WASHINGTON – A recent federal review found a troubling trend: Veterans reported college advisers had led them to believe the government would cover the cost of their education, only to find out later that student loans would be necessary.
So the U.S. Department of Education is warning the nation’s colleges not to swindle American veterans, and it’s inviting vets who have been deceived to come forward with their experience.
The warning, issued Wednesday morning, marks one of the first public actions from a newly restarted enforcement unit within the Education Department. That office is meant to safeguard taxpayer money and ensure students get the education they pay for.
Kristen Donoghue, the head of the recently restarted unit, said the bulletin could help prevent the predatory behaviors that may leave some with tens of thousands in debt, but also serves as a reminder that “there’s a cop on the beat.”
Borrowers who feel they were misled into taking out loans should submit a complaint to the Federal Student Aid office.
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The return of the “enforcement unit” comes after former Education Secretary Betsy DeVos had deprioritized the office. Under DeVos, the government also rejected tens of thousands of people seeking financial relief and saying their colleges misled them. The Education Department was then the subject of a class-action lawsuit that remains ongoing.
In October, the Biden administration announced it would again create the office and said Donoghue, who previously had worked for the Consumer Financial Protection Bureau, would lead it.
As of February, the Education Department has sent back nearly $2 billion to students who were able to prove their schools misled them. Most recently, the agency sent millions of dollars to students who were defrauded by DeVry University and other colleges that have since closed. But the Department still had a backlog of nearly 88,000 applications as of September.
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That review of borrowers’ claims highlighted the pattern involving veterans and the GI Bill, which promises U.S. military veterans around four years of college tuition, plus an allowance.
In some cases, the department said, students even reported loans were taken out in their name without their knowledge. The agency warned that schools found misleading students could lose access to federal money.
Large debt loads would especially be a surprise to veterans who were told the GI Bill would cover the cost of their education. The program is generous, but doesn’t necessarily cover the cost of attending every institution. It does cover tuition for public colleges and up to $26,000 at private institutions per academic year. Even with those limitations, the program can fully cover the cost of tuition at roughly 5,600 colleges.
Yet Veterans Education Success, a nonprofit advocacy group, has received reports from thousands of student veterans over the past eight years who said they were deceived into taking out student loans.
“What is so frustrating to student veterans who discover these loans is that they know their hard-earned GI Bill would cover the full tuition and fees at any public university in the country, as required by federal statute, with a housing and book allowance on top of it,” a report from the nonprofit reads. “In other words, they have no need for loans.”
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The Education Department’s warning may not satisfy student advocates who have been pushing the government to do more to rein in the behavior of predatory institutions. For example, no school is named in the department’s letter, and no enforcement actions, such as withholding universities’ ability to access federal money, have been taken.
But the bulletin is also notable in that it doesn’t limit its reach to for-profit colleges, the type of institution most commonly the target of government oversight. Donoghue said the department had spotted the trend across “a variety of different types of institutions.”
She said the agency is focused on investigating predatory schools, though she couldn’t talk about specific cases that have been launched.
USA TODAY recently reported the Education Department had sent an inquiry to Colorado Technical University related to its recruitment practices, including alleged misrepresentations of aid available to veterans.