Wednesday, June 29, 2011

GI Bill benefits exploited by for-profit and online colleges

(Update: Someone writing from the University of Phoenix's corporate parent attempted to post an anonymous comment. Scroll to the end for details) I knew that the multibillion dollar for-profit college industry had some ethical failings (see "ACICS accreditation and for-profit education: What's at stake"), but this takes the cake. According to Frontline's "Educating Sergeant Pantzke" (scroll down to see the video), the ways in which for-profit and mostly online colleges such as Westwood, University of Phoenix, Kaplan University, Gibbs College, DeVry University, Ashford University, and Art Institutes are exploiting military vets are absolutely shameful -- and motivated by a desire to scoop up billions in generous GI Bill benefits for veterans.

Examples of for-profit and online colleges exploiting GI Bill benefits 

The vets have served their country, and want to use the educational benefit to get a solid  education and a good job following their service. However, the online degrees provide questionable educational value and Frontline found that hiring managers look down on them. In other words, it's a scam -- and taxpayers are paying for it. A few low points in the report:
  • An Army vet who attended Gibbs College (owned by Career Education Corporation) to study computer animation was promised that the college had connections had connections with the biggest Hollywood studios, including Pixar. The student claims Gibbs never provided proper computer animation training. He blew his GI Bill benefit (which you can apparently only spend on one institution) and took out tens of thousands of dollars in private student loans before realizing his education was useless. His conclusion: "Honestly, I'll regret going to college for the rest of my life."
  • GI Bill benefits exploited by for-profit and online colleges
  • Another combat veteran, Sergeant Pantzke (pictured) wanted to study photography and was sucked in by the Art Institute's pitch. He was accepted as soon as he filled out the school's online form to inquire about the online bachelor's program. Despite having PTSD, he was promised full support to help him with his studies, which he never received (according to Daniel Golden, an investigative journalist who interviewed him for Bloomberg, "He had preserved a string of e-mails between himself and officials at the Art Institute of Pittsburgh, and included in those e-mails were several in which he had asked for help. He had asked for face-to-face tutoring; he had asked for simplified homework assignments. And they had told him that they wouldn't make those accommodations for him"). The school took $70,000 of his GI Bill money, then flunked him.
  • At these rates, soldiers are paying more for their education than a single year's tuition at Harvard Business School. Why are the for-profit, mostly online colleges schools so expensive? According to BusinessWeek, "American Military University, [University of] Phoenix, and closely held Grantham charge $250 a credit, or $750 a course, which allows them to receive the maximum reimbursed by U.S. taxpayers without service members having to pay any out-of-pocket tuition." By comparison, "Publicly funded community colleges offer classes on military bases for as little as $50 a credit."
  • Golden also recounted the tale of an unnamed for-profit college (turns out it's Ashford University) that sent a female recruiter to the Wounded Warriors barracks in Camp Lejeune in North Carolina to sign up brain-injured Marines.
  • Ashford University (remember them?) has 9,000 current or ex-military students, and uses vets for recruiting. Two former recruiters spoke on-screen to Frontline and said they can help establish a rapport with prospective students and convince them to enroll.
  • Westwood College recruiters lie about job prospects to potential students: On one recording of a phone conversation provided to Frontline, the recruiter told a prospect "Right out of the box you have the ability to make between $72 and $82 thousand dollars."
  • How much do University of Phoenix and other graduates of for-profit colleges really make? The answer, according to survey data from PayScale cited by Frontline, is military graduates earn 12-15% less at for-profit colleges compared to military graduates of public state schools. The salary levels shown on screen look to be in the $30,000 to $45,000 range.
  • Do LinkedIn recruiters treat graduates of online colleges the same as graduates of traditional brick-and-mortar colleges? Reports by the Wall Street Journal indicate that online and part-time degrees are often ignored by professional job recruiters.
  • Ted Daywalt of VetJobs was even more blunt about the prospects for graduates of for-profit schools, and said online degrees have a poor reputation in industry. The Navy vet said he talked with 30 HR managers and asked if they were presented with two job candidate with similar work backgrounds, but one graduated from an online school, and one from a well-known "brick and mortar school," which would they choose? All of the HR managers would choose the brick and mortar school, he said.
  • The for-profits have done a skillful job of gaming online search results and Web pages that curious vets might look at. For instance, only directs students to for-profit colleges. I looked them up on the site -- the choices are American Military University (owned by American Public Education, Inc.), Strayer University (owned by Strayer Education, Inc.), Ultimate Medical Academy Online, Grantham University, Virginia College (owned by Education Corporation of America), Walden University (owned by Laureate Education), Kaplan University (operated by Iowa College Acquisition Corporation, which is owned by Kaplan Inc., which is in turn owned by the Washington Post), DeVry University (owned by DeVry Inc.), University of Phoenix (owned by Apollo Group), Ashford University (owned by Bridgeport Education), Capella University (owned by Capella Education Co.), Westwood College (owned by Alta Colleges), Art Institutes (owned by Education Management Corporation), and Full Sail University.
  • According to the Veterans Administration, graduation rates at private for-profits stand at 28%, half the rate for public colleges.
  • Even if students realize their mistake and try to leave the online and for-profit programs for a public brick-and-mortar school, they won't be able to start their GI benefits at a new school. Even worse, the credits don't always transfer, either because there is no comparable coursework at the state school or community college, or the for-profit school is nationally accredited (see my post on regional accreditation vs national accreditation).    

For-profit and online college scams on Frontline

There's more in the Frontline documentary, which you can watch below. It's only about 20 minutes long. I also urge you to watch Frontline's "College Inc." and read some of the other blog posts I've written about the University of Phoenix, online math classes, and distance education, which are listed below the video (scroll down to the bottom of the page).

Watch the full episode. See more FRONTLINE.

University of Phoenix astroturfing my blog

Update: Someone attempted to leave a comment on the site stating the Frontline report is "misleading" and claiming that certain for-profit colleges "like University of Phoenix" are different, specifically when it comes to transferring credits.  However, there are some notable examples of schools that do not accept UoP transfer credits ("CIT does not accept courses from the University of Phoenix", "the University of Phoenix is not an accredited institution"). The author was anonymous, but when I checked out my web logs, what did I see? It turned out that the comment was left by someone from UoP's corporate parent, Apollo Group (see screenshot below, which shows the origin of the comment).
University of Phoenix astroturfing my blog
I don't mind if executives from for-profit schools leave comments on my blog, but they must clearly identify their association -- or the comment will be rejected and I will expose the incident. It's happened before, as this bizarre attempt at astroturfing or ridiculing UoP students (apparently by another UoP employee) shows.

For further reading about online education and for-profit colleges, I would suggest the following posts:
My company has also released a LinkedIn book that explains how to create a rock-solid profile and leverage the online LinkedIn network to improve your career. 


  1. Here is my experience of you and your blog and my experience of interacting with the University of Phoenix in my college pursuit.

    I think you miss the point about the demographic of people who attend. They are people like me who want a degree, they are in their 30's, they have families, they have car payments, mortgages and they want to be qualified to move up and considered for jobs. They knew they should have gone to college and they didn't.

    I have been to all the state schools in my city and quite honestly they suck. At least the way they are designed just doesn't work. Their customer service makes the DMV look like Nordstroms. Their staff are not present, uncaring, and basically look like they are just miserable.

    The schedules of classes don't work for someone to have a day job and go to school full-time and ever see your family.

    The University of Phoenix really speaks to people like me and they were so professional, gracious, and genuinely seemed to care about me. They have an amazing website and Facebook-like student social media and connections that are state of the art.

    I recommend you do something really creative- like you put yourself in my shoes and then go to the University of Phoenix- walk-in and say you want more information. (Do it in the spirit of Eddie Murphy when he used special effects make-up and walked around Manhattan as a white guy.
    I dare you). Do it from the point of view of someone like me, not your already existing opinion.

    You will discover that this place is doing a lot right and honestly I think they will reach a level of critical-mass where there will be full agreement for their degrees. It is only a matter of time.

    Have you been to the University of Phoenix?

    Last- I have a beef with your conspiracy theory about Apollo Group Staff lying and pretending to be students.

    I think you relate to University of Phoenix as an online only school. But the have large campuses all around the United States.

    Isn't it possible students sign in at computers at University of Phoenix? That you are getting your comments from the computer labs. They have this great, huge Learning Center that is like a hybrid of Starbucks and a Computer Lab.

    When I visited their office, there were tons of students there working on assignments and also socializing, working in groups, and I saw a few surfing the internet and checking their Facebook accounts. They have thousands and thousands of students on those computers everyday with the Apollo Group IP address!

    I did not chose to enroll at the University of Phoenix, but I now support them. I enrolled at the Community College because they have more creative classes I am interested in pursuing.

    Thank You-
    Brian Nord

    1. i am exactly with you. It is not that I had trouble with the coursework at traditional colleges, it is that I couldn't go to them while working two jobs. I have been to Florida Tech online and UoP, and now see that online school gives those of us that can't just take off and go to school a chance. It has changed my life, given me a career, and allowed me to still provide for my family while I did it. State schools need to be learning from this until they do UoP meets a need that they can't even touch. I work a few blocks from Univ. of Texas, but will be going back to school (PHD) online because they will not work with my schedule.


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