Senators Condemn For-Profit Colleges' Use of Military Tuition Aid

June 12, 2013

[Updated (6/12/2013, 6:26 p.m.) with comment from DeVry University.]

Two Democratic senators used a Congressional hearing on Wednesday to condemn for-profit colleges as preying on active members of the armed forces to receive federal tuition aid by increasing enrollments but ignoring academic quality.

At the hearing, before the defense appropriations subcommittee, Sen. Richard J. Durbin of Illinois and Sen. Jack Reed of Rhode Island called for stricter accreditation standards and criticized for-profit universities like DeVry as using slick marketing tactics to get a larger cut of federal dollars.

The hearing seemed to revive Senator Durbin's efforts to pressure the for-profit sector to increase value for military members after he tried last year to reduce the percentage of federal dollars those universities could keep as income.

Now Mr. Durbin focused on improving standards at the universities eligible to receive the $568-million that the U.S. Department of Defense budgets for military tuition assistance.

"This program needs to be improved, and I think it can be," he said. "We need to take a hard look, starting with accreditation. Some of these schools should not be accredited. There ought to be some policing" within the for-profit sector.

Federal law makes military tuition assistance an exception to the "90/10" rule, which allows for-profit colleges to receive no more than 90 percent of their revenue from federal sources. That exception has led Democratic lawmakers to raise their eyebrows at the high number of service members at those colleges.

Testimony at the hearing most critical of for-profit colleges came from Christopher Neiweem, an Iraq War veteran who worked as a recruiter for DeVry University. Mr. Neiweem said management at DeVry scolded recruiters if they could not persuade service members and veterans to enroll, creating "a business culture that emphasized hasty enrollment over student needs."

"It's a profit-driven industry," he said. If applicants "had an objection, we were supposed to work through it."

In a response after the hearing, a DeVry spokesman, Ernie Gibble, said that "veterans and active-duty military personnel choose DeVry University for the same reason as other nontraditional students—we offer quality academics and student services with flexibility to meet their busy schedules."

Steve Gunderson, president of the Association of Private Sector Colleges and Universities, a trade group of for-profit institutions, contended at the hearing that poor-performing universities existed in every part of higher education and that the senators were demonizing the for-profit sector.

Mr. Gunderson, a former congressman, also cited the federal government's insufficient data-collection systems as a barrier to proving which colleges had served students best, and denied that for-profit colleges had a financial incentive to enroll service members.

Terry W. Hartle, senior vice president of the American Council on Education, urged the Defense Department to work more closely with the U.S. Department of Education to track colleges' performance.

"All of us have come to realize in the last few years," he said, "that there was not the attention paid to the outcomes and the impact on the individual service members that I think we should have."