The University of Phoenix, headquartered in Phoenix, Arizona runs an online college popular among military veterans, is under federal investigation for possible deceptive or unfair business practices, its parent company the Apollo Education Group announced to shareholders July 29.
The University of Phoenix, is the largest recipient of federal student aid for veterans and often a sponsor at military education and employment events. Since 2009, when the GI Bill expanded student aid benefits for veterans, the University of Phoenix online program has collected nearly a half a billion dollars in tuition and fees for veterans — a figure that pales every other institution identified as a GI recipient by the Department of Veterans Affairs.
In a filing with the Securities and Exchange Commission, the company disclosed that it had received a “civil investigative demand” from the Federal Trade Commission last week. According to the document, investigators asked for information on a “broad spectrum” of matters, including marketing, recruiting, enrollment, financial aid, tuition, academic programs, billing and debt collection, as well other facets of the business. The filing lists “military recruitment” as one of the areas the FTC is examining.
The filing said Apollo is “evaluating the demand and intends to cooperate fully with the FTC.”
Apollo and the FTC declined to comment further.
The FTC probe is the latest of several state and federal investigations into the online for-profit college industry. Critics say many of these colleges utilize aggressive recruiting tatics to reach students who qualify for large amounts of federal student aid, including GI money. However, the credits often don’t transfer to other schools and aren’t recognized by employers.
On July 1, new federal rules went into effect for any school with a career-training program. Graduates have to be able to earn enough money to repay their student loans, or a school risks losing access to financial aid. Consumer advocates say the regulation is a first step toward reining in the industry. But, they add, because the regulation looks at employment rates for graduates, it won’t affect schools with high dropout rates.
While its online program received $488 million, its campuses also took in large sums to educate vets. In San Diego, Calif., for example, its campus received $134 million in GI tuition assistance, while its campus in Costa Mesa, Calif., received $122 million.
Comparitively, the top recipient of GI tuition assistance among public institutions is the University of Maryland-University College, with $150 million in GI tuition since 2009.