NPR logo

White House May Close Loophole That Sends Billions To For-Profit Schools

  • Download
  • <iframe src="https://www.npr.org/player/embed/383346101/383346102" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
  • Transcript
White House May Close Loophole That Sends Billions To For-Profit Schools

Education

White House May Close Loophole That Sends Billions To For-Profit Schools

White House May Close Loophole That Sends Billions To For-Profit Schools

  • Download
  • <iframe src="https://www.npr.org/player/embed/383346101/383346102" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
  • Transcript

It helps for-profit schools capture billions from the new GI bill — including the University of Phoenix, a school with no sports program that had bought naming rights to Sunday's Super Bowl stadium.

ROBERT SIEGEL, HOST:

Believe it or not, the Super Bowl and today's White House budget have a connection. The game was played at the University of Phoenix Stadium. University of Phoenix is a for-profit school, and it benefits from an obscure rule that lets for-profit schools get extra revenue from the federal GI bill. And here's the connection - the White House budget announced today seeks to change that rule. NPR's Quil Lawrence reports.

QUIL LAWRENCE, BYLINE: The post-9/11 GI Bill aims to get new vets into college, just like the original GI Bill did after World War II. But college is different today. There are more for-profit and online schools. Paul Reicoff is with Iraq and Afghanistan Veterans of America.

PAUL REICOFF: Eight out of 10 of the top recipients of money, or post-9/11 GI Bill, are for-profit schools. It's not Harvard. It's not Columbia. It's for-profit schools. And these schools aren't doing well.

LAWRENCE: Not doing well for their students. For many schools, fewer than 2 out of 10 graduate. At the same schools, about a quarter who do graduate can't get a job good enough to pay back their student loans. What's called the 90/10 Rule was set up as kind of a quality control. It bars for-profit schools from getting more than 90 percent of their revenue from federal aid - Pell Grants, for example. The idea is a school should be able to come up with 10 percent of its revenue from people willing to pay with their own money. The Obama administration wants to close a loophole. Right now, GI Bill funds aren't counted as federal money. Reicoff says for-profit schools, like University of Phoenix, have benefited from that exception.

REICOFF: They've taken full advantage of this loophole, and they've made a lot of money. And some of that money is being spent on naming a stadium for a university that doesn't have a sports program. That money should go to veterans.

LAWRENCE: For-profit schools say they're providing an education to people who wouldn't otherwise go to college.

MARK BRENNER: We graduated over 10,000 students who are affiliated with the military each and every year.

LAWRENCE: Mark Brenner is chief of staff at the Apollo Education Group, the parent company of University of Phoenix. He says online courses are a natural for vets. They move around a lot and sometimes have jobs and families to work around. Brenner also says the 90/10 Rule doesn't measure the quality of a school. It just shows how many at that school need financial aid.

BRENNER: The reality is if you had a 90/10 metric that was more restrictive, you would be hurting lots and lots of families who have first-generation college students.

LAWRENCE: Veterans organizations come down on both sides of the issue. The American Legion is against changing the 90/10 Rule. But this debate affects a new generation of vets - the people Paul Reicoff represent. He says Iraq and Afghanistan vets have one shot at using GI Bill money to get a good education.

REICOFF: Every single day we hear from veterans who have their GI Bill burnt out. They have a ton of debt, and they have a degree they can't use. And they feel like they were not getting the most out of their money.

LAWRENCE: Advocates hope changing the rule will force for-profit schools to compete in the market and offer a better education for vets. But it's up to Congress to decide whether to take up the Obama administration's suggestion. Quil Lawrence, NPR News.

Copyright © 2015 NPR. All rights reserved. Visit our website terms of use and permissions pages at www.npr.org for further information.

NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.