The online college is under scrutiny for possible deceptive or unfair business practices
WASHINGTON — The University of Phoenix, an online college popular among military veterans, is under federal investigation for possible deceptive or unfair business practices, its parent company the Apollo Education Group announced Wednesday.
The for-profit, publicly traded company is the largest recipient of federal student aid for veterans and often a sponsor at military education and employment events. Since 2009 when the GI bill expanded student aid benefits for veterans, the University of Phoenix has taken in more than $488 million in tuition and fees — a figure that dwarfs nearly every other institution identified as a GI recipient by the Department of Veterans Affairs.
In a filing to the Securities and Exchange Commission, the company told shareholders that it received a “civil investigative demand” from the Federal Trade Commission this week. According to the document, investigators asked for information on a “broad spectrum” of matters, including marketing, recruiting, enrollment, financial aid, tuition, academic programs, billing and debt collection, as well other facets of the business. The filing lists “military recruitment” as one of the areas the FTC is examining.
The filing said Apollo is “evaluating the demand and intends to cooperate fully with the FTC.”
Apollo and the FTC declined to comment further.
The FTC probe is the latest of many state and federal investigations into the for-profit college industry. Critics say many of these colleges are aggressive in recruiting students who qualify for large amounts of federal student aid, including GI money. The credits often don’t transfer to other schools and aren’t recognized by employers.
Industry officials say they are unfairly being scrutinized, and say for-profit schools have expanded education opportunities to communities who wouldn’t otherwise have access.
On July 1, new federal rules went into effect for any school with a career-training program. Graduates have to be able to earn enough money to repay their student loans, or a school risks losing access to financial aid.