President Obama has signed an Executive Order to crack down on “bad actors” that prey on veterans and service members considering higher education, including those who provide false or misleading information on student loan interest rates.
“We’re making sure veterans and service members get a simple fact sheet called ‘Know Before You Owe’ that lays out all the information they need about financial aid and paying for college,” Obama said in his weekly address.
The Executive Order lays out new regulations for higher education institutions the receive funding from federal military and veterans educational programs, including benefits provided by the Post-9/11 GI Bill and the Tuition Assistance Program.
Prior to enrollment, these institutions must provide prospective students who are eligible to receive Federal military and veterans educational benefits with “a personalized and standardized form” that will be developed U.S. Education Department officials along with the Department of Defense and Veterans Affairs.
Obama said recruiters are overwhelming service veterans and military members with misleading financial information.
“They bombard potential students with emails and pressure them into making a quick decision,” the president said. “Some of them steer recruits towards high-interest loans and mislead them about credit transfers and job placement programs.”
The form ordered by Obama’s Executive Order is intended to help those prospective students understand:
- The total cost of the educational program, including tuition and fees;
- The amount of that cost that will be covered by Federal educational benefits;
- The type and amount of financial aid they may qualify for;
- Their estimated student loan debt upon graduation;
- Information about student outcomes; and other information to facilitate comparison of aid packages offered by different educational institutions.
Institutions also have to inform students who are eligible about the availability of Federal financial aid.
They also need to have in place policies to alert those students about their potential eligibility for that aid – before packaging or arranging private student loans or alternative financing programs;
Obama’s executive order also prohibits fraudulent and “unduly aggressive recruiting techniques” on and off military installations, “as well as misrepresentation, payment of incentive compensation, and failure to meet State authorization requirements” consistent with the regulations issued by the Department of Education.