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For-profit schools accused of taking advantage of veterans

Posted at 6:34 PM, Feb 21, 2022
and last updated 2022-02-24 07:12:19-05

PHOENIX — Veterans who used their G.I. Bill or other benefits to pay to attend for-profit colleges are fighting to get their money back.

Recently, the Biden administration announced plans to forgive more than $400 million in student loans.

Those borrowers attended for-profit schools like DeVry University, ITT Technical Institute, the Minnesota School of Business/Globe University, and 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 same schools may not get their benefits restored.

"We didn't know how to pay for college," said Alphi Coleman, an Army veteran who joined the military to help pay for college.

"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," she said.

Coleman was a reservist working full-time for the military and used her G.I. Bill at the University of Phoenix which is a for-profit college based in Arizona.

It was not one of the schools where loans were forgiven but it has been accused of wrongdoing before.

"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 and quickly found out that was not the case."

Last week, Coleman testified to the Department of Education about the problems she faced as a student:

"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."

Other veterans have spoken out in support of the university.

"Unfortunately, many politicians are telling me where I can go to school. I attempted to go to a community college, but I found University of Phoenix worked better for me," said Josh Guzon, a Marine Corps veteran.

"When you limit choices for veterans, you hurt me and my family," he added.

In 2019, the University of Phoenix agreed to a settlement with the FTC after the government accused them of luring students in with ads that falsely touted career opportunities for its students with national employers like AT&T, Yahoo! and Microsoft.

A link to one of the videos can be found here.

A spokesperson for the school said "The ads were not deceptive. The FTC found no evidence of wrongdoing on the part of UOPX, the FTC did not take this matter into a court of law, and UOPX admitted no wrongdoing and chose to settle with the FTC to avoid a protracted court battle that would have distracted resources from our mission to serve working adults achieve their education and career goals."

Per the settlement, the school had to pay $50 million in direct payments for some students and cancel an additional $141 million in balances students owed directly to the school.

"And I know the tactics they had been accused of doing is what they had done to I was very hopeful that with that lawsuit I would get some kind of justice," Coleman said.

According to her, she exhausted her G.I. Bill paying for school.

Meanwhile, groups like Veterans Education Success told ABC15 she's not alone.

According to the nationwide nonprofit, 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, the vice president of legal affairs and Veterans Education Success.

When asked about the accusations, a spokesperson for the University of Phoenix sent the following statement:

“University of Phoenix (UOPX) is proud of the opportunities and outcomes we’ve been able to provide our active duty and veteran students and alumni. UOPX has been a certified Veteran Supportive Campus by the Arizona Department of Veterans' Services since 2019 and, thus, has met the AzDVS C.A.R.E. criteria that demonstrate our commitment to providing support to student veterans, and veteran faculty and staff, for a positive and successful education experience. It’s unfortunate ABC15 decided to run a story based primarily on one person’s claims without speaking to any of the thousands of military affiliated students we help every year. We applaud and honor these patriotic Americans for serving our country and we cherish being part of their educational and career journeys."

Madaio said it's possible to have their benefits restored but it would probably take an act of Congress.

Still, he's urging veterans impacted by for-profit schools to come forward.

"These benefits should not be allowed to be wasted by schools that are not teaching people what they need to teach them and are lying just to get those students in the door just to suck away their G.I. money," he said.

Coleman said if she's able to get her G.I. Bill back she would go to a more reputable college.

"I volunteered for this, yes but I volunteered based on the promise of opportunity and I feel like that was taken from me," she said.