The Department of Veterans Affairs is suspending educational benefits for new students enrolling in programs at five universities, citing “erroneous, deceptive, or misleading” enrollment practices, Military Times has learned.
In an email to congressional offices, the VA identified University of Phoenix, Colorado Technical University, American InterContinental University, Bellevue University and Temple University as in violation of U.S. law which prohibits illegal “advertising, sales, or enrollment practices.”
“[The] VA notified the schools of the agency’s intent to suspend program approvals and payment of educational assistance for the education and training of new Veterans and other eligible persons,” the email states.
The agency’s suspension applies to all new enrollments, both “in residence and online,” effective May 9, 2020, “unless the schools can provide contrary evidence to refute the evidence provided that supports VA’s conclusion,” the email continues.
The suspension, however, will not affect those currently utilizing GI Bill benefits, as long as there are no breaks in enrollment for the students.
“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 press release. “The department is committed to helping beneficiaries avoid any negative consequences that may result.”
"[Tragedy Assistance Program For Survivors] is grateful that VA is taking actions to protect military connected students,” Ashlynne Haycock, deputy director of policy and legislation at TAPS told Military Times. “If VA and the [Federal Trade Commission] feel that certain schools have violated the law and their VA contract, they should not be eligible to receive those funds in the future.”
“TAPS and others are standing by to support those students impacted, especially if they need help transferring to a different institution," Haycock added.
Ahead of the formal VA announcement, several veterans groups were preparing information packets for an expected flood of inquiries from students at the schools. VA is encouraging students attending or considering attending the schools to contact the department’s Education Call Center at 888-442-4551.
“VA has not taken corrective action against these schools lightly and are committed to help beneficiaries avoid or mitigate any negative consequences that may result,” the email added.
At the state level, “agencies responsible for approving courses at these schools may also take independent actions based on VA’s decision,” the press release stated.
If the state agencies “withdraw program approval," then the “VA’s authority to issue benefit payments to currently enrolled students as well as new students” would be removed, the release added.
According to the VA’s website, over 15,000 GI Bill students (which includes active duty, veterans and family members using benefits) attended the University of Phoenix online alone in the last year.
The university system had an additional nearly 9,000 students receiving benefits at physical locations nationwide and had nearly 600 complaints across its campuses. 332 complaints involved financial issues and/or student loans, 181 about educational quality and 114 about marketing practices.
Nearly 2,000 GI Bill students attended American InterContinental University both online and in person, according to the VA. The university has 25 complaints in the last two years across its campuses, including 14 about tuition, fees and student loans.
Colorado Technical University had over 5,000 GI Bill student attendees in the last year, mostly through their online program. The university had 198 student complaints in the last 24 months, including 112 about tuition and fees and 46 about recruiting and marketing practices, according the VA’s statistics.
Career Education Corporation, the parent company of both AIU and CTU, reached a $30 million settlement with the FTC and agreed to additionally pay nearly $500 million.
“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,” said Carrie Wofford, president at Veterans Education Success, a veterans advocacy group, in a press release. “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.”
In 2019, the FTC reached a $191 million settlement with the University of Phoenix and its parent company over deceptive advertising practices.
“The welfare of students is obviously or most pressing concern,” said Tanya Ang, vice president at Veterans Education Success. “We’re ready to support any student who wishes to transfer to a new GI Bill-approved school or needs free counseling and legal support on what to do next."
Officials from University of Phoenix say they will respond quickly to VA to ensure no disruptions take place.
“[University of Phoenix] is a leader in serving military and veteran students in the United States. Our students choose us because of the high degree of support services and convenient modes of learning we offer,” said a university spokesperson in an emailed statement to Military Times. “It’s important to note that no students or benefits are currently impacted by [VA’s] recent announcement. 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.
“In the meantime, let us be clear: after an FTC investigation that lasted more than five years, the one marketing campaign the Commission had issues with ended six years ago and occurred under prior ownership. The University admitted no wrongdoing in choosing to settle with the FTC and continues to believe we acted appropriately,” the statement continued. "We chose to settle to end the potential for protracted litigation that would impact our focus on our students. Our more than one million alumni are a testament to the value of our accredited University and career-relevant programs for adult learners.”
The university last year announced its intention to contest the FTC’s complaint, and it disputes the VA’s characterization of the situation, the spokesperson added.
Temple University had nearly 1,000 current GI Bill students with only three complaints in the last two years, while Bellevue University had over 1,500 GI Bill students with no complaints, according to the VA.
In December 2019, Temple University reached a settlement agreement with the attorney general of Pennsylvania regarding allegedly deceptive marketing practices.
“The false reporting, which was done intentionally and knowingly to boost the school’s rankings, elevated Fox Business School as the nation’s top Online MBA program for several consecutive years. The school used this ranking to attract prospective student applicants,” a press release stated.
“This behavior mislead students, alumni, employers and the public about the quality and value of these Temple programs,” said Attorney General Josh Shapiro in the release. “It’s critical that students and alumni alike have confidence in the value of their degree or certification from Temple University or any other institution.”
The settlement included the establishment and funding of $250,000 in scholarships for Fox Business School students over the next ten years, the release added.
It is not immediately clear if the settlement with the State of Pennsylvania is related to the VA’s benefits decision.
Temple University officials say they will show VA they have taken corrective measures.
“Temple University and the Fox School of Business provide an excellent academic experience for all of its students, including veterans. 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,” said Ray Betzner, associate vice president at Temple University, in an emailed statement to Military Times. “We look forward to continuing to provide an outstanding education to veterans. It is important to note that our current veteran students are not affected by this announcement.”
Bellevue University officials said they are looking forward to providing the VA with a “full, timely and accurate response” while reiterating the agency has “received zero complaints” from the university’s over “1,500 veteran-benefitted students.”
“Bellevue University believes that the [VA’s] recent notification is based on unsubstantiated, recycled allegations from a [county court] lawsuit. The allegations in that lawsuit by the Nebraska Attorney General have been denied in [county court]," said Cris Hay-Merchant, director of strategic communications at Bellevue, in an email to Military Times. “We stand by our initial response that we have never misled or would mislead any student, and that includes our military and veteran-benefitted students. We intend to defend this matter vigorously.”
Lawmakers have taken notice.
“The financial incentive for for-profit colleges to prey on veterans and service members is well documented," said Democratic Reps. Mark Takano and Mike Levin, both of California, in a joint statement with Illinois Democrat Sen. Dick Durbin. “Today’s action by the Department of Veterans Affairs protects new G.I. Bill enrollees from being defrauded or misled.”
The three members had previously sent a joint letter to VA Secretary Wilkie regarding the FTC settlements.
This story has been updated to include new information. Stay with Military Times for updates on this developing story.
Dylan Gresik is a reporting intern for Military Times through Northwestern University's Journalism Residency program.
Leo covers Congress, Veterans Affairs and the White House for Military Times. He has covered Washington, D.C. since 2004, focusing on military personnel and veterans policies. His work has earned numerous honors, including a 2009 Polk award, a 2010 National Headliner Award, the IAVA Leadership in Journalism award and the VFW News Media award.