As reported in a recent blog post by Holly Petreaus, Assistant Director of the CFPB’s Office of Servicemembers Affairs, an Executive Order signed last week by President Obama directs the Secretaries of Defense, Veterans Affairs, and Education to consult with the CFPB and the U.S. Attorney General to take immediate action to ensure that service members, veterans, spouses and other family members “have the information they need to make informed decisions concerning their well-earned Federal military and veterans educational benefits.” The Executive Order is intended to combat what it describes as “reports of aggressive and deceptive targeting of service members, veterans, and their families by some educational institutions” to gain access to such educational benefits.
The Executive Order requires the Departments of Defense, Veterans Affairs and Education to establish “Principles of Excellence (Principles) to apply to educational institutions receiving funding from Federal military and veterans educational benefits programs, including benefits programs provided by the Post-9/11 GI Bill and the Tuition Assistance Program.” The Principles must require such educational institutions to provide various disclosures and protections, including (1) “a personalized and standardized form” to be developed by the Secretary of Education, working with the Secretaries of Defense and Veterans Affairs, to be provided to prospective students eligible for federal military and veterans educational benefits, prior to enrollment, that discloses information about tuition and fees, costs covered by federal educational benefits, financial aid, estimated debt at graduation, and graduation rates (a form that sounds very much like the CFPB’s “Know Before You Owe” financial aid shopping sheet), (2) information about eligibility for federal financial aid before packaging or arranging private student loans or alternate financing programs, (3) educational plans that detail how students using federal military and veterans educational benefits will fulfill requirements necessary to graduate and the expected timeline for completion, (4) a point of contact for academic and financial advising, and (5) the ability for a student to re-enroll after leaving for service-related reasons or receive a refund if a student must withdraw prior to course completion.
Other items in the Executive Order include (1) a requirement for the Secretary of Education to collect data from educational institutions on funding received through certain programs and to make the data available on the College Navigator website, (2) creation of a centralized complaint system for students receiving military and veterans educational benefits to register complaints that can be responded to by various agencies including the CFPB, (3) creation of uniform procedures for referring potential matters for civil or criminal enforcement to the Department of Justice or other agencies, and (4) establishment of new uniform rules and strengthening of existing procedures for access to military installations by educational institutions, which access to be limited to institutions that have entered into a specified agreement with the Departments of Defense and Veterans Affairs.
It’s unclear whether the complaint system mandated by the Executive Order is intended to eventually displace the CFPB’s existing complaint system for student loan complaints (which we have written about) when the complaint involves a military service member, veteran or family member. It’s also unclear how this will affect some of the other steps the CFPB has taken to address financial issues affecting service members, which were not mentioned in the CFPB blog post. Working jointly with State Attorneys General and the Department of Defense, the CFPB has created a “Repeat Offenders Against Military Database”(ROAM) to collect information on enforcement actions taken by federal and state officials against perpetrators of financial scams against the military community. (See our blog post on ROAM.) In addition, the CFPB announced that it had entered into an agreement with the Judge Advocate Generals of the U.S. Army, Marine Corps, Navy, Air Force, and Coast Guard under which the JAGs provide information on consumer complaints from service members and military families to the CFPB.