Bloomberg News

Obama Moves to End Deceptive School Recruiting of Veterans

April 27, 2012

President Obama speaks to U.S. military veterans during an event at the White House in Washington on April 20, 2012. Photographer: Saul Loeb/AFP/Getty Images

President Obama speaks to U.S. military veterans during an event at the White House in Washington on April 20, 2012. Photographer: Saul Loeb/AFP/Getty Images

President Barack Obama, calling the recruiting tactics of some schools trying sign up veterans “appalling,” signed an order requiring more financial disclosure to protect military members and their families.

The order will limit recruiters’ access to military facilities and require schools to provide financial aid options. The government will also seek to halt improper use on websites of the term “GI Bill,” referring to the educational benefit program for veterans.

“Sometimes you’re dealing with folks who aren’t interested in helping you,” Obama told veterans, soldiers and their families at Fort Stewart in Hinesville, Georgia, home of the U.S. Army’s 3rd Infantry Division. “They don’t care about you, they care about the cash.”

The Obama administration said some for-profit and non- profit schools recruit veterans with brain injuries, offering them limited academic support and encouraging service members and their families to take out expensive loans rather than directing them to less expensive federal student aid.

The policy isn’t designed to single out any category of schools, according to an administration official who briefed reporters on condition of anonymity last night. Still, much of the deceptive recruiting reported since 2001 has been carried out by for-profit schools, the official said.

Veterans’ Unemployment

Tens of thousands of U.S. veterans of Iraq and Afghanistan are struggling with the transition to civilian life. The jobless rate for veterans who have served since the Sept. 11 terrorist attacks was 12.1 percent last year, according to a report by the U.S. Bureau of Labor Statistics. That compares with an overall U.S. unemployment rate of 8.2 percent in March.

The president’s trip to Fort Stewart comes as he’s pressing Congress to freeze rates on certain student loans. He threatened to veto legislation passed this afternoon by the Republican- controlled House to pay for the freeze using public health funds.

While today’s trip was categorized as official business by the White House, Obama also is pivoting toward his re-election campaign with rallies planned in the battleground states of Ohio and Virginia next week.

Obama lost Georgia to Republican rival Arizona Senator John McCain by 5 percentage points in 2008. While Georgia has 16 of the 270 electoral votes needed to win, a message that Obama cares about veterans resonates beyond the state, analysts said.

‘Strong’ on Security

“It’s in the Democrats’ interest to do this even if they’re not going to generate a lot of military voters, because after 9/11 you have to show that you’re strong on national security,” said Peter Feaver, a political science professor at Duke University in Durham, North Carolina, who worked on the National Security Council under Presidents Bill Clinton and George W. Bush. “The electorate as a whole, not just the military voter, wants this.”

Before speaking, the president and first lady Michelle Obama strolled along a Fort Stewart’s Warrior Walk, which pays tribute to the 441 members of the service attached to the 3rd Infantry Division, Fort Stewart of Hunter Army Airfield who died in the wars in Iraq and Afghanistan.

Tuition Assistance

Under the order, students who take part in the Defense Department’s Tuition Assistance program must be given a “Know Before You Owe” form, created by the Consumer Financial Protection Bureau and the Department of Education, that outlines tuition and federal financial aid information.

The order also directs the registration of the term GI Bill so that websites can’t use it inappropriately to lure veterans, and it calls for the creation of a central clearinghouse for complaints.

Democrats have proposed legislation in the House and Senate to curb what sponsors of the measures call the aggressive marketing to veterans and service members of subpar academic programs by for-profit colleges.

For-profit colleges such as Apollo Group Inc. (APOL:US)’s University of Phoenix can get as much as 90 percent of their revenue from federal financial aid programs. Schools solicit troops partly because their government tuition programs are excluded from that cap.

Eight for-profit college companies received about $626 million in veterans’ education benefits in the most recent academic year, the Senate education committee, headed by Iowa Democrat Tom Harkin, said in a November report. They include the University of Phoenix, the largest chain by enrollment, and Pittsburgh-based Education Management Corp. (EDMC:US), the second-biggest.

For-Profit Colleges

The 15 largest for-profit colleges spent a combined $3.7 billion, or 23 percent of their fiscal 2009 budgets, on advertising, marketing and recruiting, according to a summary of legislation proposed in the Senate earlier this month by Harkin and Democrat Kay Hagan of North Carolina.

The president’s re-election campaign has a veterans and military family outreach program that is made up of almost 11,000 veterans and military family member volunteers.

“You haven’t heard a Democratic president talk in such glowing or laudatory terms about military service probably in two generations since Truman,” said Richard Kohn, a professor emeritus of military history at the University of North Carolina at Chapel Hill.

So far the Joining Forces initiative has led to more than 50,000 veterans and military spouses being hired by U.S. businesses and pledges from businesses to hire at least 160,000 more in the future. Participating companies include Sears Holdings Corp. (SHLD:US), Comcast Corp. (CMCSA:US) and Microsoft Corp. (MSFT:US)

The campaign is also working to better train doctors and nurses who treat military veterans suffering from combat trauma, including post-traumatic stress Disorder, and efforts to make it easier for military spouses to transfer professional licenses from state to state.

To contact the reporter on this story: Kate Andersen Brower in Washington at kandersen7@bloomberg.net

To contact the editor responsible for this story: Steven Komarow at skomarow1@bloomberg.net


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Companies Mentioned

  • APOL
    (Apollo Education Group Inc)
    • $32.19 USD
    • 0.46
    • 1.43%
  • EDMC
    (Education Management Corp)
    • $0.25 USD
    • -0.02
    • -8.0%
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