Business student

Veterans in debt to students still struggle under Biden administration

A location of Everest College in Woodbridge, Virginia.


Cerena Jones served in the US Air Force from 2000 to 2005, and soon after, she used her GI Bill to attend Everest College in Dallas.

She hoped that obtaining her associate degree in business administration would be the start of a long career.

She soon realized, however, that the school had lied to her about the quality of her classes and promising to hire her after graduation. Corinthian Colleges, the founder of Everest, will later be accused of predatory and illegal practices and will file for bankruptcy.

More from Personal Finance:
Here are the colleges with the best return on investment
Fewer students go to university because of the cost
How to Maximize Your College Financial Aid

“They announced through advertisements and during the visit that they had this great career center that helps you find a job,” said Jones, 42. “It didn’t happen. My diploma is rubbish, just a piece of paper.”

Yet more than a decade later, the veteran has $ 30,000 in Everest federal student loans.

She plans to seek debt relief through the US Department of Education’s borrower defense loan discharge process, which aims to ensure that defrauded students are unharmed. But busy working and raising two children, the single mother has yet to have time to begin the application process.

“I just feel like I’m going to be stuck in this black hole forever,” she said.

Cerena Jones

Courtesy of: Cerena Jones

Under President Joe Biden, defrauded student loan borrowers, including many veterans, have seen a brutal reversal in the way their loan forgiveness requests were handled by the former Trump administration. Since Biden took office, more than $ 9 billion in student loans have been canceled and forgiveness programs have been overhauled and improved.

Yet many former military personnel who were misled by their schools are still struggling with their federal loans, advocates say.

“We want them to resolve the backlog in defending borrowers,” said Christopher Madaio, vice president of legal affairs for the nonprofit Veterans Education Success.

Many other defrauded veterans need more guidance and support to simply ask for forgiveness, Madaio said.

“It’s complicated, and even the Department of Education website doesn’t clearly state what makes a strong app versus a weak app, and what the right facts are to include.”

I just feel like I’m going to be stuck in this black hole forever.

On one level, it’s surprising that veterans are struggling with student debt.

The GI Bill essentially gives veterans a free ride to public colleges in any state, and takes much of the note at private, nonprofit schools.

However, because for-profit schools tend to have higher tuition fees than public and non-profit colleges, veterans who attend them end up having to borrow. Not all former military personnel are made aware of this reality, said Carrie Wofford, president of Veterans Education Success.

“A lot of them say, ‘The GI will cover everything, and by the way, here are some documents you need to sign,’ and it turns out they’re loans,” Wofford said. “It’s one of the many things they lie about.”

For-profit schools are preying on veterans because of their GI Bill money, Wofford said, and also because of the so-called 90/10 loophole. Under a Higher Education Act, for-profit schools are required to derive at least 10% of their income from private funds, while the remainder can come from federal aid from the US Department of Education. .

But because the GI Bill’s money comes from the US Department of Veterans Affairs rather than the Department of Education, these schools can use this aid to meet their non-federal needs.

“It was an accounting gimmick, but it made for-profit schools target veterans,” Wofford said. (The American Rescue Plan Act, the $ 1.9 trillion stimulus package passed in March, addressed that problem by closing the loophole, but the effective date is pushed back to 2023.)

All of this explains, at least in part, why about a fifth of undergraduate veterans enroll in for-profit schools, more than double the share of students who are veterans (9%), according to one. rough estimate by higher education expert Mark Kantrowitz. Despite the generous benefits of the GI Bill, at least 320,000 veterans are struggling with student loans and over 11% are in default.

Despite improvements for defrauded students under the Biden administration, Wofford said it was mind-boggling to see more requests for help not being granted when it is clear the schools in question were fraudulent. Some of these schools even remain eligible for federal funding.

“There is enough government evidence on some schools that they need to start cutting schools,” she said. “Why is this school still eligible for Federal Student Aid? Why is it still allowed to get the GI Bill [funds]? “

The White House did not respond to a request for comment.

Even for veterans whose student loans have been canceled, problems remain.

David Reyasbautista, who served in the navies from 1999 to 2003, also attended a school owned by Corinthian Colleges, which he says left him worse off.

Reyasbautista, 43, believed his studies would lead to a job at one of America’s largest automakers. “They said, ‘You will hear Chevrolet, Ford and Dodge’,” he said. “I wanted to make my children proud.” Reyesbautista, who now lives in Riverside, California, has six children.

But after graduating, he couldn’t even land a job at a local machine shop. “No one would hire me,” he said. “They were looking at my certificate and laughing.”

David Reyasbautista

Courtesy of: David Reyasbautista

This year, his borrower defense request was approved by the Biden administration and his federal student loans were canceled. But he is not eligible to use his GI Bill education benefits again. Lawyers say Congress has yet to give veterans the right to restore their GI Bill in the event of fraud, unless the school has closed or has been frowned upon for funding, and even then the rules. are narrow.

Reyasbautista wants to go back to school to learn physical education and training, but he cannot afford it. His work problems persist today and he is currently unemployed.

“It’s excruciating because I know I can use it better if I get a second chance,” he said.

He continues to plead his case with the Department of Veterans Affairs on why he should be able to return to school, and he lamented the fact that it was not easier after the government had already determined that his first school was ‘had deceived.

“Why should I fight them to get what I deserve?” He asked.

Leave a Reply

Your email address will not be published.