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Education benefits overstated

| Friday, Nov. 4, 2011

A Senate committee corrected a September report about veterans benefits collected by for-profit colleges because it relied on incorrect data and overstated the amount the companies received.

The Senate Health, Education, Labor and Pensions Committee mistakenly combined two years of data into one, committee chairman Senator Tom Harkin, Democrat from Iowa, said on Thursday. Eight for-profit colleges received about $626 million in veteran education benefits in the most recent academic year, instead of $1 billion as reported Sept. 22, he said.

Harkin's office, along with the Education Department and states' attorneys general, have accused for-profit colleges of exploiting students, including veterans, with aggressive recruiting tactics and misleading marketing claims. The colleges have said they provide educational opportunities to low-income, minority and older students who frequently encounter obstacles that prevent them from attending traditional campuses.

"Through a reckless rush to judgment, the committee's majority members unleashed an unwarranted tidal wave of negative publicity for our schools," the Association of Private Sector Colleges and Universities, a Washington-based group representing U.S. for-profit colleges, said in a statement.

The Post-9/11 GI Bill distributed $4.4 billion to almost 6,000 institutions educating veterans from 2009 to 2011, according to the report. The seven top recipients were for-profit colleges, even after the correction, it said.

"Upon discovering this error, HELP Committee staff re-analyzed the data and found that the central findings remain unchanged: The top 10 recipients of Post-9/11 GI Bill education benefits are the same, and eight of the 10 biggest recipients in 2010-2011 are for-profit colleges with poor rates of student success," committee spokeswoman Justine Sessions said in an e-mailed statement.

The corrected report shows the increase in dollars was slower than first reported. Revenue from veterans benefits at Apollo Group Inc., which owns the University of Phoenix, increased 73 percent to $133 million in the 2010-2011 academic year from a year earlier. The incorrect report said it almost tripled to $210 million.

Similar increases were mistakenly reported for Education Management Corp., based in Pittsburgh; ITT Educational Services Inc., in Carmel, Ind.; DeVry Inc., in Downers Grove, Ill.; Career Education Corp., based in Schaumburg, Ill.; Strayer Education Inc., based in Herndon, Va.; Corinthian Colleges Inc., based in Santa Ana, Calif.; and Washington Post Co.'s Kaplan Inc.

The committee also overstated the benefit revenue received by the University of Maryland system and the University of Texas system, the two largest non-profit recipients of veterans benefits.

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