FOR IMMEDIATE RELEASE, June 27, 2012
Iowa Settles Investigation of For-Profit Schools Web Promoter
Company Relinquishes GIBill.Com to the U.S. Veteranís Administration
(DES MOINES, Iowa) Attorney General Tom Miller announced today that Iowa and 19 other states have settled a consumer protection investigation of QuinStreet, Inc., a California company that uses the Internet to generate leads on potential college students primarily for the for-profit education industry. The settlement resolves concerns about the company’s advertising practices, particularly with its targeting of military service members and veterans.
The Attorneys General alleged that QuinStreet, Inc., the owner of GIBill.com and multiple other website domains, violated the states’ consumer protection laws in the course of operating certain websites. Miller said that the Attorneys General were particularly concerned that several of the company’s sites targeting military service members and veterans, including GIBill.com, were deceptive in giving the appearance that the sites were operated, owned or endorsed by the U.S. government or military.
“We are simply not going to stand by and watch the men and women who put their lives on the line for us every day be targeted by companies that intend to take advantage of them,” Miller said. “This company’s misleading websites undoubtedly tricked veterans into applying to expensive for-profit colleges based on false premises, and that is not acceptable.”
As part of the settlement, QuinStreet will relinquish ownership and control of the domain GIBill.com to the Department of Veterans Affairs, which will utilize the domain to promote the GI Bill program and educate service members and veterans about the benefits available to them under the program. QuinStreet will also shut down and cease to use any domain names that include the term “GI Bill.”
"I applaud the state Attorneys General for the settlement announced today to protect service members from misleading and deceptive websites that target their GI Bill benefits. These new consumer protections will help ensure that veterans looking online to learn more about the GI Bill will find accurate information about the benefits they have earned through their service and sacrifices for our country," said Holly Petraeus, assistant director for Servicemember Affairs at the Consumer Financial Protection Bureau.
“At VA, it is part of our mission to support and encourage Veterans as they seek higher education. We must ensure that they are adequately and accurately informed about their education options throughout the process,” said Department of Veterans Affairs Deputy Secretary Scott Gould. “Predatory, aggressive and deceptive marketing directly inhibits our ability to ensure they understand those options. This settlement is a positive step towards ensuring our Veterans have the education opportunities they’ve earned. VA stands with the states’ Attorneys General, and all Americans, in protecting Veterans from predatory, exploitive or deceptive marketing of any service.”
The states found that the sites were misleading in giving the impression that the schools listed as “eligible GI Bill schools” were the only schools at which the veterans’ benefits could be utilized. In fact, the list only consisted of QuinStreet clients, which were primarily for-profit colleges. Consumer advocates and state Attorneys General have seen for-profit colleges intensify their recruitment of veterans since 2008 when Congress enacted the Post 9/11 GI Bill making billions of dollars in educational benefits available for veterans and their families. Of 20 for-profit colleges analyzed by the U.S. Senate HELP Committee, total military educational benefits increased from $66.6 million in 2006 to a projected $521.2 million in 2010, an increase of 683 percent. One reason why military members are attractive to for-profit colleges is because their benefits don’t count toward the proprietary colleges’ cap on federal Department of Education funding. The law says for-profit colleges must get 10 percent of their funding from other sources besides federal student loans or Pell Grants, but with the GI Bill loophole, they can secure 100 percent of their funding from the federal government.
In May, Miller joined 21 other state Attorneys General in calling on Congress to change the so-called “90-10 rule” so that for-profit schools will no longer benefit by targeting service members. http://www.state.ia.us/government/ag/latest_news/releases/may_2012/schools_for_profit.html
Other terms of the settlement
- The Twitter, Facebook, and other social media accounts associated with GIBill.com will be shutdown.
- All QuinStreet military-related sites will have unavoidable, clear and conspicuous disclosures adjacent to the website logo and website name that clarify the site is not owned or operated by the U.S. government.
- Disclosures that the schools listed on the sites are not the only schools that accept GIBill benefits, and links to the VA’s page that provides a complete list.
- All of QuinStreet’s education-related websites will have disclosures that clarify that schools that appear on the websites are advertisers or pay to appear on the sites.
- QuinStreet will no longer be able to make any claims that the information presented on the site is “neutral” or “unbiased” or that schools are “top” or “best” unless the information comes from an independent source.
- All QuinStreet education-related sites must have an “About us” page and an FAQ page that clearly explains the site is owned by QuinStreet and contains identifying information about the company and its business operations.
Miller said that the investigation was led by Kentucky Attorney General Jack Conway and his staff. Miller added that members of his office’s Consumer Protection Division were active members of the team of Attorneys General conducting the investigation and negotiating the terms of settlement. Other states joining in the settlement, in addition to Iowa and Kentucky, include: Alabama, Arizona, Arkansas, Delaware, Florida, Idaho, Illinois, Massachusetts, Mississippi, Missouri, Nevada, New York, North Carolina, Ohio, Oregon, South Carolina, Tennessee, and West Virginia. As part of the agreement, QuinStreet will pay the states a total of $2.5 million to settle the consumer protection claims. Miller said that Iowa’s share of the settlement fund will be $225,000 and will be used for consumer litigation and education.
Miller noted that this settlement is part of ongoing investigations of the recruiting and deceptive business practices of some proprietary colleges by state Attorneys General.
In April, Miller’s office issued a Consumer Advisory concerning for profit colleges: http://www.state.ia.us/government/ag/consumer_advisories/e_commerce_internet/for_profit_colleges.html
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