The Biden administration recently announced a plan to forgive over $400 million in student loans based on predatory or misleading lending in the for-profit education sector. Many veterans who sought accessible, affordable college credentials at these for-profit institutions now want their money back.
The military borrowers, many of whom used the G.I. Bill or other military benefits to attend school, attended schools like ITT Technical Institute, DeVry University, the Minnesota School of Business/Globe University, or Westwood College.
An estimated 16,000 students will receive debt forgiveness through a legal provision known as borrower defense. However, former service members that used their G.I. Bill to pay for those schools may not get their benefits restored.
“We didn’t know how to pay for college,” said Alphi Coleman, a veteran who enrolled to earn benefits like the G.I. Bill. “We didn’t have counselors in our school to tell us how that was going to happen so one way I knew was the military because they hung out in our cafeterias.”
If a soldier exhausted their military benefits to pay for a bogus college, they likely won’t see any restitution. In many cases, once the soldier exhausts their military benefits for any reason, the Pentagon sees the debt fulfilled and closes the access. A typical student who cut a personal check would see restitution, though, thanks to the Biden plan.
For-profit schools accused of targeting ex-military students for their benefits
According to the nationwide nonprofit Veterans Education Success, thousands of veterans have used their educational benefits from the military at for-profit colleges.
“Unfortunately, the target has been on the back of veterans because of some unfortunate loopholes in federal law,” said Chris Madaio. Madaio is the vice president of legal affairs at Veterans Education Success.
Coleman testified to the Department of Education about the deception she experienced at for-profit school the University of Phoenix.
“I had seen marketing that said there were three- and four-star generals that went to the University of Phoenix. So I had this really high expectation of what I was going to receive,” Coleman told the government agency. “But I quickly found out that was not the case. I felt pressure to enroll from Phoenix recruiters who told me I needed to enroll quickly or I’d miss out; so I signed up right away.
“But when I arrived, I found out that new cohorts started every week. They also claimed their alumni went on to be executives; and that the school had partnerships with government agencies and companies like Microsoft and AT&T. But I never saw these or any other job placement services.”
Madaio said it’s possible to have military benefits restored. But it would probably take an act of Congress, he said.
“These benefits should not be allowed to be wasted by schools that aren’t teaching people what they need. They are lying just to get those students in the door just to suck away their G.I. money.“