Obama To Sign Executive Order To Keep For-Profit Colleges From Defrauding Military Families

President Obama announced today that he will sign an executive order aimed at preventing abuse in a federal program that helps military members, veterans, and their families attend college. Under the new rule, schools will be required to provide information regarding financial aid, loan repayment plans, and credit transfers, practices that will help end abuse primarily at for-profit colleges.

The executive order will target several main areas, particularly by requiring colleges to provide the Consumer Financial Protection Bureau’s Know Before You Owe financial aid information to all students and cracking down on aggressive recruiting practices. Schools with histories of bad practices will be kept from recruiting on military bases and, through the CFPB, existing rules will be more stringently enforced and a complaint system for military students will be created.

Obama told the story of one college recruiter who visited North Caronlina’s Camp LeJeune and signed up Marines who had brain injuries “just for the money.”

“One of the worst examples of this is a college recruiter who had the nerve to visit a barracks at Camp Lejeune and enroll marines with brain injuries, just for the money,” Obama said. “These Marines had injuries so severe, some of them couldn’t recall what courses the recruiter had signed them up for. That’s appalling. That’s disgraceful. It should never happen in America.”

He continued: “They’ll say you don’t have to pay a dime for your degree but once you register they make you sign up for a high interest student loan. They say if you transfer schools, you transfer credits. When you try to do that, you suddenly find out you can’t. They’ll say they’ve got a job placement program when, in fact, they don’t. It’s not right. They’re trying to swindle and hoodwink you. Today here at Ft. Stewart we’re going to put an end to it.”

The executive order’s primary target is for-profit schools. These schools often charge exorbitant tuition prices while leaving students buried in debt and with few job prospects. Military members are among the industry’s biggest targets: in 2010, 20 for-profit companies took more than $500 million in military education benefits, primarily because taking assistance money from the G.I. allows the colleges to exploit a loophole that lets them take more loan money from the federal government. Because of these practices and others, state attorneys generals across the country are now investigating these schools.