CBS46 Investigates: Veterans in debt after state agency approved - CBS46 News

CBS46 Investigates: Veterans in debt after state agency approved questionable school

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Navy veteran Ryan Grant expected getting an education on the GI Bill would prepare him for the future. He never anticipated it would leave him, his wife and children homeless.

But that's what happened after Grant enrolled and later withdrew from a barber school he now believes should never have been approved to teach veterans.

"I'm hurting. My family has been evicted from our home. Now my wife and six kids have nowhere to be," said Grant.

Grant's ordeal led to a CBS46 investigation that found the state agency responsible for reviewing schools to teach veterans through the GI Bill does little to ensure the institutions can financially fulfill their commitment to the state's 24,000 veterans who currently are using the GI Bill. In some ways it's tougher to be approved for a credit card or rent an apartment than it is to be cleared to collect federal funds for teaching veterans.

The Georgia Department of Veterans Services, which is contracted by the federal Department of Veterans' Affairs, doesn't conduct background checks, credit checks or review court records before recommending a school for approval.

Grant and fellow veterans Jamar Hughes and Gaston Henderson said their experiences at Cutting Edge Barber and Beauty Institute underscore why the state needs to conduct more thorough reviews of schools.

The trio withdrew from Cutting Edge this summer after learning the branch they were attending in Jonesboro was not approved to teach veterans. Only Cutting Edge's downtown Atlanta location was VA-approved. Nonetheless, the veterans claimed school owner Deedria Clark collected funds by misrepresenting the branch they were attending.

A quick search online turned up more troubling information about the school. Clark herself and Cutting Edge had filed a total of 17 bankruptcies in as many years - almost all were dismissed. A federal tax lien revealed the school had failed to pay more than $12,000 in unemployment taxes. Clark claimed she personally took over the lien from the school in 2012 but the school filed two bankruptcies since then.

CBS46 also learned Clark may have misrepresented the school's financial stability to the approving authority. On a financial statement included in her approval application to the DVS, Clark indicated the school had $7,450 in liabilities but a bankruptcy filing around the same time claimed the school's debt totaled more than $178,000.

"How did she get approved? If she has all of these financial issues, I want to know who looked into this," said Grant.

According to federal law, state approving agencies like the Georgia Department of Veterans Services are supposed to ensure unaccredited schools are financially sound before recommending the institution for approval. None of Clark's financial information was considered by the DVS because it wasn't aware of it.

According to John Suggs, DVS spokesman, the agency ensures applicant schools complete and submit all necessary forms before recommending approval. The DVS does not independently verify the statements applicants make in the forms.

That concerns Grant and the other veterans who were left with debts for withdrawing prematurely from Cutting Edge.

"I needed to get out of that school as fast as I could because it was illegal. I'd get in trouble if I was caught cutting hair in an unlicensed facility," said Hughes, who said he owes the VA approximately $5,000. Grant said he owes $14,000 and the VA withheld his housing stipend which has led his family to be evicted from their home.

But appealing to the DVS for help proved fruitless for Grant and Hughes.

The men said DVS officials brushed them off and refused to reconsider the school's approval status.

In a recorded phone conversation, DVS Director Larry Edwards can be heard calling Hughes a "street corner attorney" after Hughes questioned how the DVS can stand by its approval of Cutting Edge.

"I honestly feel like the VA is treating us like dirt," said Henderson.

"The VA should step up and take ownership and come down on who didn't do their job," said Grant.

After CBS46 began investigating, the DVS revoked Cutting Edge's approval because the school lost its cosmetology school license after moving to a different downtown Atlanta property.

According to the DVS, the 12 veteran students are obligated to repay VA educational benefits received for training but can request waivers to clear the debt.

It's a bit of welcome news for Grant and the others who can't help but wonder how many other veterans are attending questionable schools because the Georgia DVS doesn't bother to check them out.

"You're not just hurting me. You're hurting my family," said Grant about the VA.

No one from the DVS would agree to an on-camera interview or indicate whether any additional steps would be taken to ensure schools' financial soundness.

The U.S. House Committee on Veterans' Affairs is scheduled to hold a hearing in November to review how state approving authorities like the DVS operate.

Clark also declined an interview but issued a statement that reads in part, "I would go to the end of the earth for our students i.e., homelessness, bankruptcy, divorce. The American dream says try, try, and try again. I am committed to do this because of the 159 families that we have trained and licensed and employed."

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