importance of thorough research and careful consideration before enrolling in a for-profit institution.

Read next: Yellow Ribbon College Guide

Advice for Veterans Considering For-Profit Colleges

If you’re considering using your GI Bill benefits to attend a for-profit college, make an informed decision:

• Do your research: Thoroughly investigate any for-profit college you’re considering. Look for information on graduation rates, job placement rates, and student loan default rates. Compare these statistics to those of public or non-profit institutions offering similar programs.
• Read reviews and testimonials: Seek out reviews and testimonials from current and former students. Pay attention to both positive and negative feedback. Look for patterns in the comments that may reveal potential red flags.
• Ask questions: Don’t hesitate to ask questions about the program, the school’s accreditation, and its job placement services. If a recruiter is hesitant to answer your questions or provides vague or evasive answers, you may be considering the wrong school.
• Compare costs: Compare the cost of attendance at the for-profit college with that of public or non-profit institutions. Consider the total cost, including tuition, fees, and living expenses. Factor in the potential for higher debt burdens and lower earning potential associated with for-profit colleges.
• Consider alternatives: Explore alternatives to for-profit colleges, such as public or non-profit institutions, community colleges, and vocational schools. These options often offer high-quality education at a lower cost.

For-profit colleges may be an option for some students, but it’s crucial to review them thoroughly.

The profit-driven education model is said to create conflicts of interest, leading to aggressive recruiting tactics, inflated tuition fees, and questionable educational quality. Not all for-profit schools are predatory, but thanks to a variety of scandals associated with them it may be a bad idea to apply without additional research.

Read next: Yellow Ribbon College Guide