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IAVA Applauds DoD’s Crackdown on University of Phoenix

For-profit school long criticized for taking advantage of New GI Bill veteran students

New York (October 9, 2015) — Yesterday, the Pentagon announced it would ban the for-profit University of Phoenix from recruiting students on all U.S. military bases, including at job fairs and other training events. The move was welcomed by Iraq and Afghanistan Veterans of America (IAVA), which for years has called for action against predatory education institutions, like the University of Phoenix, and to close what is commonly referred to as the “90/10 loophole.”

“This is good and long overdue news for veterans and active duty troops worldwide,” said IAVA Founder and CEO Paul Rieckhoff. “IAVA members have been taken advantage of and manipulated by many for-profit “schools,” but the University of Phoenix is constantly reported as the single worst by far. Too many of our members have been left by the University of Phoenix with their New GI Bill burned out, loads of debt and a degree they can’t use. IAVA applauds this long overdue move by the DoD to protect our troops, veterans and their families. And we encourage all vets to check out the free for more information and for help if you’ve been ripped off by University of Phoenix or any other for-profit school.”

Yesterday’s announcement follows on the heels of reports this summer that the University of Phoenix had gamed the system to reap more than $1 billion in taxpayer-funded Post-9/11 GI Bill benefits.

The landmark Post-9/11 GI Bill has sent more than one million veterans to school. Designed to help veterans in their career and transition home, the GI Bill is educating tomorrow’s leaders. However, predatory actors in the for-profit school sector continue to take advantage of veteran benefits. IAVA will continue to bring attention to this targeting of veterans and their hard-earned GI Bill benefits.

Congress passed the 90/10 rule to make sure that no school could be funded by more than 90 percent of federal dollars, such as federal financial aid and loans. However, an unintended consequence has occurred and veteran and military benefits — such as the GI Bill — are currently excluded from earmarked federal dollars. This allows for-profit schools to supplement designated federal dollars with GI Bill funds, which are counted as private dollars. The loophole allows schools to be completely funded by federal dollars: 90 percent from federal financial aid and the 10 percent “private funds” from the GI Bill, thereby rewarding schools for targeting veterans.

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