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VA to suspend some GI Bill enrollments, holding back more than $200 million from ‘deceptive’ universities

By STEVE BEYNON | STARS AND STRIPES Published: March 9, 2020

WASHINGTON — The Department of Veterans Affairs announced Monday that it plans to terminate some GI Bill enrollments and withhold more than $200 million in payouts to certain universities for deceptive recruiting practices that target veterans and service members. 

VA officials notified the University of Phoenix, Colorado Technical University, American InterContinental University, Bellevue University and Temple University that the agency intends to suspend approvals of new enrollments. The move comes after officials found “sufficient evidence” that each school used “erroneous, deceptive, or misleading” enrollment and advertising practices to recruit veteran students, according to a letter that the department sent out to veteran advocacy groups and congressional lawmakers. 

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

The VA would not comment on the specifics for stripping each school of their GI Bill eligibility. Yet some for-profit schools have a long track record of conning service members and veterans. In December, the Federal Trade Commission slapped a $50 million fine on the University of Phoenix and ordered it to forgo $141 million in student debt collection. Investigators said the school ran an advertising campaign targeting veterans featuring Microsoft, Twitter and Adobe, falsely implying the university worked with those companies to give students opportunities to work with them.

Andrea Smiley, vice president of the University of Phoenix, said the school maintains its position that it did nothing wrong.

“The university admitted no wrongdoing in choosing to settle with the FTC and continues to believe we acted appropriately,” she said in a statement.

The VA said suspending the GI Bill benefits will not impact current students who maintain continuous enrollment at these schools. The VA said the universities have 60 days to take “corrective action” or all new students will be denied benefits, which would be a significant financial blow to most of the schools. 

The decision to blacklist deceptive universities could have serious financial consequences for each school. No school receives more GI Bill money than the University of Phoenix with 22,780 GI Bill recipients enrolled in 2018, from which the school took in $150,565,041 in revenue, according to the most recent VA data. 

In the same year, Colorado Technical University enrolled 5,535 GI Bill students, which generated $45,559,236 in revenue. American InterContinental University’s GI Bill enrollment was 2,025 and its GI Bill revenue was $14,712,534. Bellevue has 1,595 enrollees, which amounted to $7,359,984. 

The potential expulsion of the schools from their GI Bill eligibility comes after years of advocates sounding the alarm over some for-profit schools seeking to deceive veterans for their federal benefits. Last year, three dozen veteran organizations implored Wilkie to crack down on universities who have deceptive recruiting. 

“We’re grateful VA intends to suspend enrollment of new GI Bill students at these institutions. This sends a powerful message, one we’ve been advocating for VA to exercise since 2012, that the federal government and taxpayers will no longer tolerate schools that seek to defraud veterans and other military-connected students out of their hard-earned federal education benefits,” said Carrie Wofford, president at Veterans Education Success. “Today’s decision by VA is more than justified based on the years of mounting evidence against University of Phoenix and Colorado Tech for maliciously defrauding veterans.” 

The universities that the VA are boycotting are mostly for-profit schools, which have been accused by lawmakers and advocates for years of practicing in shady business practices to target veterans, largely because of the so-called “90/10 loophole.” The 90/10 rule requires that for a for-profit school to be eligible to receive federal student assistance, it must find at least 10% of its revenue from sources other than federal aid. The idea being legitimate for-profit schools should be able to recruit students willing to pay out of their own pockets and taxpayers wouldn’t be propping up failing schools. However, the GI Bill does not count towards this federal aid limit, despite those dollars coming from federal funding. 

Temple University, which has 986 GI Bill students and garners $12,174,441 in revenue, had only three formal complaints from veterans, compared to the University of Phoenix, which has more than 500. VA officials would not comment on the specific reasoning behind any of the schools being stripped of their GI Bill eligibility.

However, in December, Pennsylvania Attorney General Josh Shapiro announced a settlement with Temple regarding false reporting by its Fox Business School to rankings publications to garner a No. 1 ranking for its online MBA program. The AG’s office said Temple’s false reporting was done “intentionally and knowingly.” The settlement included $250,000 in new scholarships for students. 

beynon.steven@stripes.com
Twitter: @StevenBeynon

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