For-Profit College Marketer Settles Deception Charges

QuinStreet was a "lead generator" for for-profit schools

Returning service members are eligible for education benefits under the GI Bill and attracting these students can be lucrative for the growing number of for-profit educational institutions in the U.S.

But in recent years policymakers have been closely monitoring these schools' marketing to ensure the former service personnel are getting reliable and complete information. A number of states sued one company – QuinStreet Inc. - for allegedly putting out misleading information. That case has now been settled.

QuinStreet owns a network of websites that generate leads primarily for the for-profit education industry. The multistate enforcement action arose in conjunction with a larger ongoing effort by state attorneys general looking into the recruiting and deceptive business practices of some for-profit colleges.

Misleading information

The investigation determined that the sites misleadingly gave the impression that the schools immediately listed as "eligible GI Bill schools" were the only schools at which the veterans' benefits could be used.

As part of the settlement QuinStreet will relinquish ownership and control of the domain to the Department of Veterans Affairs, which will use it to promote the GI Bill program and educate service members about the benefits available to them under the program.

In the future, the company must clearly disclose that its sites are not associated with the U.S. government and unequivocally state that companies appearing on certain websites are not the only schools that accept GI Bill benefits. The company will also pay $2.5 million to the settling states.

Complaints from students

Many complaints from students about for-profit schools revolve around funding, including the GI Bill. Ahshayahona, of Shaw Air Force Base, S.C., says she has completely run out of G.I. Bill funds because of what she said is delays by Kaplan University.

“I now have no GI Bill money because Kaplan got all of it and I owe on loans because of Kaplan,” Ahshayahona wrote in a ConsumerAffairs post. They have now kicked me out of my program and told me that I had to apply for re-admission. I have had to pay $50 out my pocket for a background check for Kaplan. I have close to a 3.0 GPA and I feel like Kaplan is blocking me from doing my clinicals because they can not find a facility that would deal with them or their students.”

Consumer advocates and state Attorneys General have seen for-profit colleges intensify their recruitment of veterans since 2008, when Congress enacted the Post 9/11 GI Bill, which made billions of dollars in educational benefits available for veterans and their families. According to a February 2011 General Accounting Office report, $9 billion in educational benefits were provided to service members and veterans in Fiscal Year 2010.

Oregon Attorney General John Kroger notes that of 20 for-profit colleges analyzed by the U.S. Senate HELP Committee, total military educational benefits increased from $66.6 million in 2006 to a projected $521.2 million in 2010. Part of the reason why military members are attractive to for-profit colleges is because their benefits don't count toward the business' 90 percent cap on federal Department of Education funding, Kroger said.


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