Submitted by Paul Fain on August 10, 2015 - 3:00am
Apollo Education Group said Friday that it is being investigated by California's attorney general, Kamala Harris. The inquiry relates to the University of Phoenix, which Apollo owns, and students who are veterans or members of the U.S. military or California National Guard, according to an Apollo corporate filing.
The investigation follows a broad information request last month from the U.S. Federal Trade Commission, which is scrutinizing allegations of deceptive marketing by Phoenix. That investigation also includes the recruitment of military students.
Apollo last week released a written statement by retired Army Major General Spider Marks, who is executive dean of the Phoenix's College of Security & Criminal Justice. "The university’s practices relating to compliance, training and student support services for military students should, we believe and hope, serve as a model for all institutions, organizations and companies," Marks said.
Laureate Education, a for-profit chain with a global reach, paid Bill Clinton $16.5 million between 2010 and 2014, Bloombergreported last week. Clinton had served as an honorary chancellor for Laureate International Universities, a subsidiary of the privately held company, which is among the world's largest higher education providers.
He stepped down earlier this year, after his wife, Hillary, officially launched her campaign for the Democratic presidential nomination. Laureate had not disclosed how much it paid the Clintons. But Hillary Clinton's campaign released the couple's tax returns on Friday, Bloomberg reported.
Kaplan Career Institute and Lincoln Technical Institute have settled with the Massachusetts attorney general, Maura Healey, to resolve allegations of inflating job placement numbers and employing unfair recruiting tactics, Healey's office said in a written statement. The settlement is part of Healey's broad pursuit of the for-profit industry. Kaplan agreed to pay about $1.4 million to resolve the suit. Lincoln paid about $1 million. Most of the money will go to help eligible former students who attended the two for-profit chains to pay down their debt.
In a written statement, Kaplan, Inc., said it "emphatically maintains that its actions were compliant and in the best interests of students, who were well-served by the institution." The settlement did not include a finding of wrongdoing, and Kaplan said it resolved the legal challenge "due to the high cost of protracted litigation."
Apollo Education Group, which owns the University of Phoenix, disclosed in a corporate filing Wednesday that they received a civil investigative demand from the U.S. Federal Trade Commission.
According to the filing, that "demand" relates to an investigation to look into allegations of "deceptive or unfair acts or practices in or affecting commerce in the advertising, marketing or sale of secondary or postsecondary educational products or services or educational accreditation products or services."
It requires Apollo to provide the federal agency with a broad range of documents and information about Phoenix, relating to the for-profit's chain's marketing, recruiting, enrollment, financial aid, tuition and fees, academic programs, academic advising, student retention, billing and debt collection, complaints, accreditations, training, military recruitment, and other matters. The request covers 2011 to the present.
Representatives from the company declined to comment and referred to the statement in the filing, saying: "Apollo is evaluating the demand and intends to cooperate fully with the FTC."
This is the most recent action taken by the agency against a for-profit institution since it charged the Georgia-based, online Ashworth College with misrepresenting the training and credentials students could earn, as well as whether credits from Ashworth would transfer to other institutions.
More than a year ago, DeVry Education Group received a similar demand from the FTC relating to the "advertising, marketing or sale of secondary or postsecondary educational products or services or educational accreditation products or services by DeVry Group during the past five years."
That investigation has been ongoing.
"The University of Phoenix investigation is important because of the national reach of the organization and because of the documents requested by the FTC," said Elizabeth Baylor, an associate director of postsecondary education at the Center for American Progress.
Those documents, including ones related to military recruitment, are important because a 2014 report from the Senate's Health, Education, Labor and Pensions -- or HELP -- committee found that Phoenix received the most GI Bill funds of any institution, totaling $750 million over four years, said Baylor, who also served as a senior investigator on the HELP committee under former Iowa Senator Tom Harkin.
"This type of finding shows that the FTC plans to examine the practices of University of Phoenix might well be warranted," she said.
Phoenix has struggled in recent years as enrollment and revenue has plummeted. Most recently Apollo Group announced it was laying off approximately 600 employees, who were mostly "enrollment counselors."
Earlier this month the company announced they would revamp the admissions policy to become a more selective institution.
Higher Ed, Not Debt is a nonprofit advocacy group with a focus on for-profit colleges. It joined with the Service Employees International Union and Student Debt Action to organize a Monday protest outside the annual shareholder meeting of ITT Educational Services Inc., which owns ITT Tech, an embattled for-profit chain that is facing federal fraud charges and various other state and federal lawsuits.
Inside Higher Ed reported on the demonstration in Arlington, Va., which featured about 20 protesters. A news release Higher Ed, Not Debt distributed before the event said “former educators and ITT students” would attend. At the demonstration, an official with the group told a reporter that multiple students who had attended ITT were there.
However, only one former ITT student attended, the group later disclosed. The former student, Anthony Byrd, said he attended an ITT campus for about six weeks. Inside Higher Ed was not able to confirm those details, as Byrd refused to grant a waiver from federal student privacy rules that would have allowed ITT to release details about his time at the school.
Higher Ed, Not Debt is organized by unions and progressive groups, including the Center for American Progress, a left-leaning think tank. On Tuesday, a spokesman for the Center for American Progress confirmed that only one former ITT student attended the event.
“Anthony Byrd was the only former ITT Tech student who was able to attend the demonstration yesterday,” the spokesman said in an email. “Many of [the] demonstrators were advocates from groups like Higher Ed, Not Debt and the SEIU, which advocate for students who were wronged by for-profit institutions like ITT Tech.”
The spokesman said many ITT Tech students are financially stressed and unable to make the trip for the protest. But he said 1,500 former students of the for-profit chain have signed a petition asking for a refund.
On Monday ITT said the protest's organizers were not providing accurate information to students or shareholders about ITT's successes.
“Organizations with ideological biases are tainted by ulterior motives, and they frequently recruit people to stage protests,” said Nicole Elam, an ITT spokeswoman, in an emailed statement. “We are helping students build better lives, secure employment and earn higher salaries. The targeted recruitment of former students as ‘spokespeople’ by these organizations also provides us no option to counter claims that may be false, without a student providing a signed release of their records.”
The U.S. Attorney's Office for the Western District of North Carolina last week issued a subpoena to Universal Technical Institute Inc., the for-profit chain disclosed in a corporate filing. The inquiry covers a "broad range of matters" at the institute's campus in Mooresville, N.C., including its compliance with a federal rule that requires for-profits to receive less than 90 percent of their revenue from the federal government.
Nine in 10 students in California's unaccredited law schools drop out, The Los Angeles Times reported. California is among the few states with many unaccredited law schools, in large part because the state is unusual in allowing graduates of unaccredited institutions to sit for the bar. Most but not all of the unaccredited colleges are forprofit.
Kaplan's CEO, Thomas C. Leppert, will step down after two years on the job, the for-profit higher education company said on Thursday. Leppert will be replaced by Andrew S. Rosen, the executive vice president of Graham Holdings Company, which owns Kaplan. Rosen, a veteran at the company, is also Kaplan's chairman.
Kaplan has diversified in recent years, and does a substantial amount of business with nonprofit higher education. Like several other large for-profit chains, the company has reduced its campus footprint amid the sector's declining enrollments. In February it sold 38 Kaplan College campuses to Education Corporation of America, a privately held for-profit.