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Protecting Veterans from Predatory Practices: An Overview of “Know Before You Owe”


Recently, President Obama signed an Executive Order that is aimed at protecting military service members, veterans, their spouses and families from what he called “aggressive and deceptive targeting by educational institutions.”

Since the Post-9/11 GI Bill became law, reports of for-profit career colleges behaving badly became increasingly widespread. In his address, the President described institutions who have heavily recruited veterans with serious brain injuries without providing academic support or counseling; or who have steered military families toward taking out high-cost institutional loans rather than encouraging these families to apply for Federal aid first; and who have not disclosed meaningful information about service members’ graduation records and their ability to succeed in the workforce.

Of the ten educational institutions who collected the most Post-9/11 GI Bill benefits between 2009-2011, eight were for-profit schools; six schools had undergraduate student withdrawal rates that were higher than 50 percent. Without proper support for military students, both active duty, reservists and veterans, our service members are not set up to succeed in their post-military  endeavors.

To address concerns voiced by veterans, service members and military families, and to protect those who serve our country from predatory marketing practices, the President issued an Executive Order — some press releases say this was released last April, others say October - that places stricter requirements on educational institutions’ information disclosure, recruiting, access to military installations and support services. The Executive Order also establishes a centralized complaint system for students who receive educational benefits.

The Executive Order will apply to the Department of Veterans Affairs, the Department of Defense, the Education Department, the CFPB and the Department of Justice as well as the thousands of educational institutions who participate in the variety of military and veteran education benefits, including the GI Bill, Tuition Assistance Program, and Military Spouse Career Advancement Account Program (MyCAA).

Some of the Order’s highlights:

  • Information Transparency: The Executive Order will require that the roughly 2,000 higher education institutions participating in the DoD’s Tuition Assistance Program and the nearly 6,000 schools who participate in the GI Bill program provide all students with a copy of the Know Before You Owe financial aid form. The single-page form acts as a budget worksheet, with places to tally the cost of attendance, funding support, and options to pay net costs. Much like its housing counterpart, the “Know Before You Owe” form is designed to help give students a realistic picture of the cost of attending school and help them pursue resources that are the best for them.

    The VA will post on their website a list of schools that receive GI Bill benefits and agree to adhere to the Executive Order. Schools are also now required to provide information about school performance, veteran graduation rates, key financial aid documentation, and other consumer protection information before students use their military education benefits. They will also now be required to provide more detailed reporting on their compliance with military benefits provisions as well as student performance.

  • Crackdown on On-Base Recruiting Practices: The Executive Order now requires the DoD to publish a set of requirements for educational institutions that they must meet before they are permitted to have access to military installations for recruiting purposes. This is intended to protect service members from aggressive and deceptive marketing efforts by educational institutions.
  • Centralized Educational Benefits Complaint system: To ensure the appropriate agencies receive information and documentation needed to enforce proper compliance with military benefits, the VA, DoD, and ED will collaborate with the CFPB and Department of Justice to form a centralized feedback system for students who receive military educational benefits.
  • Support Services for Service Members and Veterans: Schools that participate in military education benefit programs for current service members and veterans must provide proper academic and financial aid counseling services to meet these students’ unique needs. They must provide staff that are familiar with the VA and DoD programs as well as offer military students the flexibility to easily re-enroll or receive a refund if their military service duties require them to leave school.
  • Strengthen Enforcement Functions: In order for all of these directives to work properly, the Executive Order requires that the VA and DoD beef up the compliance and enforcement functions within their ranks. This will give them the ability to more effectively investigate and act on complaints of impropriety. Finally, the Executive Order calls for trademark registration and protection of the term, “GI Bill,” which would restrict the use of the term and allow for increased oversight of when and where it is applied.

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