Orwell Award Announcement SusanOhanian.Org Home

University of Phoenix Barred From Recruiting on Military Bases

Reader Comment: I would prefer to read of Harvard Graduates being barred from serving in any capacity in our Federal Government.

Ohanian Comment Phoenix president Timothy Slottow has an MA in Business Administration.Previous employment: Executive Vice President and Chief Financial Officer
University of Michigan and Assistant Vice President of Finance Amtrak

Salary.com reports that Apollo Education Group CEO Gregory W. Cappelli made $8,995,383 in total compensation. Of this total $800,000 was received as a salary, $1,113,600 was received as a bonus, $3,304,471 was received in stock options, $3,690,040 was awarded as stock and $87,272 came from other types of compensation. This information is according to proxy statements filed for the 2014 fiscal year. Earlier, Mother Jones listed him as One of the Nation's 10 Most Overpaid CEOs. Cappelli also holds an MBA.

BankTalk provides other publicly traded for-profit college chief salaries, posted February 2014:

Twelve Salaries of For-Profit University Presidents

American Public Education, Wallace Boston:$2.32 million (2012)

Apollo Group (U of Phoenix), Gregory W. Cappelli: $4.54 million (2013), $4.05 million (2012). Chairman Emeritus John Sperling received $6.87 million and $6.95 million in 2013 and 2012, respectively.

Bridgepointe Education, Andrew Clark: $2.25 million (2012), $2.70 million (2011)

Career Education, Steven Lesnik: $3.11 million (2013) and $504K, (2012).

Corinthian College (Everest, WyoTech), Jack Massimino: $3.02 million (2013) and $3.19 million (2012)

Devry, Daniel Hamburger: $6.24 million (2013) and $5.05 million (2012).

Education Management (Art Institutes, Brown-Mackie, Argosy), Edward West: $1.16 million (2013) and $1.25 million (2012).

Grand Canyon Management, Brian Mueller: $2.68 million (2012)

Lincoln Educational Services, Shaun E. Mcalmont: $1.97 million (2012)

Strayer, Robert Silberman: $2.56 million (2012)

University Technical Institute, Kimberly Mcwaters: $2.20 million (2013), $1.97 million (2012)

ITT Educational Services, Kevin Modany: $8.76 million (2012). No data for 2013 at this time. Four other employees earn more than $1.5 million at ITT.

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.

Write to Ben Kesling at benjamin.kesling@wsj.com and Douglas Belkin at doug.belkin@wsj.com

— Ben Kesling and Douglas Belkin
Wall Street Journal





This site contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of education issues vital to a democracy. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. For more information click here. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission from the copyright owner.