Obama at Fort Stewart: Many for-profit colleges “are trying to swindle and hoodwink you.”

President Barack Obama and Michelle Obama are now speaking at Fort Stewart, Ga., about abuses in the for-profit college sector, which is getting an increasing share of veteran education dollars, often through deceptive marketing.

Obama described one for-profit college recruiter who visited brain-injured Marines at Camp Lejeune and enrolled them in courses.

“They are trying to swindle and hoodwink you,” said Obama. “Here at Fort Stewart, we are putting an end to it.”

He then outlined the content of an executive order that will require more disclosure from the colleges

Here is a good AP story on the issue from AJC.com:

The Obama administration wants to trademark the term “GI Bill” in an effort to shield veterans and military families being swindled or misled by schools that target their federal education benefits.

President Barack Obama is signing a wide-ranging order on Friday that partially addresses growing complaints about fraudulent marketing and recruiting practices aimed at military families eligible for federal education loans under the GI Bill.

The president and first lady Michelle Obama planned to talk to troops at the Fort Stewart Army post in Georgia, where Obama will sign an executive order mandating several new education protections for military service members.

There is little the federal government can do to shut down diploma mills, but the new protections would make it harder for post-secondary and technical schools to misrepresent themselves to military students.

The main target of the White House action is for-profit colleges and universities that market heavily to military families because of the easy availability of federal loan money under the GI Bill. Some post-secondary schools target current and former military service members using deceptive military-themed websites that appear to be government-run or connected to the GI Bill benefit system, administration officials said.

The financial regulation overhaul that Obama signed in 2010 included the creation of a Consumer Financial Protection Bureau with specific authority to protect members of the military from predatory financial practices.

The law set up an Office of Service Member Affairs to help members of the military and their families “make better informed decisions regarding consumer financial products and services.” Bills pending in Congress, largely backed by Democrats and unlikely to become law soon, would do many of the same things Obama was ordering Friday.

Obama’s order will also set a new gauge that potential students can use to calculate how much a school will really cost in tuition and fees. Schools are asked to voluntarily participate in the “Know Before You Owe” system this school year and would be required to do so next year.

Federal money, most of it through the financial aid students receive, accounts for up to 90 percent of for-profit colleges’ revenue — even more if veterans attend the school on the GI Bill. Some schools spend a quarter or more of their revenue on recruiting, far more than traditional colleges. In some cases, recruiting expenses approach what these institutions spend on instruction.

–From Maureen Downey, for the AJC Get Schooled blog

37 comments Add your comment

Atlanta Media Guy

April 27th, 2012
1:22 pm

Hey Maureen between Obama and the AP, I think I will check out a few more media sources before I get too outraged at their outrage. Lately the Dems have been famous for creating a crisis, like the college loans interest doubling, and then they browbeat the Repubs on the campaign trail. Hey folks, the Dems are the ones who wrote that bill, so the crisis was created by them and now they want you to believe they are the only ones who can change it.

I’m not a fan of the for-profit colleges, but now that Obama has brought it up I guess I need to look into it. Like the contraception/Fluke deal and every other democrat manufactured crisis of late, one must be careful what to believe.

Maureen Downey

April 27th, 2012
1:27 pm

Don't Tread

April 27th, 2012
1:32 pm

The problem is not the profit motive – the problem is the “diploma mill” attitude. There are public colleges (and high schools, for that matter) that would qualify as “diploma mills”.

John Konop

April 27th, 2012
1:51 pm

The sad part is many of the degrees from the for profit schools could be part of high school if we embraced Vo-tech education in High School. The most successful school system have an academy style approach for high school in partnership with local JC, colleges…….. If we adopted this approach over the one size fit all 4 year college or you are out failed No Child Left Behind system it would substantially fix the problem. Why not let kids track via the best track for the individual via aptitude over a one size fit all approach?


April 27th, 2012
2:05 pm

It is good to provide the military with some level of protection. It is harder to check out a college while serving your country. I’d be extra careful when looking at “colleges” that are almost exclusively housed in office park locations that could easily be gone overnight with a few moving trucks.

The other warning sign for me is the sticker cost. When it costs a state resident more to attend ____ (for profit U) than it does to attend the state’s major university, I get worried. Why is it less expensive at the place with dorms, meal plans, lots of labs & more majors?


April 27th, 2012
2:13 pm

I am thrilled that this is coming to light. I received a degree from UGA and then did some post-graduate work at University of Phoenix online, a for-profit university, b/c it was the only way I could get an advanced degree where I lived at the time. UOP was much more expensive than UGA, but they set up a school loan for me, before I could say no.

UOP said they screened candidates – a complete lie. The teachers may have had valid experience and provided good info, but we worked on teams and were graded as a group. I ended up writing virtually all the papers and doing all project work. It was clear that my teammates were completely clueless about the material and relied on me to pass. Most people were given As and Bs regardless of performance because employers will only reimburse you for those grades. When I complained to the instructor, he said “this a good learning experience because throughout your career you will have to work on teams with less skilled people.” But when you are part of a business team, those candidates have already been screened as a condition of employment.

I contacted UOP Administration and told them I was quitting. They strongly encouraged me to stay saying that I was a great asset to my classmates (no kidding… and their wallets). The young man on the phone said he had five degrees from UOP (and he was answering the 800 number during a boom in the economy). I know hiring managers who see a UOP degree and throw it in the trash, because interviews with these candidates are ridiculous.

I even went so far as to complain to AndvanceED. Their response several years ago was “we haven’t had any complaints.” First, I doubt most 20-somethings who have never attended any other institution would have the critical thinking skills or experience to recognize they were being defrauded. Second, if you don’t actually write down or store the complaints, you wouldn’t know you had any complaints! It’s a travesty that these institutions are accredited.

Howard Finkelstein

April 27th, 2012
2:26 pm

What a load. At issue is individuals taking out loans for stupid degrees, then graduating and becoming a convenient store clerk or something SUPER COOL like a Starbucks Barista or just being to lazy or being the bums they truly are and doing nothing.

Poor poor pitiful grads *sigh*. I can hear it now…”Mommy, MOMMY, Ive been accepted to first idiots academy and have an approval for my loan. I think my degree with be typewriter maintenance. What a wonderful person I am.”

Just more stupidity and irresponsiblity run rampant.


April 27th, 2012
2:27 pm

the military loves OBAMA because he wont send them to war like BUSH did for no reason.


April 27th, 2012
2:31 pm

How is it I already know the Republicans will fight Obama tooth and nail on this?


April 27th, 2012
2:41 pm

These for-profit schools are well-known for recruiting and accepting unqualified students with extravagant promises of employment after graduation. These ARE the “diploma mills.” For that reason, their graduates have an even harder time finding employment after graduation than regular college students. And when the students signed up with these for-profit schools fail to pay off their student loans, the taxpayer is stuck with them. This is a general problem not confined to the military.

William Casey

April 27th, 2012
2:46 pm

The full GI benefit should NOT be released to ANY school until the veteran has a JOB in his/her field. This would seperate the wheat from the chaff in a hurry.

Ron F.

April 27th, 2012
2:50 pm

carlos: all he has to do is say he’s for it, and suddenly they’re unilaterally against it. I bet if he told Boehner he liked his tie, the fool would burn the thing!


April 27th, 2012
2:58 pm

Of course, Mr. Obama is also pushing the idea of ever-softer terms for student loans, with taxpayers absorbing the inevitable extra losses.

This will only feed the runaway rise in college tuition fees.

And it will breed a growing resentment among not only taxpayers stuck with the bill but also those who played by the rules—and PAID BACK their college loans without the extra taxpayer help.

Attentive Parent

April 27th, 2012
3:11 pm

So how many of the USG colleges or universities have SAT minimums?

Four is what I have read. So only the USG can run diploma mills?

And that’s OK because attaining credentials is what is important, right? See Maureen’s story from earlier in the day.

Paper credentials are the whole point.

Only the public sector can offer diploma mills.


April 27th, 2012
3:13 pm

@Liberalefty. Are you sure about thar. War means getting paid. Obama means budget cuts and tricare cuts. If you really want government healthcare why dont you try it before you buy it. Obama is not loved by the majority of the military. Infact many people were forced to go to stewart today.

joe parker jr

April 27th, 2012
3:45 pm

What for-profit colleges are in the Fort Stewart area? And what diploma mills?

HS Public Teacher

April 27th, 2012
3:48 pm

For-profit colleges “bad?”

I think that for-profit k-12 is even worse – particularly when they want to take tax money from the public schools!


April 27th, 2012
3:48 pm

SAT minimums are not the only way for students to demonstrate their readiness for college entrance. And given the well-publicized problem of USG graduation rates within 6 years that range from 64% to 50% (see previous blogs about this on “Get Schooled”), I don’t think you can accuse them of being “diploma mills.”

A Conservative Voice

April 27th, 2012
3:56 pm

So, is he paying for this trip since this is so much political “Buffalo Chips”? I don’t doubt that these “for-profit” schools are out for the bucks but, he’s politicizing it and trying to “BUY’ votes.

Once Again

April 27th, 2012
4:01 pm

Many public colleges and virtually every government run K-12 school is doing exactly the same thing. Welcome to the world of government intervention in the economy. At the K-12 level it is through theft (taxation) and at the college level it is through Federal Reserve bubble dollars, cheap student loans and other financial distortions of the market.

Get an economics education FREE online at www(dot)mises(dot)org in the Austrian school of economics and never be baffled by government lies about money again.


April 27th, 2012
4:07 pm

Back in the day when common sense ruled the land, if a person got “hoodwinked”, you got back up, dusted yourself off, and chalked up one for experience. All I can say is St. Obama better lay in a good supply of pens to sign Executive Orders, because there are unscrupulous car salesmen, siding salesmen, roofing contractors, insurance salesmen, etc, etc, etc, etc, etc.

BTW, anyone else see the irony in a politician saying someone is “hoodwinking” you?

Unfunded pension

April 27th, 2012
4:30 pm

The notion that I would consult an AJC blog to find out the truth is ridiculous.

bootney farnsworth

April 27th, 2012
5:47 pm

what kind of president says “hoodwinked”?

bootney farnsworth

April 27th, 2012
5:49 pm

‘course to be fair, Mr Hope & Change knows a lot about hoodwinking people.

what did Twain say? write what you know.

Mikey D

April 27th, 2012
6:34 pm

“They are trying to swindle and hoodwink you,” said Obama.

Exactly how is this different from the swindle that Arne Duncan has been running for the past 3+ years? RTTT is a monumental hoodwink, but the president doesn’t seem to mind.

Ed Johnson

April 27th, 2012
7:24 pm

@Lee: BTW, anyone else see the irony in a politician saying someone is “hoodwinking” you?



April 27th, 2012
8:28 pm

There’s something about an “Executive Order” to fix a problem of “hoodwinking” that really bothers me… I’m not sure I can put my finger on it. I’m thinking that there should be some sort of legislation that ought to be going through both the House and the Senate that gets at the root of the problem with all student loans being used at the true diploma mills — there should be some “check” on what the students are getting for their money (reference my earlier commetns about the spiraling costs of higher ed at very legitimate schools — much less at the illegitimate schools and at the schools that shut down mid-degree). “Tweaks” could be made to the bankruptcy code to address discharge when the degrees don’t grant “benefit” — there are, I think, better, more complete, ways to “skin” the cat of the fraud that I think he may be trying to legitimately address in a very political way.

Jack in Cumming

April 27th, 2012
10:37 pm

Political grandstanding. Meanwhile jobs r a joke, Afganistan a quagmire, and GDP came in way under signing lame economic recovery despite trillions in debt.

Obama cannot run on unpopular healthcare or economy so he diverts with grandstanding like this bill or the bill that “cracks down” on oil speculators. Gas is 4 bucks due to anyone but Obama yet in 2006 bush was getting rich cause of 3 dollar oil


April 27th, 2012
11:20 pm

Good question, joe parker jr. IIRC, there are several colleges that hold classes on Ft. Stewart, with the permission and blessing of the base — or at least this was the case a decade ago.

A working Mother

April 28th, 2012
6:45 am

Don’t Tread is right.
He hit the nail on the head when he said “The problem is not the profit motive – the problem is the “diploma mill” attitude. There are public colleges (and high schools, for that matter) that would qualify as “diploma mills”.”
Most GA public schools are diploma mills.


April 28th, 2012
4:28 pm

Virtually ALL for profit schools are trying to hoodwink you.

Anonymous Prof

April 28th, 2012
9:04 pm

I have read the comments and I must say it is sad when individuals try to turn a serious issue into a dem vs. repub issue. This problem is REAL. I work with one of these for-profits. The for-profits have lost their way. Their mission statement may say that they are in the business of educating but most are now in the business of meeting numbers (warm bodies that can get federally-backed money).
I would say 70% or more of the problem is in the recruiting. Recruiters have to meet numbers or else they are terminated. In a bad economy this has led many of them to say and do unethical things. I have had a number of students tell me a recruiter told them x and I have to tell them, no that is not true. Students in many of these schools are not given academic advisors. Instead, their advisors are recruiters. In my opinion that is unethical.

In addition, some instructors at these schools have only Bachelor’s degrees with no grad school work at all. Yet, these individuals are teaching. The only thing this accomplishes is to help keep cost down. This is only one of the reasons why almost all for-profits cannot achieve regional accreditation (the accreditation most nonprofit public and private universities have).

There are a really small number of individuals for whom for-profits are right for them. I make it my duty at this point to tell students not to continue if I think they should be somewhere else. I know a number of educators that do the same.

I personally am all for a capitalistic style market. However, when government money is involved in what is clearly a loose loose situation, something needs to be done. Kudos to a president (no matter party) that brings awareness to what I am sure will be the cause of the next economic bubble to burst if something is not done soon.


April 29th, 2012
11:36 am

@ Anonymous Prof. And kudos to you for speaking out honestly about the job in which you find yourself. You clearly still have the instincts of the true educator and know what education should be. I have known several former doctoral students who got their “content” degrees and then could not find teaching positions at regular non-profit schools in this terrible job-market, and so turned to the others.

Good luck to you.


April 30th, 2012
1:05 pm

I recall looking into Univ. of Phoenix for a few courses a couple of years ago and the salesman – ahem, recruiter – gave me so many lines about the place and was so eager about the sort of funding I could expect to get that I decided to just let it go. I could not let go of reality long enough to begin the application process. And I got a lot of follow-up phone calls from them for a long time. These schools are too much concerned with the profit aspect. I’m still glad not to be involved.


April 30th, 2012
2:12 pm

And how many admins in public schools get their advanced degrees from online diploma mills? We have several at our board office who think their Ed.D. grants them sainthood and instant genius. These folks are incompetent, plain and simple, but they have a DOCTORATE! They get paid the big bucks for being incompetent while teachers are doing all the work and getting half of what these folks make. And question one of these “doctors”?? Are you kidding? The wrath of Satan is light compared to what these folks will do.



May 2nd, 2012
7:39 pm

We need to shut down the ability to earn more compensation for the on-line Ph.D. and Masters from the diploma mill — the increase salary should only be available for those degrees coming from schools truly providing a degree that will add benefit to the teacher that will be useful in the classroom and not just a degree on paper that will look okay in a frame and increase pay.


May 3rd, 2012
11:26 pm

Used to work at AIU Buckhead – 10 years – faculty were required to “volunteer” to call failed students once they were eligible for financial aid again – they even used janitorial staff for calls. Accepted students’ word that they had graduated HS. Current Dunwoody AIU officials involved. If you’re so dim, look up recent scandals of Career Education Corp – the parent co. – also own Cordon Bleu – you’d really be bleu if you had paid the tuition (or eaten the student cuisine). If you’re too stupid to do the research, you should pay the tuition yourself – the gov & taxpayers should not fork out $$$$ to for-profits charging a fortune for worthless degrees.