itttech.png
Former ITT Tech students can get discharged from debt under the U.S. Department of Education, but the Department of Veterans Affairs lacks that authority. Congressional Democrats and Republicans are haggling over how to provide it.
(ITT Tech)
WASHINGTON -- When ITT Technical Institutes, a chain of for-profit career colleges accused of fraud, shuttered operations this month, many of its students became eligible for federal student-loan forgiveness.
Military veterans using VA education benefits got no such relief, however. And an effort by U.S. Sen. Sherrod Brown, an Ohio Democrat, failed to change that this week.
This is not the final word. But unless Congress acts soon, Brown and others said about 7,000 veterans who were attending ITT Tech classes, including 520 in Ohio, could be affected.
ITT had nine campuses in Ohio, including in Warrensville Heights, Strongsville, Akron and Youngstown, enrolling 3,200 students statewide. Authorities at the Legal Aid Society of Cleveland have been trying to help students understand debt forgiveness, and Cuyahoga Community College and Lorain County Community College are holding sessions to help former ITT students understand other education options.
But for veterans, the uncertainty about benefits could make some unable to transfer to another school "this month or next month," said U.S. Sen. Tom Carper, a Delaware Democrat and Vietnam veteran.
"It's just not fair to them," Brown said on the Senate floor Wednesday night, as Congress was wrapping up business for an election-season break.
"I just don't think we should ever leave this place treating a veteran worse than a non-veteran."
Here's what the issue is about.
Different programs, different forms of aid:
Most college students get student loans or other financial aid through programs coordinated or run by the U.S. Department of Education. Military veterans, however, are eligible for tuition and housing allowances through the Department of Veteran Affairs.
This difference is usually invisible to the public. But the different federal departments face different regulations and financial constraints.
When Corinthian Colleges, accused of defrauding students with poor quality programs and expensive loans, shut down and declared bankruptcy last year, the Department of Education said it would forgive some student loans. Debt forgiveness has nevertheless been spotty and some lawmakers are unhappy with the Department of Education's response to Corinthian students.
ITT Tech, under enormous financial pressure because of growing scrutiny and legal actions by federal agencies, was accused of making predatory loans and spending too much on marketing. When it closed Sept. 6, the Department of Education said it would use the same statutory authority to help students make sure their existing credits transferred to other schools or get the loans for ITT Tech classes discharged.
In other words, the closures wouldn't put them more deeply in debt.
The cost to taxpayers is not yet known and will be partially offset by collateral that the Department of Education made ITT set aside when its troubles began.
VA has less leeway, however, because of its own financial and regulatory constraints. Congress could help by authorizing VA not to count toward a student's limits any benefits wasted on ITT Tech. That is what Brown wants.
But that would cost VA money -- and Republicans in Congress say that without a dedicated source, VA will have to take funds from one of its other programs, harming veterans in another way. Republicans say they want the same thing as Brown, but first, they want to make sure there's a way to pay for it.
This week's non-action:
Brown, a member of the Senate Committee on Veterans Affairs, proposed in a motion Wednesday evening that the Senate immediately help veterans affected. The bill he wanted to pass by unanimous consent, avoiding the need for a lengthy roll-call vote, would restore any benefits the students otherwise may be deprived of or wasted because of the ITT Tech's actions. These are students "who through no fault of their own were -- there's no other word for it -- bilked by the for-profit school ITT," he said.
But as in earlier discussions, a Republican objected, saying Congress first needed a way to make sure VA had the money. Although Brown called such a concern a "red herring" -- Congress tends to find money when it really needs to -- Sen. Thom Tillis of North Carolina said the concern is legitimate. Tillis's objection killed any prospect of unanimous consent.
"We can say that we're authorizing the VA to pay for it, but what are they going to do?" Tillis said. "We haven't provided them with any funds to do it, so what potentially suffers as a result?
Passing a Senate bill and leaving for the election recess so the House can then consider it later, without telling the House where the money will come from, just delays a solution, Tillis said. He noted that he is one of the lead Republican sponsors on the bill and agrees with Brown in principle, but wants to work out the details first.
Brown agreed that leaving without a solution wasn't good.
"First of all, the Senate shouldn't leave town," he said. "We should finish our work."
Next to come:
Veterans issues seldom go unaddressed in Congress, so there is hope for action in early December, when lawmakers reconvene.
"My hope is that when we return from the recess after the elections, I hope we can start crossing the aisle about doing more to protect out student veterans in the Post-9/11 GI Bill," Carper said.
Tillis agreed that Republicans will work with Democrats to solve the problem -- with a pay-for.
"This is just about being responsible and doing both parts of our job," Tillis said. "Coming up with good policy and then coming up with a way to pay for it."