It’s no secret that for-profit colleges receive a large chunk of their revenue from military education benefits. To deter unscrupulous for-profit colleges from unfairly targeting these prospective students, the government has imposed several limitations on just how these companies can recruit servicemembers. But a new report shows that one of the nation’s largest proprietary education institutions – The University of Phoenix – spends millions of dollars to allegedly skirt those rules.
While for-profit schools often provide a convenient avenue for former and current military members and their families to receive higher education, several reports over the past few years have shown that in many cases these students are receiving a useless piece of paper in exchange for thousands of dollars in taxpayer-funded military benefits such as the Post 9/11 GI Bill.
Because of this, President Obama signed a 2012 executive order intended to prevent for-profit colleges from gaining preferential access to the military, such as freely dispatching recruiters to bases. While these rules have helped to hamper aggressive recruitment tactics of some schools, the report by Reveal with the Center for Investigative Reporting shows the University of Phoenix might not be one of them.
The University of Phoenix has never appeared to be one to hold its purse strings tightly – allegedly spending millions of dollars each year on marketing events and sponsorships to gain the attention of prospective students. The company famously paid $155 million for the naming rights of a monstrous football stadium, even though the school has no athletic teams.
But, according to Reveal, the school may just spend the most money covertly recruiting servicemembers.
We really recommend that you head over and read the entire report on Reveal, but here are the 10 things that we learned from the exposé, which relied on statements from officials with the Department of Defense, former servicemembers recruited by the school, University of Phoenix staff, lawsuits against the school and internal documentations from the company.
1. The University of Phoenix allegedly regularly sponsors events – such as a $25,000 concert at Fort Campbell – for servicemembers as a way to sidestep an executive order that bans “inducements, including any gratuity, favor, discount, (or) entertainment” for the “purpose of securing enrollments of Service members.”
2. Internal company documents suggest that such events are part of the school’s “deliberate effort” to create the impression that it is sanctioned and even recommended by the armed forces.
3. An investigation by Reveal found that the University of Phoenix paid five military bases more than $1 million over the past five years to sponsor events for servicemembers such as concerts, Super Bowl parties, father-daughter dances, festivals, fashion shows and résumé workshops.
4. According to Dept. of Education records, these covert recruitment strategies likely paid off, as the school brought in $345 million in GI Bill funding to educate 50,000 veterans in 2014. The school also received $20 million from the Pentagon for the education of some 10,000 active duty servicemebers last year, Reveal reports.
5. The University of Phoenix’s online program enrolled 24,000 Iraq and Afghanistan veterans last year. The graduation rate for that program sits at about 7.3%, with nearly one in five students eventually defaulting on their loans within three years.
6. The University of Phoenix has been partnering with the U.S. Chamber of Commerce Foundation to host employment workshops at Hiring Our Heroes job fairs. The school has allegedly worked out a deal to be the only institution of higher learning showcased at the fairs. Officials say that the school is prohibited from marketing itself at these events. But…
7. A servicemember wearing a camera recorded representatives of the company marketing its services to military personnel. In one case, a workshop trainer repeatedly encouraged those in attendance to visit the college’s website. Additionally, the trainer used an example of a “good” resume featuring the University of Phoenix under education, while a “bad” resume did not.
8. A recent lawsuit filed by former University of Phoenix employees allege the school required them to “operate stealthily” in order to “utilize job fairs as a vehicle for recruitment.” The two employees allege they were fired for not recruiting enough servicemembers.
9. Internal documents show the college has placed recruiters in leadership positions at a plethora of veterans groups such as local chapters of AMVETS, the Navy League of the United States and the Association of the United States Army. The company has also allegedly courted leaders of the American Legion, which once backed legislation to forbid for-profit colleges from spending taxpayer money on marketing and recruitment.
10. The University of Phoenix allegedly uses military insignia without proper licenses. In an effort to better ingrain itself in military culture, Reveal reports, the company purportedly hands out a custom engraved coin on military bases. The coin, which features the school’s logo on one side and the emblems of all military branches on the other, is similar to a “challenge coin” given to military personnel by officers to mark major accomplishments.
Reveal reports that reps for the University of Phoenix declined to be interviewed for their report, but a senior vice president for the school’s parent company, Apollo Education, says the school plays an important role in offering degrees to servicemembers and that the company supports the executive order to “rein in bad actors from all sectors of higher education.”
Following the release of Reveal’s report, Illinois Senator Dick Durbin called on the Department of Defense to investigate the University of Phoenix’s marketing practices.
“I am astonished at the Department’s willingness to accept payment for access, in violation of the spirit of Executive Order 13607, and disappointed in the conduct of its personnel, shielding the company from public scrutiny,” Durbin wrote in a letter to Secretary of Defense Ashton Carter. “I urge you to investigate these allegations swiftly and take immediate steps to bar the company from further access to service members until these issues are resolved.”
“The University of Phoenix is a for-profit company that makes much of its money off of service members and veterans, including $1.2 billion in GI Bill benefits alone since 2009. In return, the company offers degrees of questionable value, below-average graduation rates, and a student loan default rate almost forty percent higher than the national average.”
University of Phoenix sidesteps Obama order on recruiting veterans [Reveal: from the Center For Investigative Reporting]