Officials announce $2.5 million settlement against GIBill.com

Posted June 27, 2012, at 8:03 p.m.

FRANKFORT, Ky. — Kentucky Attorney General Jack Conway announced at a news conference Wednesday in Washington that a website designed to steer veterans to for-profit colleges must pay a $2.5 million settlement and turn over the site to the U.S. Department of Veterans Affairs.

The settlement stems from Conway’s investigation of alleged deceptive recruiting practices by some for-profit colleges. It is part of an agreement with 20 state attorneys general that was filed Wednesday in Franklin Circuit Court.

Kentucky is scheduled to receive about $325,000 of the $2.5 million settlement.

QuinStreet Inc. operated GIBill.com, which steered veterans to mostly for-profit colleges that were clients of QuinStreet, according to information provided by Conway’s office. The site led users to think it was sponsored by the U.S. Department of Veteran Affairs, Conway said.

State attorneys general and consumer advocates have said that for-profit colleges increased their recruitment of veterans after Congress passed a robust GI Bill in 2008, making billions of dollars available to veterans and service members.

The influx of federal aid made veterans particularly attractive to the proprietary education industry. A recent report by a U.S. Senate committee showed that GI Bill funding at 20 for-profit colleges increased 683 percent from 2006 to 2010.

For-profit colleges must receive 10 percent of their overall funding from sources outside of federal financial aid, but money from the GI bill does not count toward that cap. That means if a school recruits veterans, it could get 100 percent of its funding from the federal government.

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