Veterans Left Behind: How Oversight Failures in VA-Approved Education Programs Put Thousands at Risk (Michael S. Hainline)

[Editor's note: Michael S. Hainline is a member of Restore the GI Bill for Veterans.]

Veterans across the country rely on the Department of Veterans Affairs’ (VA) approval system to ensure their education and job training programs are safe, legitimate, and lead to meaningful employment. Yet, thousands have been failed by a system riddled with oversight gaps, conflicting interests, and regulatory loopholes that allow unsafe equipment, poor training, and deceptive schools to remain approved — often at great personal and financial cost to the veterans and taxpayers.

I know this all too well. As a former military police officer who trained as a truck driver in 2016 under a VA-approved program, I was exposed to dangerous, poorly maintained equipment that ultimately caused me to lose the use of my right arm for over a year, a disability I will carry for life. 

Despite repeated complaints to the program staff and the assigned State Approving Agency (SAA), the official body responsible for oversight, my concerns were dismissed, and no corrective action was taken until years later — and only after significant evidence surfaced.

Unsafe Equipment Ignored

During my class, veteran student Mike and I, and non-veteran students Dustin & Richard, discovered that the landing gear on the 1977 Stoughton trailer assigned for training was missing an axle and four wheels. I reported this to the staff, who admitted the equipment was faulty but took no timely corrective action. A veteran student later informed me that the school replaced the landing gear on a similar 1987 Great Dane trailer sometime after our class ended, contradicting official reports submitted to the VA and state approving agencies that claimed no issues existed.

To confirm these claims, I located the trailer used in program advertising and compared photos taken during and after our training. The landing gear had indeed been replaced—freshly painted and altered, as confirmed by Great Dane Trailers’ manufacturer. 

The trucks used for training showed similar problems. According to Vehicle Identification Numbers, three trucks had modifications—such as frame cutting between tandem axles—that Daimler Trucks North America (the manufacturer) neither recommended nor approved. Federal Motor Carrier Safety Administration guidelines were not followed, creating additional safety concerns, per conversations with the Federal Motor Carrier Safety Administration. 

Systemic Oversight Failures

These issues highlight a broader problem: the State Approving Agencies, under contract with the VA, are failing to provide adequate oversight and ensure program quality. The VA Office of Inspector General’s 2018 report (OIG Report #16-00862-179) found that 86% of SAAs did not sufficiently oversee educational programs to ensure only eligible, high-quality programs were approved. The report estimated that without reforms, the VA could improperly pay out $2.3 billion over five years to subpar or fraudulent institutions.

Alarmingly, the VA Veterans Benefits Administration (VBA) is restricted in its ability to question or audit the reports submitted by SAAs. There is no mechanism for veterans to challenge or appeal SAA findings, effectively leaving veterans powerless within a system that is supposed to protect them.

Veteran Service Organizations’ Silence

I sought help from veteran service organizations but found little interest in addressing these critical problems. The American Legion initially responded to my outreach in 2017, engaging in conversations and phone calls. However, within months, communication ceased without explanation. Attempts to meet with American Legion leadership and their legislative contacts, including Dr. Joe Wescott—an influential consultant on veterans’ education—were unsuccessful. Dr. Wescott dismissed concerns about the integrity of the SAA’s targeted risk-based reviews, citing that schools typically fix problems before SAAs visit, and failed to investigate conflicts of interest between report authors and SAA officials.

At the 2024 American Legion convention, a planned meeting between a fellow veteran and Legion leadership was abruptly canceled. Meanwhile, other veteran groups such as Veterans of Foreign Wars (VFW), Disabled American Veterans (DAV), and Veterans Education Success (VES) showed engagement, but the American Legion and Student Veterans of America remained unresponsive.

The American Legion’s own 2016 Resolution #304 warned of the exact issues I and countless other veterans have endured: deceptive practices by some education providers, poor accreditation standards, and underfunded and understaffed SAAs unable to enforce proper oversight.

A Cycle of Scandal

Congressional staff admitted privately that veterans’ education legislation rarely progresses without support from key players like Dr. Wescott and the National Association of State Approving Agencies (NASAA), whose leaders have repeatedly declined to meet with veterans raising concerns. These complex relationships between SAAs, VA officials, veteran groups, and legislators perpetuate a “cycle of scandal” that leaves veterans vulnerable and taxpayers footing the bill.

In 2023, a combat veteran attending the same program I did reported similar frustrations: only one of three trucks was roadworthy, severely limiting practical training time for a full class of students. Despite numerous documented complaints, the NASAA president refused to meet or discuss these issues.

The Human Cost

Beyond financial waste and bureaucratic failures, real human harm occurs. My injury, caused by training on unsafe equipment, robbed me of a year of mobility and continues to affect my life. Thousands of veterans have lost their G.I. Bill benefits, incurred debt for worthless or limited degrees, or been misled about their job prospects after completing programs approved by the very agencies meant to protect them.

The internet is rife with investigative reports exposing waste, fraud, and abuse in VA-approved programs. Headlines like “School Scammers Are Robbing Veterans and the Government Blind” and “For-Profit Colleges Exploit Veterans’ G.I. Bill Benefits” are far too common.

A Call for Reform

Despite these glaring failures, meaningful reform remains elusive. The VA OIG report and numerous investigations call for increased accountability, transparency, and cooperation between the VBA, SAAs, veteran service organizations, and Congress. Veterans deserve a system that genuinely safeguards their education and wellbeing.

My fellow former veteran students and I have organized online and turned to media outlets to break the silence. It’s time for the public and policymakers to hear our stories—not just slogans and “catchy” legislative titles that fail to restore lost benefits or improve program quality.

We veterans demand change—because we have earned more than empty promises and a broken system that leaves us behind.

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Michael S. Hainline is a veteran and advocate living in Pensacola, Florida. He served in active duty and reserve military components and now works to expose the failures of oversight in VA-approved education and job training programs. He can be reached at hainline1962@gmail.com.

Failure to Communicate: VA Office of Inspector General no longer accepting emails and VA chatbot has no answers.

The Department of Veterans Affairs, Office of Inspector General (VA OIG), is no longer accepting tips from veterans who have been ripped off by predatory subprime colleges--at least not via email. The Higher Education Inquirer, at one time, was an important source for information for the VA OIG, but the VA's watchdogs stopped corresponding with us a few years ago for no apparent reason. This failure to communicate is part of a longstanding pattern of indifference by the US Government (VA, DOD, ED, and DOL) and veterans' organizations towards military servicemembers, veterans, and their families who are working to improve their job skills and job prospects.   

VA's chatbot also has much to be desired.

DOD, VA Get Low Grades for Helping Vets Make College Choices

The Department of Defense (DOD) and the Department of Veterans Affairs (VA) are tasked with helping servicemembers and their families make successful transitions to civilian life.

The Department of Defense offers college classes on base through their education centers. They also provide free education opportunities through DOD Tuition Assistance (TA). DOD offers a tool called TA Decide to help servicemembers choose schools and a short series of classes for outgoing servicemembers, called the Transition Assistance Program (TAP). The US Army also has Army University which puts all military education in one place.

VA claims to offer individual counseling for transitioning servicemembers and veterans seeking information about post-military careers and education. This includes a career tool called Career Scope and an online tool for selecting schools, called the GI Bill Comparison Tool.

How well are these education and career programs working? It would certainly appear from the available data that DOD and VA are failing many servicemembers, veterans, and their families.

I have reached out to DOD for information about the effectiveness of DOD TA, TA Decide, US Army University, and other programs but have not gotten any feedback. I have also tried to connect with VA but they also have not responded.

According to Student Veterans of America and their NVEST report, 46 percent of all people using the GI Bill do not finish school, and 25 percent use their hard earned GI Bill on for-profit colleges. In 2017, CBS News also reported that 40 percent of all GI Bill money goes to for-profit colleges. To make matters worse, some of the worst actors in the subprime college sector (like University of Phoenix, Ashford University, Colorado Tech, and Purdue University Global-Kaplan) get a large amount of TA and GI Bill money.

[Image below from GI Bill Comparison Tool shows the schools with the most GI Bill students. Downloaded 11-8-2018. ]




In 2011, the Government Accountability Office (GAO) reported that DOD had done some work on ensuring greater accountability from online schools, but that more needed to be done. Since 2017, DOD has made two reviews of schools receiving TA funds, but the information has not been released to the public. US Army University also continues to partner with subprime colleges such as University of Phoenix, DeVry, and Ashford University.


Related links:

8 tips to help vets pick the right college (Military Times)

Veteran Mentor Network on LinkedIn

Warrior Scholar Project

Service to School

Veterans Upward Bound

US Departments of Education, Defense, and Veterans Affairs Shirk Responsibilities to Servicemembers, Veterans, and Their Families

As a military veteran working to expose some of the most predatory practices by subprime colleges, the idea that anyone at the US Department of Education, US Department of Defense (DOD) or Department of Veterans Affairs (VA) would say "Thank you for your service" rings hollow, especially on the 4th of July.

The US  government has systematically shirked its oversight of subprime colleges that target servicemembers, veterans, and their families, especially during the Trump Administration.

I have to give some credit to President Obama for trying to do something against these schools, with Executive Order 13607, but much of that work has been undermined by DOD and VA officials.

• Instead of exposing poor performing schools that get DOD Tuition Assistance, officials in 2018 decided that protecting these schools from a "witch hunt" was more important.
• In 2019, DOD continued to protect even the worst 50-100 subprime schools from public scrutiny.
• VA Office of Inspector General reported that $474 million had been inappropriately allocated to subprime schools, but I have seen no attempt to claw back the money for US taxpayers.
• Purdue University Global, one of the worst schools for misleading consumers, has faced no consequences for their unethical behavior as they targeted servicemembers in the Army, Navy, Air Force, and Marine Times, as well as social media.

I have filed a FOIA and a complaint about Waste, Fraud, and Abuse to DOD, but have been told not to hold my breath. And I have also filed a complaint with the VA, but have even less faith that they will do their job.

Related article: 8 tips to help vets pick the right college (Military Times)

Ashford University Deceiving Consumers, Violating Department of Defense Regulations

dahneshaulis@gmail.com

Since its inception in 2005, Ashford University has been an overly priced, low value educational institution with questionable ethics and poor student outcomes.  As a result, servicemembers and veterans have filed a disproportionate number of complaints about the school through the Department of Defense, Department of Veterans Affairs, and the non-profit Veterans Education Success.[i][ii][iii]

Ashford and its parent company Bridgepoint Education (BPI) have also been the subjects of investigations,[iv] lawsuits, and legal and out-of-court settlements for a continuing series of unethical and illegal business practices: taking advantage of wounded service members[v], falsifying student retention data,[vi] robocalling prospective students,[vii] and deceiving students about private loans.[viii]  All of these practices violated elements of the Department of Defense’s Memoranda of Understanding (“DOD MOU”) signed by one or more Bridgepoint executives in 2011 and 2014.[ix]  

Recently, Ashford University and Bridgepoint have also been under scrutiny by VA for making false statements about the location of the school’s main business location.  While this may not be a violation of the DOD MOU, it does exemplify the company’s repeated unscrupulous behavior[x]

VA’s GI Bill Comparison Tool states that Ashford University has a 16 percent graduation rate and 23 percent student loan repayment rate.  The page carries a warning because of its problems with GI Bill certification in California, and its current lawsuit as a defendant against the State of California. [xi]

According to authors from the US Treasury and Stanford University, Ashford University also carries a 47 percent 5-year cohort default rate (CDR). [xii]

Despite its horrendous record, Ashford University has received hundreds of millions of dollars in DOD TA money and Department of Veterans Affairs GI Bill funds.  According to the Center for Investigative Reporting, almost all of Bridgepoint’s money comes from federal government programs, which also includes Pell Grants and federal student loans in addition to TA and GI Bill funds.[xiii]   

2017 State of California Lawsuit

In its recent 40-page civil complaint against Bridgepoint Education and Ashford University, the Attorney General of California stated that the company and its university systematically deceived consumers, including veterans, through:

(1) a high pressure sales culture,

(2) false or misleading statements concerning financial aid and costs of attendance,

(3) misrepresentations regarding transferability of credits, and

(4) misrepresentations regarding employment prospects.[xiv] [xv]

While all of these items are pertinent to service members and veterans, items 3 and 4 appear most applicable to stipulations in Ashford University’s DOD MOU.[xvi]

In Ashford University’s Memorandum of Understanding with the Department of Defense, the school  agreed to provide specific consumer information to servicemembers, including information about financial aid and transferability of credits.  Judging from the State of California’s civil complaint, there is no indication that Ashford was providing this information. 

To the contrary, Bridgepoint and Ashford employees systematically deceived consumers about financial aid and transferability of credits:

False or Misleading Statements Concerning Financial Aid and Costs of Attendance (pp. 11-16 in the State of California’s Civil Complaint)

“In its efforts to lure in prospective students, Ashford systematically made false or misleading statements about students’ ability to obtain federal financial aid and the school’s costs of attendance.”  

“For example, Admissions Counselors commonly told consumers that federal financial aid would cover all their costs of attending Ashford University, or that they would receive certain kinds of federal financial aid, when the Counselors either had no basis, for making those promises.” 

“At the same time, Ashford misrepresented to consumers that it could not be determine final financial aid awards until after enrollment, and then it failed to issue the final awards until it was too late for students to withdraw without liability.  This led many to incur unexpected debts for tuition and fees they owed due to a shortfall in their final award.” 

“In another repeated tactic, Admissions Counselors enticed consumers by telling them that they could use federal financial aid for non-educational expenses, even though federal law prohibits this conduct.” 

“Admissions Counselors also made numerous other representations concerning various aspects of financial aid eligibility, a complex topic on which they were unprepared to provide guidance, as well as the costs of attending Ashford.” 

“Unlike other schools, Ashford does not send financial aid award letters until after a student enrolls, giving Admissions Counselors ample opportunity to make false forecasts about financial aid in their sales pitches to consumers.”

“In one common form of representation, Ashford told prospective students who had not yet filled out a FAFSA or received a financial aid award letter that they would not have to pay any “out of pocket costs.” 

“For many consumers, these kinds of misrepresentations made Ashford University seem more affordable than it actually was….Students ended up owing Ashford unanticipated out-of-pocket balances, or had to take out more loans than they expected.

“Ashford also told students and prospective students that final determinations about financial aid could not be made until after the student enrolled, and it required students to enroll without first receiving a financial aid award letter.  Ashford then waited until students were well into their coursework to send the financial aid award letters.  In reality, it was possible for Ashford to make final determinations prior to enrollment, just as many other colleges and universities do. Waiting to process financial aid until after an enrollment allowed Ashford to prevent prospective students’ financial concerns from getting in the way of Admissions Counselor’s quests to close their sales.”  

Elements of the MOU pertaining to financial aid (pp. 4-5):

f. Before enrolling a Service member, provide each prospective military student with specific information to locate, explain, and properly use the following ED and CFPB tools:

(1)  The College Scorecard which is a planning tool and resource to assist prospective students and their families as they evaluate options in selecting a school and is located at:  http://collegecost.ed.gov/scorecard/.

 (2)  The College Navigator which is a consumer tool that provides school information to include tuition and fees, retention and graduation rates, use of financial aid, student loan default rates and features a cost calculator and school comparison tool.  The College Navigator is located at: http://nces.ed.gov/collegenavigator/.

 (3)  The Financial Aid Shopping Sheet which is a model aid award letter designed to simplify the information that prospective students receive about costs and financial aid so they can easily compare institutions and make informed decisions about where to attend school. The Shopping Sheet can be accessed at: http://www2.ed.gov/policy/highered/guid/aid-offer/index.html.

 (4)  The “Paying for College” webpage which can be used by prospective students to enter the names of up to three schools and receive detailed financial information on each one and to enter actual financial aid award information.  The tool can be accessed at: http://www.consumerfinance.gov/paying-for-college/.

g. Designate a point of contact or office for academic and financial advising, including access to disability counseling, to assist Service members with completion of studies and with job search activities.

(1)  The designated person or office will serve as a point of contact for Service members seeking information about available, appropriate academic counseling, financial aid counseling, and student support services at the educational institution;   (2) The point of contact will have a basic understanding of the military tuition assistance program, ED Title IV funding, education benefits offered by the VA, and familiarity with institutional services available to assist Service members. 

h.  Before offering, recommending, arranging, signing-up, dispersing, or enrolling Service members for private student loans, provide Service members access to an institutional financial aid advisor who will make available appropriate loan counseling, including, but not limited to: 

(1)  Providing a clear and complete explanation of available financial aid, including Title IV of the Higher Education Act of 1965, as amended. 

(2)  Describing the differences between private and federal student loans to include terms, conditions, repayment and forgiveness options. 

(3)  Disclosing the educational institution’s student loan Cohort Default Rate (CDR), the percentage of its students who borrow, and how its CDR compares to the national average.  If the educational institution’s CDR is greater than the national average CDR, it must disclose that information and provide the student with loan repayment data. 

Misrepresentations Regarding Transferability of Credits (pp. 16-23 in the State of California’s Civil Complaint)

“Ashford falsely told consumers that their prior credits would transfer into Ashford University.”

“Ashford also systematically misrepresented the extent to which Ashford University credits can transfer to other universities. Ashford’s Admissions Counselors routinely enticed prospective students with the promise that Ashford University offers them the flexibility to study online at a pace convenient to them, earning credits that they can later apply to other, less flexible, schools that the student was considering.”

“Ashford’s sales teams also told consumers that because Ashford University was regionally accredited, its credits were certain or likely to transfer to other schools….In other instances, Admissions Counselors have stated that Ashford University are accepted at specific schools, such as University of Southern California, UCLA, UC Berkeley, UC San Diego, and Harvard.” 

“Ashford also made misrepresentations regarding the transfer of credits from ongoing and future casework. Ashford University student and Army Reserve veteran P.M. was deceived by false promises that credits he earned at a community college while attending Ashford University would transfer to Ashford….As P.M. approached graduation at Ashford, he was alarmed to discover that Ashford had capped the amount of credits he could transfer….because Ashford broke its promise to accept all of the community college credits, P.M. had to spend additional time in school at Ashford University to make up for lost credits under the lower housing allowance. As a result he also fell behind in his rent, had to take another job to keep up with the bills, and his credit score suffered. Second, because GI Bill benefits are not unlimited, he wasted some of his veterans’ benefits by spending them on coursework he was unable to put toward a degree.”

This violates the following provision of the Ashford University’s DOD MOU:

“(1) Disclose its transfer credit policies and articulated credit transfer agreements before a Service member’s enrollment.  Disclosure will explain acceptance of credits in transfer is determined by the educational institution to which the student wishes to transfer and refrain from making unsubstantiated representations to students about acceptance of credits in transfer by another institution.” (p.7) 

Misleading and Deceptive Use of "Military Friendly" and "Best For Vets" Logos

Ashford University continues to use logos that are deceptive.  Promotional materials show that Ashford University claims to be "Military Friendly" and "Best For Vets."  But these designations are no longer valid.  

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[i] http://download.militaryonesource.mil/12038/MOS/Reports/PECS-Report-FY14.pdf

http://download.militaryonesource.mil/12038/MOS/Reports/PECS-Report-FY15.pdf

[ii] https://www.vets.gov/gi-bill-comparison-tool/profile/21007103#viewWarnings

[iii] Veterans Education Success has reported 113 complaints from servicemembers and veterans regarding Ashford University.  https://static1.squarespace.com/static/556718b2e4b02e470eb1b186/t/5a302b5df9619a75ac81f0b7/1513106270402/Final+Ashford+Memo+%28Public%29.pdf

[iv] Ashford University was a major focus of the PBS/Frontline documentary, College Inc. http://www.pbs.org/video/frontline-college-inc/

In 2011, in Senate Hearings, Senator Harkin referred to Ashford University as “an absolute scam.” https://www.insidehighered.com/news/2011/03/11/senate_hearing_on_for_profit_colleges_singes_accreditors_as_well_as_bridgepoint

[v] https://www.bloomberg.com/news/articles/2009-12-30/for-profit-colleges-target-the-military

[vi] https://www.sandiegoreader.com/news/2016/feb/11/ticker-suit-charges-bridgepoint-cooked-books/   
https://www.classaction.org/media/fellows-v-bridgepoint-education-inc.pdf

[vii] https://www.sandiegoreader.com/news/2014/dec/11/ticker-bridgepoint/

[viii] http://www.thefiscaltimes.com/2016/09/12/CFPB-s-Latest-Target-Profit-College-Chain

[ix] https://www.dodmou.com/InstitutionViewSignatureOldSystem/GetVersion1?institutionId=2545

Ashford’s current DOD MOU is in effect until 2019. https://www.dodmou.com/InstitutionViewSignature/GetFile?institutionId=1817

[x] https://static1.squarespace.com/static/556718b2e4b02e470eb1b186/t/5a05926b0d9297cba279c201/1510314604212/Ashford+Report.FINAL.pdf

[xi] https://www.vets.gov/gi-bill-comparison-tool/profile/21007103#viewWarnings

[xii] https://www.brookings.edu/wp-content/uploads/2016/07/ConferenceDraft_LooneyYannelis_StudentLoanDefaults.pdf

[xiii] https://s3.amazonaws.com/static.apps.cironline.org/doe/133.html

[xiv] file:///C:/Users/dahnshaulis/Desktop/Ashford-Bridgepoint-COMPLAINT-Calif.pdf

[xv] Bridgepoint Education is also presumably under investigation by the State Attorneys General in New York and North Carolina.  This is in addition to the company’s settlement with the Consumer Financial Protection Bureau.

https://www.washingtonpost.com/news/grade-point/wp/2017/11/29/california-attorney-general-sues-for-profit-bridgepoint-education/?utm_term=.def909507b82

[xvi] https://www.dodmou.com/InstitutionViewSignature/GetFile?institutionId=1817

College Meltdown Investigation: New Horizons Computer Learning Centers

Related article: Are Brand Name Coding Bootcamps the New Higher Education Scam?

Related article: 8 tips to help vets pick the right college

I am currently investigating New Horizons Computer Learning Centers, a system of franchises that provides certified Microsoft and Cisco training and testing. The centers cumulatively receive more than $20 million a year in GI Bill funds for military veterans and an unknown amount from the Department of Defense for military spouses. New Horizons also takes VA Vocational Rehabilitation funds for disabled veterans.

The for-profit schools are privately owned, unaccredited, and do not receive Pell Grants or federal student loans, making the parent company, New Horizons Worldwide, and its franchisees difficult to research. Facing declining revenues since the tech crash of 2001, the once publicly traded company went private in 2010, and slipped under the radar.

Claims about New Horizons' training and outcomes are impressive, but only if they are true. At this point, I am skeptical about these claims after reading repeated complaints about New Horizons Computer Centers and their business practices.

Several of the New Horizons Learning Computer Learning centers are based where service members and veterans live, including Killeen (163 veterans, $686K), Fort Worth (55 veterans, $445K), San Antonio (102 veterans, $641K), Richmond (111 veterans, $1.33M), Atlanta (44 veterans, $208K), Jacksonville, FL (219 veterans, $2.62M), Anaheim (254 veterans, $1.01M), Las Vegas (29 veterans, $15K), Miami (452 veterans, $6.06M), Colorado Springs (52 veterans, $356K), Orlando (236 veterans, $3.99M), Spokane (56 veterans, $968K), Tampa (171 veterans, $1.65M), and McClean, Virginia (94 veterans, $807K).

Recruiting thousands of military spouses, and veterans (including disabled vets), the New Horizons chain also claims to be "Military Friendly" and to adhere to VA's Principles of Excellence. New Horizons markets to veterans by selling their programs as "GI Bill Training." And they claim to offer top-notch instructors and career consultants. Credible information about gainful employment following the training programs, however, is non-existent.

Despite its claims, New Horizons Computer Centers have received a rash of complaints from veterans using their GI Bill benefits. The most common GI Bill complaints about the schools have been about finances, marketing and recruiting, and quality of education.

Complaints across the internet suggest that the learning centers are not worth the cost. New Horizon's recruiting practices also appear to be unethical, using bogus job offers to make their sales pitches.

While New Horizons courses cost $87 to $100 per hour, community colleges offer computer and IT training at lower costs. Lower priced online training can also be gotten for free or close to free, through One Stop unemployment offices and Groupon.

If you have any complaints about any New Horizons Computer Learning Centers, please email me at dahneshaulis@gmail.com

South University's Accreditor Takes School Off Warning Status

South University has been given a clean bill of health by its regional accreditor, the Southern Association of Colleges and Schools Commission on Colleges (SACSCOC). This week, SACS removed the school from Warning status and reaffirmed accreditation for the school for 10 years. The accreditor also requested a Monitoring Report within six (6) months.

According to a South University press release issued today: 

Dr. Steven Yoho, Chancellor of South University, expressed his pride in the university's achievement. "This renewed accreditation is a testament to the dedication and hard work of our faculty, staff, and students. It reflects our ongoing commitment to providing transformative and quality student outcomes that prepare them for success in a rapidly evolving world. We are proud to maintain the highest standards in academic quality and student support, and this accreditation reinforces our position as a leader in higher education."  

Additional Intel from HEI

South University has been profitable lately, and currently has more assets than liabilities, but it is facing a $36M balloon payment from a $50M Main Street Loan due in December 2025. Main Street Loans cannot be forgiven, and a $36M payment might be difficult to pay out so quickly. SACS is well aware of this impending payment.  Admittedly, the latest posted finances are almost two years old.  We look forward to seeing more up-to-date finances when the latest IRS 990 is posted. 

South could seek another lender to pay off the Main Street Loan. It could also renegotiate its contracts, reduce staffing, and sell off various assets to continue operating. By moving students online, South University could also reduce costs and consolidate operations. It may also be able to increase revenues through increased enrollment and grants.   

For a number of years, the US Department of Education has had South University on Heightened Cash Monitoring 1 for disbursement of federal student aid funds.

We have reached out to South University for comment, but have not received a response as of this publishing date.  HEI is also waiting on a Freedom of Information (FOIA) request regarding Borrower Defense to Repayment claims, which at some point the school could be liable for.  

South University currently educates about 10,000 students, with an estimated 7700 participating online. South also has ground campuses in Atlanta (GA), Virginia Beach (VA), Glen Allen (VA), Round Rock (TX), Columbia (SC), High Point (NC), Montgomery (AL), Orlando (FL), Savannah (GA), Tampa (FL), and Palm Beach (FL).  The school has been in operation since 1899. 

College Meltdown 2.2: Who’s Minding the Store?

The latest report by the Government Accountability Office (GAO) about wrongdoing by higher education online program managers (OPMs) felt disappointing to social justice advocates who watch the space and know the bad actors who were unnamed in the GAO document.  

US higher education has always been a racket, but its latest pursuits have gone untouched and even unmentioned.  GAO’s behavior, though, is no worse than the many other corporate enablers who are supposed to be minding government funds wasted –or worse yet—used to prey upon US working families. 

The US Department of Education has done little lately to safeguard consumers from predatory student loan servicers like Maximus and Navient, or subprime universities like Purdue University Global and University of Arizona Global, and hundreds of small players who offer marginal education leading to less than gainful employment.

The Department of Veterans Affairs has done little lately to protect veterans and their families from being ripped off by subprime schools.  At one time, VA was a leader in tracking GI Bill complaints and making them public, but transparency and accountability are far from what they were.

The US Department of Defense (DOD) has been asleep at the wheel with its distribution of DOD Tuition Assistance funds to subprime colleges.  Its complaint system is close to nonexistent. 

The US Department of Justice (DOJ) and US Securities and Exchange Commission (SEC) have done little to rein in bad actors in higher education, leaving the work to states attorneys general.  Hate crimes on campus have also been ignored.  In other cases, elite university endowments have received little notice despite eyebrow raising profits.  Student loan asset-backed securities are also below their radar. 

During the pandemic, The Department of Treasury has failed to adequately oversee funds issued to the Federal Reserve and the Small Business Administration funneled to subprime schools. 

The Federal Trade Commission (FTC), which had done an adequate job investigating predatory lead generators and marketing and advertising false claims has been hamstrung by a recent court decision and can no longer fine higher ed wrongdoers.   Predatory companies know this and will act accordingly—as criminals do when cops are not on the beat. 

What lack of oversight have you seen with federal agencies tasked to protect higher education consumers? 

Related link: College Meltdown 2.0

Related link: Maximus, Student Loan Debt, and the Poverty Industrial Complex

Related link: 2U Virus Expands College Meltdown to Elite Universities

Related link: DOD, VA Get Low Grades for Helping Vets Make College Choices

Related link:  Charlie Kirk's Turning Point Empire Takes Advantage of Failing Federal Agencies As Right-Wing Assault on Division I College Campuses Continues

Related link: The Colbeck Scandal (South University and the Art Institutes)

Related link: When does a New York college become an international EB-5 visa scam?

Related link: One Fascism or Two?: The Reemergence of "Fascism(s)" in US Higher Education

Trump Team Weakens Bipartisan Law That Protects Students and Veterans From Predatory Colleges (David Halperin)

On the eve of the 4th of July holiday, when they probably hoped no one was paying attention, the Trump Department of Education issued an Interpretive Rule that will make it easier for for-profit colleges to evade regulations aimed at protecting students, and especially student veterans and military service members, from low-quality schools.

The Department’s 90-10 rule, created by Congress, requires for-profit colleges to obtain at least ten percent of their revenue from sources other than taxpayer-funded federal student grants and loans, or else — if they flunk two years in a row — lose eligibility for federal aid. The purpose is to remove from federal aid those schools of such poor quality that few students, employers, or scholarship programs would put their own money into them.

For decades, low quality schools have been able to avoid accountability through a giant loophole: only Department of Education funding counted on the federal side of the 90-10 ledger, while other government funding, including GI Bill money from the VA, and tuition assistance for active duty troops and their families from the Pentagon, counted as non-federal. That situation was particularly bad because it motivated low-quality predatory schools, worried about their 90-10 ratios, to aggressively target U.S. veterans and service members for recruitment.

After years of efforts by veterans organizations and other advocates to close the loophole, Congress in 2021 passed, on a bipartisan basis, and President Biden signed, legislation that appropriately put all federal education aid, including VA and Defense Department money, on the federal side of the ledger.

The Department was required by the new law to issue regulations specifying in detail how this realignment would work, and the Department under the Biden administration did so in 2022, after engaging in a legally-mandated negotiated rulemaking that brought together representatives of relevant stakeholders. In an unusual development, that rulemaking actually achieved consensus among the groups at the table, from veterans organizations to the for-profit schools themselves, on what the final revised 90-10 rule should be.

The new rule took effect in 2023, and when the Department released the latest 90-10 calculations, for the 2023-24 academic year, sixteen for-profit colleges had flunked, compared with just five the previous year. These were mostly smaller schools, led by West Virginia’s Martinsburg College, which got 98.73 percent of its revenue from federal taxpayer dollars, and Washington DC’s Career Technical Institute, which reported 98.68 percent. Another 36 schools, including major institutions such as DeVry University, Strayer University, and American Public University, came perilously close to the line, at 89 percent or higher.

The education department last week altered the calculation by effectively restoring an old loophole that allowed for-profit colleges to use revenue from programs that are ineligible for federal aid to count on the non-federal side. That loophole was expressly addressed, via a compromise agreement, after Department officials discussed the details with representatives of for-profit colleges, during the 2022 negotiated rulemaking meetings.

All the flunking or near-flunking schools can now get a new, potentially more favorable, calculation of their 90-10 ratio under the Trump administration’s re-interpretation of the rule.

In the lawless fashion of the Trump regime, the Department has now undermined a provision of its own regulation without going through the required negotiated rulemaking process. (The Department’s notice last week included a labored argument about why its action was lawful.)

As it has done multiple times over its first six months, the Trump Department of Education, under Secretary Linda McMahon, has again taken a step that allows poor-quality predatory for-profit colleges to rip off students and taxpayers.

[Editor's note: This article originally appeared on Republic Report.]

20-year UVA law school librarian forced to seek redress from President Jim Ryan; defending the right to protest in the face of illegal disciplinary action

Contact: Ben Doherty, 434-282-9009

Charlottesville - On Saturday, May 4th, Ben Doherty (they/them) joined hundreds of UVA co-workers, students and community-members protesting for university leadership to divest from Israel’s war-machine.

Not only do Ben and coworkers have a demonstrable right to protest under the law, it’s also the case that UVA as a public institution has legal restrictions that prevent it from infringing on such rights. However, in response to this May 4 protest, UVA law school leadership issued Ben a “Letter of Counseling.” Letter of Counseling refers to an optional first step in discipline by the VA Department of Human Resources Management’s Standards of Conduct which has jurisdiction over UVA.

On June 25th, Ben was joined by coworkers on a delegation where they asserted the need for UVA to accept its legal restrictions and honor Ben’s right to protest. In response to this delegation, the UVA law school’s Assoc. Dean sent an email to Ben indicating, “a letter of counseling is not a disciplinary action.” However the email also sent mixed messages that were out of step with DHRM requirements. The Asst. Dean would not categorically agree that the result of ruling it not discipline is by extension ruling it unable to be referenced in any future cumulative evaluation or attempts at termination. The Asst. Dean encouraged Ben to take a one-on-one with Dean Leslie Kendrick. However, that meeting on July 12th did not resolve anything.

The unwillingness to comply with Ben’s rights is a risk not only for Ben but for their coworkers as well. That’s why Ben and their team have decided that the issue must be brought to the attention of UVA President Jim Ryan. Ben will lead a delegation to President Jim Ryan’s office tomorrow Wednesday, Oct. 9th at 1pm.

***

What: Delegation to President Jim Ryan

When: Wednesday, Oct. 9th, 1pm.

Where: Launching from Gingko Tree (b/w Rotunda & Chapel), UVA Campus 145 McCormick Rd.

***
Please see below: Full statement from the UCW-UVA’s campaign committee to defeat retaliation.

On Wednesday, October 9 at 1:00pm, United Campus Workers-University of Virginia (UCW) will rally to “say no to retaliation” outside of Madison Hall at the University of Virginia. UCW has chosen that location to tell UVA President Jim Ryan that it will not accept retaliation against any workers for exercising their right to protest.

On May 4, 2024 the University of Virginia administrators sent in riot police to violently break up the encampment for Palestine. After attacking the protesters with shields and chemical weapons, the police arrested 27 people. One of the people arrested was Ben Doherty (they/them pronouns), a librarian who has worked at the law school for over 20 years. Like the other arrestees, Ben was charged with criminal trespass–a charge that was later dismissed; and given a No Trespass Order barring them from campus–which was also soon rescinded since Ben was not an actual threat to anyone at the university.

However–in addition to the police violence, dismissed criminal charges, and rescinded No Trespass Order–on May 21, 2024, the law school issued a “letter of counseling” to Ben. The letter mischaracterizes Ben’s lawful protest against genocide in Palestine as insubordination and explains that “future conduct of this kind, whether at the Law School or elsewhere at the University, will very likely result in disciplinary action up to and including termination.” That is now the second “letter of counseling” the law school has placed in Ben’s employment record, the first being in 2018 when Ben objected to the presence in the law library of one of the main organizers of the white nationalist Unite the Right rally who was harassing people in the law school, and whom the University had failed to issue a No Trespass Order.

Workers everywhere have a right to protest and the United Campus Workers will collectively oppose any retaliation against workers for exercising that right. The University cannot be allowed to illegally chill anyone’s right to protest against genocide. UCW has already raised its concerns about this illegal and chilling discipline twice earlier this summer, and now is asking Jim Ryan to stop this retaliation threatening Ben’s termination for engaging in their right to protest as a member of the world community.

Quote from Ben Doherty: “In 2017 and 2018, I was present when University administrators did nothing to protect UVA students, staff and community members from blatant white nationalist violence and harassment. In 2024, I was also present when University administrators sent violent riot police in to attack and arrest people protesting against genocide in Palestine. In both cases, University leadership failures fell on the backs of students, workers and community members. To cover these failures, the University wants to keep people quiet and we all must work collectively to push back against University retaliation designed to chill our right to protest injustice.”

Gary Broderick
UCW-VA Lead Organizer
804-347-4942

National American University and the Subprime College Crash

Summary

• As a subprime higher education company, National American University Holdings (NAUH) has avoided media and agency scrutiny for years.
• NAUH has been losing money since 2015, with only severe cost cutting in sight.
• A former NAUH executive has filed a False Claims lawsuit alleging that the school defrauded the US government.
• Share price has been at or near $1 delisting price since March 2018.
• NAUH has mortgaged their real estate assets to stay afloat, to the tune of $8M, a big number for a small cap company.
• NAUH is underwater, with debt surpassing equity in May 2018.
• NAUH has delayed submitting its annual report to the SEC.
• NAUH has only one major investor, T. Rowe Price.

NAUH and the Subprime College Crash
While subprime college college companies like Corinthian Colleges (COCO), Apollo Group (NASDAQ:APOL), DeVry University (DV), ITT Educational Services (ESI), and Education Management Corporation (EDMC) made the greatest profits and the greatest losses over the last two to three decades, National American University Holdings (NAUH) has been flying under the radar.

The reason for so little attention: NAUH is a small cap company with about 35 small ground campuses. Their campuses are spread out across the US West and Midwest, including Ellsworth Air Force Base near Rapid City, South Dakota. The company also has a few real estate holdings in South Dakota.

NAUH's shares have never risen to the heights of other subprime colleges that have already crashed. Its peak was $12--more than eight years ago.

According to the National Center for Education Statistics, NAUH's 3-year student loan default rate is 24% and their student loan repayment rate is 27%. Their graduation rate is 13-35%, depending on the campus. 

Worse yet, NAUH is targeting service members and veterans even more as the company lies at the brink of delisting. That's something that could get negative media attention.


Downward Trajectory
NAUH has made some money by scavenging from other failed schools, including Everest College (once part of the infamous Corinthian Colleges), ITT Tech, Brown Mackie College, Wright Career College, Career Point College, and Westwood College. But overall it has been on a three-year streak of earnings losses. NAUH's last reported gains were in February 2015.

Revenues are also down, way down. According to NAUH's last quarterly report, "FY 2018 annual revenues were $77.2 million, compared to $86.6 million in the prior year."

National American University's campuses are small, but most are too expensive to maintain. It appears that more than a dozen schools have closed or are in the process of closing.

Revenue + Earnings
(2015) 117.9M (-6.7M)
(2016) 96.1M (-8.2M)
(2017) 86.6M (-7.8M)
(2018) 77.2M (-12.3M)

Nearly all students are now learning online or through hybrid education. NAU has 4,6817 students in its online programs, 617 students at its campuses, and 747 students attend hybrid learning locations.

Enrollment
(2015) 9,519
(2016) 8,185
(2017) 6,703
(2018) 5,648

In 2016, National American University began closing campuses.  In 2018, they continue to consolidate and downsize.  


National American University Campus Populations 
(Source: National Center for Education Statistics)

Salem, VA  980

It Gets Worse
National American may gain some attention--in a bad way--because it shows few signs that it can survive.

The 2018 year started out rough, with the unsealing of a False Claims lawsuit by a former NAUH official. The lawsuit alleged that the school defrauded the US government out of millions of dollars in a student aid program, unlawfully paid bonuses to university employees for recruiting students and rigged the accreditation for its medical assisting program.

As part of its cost cutting, almost all of NAU's students are now online, which usually results in lower graduation rates--and more students who cannot repay their student loans.

NAUH has now been been forced to mortgage its properties for $8M in order to maintain liquidity. The loan is with Black Hills Community Bank. While the conditions may be favorable, maybe too favorable, business deals like this sound reminiscent of other subprime colleges before they failed.

NAUH Cash (in thousands)

(2015) 23,300

(2016) 21,713

(2017) 11,974

(2018) 5,324

NAUH's debt surpassed its equity value in May 2018. 

At this point, only one investor stands between NAUH and delisting--T. Rowe Price, a huge company that can afford to lose a little money in spots. But with all other institutional investors out, how long will T. Rowe Price keep their shares?