GI Bill™

WASHINGTON -- In their quest to tighten regulations on for-profit colleges, Congressional Democrats have turned to military and veterans' benefit, proposing a slew of bills designed to control how those institutions recruit veterans and active-duty members of the armed forces.

Now the Obama administration has adopted a similar tactic.

President Obama will sign an executive order today at a Georgia military base that will force colleges to disclose more information about financial aid and graduation rates, as well as requiring the Department of Defense to set rules for recruiting at military installations. It will also restrict the use of the term "GI Bill" in marketing and recruitment. While the order will apply to all colleges, it appears to be aimed at the for-profit sector.

The order will also set up a complaint system for reporting suspected institutional fraud or abuse of veterans’ benefits, and require institutions to abide by the same rules as those receiving financial aid from the Education Department, administration officials said.

But the officials also indicated that the president would like to see more action from Congress to tighten regulations surrounding veterans’ education benefits. For-profit colleges have an incentive to enroll veterans in part because of a rule that requires 10 percent of total revenues come from sources other than federal financial aid. Veterans’ benefits are lumped in with outside income, rather than Pell Grants, student loans and other federal sources that can make up 90 percent of a college’s revenue.

The executive order will require colleges to disclose more information about where the revenues in the 10 percent come from, so that the administration can determine how much comes from the GI Bill, tuition assistance and other Department of Defense or Veterans Affairs sources, an administration official said in a conference call with reporters Thursday evening.

“The president is open to legislation that would improve the 90/10 rule so it works better for veterans,” the official said. “He’s not endorsed any particular piece of legislation, but believes this is something that deserves Congress’s attention.”

Two senators who have been pushing for more regulation of the for-profit sector, Tom Harkin of Iowa and Richard Durbin of Illinois, introduced a bill in January to change the ratio of federal aid to other income sources to 85-15, and to include veterans’ benefits with other forms of federal financial aid.

The order will also begin the process of trademarking “G.I. Bill,” a step the administration says is necessary because many for-profit colleges are using the name of the famous veterans’ tuition benefit for marketing purposes. GIBill.com, for example, looks at first like an official government website, explaining the difference between the Post-9/11 GI Bill and earlier versions and posting news from the Department of Veterans Affairs. But the list of “GI Bill” schools veterans can select includes only a narrow range of for-profit institutions. (The website’s owner is not publicly listed.)

The largest for-profit college association said it was disappointed that the president chose to act without Congress. "The fact is that the vast majority of private sector schools provide curriculum and training that prepares our men and women in uniform for successful careers in civilian life," said Steve Gunderson, president of the Association of Private Sector Colleges and Universities, in a statement Thursday night. 

The executive order applies to the Post-9/11 GI Bill as well as tuition assistance for active-duty members of the military and the Military Spouse Career Advancement Account program.