University of Phoenix Barred From Recruiting on Military Bases
According to Chronicle of Higher Education, the median annual pay of presidents at private nonprofit universities was $358,746, compared with $627,750 at large, private research universities.
By Ben Kesling and Douglas Belkin
The Department of Defense on Thursday placed the University of Phoenix system on probation, barring the for-profit school giant from recruiting on military bases and preventing troops from using federal money for classes.
The Defense Department provided few details on the move, but the university system has been subjected to scrutiny by the department and Congress for months. In June, Sen. Dick Durbin (D., Ill.) sent a letter to Defense Secretary Ash Carter requesting an investigation into, among other things, the school's recruitment efforts on bases.
The university system, with some 200,000 enrolled civilian and military students, is a major provider of classes to active duty troops, reservists and National Guardsmen, and provides on-campus and distance learning.
"The institution will not be authorized access to DoD installations for the purposes of participating in any recruitment-type activities," said Dawn Bilodeau, chief of the Defense Department's Voluntary Education program. "Further, no new or transfer students at the institution will be permitted to receive DoD tuition assistance."
Last year, California briefly banned a campus of the university, which is a subsidiary of Apollo Education Group Inc., from enrolling veterans in its programs, alleging the school had enrolled too high a percentage of students receiving federal funding. The ban was soon lifted after the school was deemed to be in compliance. The current probation doesn't affect veteran enrollment and troops currently enrolled will be allowed to continue receiving funds.
"The University intends to continue its cooperation with federal and state agencies to respond to their requests," said University of Phoenix President Tim Slottow in a statement late Thursday. "University representatives have been working closely with DoD leaders and we all expected a different response from DoD."
He said the university will fight the decision, but will comply with the order. "At this time, the university will not accept new students who wish to use tuition assistance program funds," Mr. Slottow said.
In its most recent quarterly filing, Apollo Education Group reported significant headwinds. Revenue for the third quarter of 2015 was $681.5 million, compared with $793.6 million a year earlier. University of Phoenix enrollment fell 14.5% to 206,900 from 241,900 in the same period a year earlier.
The University of Phoenix closed 115 brick-and-mortar locations in 2012 and has been under growing pressure as the federal government has cracked down on for-profit schools with low graduation rates and high student-loan default rates.
Sen. Durbin said that he will be calling on the Department of Education and the Department of Veterans Affairs to review the Defense Department's findings to possibly bar Phoenix from enrolling students who are using GI Bill benefits.
"This is great and long overdue news for veterans and active duty troops worldwide," said Paul Rieckhoff, CEO of Iraq and Afghanistan Veterans of America, a veterans' advocacy group, who said Phoenix is often cited as a problem school by members.
Apollo plans to file an 8-K, which is required when a significant company event occurs, with the Securities and Exchange Commission on Friday, according to a person familiar with the matter.
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Ben Kesling and Douglas Belkin
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