The for-profit chain University of Phoenix can no longer recruit on military bases, nor will they have access to federal education funding for service members after being accused of targeting veterans unfairly.
Data from the Pentagon suggests that 9,000 veterans used money received from the GI bill to attend the university last year. A portion of the college’s website is dedicated to veterans, letting them know that the college has “military representatives who understand the culture and lingo you’re used to.”
However, the Department of Defense recently discovered that the school did not receive the permission it needed to hold events on military bases or to use military logos on its “challenge coins.” The coins were created by the school, copying the tokens used by the military, which are given out in recognition of good work, reports Ben Kesling for The Wall Street Journal.
The school has been given two weeks to make its case on the matter or the ban could become permanent. Parent company Apollo Education Group (APOL) made the announcement during a regulatory filing on Friday and has already discontinued the use of the coins, writes Danielle Douglas-Gabriel for The Washington Post.
“University representatives had been working closely with Department of Defense leaders and we all expected a different response,” said University President Tim Slottow in a statement.
Senator Dick Durbin of Illinois asked the Department of Defense to investigate the school after an unflattering report from the Center for Investigative Reporting was released earlier in the year which found the university had received $1.2 billion in G.I. Bill benefits since 2009.
For-profit colleges across the country have come under fire for targeting veterans and low-income students by promising them job prospects after graduating from the program. However, the schools continue to report high student loan default rates and poor graduation rates. A study from the Student Veterans of America found around 10% of veterans receive GI Bill grants to attend for-profit colleges.
Although schools may not make up more than 90% of their revenue from federal aid, funding received from the Department of Defense does not count toward this, which may encourage for-profit schools to target veterans. As a part of her run for presidency, Hillary Clinton has promised to work on closing the loophole.
Despite receiving Department of Defense financial aid from thousands of veterans, the university maintains that total funding from that source accounts for only 1% of revenue at the school.
The school is also currently under investigation by the Federal Trade Commission concerning its use of deceptive marketing tactics to attract new students. Over the last five years the school has lost around half of its students and closed 100 campuses. There are currently 206,000 students enrolled, with this year’s expected enrollment to dip down to 150,000.