As veterans transition from military service to civilian life, higher education is the most common steppingstone to new career opportunities.

The GI Bill and other educational benefits are designed to support this transition, offering veterans a path to obtain additional credentials, training and certifications. However, the use of third-party contractors in online higher education poses significant risks to veterans, potentially undermining the very benefits meant to support them.

These third-party contractors are often referred to as “online program managers” (OPMs), and they provide a range of services to colleges and universities in exchange for a cut of the tuition revenue. Depending on the arrangement, OPMs may provide marketing, recruitment, curriculum design and instruction on behalf of their client institutions.

For institutions, the appeal of working with an OPM is the promise of increased enrollment and revenue, but the reality is that most of these contractors are incentivized to pressure students into enrollment because they are paid based on the number of students who do so. Colleges are able to “share” their tuition revenue with OPM contractors because of a loophole in federal law that often runs counter to students’ best interests.

While institutions approved to receive GI Bill benefits are prohibited from providing any commission, bonus or other incentive payment based directly or indirectly on success in securing enrollments, the Department of Veterans Affairs is required to follow the Department of Education’s regulations and guidance when determining whether there has been a violation.

This concern is especially pressing in light of the recent bankruptcy filing of one of the largest OPMs, a company called 2U.

Coding bootcamps — like the Caltech cloud computing program recently profiled by The New York Times — present a unique and particularly concerning angle in this discussion. While many bootcamp programs are ineligible for federal student aid funds (like the Pell grant and federal student loans), they are often eligible for GI Bill benefits. Caltech’s cloud computing program is owned and operated by a third party called Simplilearn, itself backed by private equity.

2U owns and operates similar bootcamps that, like the Caltech program, are marketed under the names of well-known universities. This branding can mislead veterans into believing they are enrolling at a specific reputable school when, in fact, the programs are entirely created and run by a third party. This misrepresentation is not only deceptive but also exploits veterans’ and taxpayer’s trust in well-established educational institutions.

As advocates for students, veterans and the public interest, Veterans Education Success, the Center for American Progress and others have called on the Department of Education to rescind the guidance that gave rise to the OPM industry in the first place.

A letter from Veterans Education Success sent last year to the Department of Education explained how current department policy incentivizes third-party contractors to engage in predatory recruitment practices, including high-pressure sales tactics, subpar instructional offerings and exorbitant pricing financed with debt, raising the alarm over their impact on veterans utilizing their GI Bill benefits.

Minnesota recently made headlines as the first state to ban tuition-sharing agreements with OPMs. This is a significant move, especially considering Gov. Tim Walz’s background as a former command sergeant major in the Minnesota National Guard and a long-time member of the House Veterans’ Affairs Committee.

This legislative action is a direct response to the growing concerns about the financial and academic integrity of institutions that partner with OPMs. It is a clear signal that these agreements do not necessarily translate into the financial stability or educational quality that veterans deserve.

The rise of OPMs and the proliferation of bootcamps present a danger to veterans seeking to use their educational benefits. It’s not just about earned education benefits being wasted on programs with potentially little value to employers. The time and effort sacrificed to attend these programs will never be restored.

The promise of higher education should be one of opportunity and advancement, not potential financial exploitation and disappointment.

As we continue to honor and support our veterans, it is crucial to ensure that the educational benefits they have earned do not have the potential to be squandered by third-party companies interested only in the volume of their market share.

While the recent actions in Minnesota and California are steps in the right direction, the Department of Education should partner with the Department of Veterans Affairs and address this hidden danger.

William Hubbard is the vice president for Veterans & Military Policy at Veterans Education Success. He is a Marine Corps veteran with overseas service in Haiti, El Salvador, Honduras, Guatemala and Afghanistan.

Stephanie Hall is the senior director for Higher Education Policy at the Center for American Progress. She is a leading expert on college accountability and the for-profit online higher education industry.