·  Legal News, Analysis, & Commentary


Veterans Affairs Threatens to Cut GI Bill Benefits to University of Phoenix

— March 12, 2020

The Department of Veterans Affairs is planning to halt GI Bill benefits to five schools, including the University of Phoenix and Temple University.

According to The Washington Post, the decision follows an investigation by the Federal Trade Commission and a panel of state attorneys general. Collectively, they’ve determined that the affected colleges use deceptive recruiting and advertising practices to enroll veterans and their family members.

The Post reports that the schools facing benefit cuts include the University of Phoenix, Colorado Technical University, American InterContinental University, Bellevue University, and Temple.

To avoid losing access to GI Bill enrollments, the colleges must address and correct a laundry-list of issues; they have 60 days to take action.

“Our aim in taking this action is to protect the Veterans and their dependents’ GI Bill benefits and comply with the law,” V.A. Secretary Robert Wilkie said in a statement. “The department is committed to helping beneficiaries avoid any negative consequences that may result.”

The suspension, says the Post, only applies to prospective new students; it wouldn’t impact anyone who’s already taking classes at any of the colleges.

ITT Tech, a former for-profit college, was extensively criticized for its high tuition and low post-graduate earnings. Similar allegations have been made against other for-profit institutions, like the University of Phoenix. Image via Dwight Burdette/Wikimedia Commons. (CCA-BY-3.0)

Current students would still be able to avail their GI Bill benefits, provided state-level authorities don’t withdraw their support. State officials, notes the Post, decide whether colleges are eligible for veterans’ education benefits.

The University of Phoenix, along with the other four institutions, plans to appeal the decision.

“We will respond expeditiously to the VA’s teams that are handling the review process and we are working to assure no disruptions to existing or new students, now or in the future,” a University of Phoenix spokesperson said in a statement.

The University of Phoenix—the biggest recipient of GI Bill benefits for more than a decade—has been oft-criticized for the quality and cost of its education. Similar to the defunct, for-profit IIT Tech, Phoenix has been accused of charging tens of thousands of dollars for [purportedly] low-quality degrees that could be attained at public schools for far less money.

James Adams, a veteran who served two tours in Iraq, told The Center for Investigative Reporting’s Reveal News that the University of Phoenix had run a “pressure campaign” to get him enrolled.

“They kept calling and calling,” Adams said, “until I finally broke down and said I’d go to the school.”

Another veteran—former Army specialist Larry Casteel—recalled a similar experience, telling Reveal he wishes the FTC had taken action earlier. Casteel says he exhausted all of his GI Bill benefits paying for a bachelor’s and master’s in business administration from the University of Phoenix.

Tuition was so high that Casteel also had to take out another $80,000 in student loans to pay for courses.

Reveal states that, despite graduating from the University of Phoenix, Adams and Casteel are both unemployed.

“A lot of times, I don’t even put the University of Phoenix on my application because I get looked at weird,” Casteel said, adding that he’d thought an MBA would let him “do something.”

The Post says that the V.A.’s threat stems from a five-year Trade Commission investigation. It found that the University of Phoenix had, for instance, run advertisement campaigns featuring an assortment of high-profile companies, including Microsoft, Google and Yahoo.

The FTC alleges that Phoenix’s advertisements suggested the school had a partnership with those companies, allowing graduates a streamlined path to employment in tech. However, no partnership existed.

Alongside the current threats of curtailment, the University of Phoenix paid a $191 million settlement in December. However, the school denied any wrongdoing.

The other colleges named in the potential action faced similar allegations of fee inflation and deceptive marketing. Career Education Corp, the owner of Colorado Technical University and American InterContinental, was required to pay $30 million last summer for misrepresenting its affiliation with the United States military.

Temple—a public research university—faced a slightly different set of complaints. The Post states that Temple’s Fox School of Business was investigated in 2018, following reports that it inflated the rankings of its online MBA programs.

Wilkie said potentially curbing the colleges’ access to GI Bill benefits is to protect veterans from exploitation while ensuring that higher education institutions comply with federal law.

“Our aim in taking this action,” Wilkie said, “is to protect Veterans and their dependents’ GI Bill benefits and comply with the law.”

“The department is committed to helping beneficiaries avoid any negative consequences that may result,” Wilkie said.


VA plans to suspend University of Phoenix and other colleges from accessing GI Bill benefits

Veterans Affairs bans University of Phoenix from new GI Bill enrollments

Join the conversation!