In spite of previous federal investigations for deceiving military veterans, the University of Phoenix continues to collect more GI Bill funds than any other institution of higher study. From 2013 through 2021, the Veterans Affairs Administration awarded the for-profit institution $1.6 billion in GI Bill funds for students who enrolled in both on-campus and online courses. The GI Bill is designed to assist veterans in obtaining a college education, but it also offers institutions a lucrative source of income.
According to an analysis of federal statistics that independent researcher Brett Herda provided exclusively with USA TODAY, seven of the top 10 recipients of GI Bill funds are for-profit institutions, two are private colleges, and only one is a public institution.
The head of the advocacy group Veterans Education Success, Carrie Wofford, is unsurprised. Her organization has been monitoring veteran-friendly colleges for years to make sure they are providing high-quality education.
The price of closing universities
One veteran’s life was upended when a college shuttered. Even after two years, he is still rebuilding. The University of Phoenix defended its programs and insisted that it is not currently focusing on recruiting veterans.
After routinely ranking among the top receivers of GI Bill monies, the University of Phoenix’s allocation decreased from $391 million in the academic year 2013–2014 to $73 million in 2020–21. The institution came in first place for the fiscal year 2022 with $69 million and fifth place for the number of GI Bill students serviced.
According to a 2015 investigation by the nonprofit news, organization Reveals, the University of Phoenix circumvented federal restrictions on recruiting on military bases and utilized military insignia in its promotional materials without permission. For a time, the Department of Defense prohibited the institution from obtaining financial aid for tuition.
After being accused of using “deceptive marketing that falsely promised” future positions at Microsoft and AT&T, the school settled with the Federal Trade Commission for $191 million four years later. The government inspector said that the business created advertisements for veterans.
A sudden change of direction?
In the midst of a federal investigation, the University of Phoenix president abruptly (and quietly) resigns.
The Department of Veterans Affairs threatened to stop supporting Phoenix in 2020, citing the FTC suit. Colorado Technical University and American InterContinental University may no longer be able to use the GI Bill, the VA further warned. According to Herda’s investigation, their parent firm, Perdoceo Education Corporation, formerly known as the Education Career Company, has also benefited greatly from GI Bill money.
She said that the schools mentioned specialize in online learning, allowing them to reach more students and that for-profit universities are legally permitted to receive the GI Bill.
What universities receive the most GI Bill funding?
Herda, who previously worked in derivatives trading for Bank of America and the Royal Bank of Canada, learned about the top beneficiaries while creating GIBenefit.com, a consumer resource designed to assist veterans in selecting a college and degree that will be financially rewarding in the long run. He made use of information that colleges and universities submit to the Integrated Postsecondary Education Data System of the Education Department.
The University of Maryland system, the only public university in the top 10, got nearly $670 million in GI Bill funds, the majority of which went to the Global Campus, an open-access online division of the public school system at the University of Maryland. According to that institution, its founding purpose was to “serve the higher education needs of working adults and servicemembers just like you.”
Education Management Corporation, a now-defunct organization that oversaw a number of the Art Institute campuses as well as Argosy University and Brown-Mackie College, is hot on Maryland’s heels.
What accomplishes the GI Bill?
The GI Bill is undoubtedly the most generous college access program offered by the federal government. It may be used to pay for public college tuition and fees and grant veterans access to in-state tuition rates no matter where they reside.
For students enrolled in at least half-time of their studies, the benefit also includes a housing allowance. The stipend is determined by the location of the student, so a veteran studying in San Francisco, for example, would earn far more than one living in a remote area of Texas. Even moving expenses for veterans to attend school are covered.
The GI Bill’s adoption in 1944 resulted in a rise in college enrollment and an educated populace. These days, any veteran can use it or transmit it to a relative.
For public institutions and up to about $26,000 for for-profit or nonprofit colleges, the benefit covers net tuition and fees. Extensions are possible. The award is typically valid for 36 months or four years’ worth of coverage across nine-month academic years.
For-profit colleges are required by the federal government to generate no more than 90% of their revenue from tax dollars set aside for financial aid. Federal student loans and Pell Grants, which are often given to low-income families, are included in that funding. The 90% cap does not apply to GI Bill funding prior to 2023.
Veterans’ advocates claimed that the flaw permitted for-profit institutions to enroll veterans in the remaining 10% of their programs—or more—making the federal government their sole or major source of funding. The exception was eliminated by Congress in 2021 as part of the American Rescue Plan.
Why is it difficult to determine which universities are funded by the GI Bill?
Although readily accessible, the information revealing which universities receive the most cash is difficult to understand. For instance, the federal government’s system tracks each campus separately at The University of Phoenix. More than 100 campuses made up the now-defunct ITT Technical Institute, and each one is listed separately.
Universities that are operated for profit frequently change their names and organizational layouts.
Career Education Company was the previous name of Perdoceo Education Corporation. The corporation operated the Sanford Brown and Le Cordon Bleu schools under that moniker. The corporation declared that those schools would close in 2015. According to Buzzfeed, the for-profit operator blamed the Cordon Bleu closures on new federal laws designed to make sure graduates make enough money to pay off their debt from student loans.