In 2012, President Barack Obama issued an executive order banning deceptive and aggressive recruiting practices by for-profit colleges, which had been targeting veterans and members of the active-duty military in an effort to capture their GI Bill money.
But an investigation by Reveal’s Aaron Glantz found that by cultivating a cozy relationship with the armed forces, the school that receives the largest share of GI Bill money – the University of Phoenix – has circumvented the rules Obama put in place.
The for-profit school’s strategy has included engaging in recruitment drives disguised as résumé workshops and utilizing military insignias in school marketing without the required permissions. The strategy also has led the company to pay the military to sponsor hundreds of events on military bases across the country, from rock concerts to Super Bowl parties and father-daughter dances.
You can also watch our investigation on the PBS NewsHour.
Aaron Glantz, Reporter: Three years ago, President Obama said he would stop for-profit schools from taking advantage of service members and veterans.
President Barack Obama: They are trying to swindle and hoodwink you. And today, here at Fort Stewart, we’re putting an end to it.
Glantz: The president was responding to reports that for-profit colleges enjoyed virtually unrestricted access to bases, where they enrolled new students and profited from taxpayer money.
Obama: We’re going to up our oversight of improper recruitment practices. We’re going to strengthen the rules about who can come on post and talk to service members.
Glantz: President Obama signed an executive order that placed restrictions on for-profit schools, to weed out deceptive recruitment practices.
Three years after the president’s executive order, no school receives more GI Bill money than the University of Phoenix, according to the Department of Veterans Affairs.
The University of Phoenix is a large for-profit college chain with about 200,000 students – a majority of whom take classes online.
We wanted to know whether the University of Phoenix was complying with the spirit and the letter of the rules President Obama put in place – and whether the for-profit college gained an advantage through its relationship with the military.
Dan Dresen, Iraq War Veteran: University of Phoenix was one of the first schools to contact me.
Glantz: Iraq War veteran Dan Dresen wanted to be a social worker, so he could help other veterans. The University of Phoenix gave him college credit for his military service so he could graduate quickly. That’s what convinced him to enroll. He even got credits for marksmanship.
Glantz (question to Dresen): For learning how to shoot a firearm in the Army National Guard, you got course credits for social work?
Glantz: When Dresen went to apply for a master’s in social work at a state university, that school wouldn’t recognize his bachelor’s degree.
Dresen: I was devastated. I can’t use my degree.
Glantz: It was stories like Dresen’s that led to the President’s executive order. The military followed up with new rules that “ban inducements” – including entertainment – for “the purpose of securing enrollments of service members.”
But what constitutes recruiting?
The university paid for the reality TV star, Big Smo, to entertain the troops.
Glantz (stand up): Here at Fort Campbell, the University of Phoenix is spending thousands of dollars to sponsor this concert. It’s one of dozens of events the for-profit school is sponsoring at military bases across the country. The University of Phoenix’s representative was introduced onstage as a friend of the military.
Fort Campbell representative: the University of Phoenix sponsor representative…
Glantz: He gave away electronic devices.
Fort Campbell representative: Five Galaxy tablets.
Glantz: Fifteen minutes after the concert began, the Army kicked me off the base.
Fort Campbell official (off camera): I’ve got to ask you to leave the post, sir.
Glantz: An Army press officer told me off camera that I was asked to leave because I was talking on camera about the military’s relationship with the University of Phoenix.
Robert Muth is a former officer in the Marine Corps. He runs a legal clinic for veterans at the University of San Diego.
Robert Muth, Supervising Attorney, Veterans Legal Clinic: It looks like you have a corporate entity buying access to look like the preferred or the selected educational provider for the veterans or soon-to-be veterans at a base.
Glantz: Under President Obama’s 2012 order, schools are allowed to recruit on base only as part of official, regulated, education activities.
But documents from five military bases obtained using the Freedom of Information Act show the University of Phoenix sponsored events that had little to do with education – hundreds of events over the last five years. The question remains: Was the University of Phoenix recruiting at these events?
At the five bases we looked at, it paid the military about a million dollars for this access.
The investment is dwarfed by the $345 million in GI Bill money it received last year and, according to the Department of Veterans Affairs – which oversees the program – more than $1.2 billion since 2009, when the new GI Bill went into effect.
The University of Phoenix also produced a coin that its representatives hand out on military bases – it includes the insignias of every branch of the service on one side and the University of Phoenix logo on the other.
Muth: There’s a long tradition within the military of commanders providing challenge coins to individual troops who’ve done something great. If I’m a 19-year-old lance corporal and I see that coin, I assume that the Department of Defense has viewed and vetted that organization and approved them in some way to provide me with an education.
Glantz: Many organizations produce military coins. We found the University of Phoenix was using military insignias without authorization.
We asked the Pentagon and the University of Phoenix about the coin.
Dawn Bilodeau is the chief of education programs for the Defense Department.
Glantz: Does that concern you?
Bilodeau: Yes. That would be, depending on where that was received and if they’re currently handing them out and it was reported, I would be compelled to take action.
Glantz: Retired Maj. Gen. Spider Marks is a dean at the University of Phoenix.
Marks: If there’s an issue with the specific coins that we were passing out, we’re gonna get to the bottom of that and those have been taken off the shelf. They’re not available. They’re gone.
Glantz: Even so, Marks says the coin doesn’t imply the University of Phoenix has the military’s seal of approval.
Marks: There isn’t an endorsement, implicit or explicit, by the use of that coin that DOD thinks any differently about the University of Phoenix than it does Lockheed Martin or it does Prudential Life Insurance or other companies that have challenge coins.
Glantz: Ryan Holleran served 11 months in Iraq. When he returned home, he wanted to get an education.
Ryan Holleran, Iraq War Veteran: I have a bunch of friends who’ve gone through the University of Phoenix. I have comrades, buddies who I went to war with who their partners were going to the University of Phoenix.
Glantz: He’s headed for a naval air station outside Dallas to attend a Hiring Our Heroes job fair sponsored by the University of Phoenix. Holleran agreed to take a hidden camera on to the base so we could see if the University of Phoenix was following the rules.
The sponsorship of this event is permitted, as long as the school doesn’t use the event to recruit students. Holleran attended a résumé workshop taught by the school.
Holleran: When you walk in, there’s four or five fliers and the biggest logo on all those fliers is the University of Phoenix.
Glantz: The presentation had the school’s branding on every slide. And participants were repeatedly encouraged to visit the University of Phoenix’s website.
Workshop leader: The other unique thing the University of Phoenix does, is it links you to specific degree programs at their school.
Glantz: Model résumés used by the University of Phoenix’s trainer included a degree from the University of Phoenix. Yet the main online campus that 24,000 veterans attended last year has a graduation rate of 7.3 percent, according to the Department of Education.
Holleran: It wasn’t like they were just mentioning, “Oh, here. Go get a higher education.” It’s like, “Hey. Come buy my product.”
Glantz: Last month, two former University of Phoenix recruiters filed a lawsuit in a Kentucky circuit court against the school alleging they were improperly fired.
The recruiters said Hiring Our Heroes was just a cover; that they were required to operate “stealthfully.” It was “a tool for surreptitiously obtaining personal information and/or prohibited recruitment activity.” The University of Phoenix denies the allegations.
Internal company documents show the University of Phoenix has been tracking recruitment numbers on military bases – including at job fairs and entertainment events – where recruiting is supposed to be banned by military regulations.
And so, even as the University of Phoenix lost half its students amid scrutiny from Congress and the media, the number of Iraq and Afghanistan veterans using the GI Bill there tripled. That’s according to the Securities and Exchange Commission and the Department of Veterans Affairs.
We contacted the Fort Worth Naval Air Station about the Hiring Our Heroes event – they directed us to the Pentagon. Again, Dawn Bilodeau.
Dawn Bilodeau, Chief, Department of Defense Voluntary Education: If anyone of our educational institutions was providing a workshop where they provided their own marketing materials, used their own references and had their slides with their name, that would be a reportable offence, a noncompliance action. We would receive those and adjudicate them.
Glantz (to Bilodeau): So far, you’ve received no such complaints about Hiring Our Heroes?
Bilodeau: No, sir.
Glantz: If it turned out to be true, that would be very troubling to you?
Bilodeau: It would be listed and we would take action.
Glantz: As for morale-boosting events such as big-name concerts, Bilodeau said the Pentagon is aware of past improper recruitment practices and is taking action.
Bilodeau: In the past, it was a concern, but I feel very confident with the new agreement that we have in place that we’re going to be able to enforce the requirements that are in there and take action, place schools on probation when needed, which impacts their bottom line if they’re not able to recruit new students.
Glantz: The University of Phoenix’s Spider Marks says the school is following the president’s executive order and Department of Defense regulations.
Marks: In terms of compliance, we do compliance exceptionally well.
If we’re going to sponsor morale, welfare and recreation events on military installations, it’s to benefit the service member and bring entertainment to them, opportunities with businesses off post, that kind of stuff. If we are looking to find students who want to go through the University of Phoenix experience as they transition or while they’re on active duty, that’s a separate and completely distinct action on our part.
Glantz: Dan Dresen says he was betrayed by the University of Phoenix. He’s already spent most of his GI Bill and, on top of that, he’s $9,000 in debt.
Dresen: I feel I wasted my VA benefits going to the school.
Glantz: He’s starting over, at this community college in Sacramento.
Dresen: It’s a little late for me because I already went there. I think the other veterans should get out while they still can.
Dresen hopes more veterans will step forward to complain. If that happens, he says, perhaps the government will stop the flow of GI Bill money to for-profit schools.
For the PBS NewsHour, I’m Aaron Glantz from Reveal in Sacramento.