Senator: University of Phoenix should be investigated

Sen. Richard Durbin sent a letter Wednesday to Defense Secretary Ash Carter asking for an investigation of the tactics used by the University of Phoenix to recruit soldiers and veterans to become students.

The request by the Illinois Democrat, the ranking member of the Senate Appropriations Committee's defense subcommittee, is based on a report published Tuesday by the Center for Investigative Reporting, a nonprofit news organization.

Durbin called on the Pentagon to immediately bar the University of Phoenix from further access to service members "until the issues are resolved."

Officials of the school said the report was biased and flawed.

"The University of Phoenix is organized in an amazing way to ensure that we are completely in compliance with all DoD directives and how they affect both our active-duty personnel who are students and our veterans who are students," retired Maj. Gen. James "Spider" Marks, who heads the university's College of Security and Criminal Justice, said.

A spokesman for the Defense Department said it was aware of Durbin's letter and "we will respond promptly and directly to him." The Pentagon also said it had received no complaints of wrongdoing by the University of Phoenix.

The report says a survey of five large military bases found the University of Phoenix paid the military nearly $1 million over the past five years to sponsor events that were used for recruitment. The school also has partnered, the report says, with the U.S. Chamber of Commerce Foundation to hold employment workshops at Hiring Our Heroes job fairs. Many of the fairs took place on military bases.

Durbin's letter asks Carter to investigate whether the school has violated its agreement with the Defense Department. The memorandum of understanding was based on a 2012 executive order by President Obama intended to protect members of the military and veterans from being exploited as they pursue a college education.

Durbin also questioned whether a promotional coin created by the University of Phoenix is a trademark infringement because it has the seals for the Defense Department and every branch of the military on one side.

Marks said the school's general counsel was reviewing concerns raised about the coins. He declined to comment on whether a trademark infringement was involved but said these "challenge coins" are a common part of military culture and something he often has used while in the service and in private business to recognize outstanding performance.

As to the school's involvement in functions on military installations, he said: "All of our efforts on military installations are only done because we have been invited by those commanders on those installations."

The Pentagon said in a statement it "has not previously received a complaint or been made aware of violations of the department's policy at Hiring Our Heroes events." It also has not received any complaints about "recruiting by an educational institution at an employment workshop or job fair."

The University of Phoenix received about $345 million in GI Bill funding last year to educate veterans and $1.2 billion since 2009, according to the Center for Investigative Reporting.

Apollo Education Group, the parent company of the University of Phoenix, announced in its third-quarter report Monday that it had laid off about 600 employees because of continued declines in enrollment and revenue.

Net revenue and enrollment each declined more than 14 percent in the quarter ended May 31, but net income of $48 million was above some estimates. The company's share price continued to drop Wednesday, closing at $12.45, down 24 percent since Monday's earnings report.

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