On Friday the Department of Defence announced that it would no longer allow servicemembers to use their funds to attend The University of Phoenix, a for-profit college owned by the Apollo Education Group.
The University of Phoenix would also no longer be allowed to host recruitment events on military instillations.
The DoD found that the University was using deceptive marketing practices and even using military symbols without the proper approval in order to recruit students.
This is a stunning turn of events for a college that receives the largest share of GI Bill money of any college in the country.
Here’s how it got that way.
According to a study by the Center of Investigative Reporting (CIR), The University of Phoenix received $US345 million in GI Bill money last year and $US1.2 billion since 2009.
This was made possible, in part, because of the school’s aggressive recruiting tactics. It held hundreds of events on military instillations around the country, claiming that they were not for recruiting purposes.
It also partnered with the U.S. Chamber of Commerce Foundation to hold Hiring Our Heroes job fairs at military instillations. The events were supposed to give veterans an understanding of how they could apply their skills in a civilian workforce.
Instead they were more like recruiting events for The University of Phoenix.
“When you walk in, there’s four or five fliers and the biggest logo on all those fliers is the University of Phoenix,” Iraq war vet Ryan Holleran told the CIR. “The University of Phoenix was definitely very prevalent.”
They even snuck a video into the event.
It’s unclear whether or not University of Phoenix recruiters are compensated based on the number of people they’re able to bring to enrollment — that would be illegal based on legislation Obama signed in 2009 banning incentive compensation — but what is clear is that the University keeps meticulous records on how successful their recruiters are.
They’re called “competency” workbooks.
The DoD’s ruling has deep implications outside the military too. The Department of Education has something called the 90/10 rule. It stipulates that for-profit colleges can get no more than 90% of their revenue from federal student aid.
But military money doesn’t count in that 90%. It goes in the 10% bracket. So while military students represent only 1% of the University of Phoenix’s total revenue, and 2% of its students, they are vital to the University’s existence.
Meanwhile, a relaxation of a ban on University marketing and recruiting tactics under the Bush administration, coupled with the financial crisis leaving a bunch of Americans desperate for a college degree and more opportunity, has lead to an explosion in the University of Phoenix’s enrollment over the last 20 years and change.
Enrollment peaked at around half a million students in 2010.
And that means an explosion in loans students have taken out to attend the school: