Durbin Calls on VA and Department of Education to Review DOD’s Findings on University of Phoenix and Take Action
For-profit college is under investigation by at least three State Attorneys General, the SEC, the FTC & the Education Department’s Inspector General
[WASHINGTON, D.C.] – Following the decision by the Department of Defense (DOD) to place the University of Phoenix on probation and prohibit the company from enrolling new servicemembers and their spouses using its Tuition Assistance and MyCAA programs, U.S. Senator Dick Durbin (D-IL) today called on the Department of Education and the Department of Veterans Affairs (VA) to review DOD’s findings and take appropriate action to protect students and federal taxpayer dollars.
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. Durbin’s letter to the Department of Defense requesting an investigation can be found HERE.
“After a months-long review, the Department of Defense announced yesterday that it is placing University of Phoenix on probation and considering no longer allowing the company to participate in the DOD Tuition Assistance Program. As part of its probationary status, University of Phoenix will not be allowed to enroll new students using TA benefits,” wrote Durbin. “I am asking the Department of Education [and the VA] to work with DOD to review its findings and take appropriate action to protect students and federal taxpayer dollars.”
In June 2013, Durbin held the first Defense Appropriations Subcommittee hearing on voluntary military education programs, which highlighted the for-profit industry’s pattern of exploiting service members. Read more about Durbin’s efforts to close the 90/10 loophole that allows for-profit colleges like the University of Phoenix to receive more than 90% of their revenue from the federal government HERE.
The University of Phoenix is a for-profit company that makes much of its money off of service members and veterans, including nearly $300 million from the DOD Tuition Assistance program and the VA’s GI Bill last year alone. In total, the University of Phoenix – whose students owe more in cumulative student debt than any institution of higher education in America – received nearly $3 billion in federal funding in 2014. In addition to DOD, the company is being investigated by at least three state Attorneys General, the Securities and Exchange Commission, the Department of Education Inspector General, and the Federal Trade Commission.
For-profit institutions of higher education enroll about 10 percent of all college students, but take in 20 percent of the Department of Education’s federal student aid funds and account for 44 percent of student loan defaults. Since the collapse of Corinthian Colleges, Incorporated, the for-profit college industry is experiencing a long overdue reckoning as state and federal investigations and lawsuits against the largest companies continue to accumulate.
Text of today’s letters is below:
October 9, 2015
The Honorable Arne Duncan
Secretary
Department of Education
400 Maryland Avenue, SW
Washington, DC 20202
Dear Secretary Duncan:
I write to you today in response to the Department of Defense’s (DOD) decision to place University of Phoenix on probation with regard to its participation in the DOD Tuition Assistance program and ask you to take appropriate action to protect students and federal taxpayer dollars.
In June, an article by Aaron Glantz published by the Center for Investigative Reporting alleged University of Phoenix was engaging in a variety of dubious marketing practices, including sponsoring events on military bases and using military trademarks inappropriately. On June 30, I wrote to Secretary Carter to ask him to investigate University of Phoenix’s troubling practices and the company’s compliance with its DOD Memorandum of Understanding to participate in the Tuition Assistance (TA) Program. On July 15, Under Secretary of Defense Brad Carson confirmed to me in writing that DOD was completing a full review of University of Phoenix’s TA participation.
After a months-long review, the Department of Defense announced yesterday that it is placing University of Phoenix on probation and considering no longer allowing the company to participate in the DOD Tuition Assistance Program. As part of its probationary status, University of Phoenix will not be allowed to enroll new students using TA benefits.
Given that during the 2013-14 academic year the University of Phoenix received more than $2.7 billion in federal Title IV funding, I ask the Department of Education (ED) to work with DOD to review its findings and take appropriate action to protect students and federal taxpayer dollars under ED’s jurisdiction.
Thank you for your consideration. I look forward to your timely response.
Sincerely,
Richard J. Durbin
October 9, 2015
The Honorable Robert A. McDonald
Secretary
Department of Veterans Affairs
810 Vermont Avenue, NW
Washington, DC 20420
Dear Secretary McDonald:
I write to you today in response to the Department of Defense’s (DOD) decision to place University of Phoenix on probation with regard to its participation in the DOD Tuition Assistance program and ask you to take appropriate action to protect veterans.
In June, an article by Aaron Glantz published by the Center for Investigative Reporting alleged University of Phoenix was engaging in a variety of dubious marketing practices, including sponsoring events on military bases and using military trademarks inappropriately. On June 30, I wrote to Secretary Carter to ask him to investigate University of Phoenix’s troubling practices and the company’s compliance with its DOD Memorandum of Understanding to participate in the Tuition Assistance (TA) Program. On July 15, Under Secretary of Defense Brad Carson confirmed to me in writing that DOD was completing a full review of University of Phoenix’s TA participation.
After a months-long review, the Department of Defense announced yesterday that it is placing University of Phoenix on probation and considering no longer allowing the company to participate in the DOD Tuition Assistance Program. As part of its probationary status, University of Phoenix will not be allowed to enroll new students using TA benefits.
Given that the University of Phoenix is the largest recipient of Post 9/11 GI Bill benefits--$272 million in 2012-13--I ask the Department of Veterans Affairs (VA) to work with DOD to review its findings and take appropriate action to protect veterans and federal taxpayer dollars under the VA’s jurisdiction.
Thank you for your consideration. I look forward to your response.
Sincerely,
Richard J. Durbin
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