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The federal government spends billions of dollars on tuition benefits for men and women who serve in the U.S. military, but some colleges that rely on that money use very little of it to educate veterans, according to a study released Thursday.
Using the latest data from the U.S. Education Department, advocacy group Veterans Education Success found seven of the 10 colleges receiving the most from GI Bill benefits spent less than one-third of tuition and fees on academic instruction in 2017.
Spending on instruction often correlates with the likelihood of students earning a degree and finding meaningful employment, according to the report. Research has shown that even students who enter school unprepared for the rigors of higher education have a better chance of graduating from institutions that allocate a hefty portion of tuition dollars to teaching.
From fiscal 2009 to 2017, the Department of Veterans Affairs committed nearly $35 billion in Post-9/11 GI Bill tuition payments to colleges and universities nationally.
Ten schools alone received a total of $5.4 billion in GI Bill payments, with the University of Phoenix and DeVry and Strayer universities receiving the most. The top three recipients spent just 11 percent to 15 percent of gross tuition revenue on educating students, the study found. None of the schools immediately responded to requests for comment.
The report does not explain where schools are spending tuition dollars that are not allocated for instruction. The Education Department tracks and reports college expenditures in several categories, including instruction, academic support and student services. While academic support could include items such as curriculum development, it can also include the cost of operating galleries on campus. That’s why the advocacy group zeroed in on the instruction category.
Although for-profit colleges dominated the ranks of schools spending the least on instruction, University of Maryland University College rounded out the list of institutions that earmarked less than 33 percent of tuition dollars for teaching.
The public college, which received more than $63 million in GI Bill funding in fiscal 2017, primarily serves students online. That lowers the cost of delivering instruction, which in turn would lower instructional spending. But the study argues that what U-Md. University College saves on instruction should be passed on to students through lower tuition.
U-Md. University College spokesman Robert Ludwig argues that the school offers the second lowest tuition and fees of any institution in the University System of Maryland, charging a little over $6,000 a year for in-state veterans pursuing a bachelor’s degree. He notes the college partners with Veterans Affairs to split the difference between in-state and out-of-state tuition.
Of the top 10 recipients of GI Bill benefits, Pennsylvania State University spent the largest proportion of gross tuition revenue — more than 70 percent — on instructional expenses. Embry-Riddle Aeronautical University (41.4 percent) and for-profit ECPI University (38.3 percent) followed.
At the opposite end of the spectrum, Colorado Technical University allocated only 8.2 percent of its gross tuition revenue toward academic instruction in 2017. That same year, the for-profit school’s owner, Career Education Corp., dedicated more than 37 percent of revenue to recruiting and marketing, according to a securities filing.
“We believe few in Congress would be comfortable with colleges that are diverting 90 percent of GI Bill funds away from veterans and toward TV ads and call centers that 48 states plus the District of Columbia deemed predatory and misleading,” said Carrie Wofford, president of Veterans Education Success.
Many of the same schools that derived the most in GI Bill benefits and spent the least on instruction graduated fewer than 30 percent of their students within eight years, including U-Md. University College, Strayer and DeVry. Conversely, the GI Bill recipients that allocated the most money toward teaching had the highest completion rates, according to the study.
Ludwig at U-Md. University College said the graduation rate is a bit misleading because the students the college serves often transfer in and out of the school, but Education Department data the report used does not include the completion rate for those type of students.
“For our students, their experience through higher education is not as linear as it is for transfers to traditional institutions,” Ludwig said. “Many of our students do not intend to get a degree from us. Rather, they may take a course or two while serving in the military; or get a requisite out of the way that is not available to them on their home campus.”
Veterans Education Success identified 378 colleges and universities that spend at least 50 percent of tuition dollars on instruction and graduate at least half of their students, earning them a spot on the advocacy group’s list of Best Bang for the GI Bill Buck. The group examined more than 4,600 schools.
According to the report, many colleges serving large numbers of veterans actually spend more on education than they charge in tuition and deliver high graduation rates. Those schools include Lakeshore Technical College, SUNY Polytechnic Institute, Bismarck State College, Yale University and Stanford University.
Danielle Douglas-Gabriel covers the economics of education, writing about the financial lives of students, from when they take out student debt through their experiences in the job market. Before that, she wrote about the banking industry. Follow
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