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Obama Slams the For-Profit sector over misleading Military members

Friday, April 27, 2012

President Obama will sign an executive order today that will greatly limit the For-Profit EDU sector from marketing towards military members.

The order is a result of Senator Tom Harkin’s efforts to curb the for-profit sector from getting too much money from the federal government in the form of federal student loans.

What are the main changes in this Executive Order?

  • The VA is going to be trademarking the term “GI Bill” – this will greatly limit what you can say on military specific landing pages and potentially opens up some lead generators to trademark infringement.
  • All schools must provide each prospective student information from the Consumer Financial Protection Board about the “know before your owe financial aid form.” This essentially helps students fully understand the financial implications of what they are getting into.
  • Removing recruiters from military installations.
  • Regulating online recruiting websites from potentially misleading veterans and current military members.  It is not 100% clear who will be regulating the sites though. I suspect a branch of the Department of Education will be tasked with this responsibility.  The sheer number of sites related to this topic is quite massive though.
  • Collecting data from each school about how much revenue they get from GI Bill benefits.
  • Creating a centralized complaint system for military members. If you have tried the CFPB complaint system, it is very effective and efficient.

How does this impact EDU as a sector?

  • From a sector perspective several schools are military dependent since it offsets the current 90/10 regulations. I suspect this may lead to more strategies to find students who are able to pay a larger portion of the tuition themselves.
  • Some of the for-profit stocks are already being hit today with COCO down 3%. I suspect APOL will also take a short term dip on this news.
  • The reality is that no publicly traded school has been penalized publicly for an infringement on the incentive comp rules so far. Until this happens, a lot of this news is more about suppressing the industry versus destroying it.  I also think that a lot of this news is being timed specifically around the upcoming election.

As a media buyer what do I need to know?

  • As a media buyer you may want to call your vendors who are advertising with military sites or keywords. The trademark around the GI Bill is not in effect yet, but you will need to get an inventory around what you are potentially exposed to.
  • The schools and or agencies will need to come up with an universal set of regulations around how to market to the military. This should augment the education marketing council guidelines.
  • I strongly urge you to check out the “Know before you Owe” form on the CFPB site. This gives you a much stronger idea of what the govt is requiring.

 

 

About Krish Sailam

Krish is a writer based in the Austin, TX area that is focused on making information easier to digest. Krish's enjoys topics around education, technology, economics and online marketing.

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  1. […] Bill?” April 30, 2012 By Krish Sailam Leave a Comment On Friday, President Obama issued an executive order that will limit or regulate how for-profit schools will be able to market to and recruit military […]

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