V.A. Seeks Waivers for For-Profit Ethics Law

WASHINGTON — The Department of Veterans Affairs said Tuesday it would proceed with a narrow waiver to an ethics law banning V.A. employees from receiving benefits from for-profit colleges, saying most cases posed no actual conflicts of interest with private companies vying for millions in GI Bill tuition.

The V.A.’s latest move comes after it abruptly dropped plans last week for a broader exemption.

Under the new plan, the V.A. said it would generally grant waivers only to those employees who take classes or receive payments for teaching at for-profit colleges. Government watchdogs had worried that suspending the law entirely would create financial entanglements with the private companies.

“There will be no blanket waiver, just a consistent approach to considering and granting individual waivers for those employees who are eligible for them,” said V.A. spokesman Curt Cashour.

The V.A. had originally sought to suspend the law, publishing a proposal in the Federal Register in September that was set to take effect this week for all 330,000 V.A. employees. The V.A. cited the lack of any “significant adverse comment,” but abruptly backed off the plan after The Associated Press asked about rising opposition.

In particular, veterans’ groups and ethics experts said the V.A.’s original proposal was rushed, betrayed the will of Congress and gave for-profit colleges an opening to improperly reward V.A. employees who steer veterans to the schools.

On Tuesday, the V.A. said it had no plans to publish a new proposal and would direct department leaders to issue more narrow waivers. The V.A. has estimated that thousands of department employees who took classes or taught at for-profit colleges could be exempted.

Some veterans’ groups and ethics experts said they still had questions about V.A.’s latest plan, pointing to what they say is a requirement in the law for public hearings to be held when issuing waivers. The V.A. said the law is ambiguous and that it was reviewing whether hearings would be needed.

“We are still concerned,” said Carrie Wofford, president of Veterans Education Success, a group that focuses on fraud and abuse of student veterans.

The ethics law, passed in 1966 in the wake of several scandals involving the for-profit education industry, calls for dismissal of any V.A. employee who receives “any wages, salary, dividends, profits, gratuities, or services” from a for-profit school in which a veteran is also enrolled using V.A. GI Bill benefits.

For-profit colleges have found an ally in President Donald Trump, who earlier this year paid $25 million to settle charges his Trump University misled customers. Trump’s education secretary, Betsy DeVos, halted two Obama-era regulations meant to shield students from fraud and predatory actions by for-profit universities.
Total government spending on the GI Bill is expected to be more than $100 billion over 10 years.

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