Antonio Luna thought he had discovered his next chapter when he left his base in North Carolina. Because recruiters were permitted to enter his base and make direct student pitches, he enrolled at DeVry University after serving in the Marines and earning his benefits. He remembered that particular detail. They had to be legitimate if the military allowed them entry. He realized that trust had cost him four years by 2018, when he had a bachelor’s degree but was unemployed in his field.
His tale is not unique. It resembles a template. The reasons behind for-profit colleges’ decades-long construction of entire recruitment pipelines centered around veterans are not particularly enigmatic. Veterans are now practically a commodity in the industry due to a peculiarity in federal law, and the GI Bill is a consistent, government-guaranteed source of tuition money. Reading the Senate investigations and the Government Accountability Office’s undercover reports gives the impression that no one in those boardrooms was considering a Marine corporal at all. Ratios were on their minds.
The ratio under consideration is the 90/10 rule, a law intended to safeguard taxpayers. Federal aid cannot account for more than 90% of a for-profit college’s total revenue. Reasonable enough. However, since GI Bill funds were never taken into account when calculating federal aid, each veteran who enrolled essentially made it possible to enroll nine more students who would then be able to pay with regular federal loans. Veterans, according to Holly Petraeus, who oversaw service member affairs at the Consumer Financial Protection Bureau, are “dollar signs in uniform.” It was accurate, too.
The recruiting strategies are so well-documented that the trends are nearly boring. After testing the system, a VFW employee got over seventy calls in four days. In one particularly depressing instance, Business Week revealed that Ashford University had enrolled a Marine recuperating from a traumatic brain injury who was unable to recall which course he was enrolled in. At fifteen sizable for-profit schools, GAO undercover agents pretended to be prospective students. Each and every one of them deceived them. Some instructed them to completely fabricate loan applications.
The jurisdictional maze that underlies this makes it challenging to resolve even now. As it did with DeVry, the Department of Education may discover that a school has deceived its pupils. Federal loans may be canceled. However, GI Bill benefits are administered by Veterans Affairs, and the VA lacks the power to recover funds from a dishonest college or reinstate lost benefits to a veteran. Therefore, if Luna had taken out any federal loans, they would be gone. He is no longer eligible for the GI Bill, which he actually used for four years.
The 90/10 loophole was eventually closed by Congress in 2021; this was the kind of remedy that ought to have been implemented twenty years earlier. The implementation process has been slow. It’s still unclear how much of the original intent will survive the regulatory process, but lobbyists have shown up in force, demanding exemptions and carve-outs. According to the office of Representative Delia Ramirez, her bill to reinstate lost benefits could help at least 60,000 former students.
It’s difficult to ignore how long this has been going on. After World War II, the first wave of veterans was deceived. Eighty years later, the marketing has shifted online and the school names have changed, but the fundamental structure of the program has hardly changed. As you watch it develop over several decades, you begin to question whether the issue was ever truly a loophole or if it was just a feature that no one felt was urgent enough to fix.
