VA Overturns Vet Enrollment Ban on University of Phoenix Programs

Nationally, the University of Phoenix received nearly $1 billion from the new GI Bill over the last five years. (Adithya Sambamurthy/CIR)
Nationally, the University of Phoenix received nearly $1 billion from the new GI Bill over the last five years. (Adithya Sambamurthy/CIR)

By Aaron Glantz The Center for Investigative Reporting

Within days of news that California regulators had blocked enrollment of additional veterans in seven programs at the University of Phoenix’s San Diego campus, the federal Department of Veterans Affairs has stepped in and lifted the ban.

The VA said Monday that the about-face was based on new information provided by the for-profit campus, which contradicts facts gathered during an on-site state audit in May.

That audit, conducted by inspectors from the California Department of Veterans Affairs, found that the campus had exceeded the 85 percent cap on the number of veterans enrolled in seven degree programs, including those in business, criminology and Web design.

The cap has been on the books since the Korean War, when lawmakers became concerned that fly-by-night trade schools were tailoring programs exclusively to receive GI Bill education funds.

The University of Phoenix did not respond to requests for comment, but in a statement posted on its website, Mark Brenner, chief of staff at the school’s parent company, the Apollo Education Group,said the company still has questions about “the way the May 2 state compliance audit has been handled,” but was “pleased by the Federal Department of Veterans Affairs’ rapid response to quickly clarify and remedy the situation for our veteran students.”

The 85 percent cap is one of the few regulations that schools must follow to qualify for GI Bill funds. Tom Tarantino, chief policy officer for Iraq and Afghanistan Veterans of America, said the fact that the cap was even an issue at the University of Phoenix raises concerns about improper targeting of veterans.

“You have to be really far afield to be violating that, given the small proportion of veterans in this country,” Tarantino said. “The fact that you are even close to violating it means there is something really below board here.”

When The Center for Investigative Reporting revealed the results of the state audit Wednesday, the University of Phoenix posted another statement from Brenner stating that only one of the seven programs exceeded the cap. For that program, a Bachelor of Science in organizational security and management, it said, “the University agreed voluntarily to close enrollment to VA students.”

The University of Phoenix also launched a vigorous social media campaign against CIR’s story, including sending 75 tweets disputing it from the school’s official Twitter account.

In a statement, Keith Boylan, deputy secretary at the California Department of Veterans Affairs, said his agency continues to stand by its audit, but said there is no dispute between the federal and state departments of veterans affairs.

The federal VA “reviewed new information” provided by the University of Phoenix and validated it, Boylan said, adding that, “CalVet considers the matter closed.”

VA officials wouldnot explain how they determined that all of the seven programs identified by the state audit as out of compliance with the federal law were, in fact, in compliance.

VA spokeswoman Victoria Dillon said she wasn’t sure if anyone from her agency visited the school, referring instead to a prepared statement that said the “VA believes it is important to protect Veterans and ensure that they are armed with information to make the right choice and prevent any institution from taking advantage of them solely for their GI Bill benefits without providing a quality education in return.”

Federal law does not require that schools receiving GI Bill money be accredited or report whether veterans graduate or find jobs.

The overall graduation rate at the University of Phoenix’s San Diego campus is under 15 percent, according to the U.S. Department of Education, and more than a quarter of students default on their loans within three years of leaving the school.

In June, CIR reported that the school had received more GI Bill funding than any other brick-and-mortar campus in America, $95 million since 2009. Nationally, the University of Phoenix has taken in nearly $1 billion in GI Bill funding over the past five years.

This story was edited by Amy Pyle and copy edited by Sheela Kamath and Christine Lee.

This story was produced by The Center for Investigative Reporting, an independent, nonprofit newsroom based in the San Francisco Bay Area. For more, visit cironline.org. Glantz can be reached at aglantz@cironline.org. Follow him on Twitter: @Aaron_Glantz.

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