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Tuition Assistance Suspended For University of Phoenix

Law

Thinking of using Tuition Assistance for the University of Phoenix anytime soon? Think again.

After reports of recruiting improprieties and administrative violations surfaced in July of this year the Department of Defense has put the University of Phoenix on tuition assistance probation and has banned it from any recruiting activities on military facilities, including job fairs.

In a statement filed on October 9, 2015 with the Securities and Exchange Commission the University of Phoenix stated they were notified by the Department of Defense that "the university had been placed on probationary status in respect of its participation in the DoD Tuition Assistance Program for active duty military personnel, and that the DoD is considering whether to terminate the DoD Voluntary Education Partnership Memorandum of Understanding with the University which is the basis on which the University’s active duty military students participate in the DoD Tuition Assistance Program."

This means that no new Tuition Assistance enrollments can be processed, however currently enrolled students will remain eligible to participate in the Tuition Assistance Program. In addition, while on probationary status the University will not be permitted to engage in various activities at military installations, including job training, career events, fairs and other sponsored events. DoD is also considering whether to permanently ban the University from all future Tuition Assistance participation.

The DoD cited the following issues leading to the probation:

  • The issuing of “challenge coins” which had the University of Phoenix logo on one side and trademarked DoD and specific military branch seals on the other which gave the impression of official government support of the University
  • The Federal Trade Commission investigation into advertising, marketing, and sale of secondary or postsecondary educational products or services or educational accreditation products or services; and
  • The Investigative Subpoena issued by the California Attorney General’s office in August 2015 seeking information relating to recruiting of U.S. military and California National Guard personnel and related matters and the use of U.S. military logos and emblems in marketing.

In its SEC statement, the University said that it immediately stopped using the challenge coins when DoD notified them of the trademark violation, and is discussing the manner in which it got approval for sponsored events at military installations. The University said it is "currently cooperating fully with all agencies to produce the specified information. No charges have been made in connection with these investigations".

However, Vice Chairman of the Senate Appropriations Subcommittee on Defense, U.S. Senator Dick Durbin (D-IL) praised the DOD’s decision   Durbin, who for years has sought stricter controls on for-profit colleges said, “This is a decisive action by the Department of Defense to protect servicemembers and taxpayers from a company that offers degrees of questionable value.  With below-average graduation rates and a student loan default rate almost forty percent higher than the national average, the University of Phoenix is going to have a hard time explaining why students should continue to enroll in this institution,” said Durbin.  “I will be calling on the Department of Education and the Department of Veterans Affairs (VA) to review the Defense Department’s findings and take appropriate action against the University of Phoenix to protect Title IV students and veterans using GI Bill benefits.”

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GI Bill® is a registered trademark of the U.S. Department of Veterans Affairs (VA). More information about education benefits offered by VA is available at the official U.S. government Web site at www.benefits.va.gov/gibill
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