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Grants help veterans misled by for-profit colleges

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Mae McGarry
is among 11 military veterans who have received a grant from the Veterans' Student Loan Relief Fund.

A new grant program is providing some assistance to veterans who have been burned by false promises from some for-profit colleges.

The Veterans’ Student Loan Relief Fund has awarded grants of up $5,000 each to 11 veterans in September, and applications for the second round are due Dec. 15.

The fund was set up to help eligible vets “dig out from under the debt burden imposed by certain predatory for-profit colleges,” according to a news release from the fund.

The program was launched by the Kisco Foundation and is being administered by Scholarship America. The initial investment is $150,000, said Matthew Boulay of the Kisco Foundation, which was established by Jerome Kohlberg, founder of the Kohlberg Foundation and a strong advocate for veterans’ benefits.

A growing number of military veterans who are dissatisfied with for-profit colleges are transferring to community colleges. However, the veterans often learn that they have used up their eligibility for federal student grants and must take loans to continue their education. The new fund is designed to ease some of that financial burden.

“With these grants, we are helping student veterans who were promised high-quality educations and guaranteed jobs by various for-profit colleges,” said Boulay, a veteran of the Iraq war who directs the grant program. Many of these veterans “not only exhausted their GI benefits but also built up mountains of student loan debt while only receiving non-transferable credits, worthless degrees or no degrees at all.”

Huge debt load and no degree

One of the vets who received a $5,000 grant from the fund is Mae McGarry, who had incurred a $25,000 debt attending a proprietary college for nearly three years while pursuing a bachelor's degree in criminal justice and psychology.

"I was crushed when I found out that most employers would not accept my degree because it didn't come from a certified institution," said Mcgarry, who served in Iraq in 2004 and 2005. “I wasted all my dollars and all my GI bill going to that school."

Now, her credits aren't transferable.

“Not only was I swindled out of my benefits, my whole family was,” she added. McGarry’s husband was downsized out of a job, and her children, ages 14, 13 and 8, are relying on her to get an education so she can get a better-paying job.

Another $5,000 grant went to Chad Putnam, an Air Force veteran who served in Iraq, and wanted to start a new career in 3D design. When he enrolled in a for-profit art school, he said, “I didn’t understand the concept of for-profit vs. nonprofit schools. They said they had a 94 percent job-placement rate and made it seem like they had a lot of connections in the industry.”

The tuition was $32,000 a year, and “the quality of education wasn’t there,” he said. “After two years, I started to realize a lot of the stuff they were teaching us was outdated by as much as six or eight years; that’s a lifetime in my field. They didn’t have the contacts, and the outplacement rate in my program was only 38 percent.”

After unsuccessfully trying to get a job in the entertainment industry in Los Angeles, Putnam is now working in an unrelated field and taking art classes at Lincoln Land Community College in Illinois, “where the cost is a fraction of what I was paying before.”

He still owes $45,000 in student aid debt but isn’t required to make payments as long as he’s still in school.

Tip of the iceberg

The veterans who applied for grants represent a small proportion of those who have been defrauded, Boulay said. 

“We’re just seeing the tip of this iceberg,” he said. “Given military culture, it’s hard to stand up and say ‘I was defrauded and I was misled.’ As some vets tell their stories, others will step up.”

Boulay hopes the growing attention on this issue will lead to better laws to protect veterans from unscrupulous practices by for-profit colleges.

The Veterans’ Student Relief Fund works with the University of San Diego’s Initiative to Protect Student Veterans, which helps vets file complaints and resolve disputes with for-profit colleges.

A website, “Know Before You Enroll,” provides information to help service members and veterans make informed choices about their education. Veterans who have been misled by a for-profit school can file a complaint on the website, which is a partnership of the New York Mayor’s Office of Education, Iraq and Afghanistan Veterans of America, Student Veterans of America, University of San Diego Legal Assistance and Scholarship America.

A report released in July by the U.S. Senate Health, Education, Labor and Pensions Committee documented abuses in the for-profit education sector, including overpriced tuition, predatory recruiting practices, soaring dropout rates, billions of taxpayer dollars spent on aggressive marketing and advertising, and companies gaming regulations to maximize profits.

According to the report, associate and certificate programs at for-profits cost four times more than comparable programs at community colleges. The Senate committee analyzed data from 30 for-profit higher education companies and found that 64 percent of students who had enrolled in associate degree programs in 2008-09 had withdrawn by mid 2010 with no degree.

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