This report is the second in a series examining the troubled history of for-profit higher education, from the problems that plagued the post-World War II GI Bill to the reform efforts undertaken by the George H. W. Bush administration. For the most part, the reforms Congress had adopted in creating college benefits for veterans of the Korean and Vietnam wars seemed to work, and the 1950s and 1960s were relatively scandal-free. The extension of GI Bill benefits not just to veterans but to active duty servicemen fed a rapid expansion of "correspondence schools," a more primitive and less interactive version of today's online education, conducted through the U.S. Mail. The growth in this for-profit education industry was spurred in large part by the fact that soldiers and veterans could enroll while also holding a full-time job. Vietnam veterans were not the only ones eligible for federal aid to enroll in these schools. As part of the War on Poverty, President Lyndon Johnson had expanded federal student aid programs to millions of Americans who had not served in the military, creating a new and growing pool of federal dollars for schools to tap. The convergence of these two markets --Vietnam veterans, and the middle- and low-income Americans--created the "perfect storm" for profit-making shenanigans. By the early 1970s, defaults in the relatively new guaranteed student loan program were becoming a national issue. As the consumer protection movement blossomed in the early 1970s, the Federal Trade Commission (FTC) emerged for the first time to rein in the excesses of for-profit schools. Spurred in part by the FTC's campaign, the Department of Health, Education and Welfare (HEW) began to shift its regulatory efforts. While HEW had initially treated rising student loan defaults as largely due to poor collection procedures, federal officials came to believe that in many cases the schools themselves were a bigger problem. Using authority Congress had granted it in 1972, the Office of Education began to take action against schools and, by July 1975, the "Wall Street Journal" reported that 340 had been removed from participation in federal student aid programs. Also the Veterans Administration (VA) made reforms. As a result, default rates dropped, however the reforms did not stick. Loopholes in the HEW regulations, as well as lawsuits and lobbying by the industry, soon undermined the new federal laws and regulations. [For the first report in the series, Truman, Eisenhower, and the First GI Bill Scandal," see ED614461.]