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This could be the beginning of the end for America's largest for-profit college
(Flickr/Ken Lund)
The University of Phoenix stadium.
Apollo Education Group, the parent company of The University of Phoenix (UoP), was suspended from recruiting military students by the Department of Defense (DoD) on Wednesday.
Apollo filled an 8-K form — which flags an unscheduled material event for investors — with the Securities and Exchange Commission, and announced that the DoD is still considering whether it will wholly terminate allowance of such practices at the school.
"While on probationary status the University will not be permitted to engage in various activities at military installations, including job training, career events, fairs and other sponsored events," Apollo wrote in the 8-K statement.
That's notable, and likely problematic, for the for-profit university as it pulls in more than any other US college, public or private, from military students.
UoP, the largest for-profit college in the US, has brought in $1.2 billion in GI Bill money since 2009 and received $20 million in tuition assistance from the Pentagon last year alone, The Center for Investigative Reporting (CIR) wrote in July.
That outsized share of the market, in addition to alleged predatory tactics at the school to lure in military personnel, resulted in an investigation into the school earlier this year.
Sen. Dick Durbin wrote a letter to the Pentagon this summer asking it to stop taxpayer-funded tuition payments to UoP pending an investigation.
The investigation centers on whether UoP intentionally broke an executive order from President Barack Obama with regard to access to military service members and veterans.
(University of Phoenix)
"The University of Phoenix repeatedly had paid the military for exclusive access to bases, held recruitment events disguised as résumé workshops and used military insignias in school marketing without the required permission," an investigation by CIR alleged.
For its part, school officials told the Arizona Republic that the CIR report was biased and inaccurate.
The recent announcement from the DoD that UoP must halt military recruitment appears to have surprised even the university's administration.
"University representatives had been working closely with DoD leaders and we all expected a different response from DoD," Slottow said in comments provided to Business Insider.
Though the DoD's order to stop military recruitment at the University of Phoenix is not yet permanent, it is likely a distressing development for the school, as well as the larger for-profit college industry.
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