Obama Issues Executive Order to Crack Down on Deceptive Recruiting of Vets

President Obama issued an executive order Friday that ties military and veteran education benefits to marketing and recruitment practices at postsecondary institutions. The measure also calls for the establishment of new outcome measurements, financial disclosure requirements and enhance enforcement and compliance mechanisms.

"To ensure our service members, veterans, spouses, and other family members have the information they need to make informed decisions concerning their well-earned Federal military and veterans educational benefits, I am directing my Administration to develop Principles of Excellence to strengthen oversight, enforcement, and accountability within these benefits programs," Obama’s executive order states.

The principles would ensure that educational institutions receiving funding through Federal military and veterans educational benefits programs would:

  • Provide meaningful information about the cost and quality of educational institutions, to assist service members, veterans, spouses, and other family members in making choices about how to use their Federal educational benefits;
  • Prevent abusive and deceptive recruiting practices that target the recipients of Federal military and veterans educational benefits; and
  • Ensure that educational institutions provide high-quality academic and student support services to active-duty service members, reservists, members of the National Guard, veterans, and military families.

Programs encompassed by the principles include Post-9/11 Veterans Educational Assistance Act of 2008 (Post-9/11 GI Bill) and educational benefits in the Department of Defense's Tuition Assistance Program. The principles would require institutions to:

  • Provide prospective students, eligible to receive military educational benefits, with a personalized and standardized form, prior to enrollment. The form would include total cost, including tuition and fees, the amount covered by military education benefits, eligible financial aid, estimated student loan debt upon graduation, institutional outcomes and other comparative data.
  • Provide information about the availability of federal financial aid before packaging or arranging private student loans or alternative financing programs.
  • End fraudulent and unduly aggressive recruiting techniques on and off military installations, as well as misrepresentation and payment of incentive compensation.
  • Obtain the approval of the institution's accrediting agency for new course or program offerings before enrolling students in such courses or programs, provided that such approval is appropriate under the substantive change requirements of the accrediting agency;
  • Allow service members and reservists to be readmitted to a program if they are temporarily unable to attend class or have to suspend their studies due to service requirements, and take additional steps to accommodate short absences due to service obligations, provided that satisfactory academic progress is being made by the service members and reservists prior to suspending their studies;
  • Agree to an institutional refund policy that is aligned with the refund of unearned student aid rules applicable to Federal student aid provided through the Department of Education under Title IV of the Higher Education Act of 1965.
  • Provide educational plans for all individuals using military educational benefits that detail the requirements necessary to graduate and the expected timeline of completion.
  • Designate a point of contact for academic and financial advising (including access to disability counseling) to assist service member and veteran students and their families for completion and job searches.

The order tasks the Department of Education (ED), the Department of Defense (DoD) and Veterans Affairs (VA), in consultation with the Director of the Bureau of Consumer Financial Protection (CFPB) and the Attorney General, to develop a plan for implementation of these principles and development of consumer protection tools to provide materials and comparative information to service members.

The President also calls on ED, DoD and VA, in consultation with CFPB and the Attorney General, to submit a plan to strengthen enforcement and compliance mechanisms within 90 days of Friday’s order. Such a plan would include a centralized complaint system and procedures for processing complaints, program reviews and increased monitoring of websites and programs for deceptive, fraudulent and misleading practices.

The order comes on the heels of legislation introduced by Senate Health, Education, Labor and Pensions (HELP) Committee Chairman Sen. Tom Harkin (D-IA) that would require education counseling services for every veteran eligible for education assistance from the Department of Veterans Affairs (VA), and legislation introduced by Sens. Harkin and Kay Hagan (D-NC) that would prohibit the use of revenues derived from the Title IV federal student aid programs (such as Pell Grants and  Federal Direct Student Loans), military and veterans education benefits and other forms of federal student aid by postsecondary institutions for advertising, marketing and recruitment practices. 

"Since the Post-9/11 GI Bill became law, there have been reports of aggressive and deceptive targeting of service members, veterans, and their families by some educational institutions," Obama’s order states. "For example, some institutions have recruited veterans with serious brain injuries and emotional vulnerabilities without providing academic support and counseling; encouraged service members and veterans to take out costly institutional loans rather than encouraging them to apply for Federal student loans first; engaged in misleading recruiting practices on military installations; and failed to disclose meaningful information that allows potential students to determine whether the institution has a good record of graduating service members, veterans, and their families and positioning them for success in the workforce."

An analysis of VA data, by the Senate HELP Committee, shows that of the $4.4 billion in VA higher education benefits disbursed to 5,985 institutions in the 2010-11 academic year, more than 37 percent went to for-profit education companies. The HELP Committee found that several colleges with high dropout rates and low graduation rates devoted as much as 30 percent of their revenue to advertising, marketing and recruiting.


Publication Date: 4/30/2012

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