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

Five schools, including for-profit behemoth University of Phoenix and Temple University, may be prevented from enrolling new students using GI Bill benefits because they engaged in deceptive recruiting and advertising practices, the Department of Veterans Affairs said Monday.

The decision is rooted in investigations by the Federal Trade Commission and state attorneys general that claim the colleges use misleading sales tactics to lure veterans and their families, according to the VA. The schools – University of Phoenix, Colorado Technical University, American InterContinental University, Bellevue University and Temple – have 60 days to address the problems or the federal agency will cut off access to the GI Bill benefits of new enrollees.

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

The suspension would apply only to new students, not those already taking classes at the five schools. Those students will be able to continue their programs using their education benefits unless state agencies decide to withdraw their support, the VA said. The state entities are responsible for granting schools access to veterans’ education benefits.

All of the colleges facing suspension say they will 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,” the University of Phoenix said in an email.

The for-profit chain has been the largest recipient of GI Bill education benefits for more than a decade, after the Sept. 11, 2001, terrorist attacks.

The suspension threat stems from a five-year-long FTC investigation. The trade commission says the University of Phoenix ran an advertising campaign that featured Microsoft, Twitter, Adobe and Yahoo, giving a false impression that the school worked with those companies to employ its students. There was no such partnership, according to the FTC, a charge the university disputes. The case resulted in a $191 million settlement in December, in which the university denied wrongdoing.

The trade commission referred its findings to the VA, which by law must take action within 90 days of the referral.

A separate FTC investigation of Career Education Corp., owner of Colorado Technical University and American InterContinental University, is also credited with the scrutiny of the for-profit schools. The company, now known as Perdoceo Education Corp., agreed to pay $30 million in August to resolve allegations that it misled consumers about its affiliation with the military. The company denied wrongdoing.

Bellevue University in Nebraska wound up in hot water after the state attorney general accused the school in February 2019 of misleading nursing students about the accreditation status of one of its programs. The university is fighting the allegations and said the nursing program has been accredited since October 2017.

“We believe that the evidence will show that no students were misled on the status of our nursing program accreditation,” Bellevue spokesman Cris Hay-Merchant said in an email. “It is important to note now, that the VA has received zero complaints about Bellevue, and we currently have more than 1,500 veteran-benefitted students.”

Meanwhile, Temple’s Fox School of Business was the subject of investigations in 2018 after being accused of inflating the rankings of its online MBA program.

“Temple University and the Fox School of Business provide an excellent academic experience for all of its students, including veterans,” Temple spokesman Ray Betzner said in an email. “We have just received this notice from the Department of Veterans Affairs and will respond as requested to demonstrate the substantial corrective actions that have been undertaken.”

Education funding earned by people who serve in the U.S. military has become a stable source of revenue for many colleges. But veterans groups say that some schools have failed to provide a high-quality education and that the federal government has shirked its responsibility to act.

Veterans groups have long urged the VA to keep education benefits out of the hands of colleges they say prey on members of the military. Three dozen advocacy groups implored Wilkie last year to increase oversight after an audit found that $2.3 billion in tuition benefits could go to predatory schools in coming years because of lax monitoring of colleges enrolling veterans.

“We’re grateful VA intends to suspend enrollment of new GI Bill students at these institutions,” said Carrie Wofford, president of Veterans Education Success, an advocacy group. “This sends a powerful message … 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.”