Senate Democrats are looking at ways to give VA the authority to provide relief to veteran students who were paid GI Bill benefits to attend classes at the now defunct Corinthian College or one of its subsidiaries.
Last month the Department of Education levied $30 million in fines against Corinthian for inflating job placement numbers at its subsidiary colleges. Last year, the schools came under federal scrutiny for allegations of fraud, including the use of false statistics on graduation and job placement rates.
On April 27, 2015, Corinthian shut down all 28 of its locations including Heald College, Everest College and WyoTech, leaving hundreds of veterans in the lurch. On May 4, the parent company declared bankruptcy.
One selling point that several for-profit colleges tout is their job-placement rate, luring potential students with promises of a job after graduating from their college. This is where Heald College, a subsidiary of Corinthian fell afoul of federal investigators. A Taco Bell employee was considered to be "fully employed" in her degree field of accounting, and Safeway and Macy's employees who had business administration degrees were also reported by Corinthian as "employed in their field". The federal allegations also stated that Heald paid temporary employment agencies to hire graduates in short-term jobs, some no longer than 2 days, so they could be counted as successfully placed in their degree field.
Students who received federal loans to attend any of the closed institutions can have their debt forgiven if they choose not to use any of the credits earned at a Corinthian school, however if they choose to keep their credits and transfer to another school they will remain responsible for any student debt. However, veterans who used their GI Bill benefits at a Corinthian school have no recourse; if they choose to attend another school and their credits do not transfer, there is no provision in current law allowing them to have their GI Bill reinstated.
Lawmakers have said they are working to give VA the authority to provide relief to veteran students receiving GI Bill benefits who have been harmed by this or future closures. They are asking the VA to investigate possible assistance with housing costs for Post-9/11 GI Bill recipients who will lose their housing allowance benefit as a result of the unexpected closing, and .they seek to allow stronger oversight of for-profit institutions by the VA and other Federal agencies to prevent future occurrences of similar situations.