12 Nov REPORT: New Data Shows Mississippi’s For-Profit Colleges Prey On Post-9/11 Veterans

Posted at November 12, 2013 in Press Release by

Mississippi Center for Justice
For Immediate Release
Contact: Diana Lee, diana@berlinrosen.com, 646-200-5322

REPORT: New Data Shows Mississippi’s For-Profit Colleges Prey On Post-9/11 Veterans, Get Disproportionate Taxpayer Funds

Iraq & Afghanistan Veterans Spend 2-3 Times More in GI Bill Benefits at Mississippi For-Profits Than Traditional Public Colleges and Universities, But Leave with Questionable Degrees

Jackson, MS – Mississippi for-profit colleges that target veterans are taking an outsized share in taxpayer funds through the GI Bill, even as they provide a lower-quality education and have dismal graduation rates, according to a new report from the Mississippi Center for Justice. The report is based on information obtained from the U.S. Department of Veterans Affairs through a Freedom of Information Act (FOIA) request and made public for the first time.

Data that Mississippi Center for Justice obtained through its FOIA request reveals that the state’s for-profit schools are receiving a disproportionate amount of taxpayer funds through the post-9/11 GI Bill. The data shows that from August 2009 to January 2013, over $83 million in funds went to Mississippi schools. For-profit schools received almost 14% of the funds, even though they only enrolled 7% of veteran students in the state.

“The new data point to a disturbing trend: Mississippi veterans are being scammed by costly, lower-quality for-profit colleges while taxpayers foot the bill,” said report author Whitney Barkley, staff attorney at the Mississippi Center for Justice. “While taxpayer funds enrich for-profit schools, veterans who attend them often get trapped in a cycle of debt without even earning a degree or certificate. It’s a distressing national trend that is hitting Mississippi especially hard.”

The report finds that Mississippi’s Post-9/11 veterans who attended for-profits spent 2 to 3 times more of their GI Bill benefits than those veterans attending traditional public colleges and universities. The distribution of these funds was concentrated to a handful of institutions in Mississippi, including Virginia College, Antonelli and Blue Cliff. The three-year graduation rate at these three institutions from 2009-2011 ranged from 25.6% to 51%.

“As we honor those who have served our country on Veterans Day, we must remember the hidden ways that for-profit schools are preying on veterans in Mississippi and around the country,” said Barkley.

The increased demand for postsecondary education has coincided with a booming for-profit college industry, which draws heavily on taxpayer funds. Thirty percent of for-profit schools derive more than 80% of their revenue from Title IV federal loans.

Under the Post 9/11 GI Bill, which went into effect in 2009, GI Bill benefits generally include tuition, fees, housing allowances and supplies stipends for a period of up to 36 months of equivalent full-time education. Veterans have a period of 15 years to use their benefits, which are also extended to eligible family members.
The report underscores that Mississippi’s post-9/11 veterans face acute employment challenges in a state already plagued by high rates of poverty, increasing unemployment, low educational success and rampant use of predatory loans. According to the most recent annual report from the Bureau of Labor Statistics, unemployment among Mississippi’s Gulf War II era veterans has nearly doubled from 2012 to 2013, reflecting one of the highest post-9/11 veteran unemployment rates in the country.

Furthermore, the report highlights the traps of for-profit colleges for African Americans and other minority groups in particular. A 2012 Harvard study of for-profit colleges revealed that low-income minority students are much more likely to enroll in for-profit schools than any other demographic.

“We cannot allow for-profit schools to continue to drain students, taxpayers and post-9/11 veterans in particular,” said Barkley. “Right now, federal tax dollars are being spent to ‘pay for failure,’ as for-profits evade regulations through strong and intricate lobbying support. We need greater accountability through regulatory change by both the U.S. Department of Education and the state Commission of Proprietary Schools and College Registration.”

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