WASHINGTON — A recent federal review found a troubling trend: Veterans reported college counselors led them to believe the government would cover the cost of their education, only to find out later that student loans would be needed.
For example, the US Department of Education warns colleges nationwide not to scam US veterans, and it invites veterans who have been cheated to share their experiences.
The warning, issued Wednesday morning, marks one of the first public actions by a recently restarted law enforcement unit within the Department of Education. This office is supposed to protect taxpayers’ money and ensure that students get the education they pay for.
Kristen Donoghue, the head of the recently restarted unit, said the bulletin could help prevent predatory behavior that could leave tens of thousands in debt, but also serves as a reminder that “there’s a cop on the blow”.
Borrowers who believe they have been misled into taking out loans should file a complaint with the federal student aid office.
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The return of the ‘enforcement unit’ comes after former education secretary Betsy DeVos deprioritized the office. Under DeVos, the government also rejected tens of thousands of people seeking financial aid and saying their colleges misled them. The Ministry of Education was then the subject of a class action which is still ongoing.
In October, the Biden administration announced it would create the office again and said Donoghue, who previously worked for the Consumer Financial Protection Bureau, would head it.
In February, the Department of Education returned nearly $2 billion to students who were able to prove their schools misled them. More 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 in September.
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This review of borrower claims highlighted the pattern involving veterans and the GI Bill, which promises U.S. veterans about four years of college education, plus a stipend.
In some cases, according to the department, students have even reported that loans were taken out in their name without their knowledge. The agency warned that schools found misleading students could lose access to federal money.
High debt load would come as a particular surprise to veterans who were told that the GI Bill would cover the cost of their education. The program is generous, but does not necessarily cover each institution’s attendance fees. It covers tuition for public colleges and up to $26,000 at private institutions per academic year. Even with these limitations, the program can fully cover tuition at approximately 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 tricked into taking out student loans.
“What is so frustrating for veteran students who find out about 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 like required by federal law, with an additional housing and book allowance,” reads a report from the nonprofit organization. “In other words, they don’t need loans.”
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The Department for Education’s warning may not satisfy student advocates who have pushed the government to do more to curb the behavior of predatory institutions. For example, no schools are named in the department’s letter and no enforcement actions, such as denying universities’ ability to access federal money, were taken.
But the report card is also notable for not limiting its scope to for-profit colleges, the type of institution most often targeted by government oversight. Donoghue said the department spotted the trend in “a variety of different types of institutions.”
She said the agency is focused on investigating predatory schools, though she couldn’t speak to the specific cases that have been launched.
USA TODAY recently reported that the Department of Education sent an investigation to Colorado Technical University regarding its recruiting practices, including misrepresentations about assistance available to veterans.