LOUISVILLE, Ky. – A California-based company accused of preying on veterans for their education benefits agreed Wednesday to pay $2.5 million to 20 states and turn over its website — GIBill.com — to the U.S. Department of Veterans Affairs.
The consumer protection settlement between the states and QuinStreet Inc. was filed Wednesday in a Frankfort, Ky., court.
"The actions were unconscionable and purposefully drove veterans to for-profit colleges who were perhaps more interested in getting their hands on the federal benefits than in educating our soldiers and their families," said Kentucky Attorney General Jack Conway in announcing the settlement.
The agreement comes against a backdrop in which military veterans are a lucrative market for colleges. The newly expanded Post 9/11 G.I. Bill will pay colleges of all types around $9 billion this year to educate nearly 600,000 veterans. As a result, many colleges boast of being "military friendly and "veterans friendly."
QuinStreet, an Internet marketing and media company, called the agreement a "significant step forward in helping to clarify expectations for school advertising online, and for related website design and content." QuinStreet said it didn't view its websites as misleading and that GIBill.com has never been a "material contributor" to its revenue.
Paul Szoldra, 28, a Marine Corps veteran who studies at the University of Tampa in Florida, welcomed the settlement.
"Definitely a good day for the good guys," he said.
When he was in the military, Szoldra remembers looking for information on GI Bill benefits online and finding GIBill.com. At that time, there was no disclaimer explaining who ran it, he said.
"I definitely thought it was an official site," Szoldra said.
The states alleged that QuinStreet violated consumer protection laws while operating websites that generate leads primarily for the for-profit education industry. The states said that several of the company's sites, including GIBill.com, deceptively gave the appearance that the sites were operated, owned or endorsed by the U.S. government or military.
QuinStreet will relinquish ownership and control of GIBill.com to the veterans affairs department that will use the domain to promote the program and its available benefits.
Department of Veterans Affairs Deputy Secretary Scott Gould called the settlement a "positive step toward ensuring our veterans have the education opportunities they've earned." He said that "predatory, aggressive and deceptive marketing directly inhibits our ability to ensure they understand those options."
Students attending for-profit colleges make up about 13 percent of higher education enrollment, but those students also get about 38 percent of all the Post 9/11 GI Bill money, Conway said. Members of Congress also stressed their approval of the settlement during a press conference in Washington.
Sen. Dick Durbin, D-Ill., said that the attorneys general stepped in where Congress has failed.
"It's reached a point now when you get little or nothing done when you take on the for-profit schools in Congress. Why? They own every lobbyist in town," Durbin said. "... These are not the good guys. What the for-profit schools are doing to students and their families across America is shameful. What they're doing to veterans is disgraceful."
The Association of Private Sector College and Universities, the trade association representing for-profit colleges, issued a press release saying that it values its relationship with the nation's veterans and families, and wanted to make clear it condemned any activity by companies that misleads them.
Also, the Twitter, Facebook and other social media accounts associated with GIBill.com will shut down. QuinStreet will provide expanded disclosures on other military-oriented and education-related websites.
Szoldra has created his own website (www.collegeveteran.com) to help better guide veterans through the minefield of searching for a school and re-entering civilian life.
"It can definitely be confusing," he said. "There's a ton of websites out there, there's a lot of 'military friendly' kind of schools or listing where they say these schools are military friendly and here's why. They're not really as comprehensive as they should be."
Sarah Minnis, who worked with veterans for three years at Texas A&M, said for-profit colleges often made promises that didn't come true.
"One of the biggest problems was that the credits the veterans earned wouldn't transfer to other institutions," said Minnis, who now works on education issues with the Wounded Warrior Project.
Other states involved in the settlement are Alabama, Arizona, Arkansas, Delaware, Florida, Idaho, Illinois, Iowa, Massachusetts, Mississippi, Missouri, New York, Nevada, North Carolina, Ohio, Oregon, South Carolina, Tennessee and West Virginia.
Conway's office said the settlement concludes the investigation of QuinStreet.
Associated Press writers Christine Armario in Miami and Kevin Freking in Washington contributed to this report.