The Pentagon temporarily has barred the University of Phoenix from recruiting students at U.S. military bases and will not let new active-duty troops receive tuition assistance for the for-profit giant’s courses.
The move is another blow to the University of Phoenix, which said it is under investigation by the Federal Trade Commission and California Attorney General Kamala Harris related to recruitment of members of the U.S. military and the California National Guard.
Apollo Education Group, the university’s parent, said the Defense Department notified it of the move last week.
The university’s participation in the department’s tuition-assistance program has been placed on probation in part because of the FTC and California investigations, the filing said.
Military members who are enrolled in university courses can continue to receive tuition assistance, but new enrollees or transfers will not be allowed, the filing said.
Dawn Bilodeau, chief of the Defense Department’s voluntary education programs, said in a written statement that the university “will not be authorized access to DoD installations for the purposes of participating in any recruitment-type activities, including but not limited to job training, and career events and fairs.”
In the fiscal year ended Sept. 30, there were 9,282 U.S. service members attending the university through the tuition-assistance program.
Bilodeau said she could not provide any information about the reasons for the probation.
But the Apollo Group filing said another reason cited by the Defense Department in its letter was the university’s sponsorship of “various events at military installations” without the proper approval and the distribution of so-called “challenge coins” without approval to use trademarks.
Challenge coins are small coins popular in the military as signs of membership in service branches and are given to promote morale. They have emblems of military service branches.
Apollo said the university “immediately discontinued the use of challenge coins” in July after the Defense Department raised objections. And Apollo said it has discussed the issue of approval for events at military bases with the Defense Department and noted that all previous events had been approved by base officials.
Military benefits are an important source of revenue for for-profit colleges, which historically have struggled to comply with a federal student-aid regulation known as the 90/10 rule. The rule — which requires for-profit schools to derive at least 10 percent of revenue from non-federal sources — is a cost- and quality-control measure. It ensures that schools do not operate solely on federal financial aid.
But military benefits such as the Defense Department’s tuition-assistance program and the GI Bill are not counted as federal funding.
Federal lawmakers and student advocates argue that that policy has incentivized for-profit colleges to target active-duty military and veterans in order to comply with the rule.
A 2012 Senate report found that for-profit colleges took in half of the $563 million in military tuition assistance given out in the prior year.
The GI Bill, which pays tuition and housing for military veterans, is a much larger pool of money.
A Los Angeles Times analysis of federal data from 2009 to 2014 found that for-profit colleges took in about 40 percent of the $8.2 billion given out under the latest version of the GI Bill.
The Apollo Group was by far the largest recipient of GI Bill funding, taking in more than $1.2 billion since 2009.