In a statement filed on October 9, 2015 with the Securities and Exchange Commission the University of Phoenix stated they were notified by the Department of Defense that “the university had been placed on probationary status in respect of its participation in the DoD Tuition Assistance Program for active duty military personnel, and that the DoD is considering whether to terminate the DoD Voluntary Education Partnership Memorandum of Understanding with the University which is the basis on which the University’s active duty military students participate in the DoD Tuition Assistance Program”.
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University of Phoenix now is reviewing this notice of probation.
Durbin called on the Department of Defense to investigate the University of Phoenix after the publication of an article by Reveal from the Center for Investigative Reporting documenting the for-profit college’s deceptive marketing practices and its infringement on military trademarks.
Bilodeau also noted that the school was under investigation by the Federal Trade Commission and the California State Attorney General.
“University representatives had been working closely with DoD leaders and we all expected a different response from DoD”, Tim Slottow, President of the University of Phoenix, said in a statement.
The Apollo Group was by far the largest recipient of GI Bill funding, taking in more than $1.2 billion since 2009.
According to Reveal News, the university received $20 million in military tuition assistance from DoD in 2014 alone.
The sanctions may also stem from recent complaints the university is paying the military to receive preferential treatment, by being allowed to host recruiting events ranging from a fashion show to a chocolate-tasting festival. “It is troubling that DoD has used requests for information from other governmental agencies as grounds for placing the university’s DoD MOU in a probationary status”. Hutton declined to comment about whether his agency is in the midst of an investigation of the University of Phoenix or is planning to launch one. Notably, all of the prior sponsored events in question had been approved by base officials and were conducted pursuant to written agreements. Defense officials then will determine whether to permanently bar the school from the tuition assistance program. “The DOD needs to think about what comes next, and the VA needs to take the same steps in looking at how these schools are recruiting”.
While on probationary status, now eligible enrolled students will remain eligible to participate in the Tuition Assistance Program.
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In a letter to the university dated Wednesday, Dawn Bilodeau, the Chief of Defense Department’s Voluntary Education program, pointed to the report, citing several violations by the school. “With below-average graduation rates and a student loan default rate nearly forty percent higher than the national average, the University of Phoenix is going to have a hard time explaining why students should continue to enroll in this institution”, said Durbin.
