For Immediate Release
Carrie Wofford | President (202) 838-5050
Tanya Ang | Vice President (202) 838-5050
March 9, 2020
Veterans Education Success Praises Decision by the Department of Veterans Affairs to Suspend New GI Bill Students from Enrolling at the University of Phoenix, Career Education Corporation Institutions, Bellevue University, and Temple University
VA sends a strong message to schools that choose to defraud military-connected students of their hard-earned education benefits; Vets Ed Success stands ready to support affected students.
Washington, DC – The U.S. Department of Veterans Affairs (VA) notified military and veterans service organizations today, including Veterans Education Success, of its intent to suspend new GI Bill enrollments at five institutions of higher learning for violating Title 38 section 3696. Title 38 section 3696 prohibits VA from approving enrollment of GI Bill beneficiaries to schools that use erroneous, deceptive, or misleading recruitment practices.
Affected schools include the University of Phoenix, Career Education Corporation (recently renamed Perdoceo Inc.) institutions — including Colorado Tech and American Intercontinental University — and Bellevue University and Temple University. VA’s action would not affect currently-enrolled students at these schools, only new enrollments. The letters to the schools are here.
“We’re grateful VA intends to suspend enrollment of new GI Bill students at these institutions. This sends a powerful message, one we’ve been advocating for VA to exercise since 2012, that the federal government and taxpayers will no longer tolerate schools that seek to defraud veterans and other military-connected students out of their hard-earned federal education benefits,” said Carrie Wofford, President at Veterans Education Success. “Today’s decision by VA is more than justified based on the years of mounting evidence against University of Phoenix and Colorado Tech for maliciously defrauding veterans.”
Today’s decision comes on the heels of Veterans Education Success long-standing reporting in on the need for VA to comply with 38 U.S.C. 3696 to protect veterans from predatory schools’ deceptive marketing and recruitment practices, also echoed in a 2016 Yale Law School report and in letters from three dozen veterans and military organizations to the VA Secretary in both 2019 and 2016, calling on VA to enforce this law. Under 38 USC 3696, VA may not approve GI Bill funds to “an institution which utilizes advertising, sales, or enrollment practices of any type which are erroneous, deceptive, or misleading either by actual statement, omission, or intimation.”
In today’s announcement to military and veterans service organizations, VA pointed to evidence provided by FTC in its legal action against University of Phoenix (resulting in a nearly $200 million settlement) and Career Education Corporation (resulting in a $30 million settlement as well as a legal settlement with 48 states plus the District of Columbia for nearly $500 million) and other government sources that corroborate allegations that the institutions used false or misleading advertising or enrollment practices. In justifying its announcement, VA cited FTC settlements with the University of Phoenix and Career Education Corporation and States Attorney General actions against Bellevue University and Temple University.
According to VA’s GI Bill Comparison Tool data:
- The University of Phoenix’s enrollment for all GI Bill programs for calendar year 2018 was 22,788, and its Post-9/11 GI Bill revenue was $150,565,041 for fiscal year 2018. Added to the school’s total Post-9/11 GI Bill revenue from 2009 through 2017 of $1,936,128,708, the school received more than $2.08 billion in Post-9/11 GI Bill revenue from 2009 through 2018.
- Colorado Technical University enrolled 5,535 GI Bill students in calendar year 2018, and its Post-9/11 GI Bill revenue in fiscal year 2018 was $45,559,236. And its sister school American InterContinental University GI Bill enrollment was 2,025 for calendar year 2018 and its Post-9/11 GI Bill revenue was $14,712,534 for fiscal year 2018 – for a 2018 corporate total of $60,271,770. Added to its corporate total of Post-9/11 GI Bill from 2009 through 2017 of $630,384,872, the company took $690.7 million from 2009 through 2018 in Post-9/11 GI Bill funds.
VA will notify all currently enrolled GI Bill students about its decision along with reassurance that there will be no impact on current students, who they may continue their academic program and receive benefits without interruption so long as they maintain continuous enrollment.
“The welfare of students is obviously our most pressing concern,” said Tanya Ang, Vice President at Veterans Education Success. “We’re ready to support any student who wishes to transfer to a new GI Bill-approved school or needs free counseling and legal support on what to do next. We appreciate the strong level of effort by VA in communicating their desire to work with us to mitigate any negative impact to military-connected students.”
Some questions remain outstanding, including whether today’s announcement would affect students receiving VA’s Vocational Rehabilitation & Employment benefits, as well as the impact on students receiving federal financial aid from the Department of Education or military Tuition Assistance from the Department of Defense.
Any student who needs help is encouraged to contact Veterans Education Success by calling (202) 838-5050 or email [email protected].
Students are available for media interviews. Members of the media who wish to interview students may contact Barrett Y. Bogue, Senior Communication Advisor, by email at [email protected] for student contact information.
More Background on Career Education Corporation/Perdoceo Inc. (American InterContinental University and Colorado Technical University):
- A summary of the nearly 400 student veteran complaints received by Veterans Education Success against Colorado Technical University and American InterContinental University, as well as Yale Law School’s analysis of veteran complaints against Colorado Technical University.
- 2019 FTC legal action against Career Education Corporation (resulting in a $30 million settlement as well as a legal settlement
- Student veterans have been complaining about CTU on Capitol Hill for years
- In 2013, the New York Attorney General settled with Career Education Corporation for more than $10 million for deceptive recruiting and enrollment tactics.
- U.S. Education Department 2011 action placing school on Heightened Cash Monitoring status; 2011 investigation into misrepresentations made about job placement rates; and 2010 audit to determine whether CTU had policies and procedures to ensure that CTU administered Title IV Program and other federal program funds in accordance with federal law.
- Recent reporting this month showed that the Department of Education deferred $39 million of Title IV money from 2019 to 2020 to save American InterContinental University from violating the 90/10 rule.
- 2017 agreement to pay the United States $10 million to settle a False Claims Act lawsuit brought against American InterContinental University.
More background on University of Phoenix:
- A summary of the 450 student veteran complaints against University of Phoenix, received by Veterans Education Success as well as an analysis by Yale Law School.
- 2019 FTC legal action against University of Phoenix (resulting in a nearly $200 million settlement)
- 2019 legal settlement with 48 states plus the District of Columbia for nearly $500 million.
- In 2015, the US Department of Defense put the University of Phoenix on probation, banned from enrolling military students with Tuition Assistance, following law enforcement attention and a PBS NewsHour expose with undercover footage of University of Phoenix violating Defense Department rules banning college recruiting on military bases. DOD was praised by veterans and military organizations for its action.
- 2015 California AG investigation into business and practices including against military personnel
- 2011 Delaware AG investigation for unfair and deceptive trade practices
- 2011 Massachusetts AG investigation for unfair and deceptive recruitment and financing
- 2010 Florida AG investigation for unfair and deceptive trade practices
- U.S. Securities and Exchange Commission 2012 enforcement inquiry regarding insider trading
- U.S. Education Department 2014 Inspector General subpoena into recruiting, enrolling and financing practices, and 2004 $78.5 million settlement for illegal student recruiting practices
- 2015 whistleblower lawsuit for “substantial misrepresentations” to veterans
- 2014 whistleblower lawsuit in Ohio for violating the False Claims Act
About Veterans Education Success
Veterans Education Success is a veteran advocacy organization whose mission is to advance higher education success for veterans, service members, and military families, and to protect the integrity and promise of the GI Bill and other federal education programs. The organization offers free legal services, advice, and college and career counseling to servicemembers, veterans, their survivors, and families using federal education benefits – and helps them participate in their democracy by engaging with policymakers. Veterans Education Success also provides policy expertise to federal and state policymakers, and conducts non-partisan research on issues of concern to student veterans, including student outcomes and debt levels. Additional information is available at www.vetsedsuccess.org.