[Congressional Record Volume 161, Number 159 (Wednesday, October 28, 2015)]
[Senate]
[Pages S7553-S7554]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                         UNIVERSITY OF PHOENIX

  Mr. DURBIN. Mr. President, it hasn't been a very good week or two for 
the University of Phoenix. The University of Phoenix is the largest 
for-profit university in the United States. University of Phoenix 
students cumulatively owe more in student debt than any other 
institution of higher education in America. The students enroll at this 
university, which is largely online but has some classroom experience, 
they sign up for a higher tuition than they would at community colleges 
or most universities, and when they can't finish and drop out, they 
still have debt, or when they finish, they may have a diploma that 
can't find a job.
  The University of Phoenix--this private, for-profit company--receives 
nearly $3 billion a year in Federal Student Aid funding, but the 
quality of education from this for-profit school is suspect. The for-
profit college and university industry is the most heavily subsidized 
for-profit business in America. We have seen a lot of warning signs 
about the University of Phoenix. We've seen how they target the 
military and veterans.
  Paul Rieckhoff of the Iraq and Afghanistan Veterans of America said 
that the University of Phoenix ``is constantly reported as the single 
worst by far'' when it comes to for-profit colleges taking advantage of 
veterans.
  Well, it has caught up with them. A few weeks ago the University of 
Phoenix was placed on probation by the Department of Defense, 
restricting the company from enrolling new servicemembers who used the 
Department's tuition assistance or spousal MyCAA programs. The 
Department found violations by the company, the University of Phoenix, 
after completing a review prompted by an investigative report from the 
Center for Investigative Reporting.
  The article that started this investigation exposed the University of 
Phoenix's strategy to flout Department of Defense rules, including an 
Executive order meant to protect our servicemembers--men and women in 
uniform and their spouses--from aggressive and unfair recruiting by 
for-profit colleges. You see, if these for-profit colleges can sign up 
a member of the military or their spouse, they can bring in the money 
that is set aside in the Tuition Assistance program for education and 
training, and so they want to sign up as many members of the military 
and their families as they can.
  The University of Phoenix avoided the rules set down by the 
Department of Defense by sponsoring events at military bases--not just 
a few but a lot. In one instance they paid $25,000 to sponsor a concert 
for military members and their families. They spent $25,000 for a 
concert? The company gave away computers and wrapped the stage in a 
giant University of Phoenix banner. They used official Department of 
Defense seals and logos on challenge coins and gave them out to 
servicemembers in order to show that they had some kind of close 
relationship with the military.
  In other instances found by the Center for Investigative Reporting, 
the University of Phoenix sponsored resume workshops, which essentially 
amounted to recruiting members of the military and their family to sign 
up for this for-profit college. According to the article, the company 
sponsored hundreds of events, such as rock concerts, Super Bowl 
parties, father-daughter dances, Easter egg hunts, chocolate festivals, 
fashion shows, and even brunch with Santa, on military bases.
  The University of Phoenix spent $250,000 to sponsor events over the 
last 3 years at one place--Fort Campbell, KY. Let's face it, these were 
recruitment events for the University of Phoenix, and they were paid 
for, by and large, with taxpayers' dollars. In the name of corporate 
sponsorship, the University of Phoenix could gain direct access to 
military bases with a nod and a wink from servicemembers. They told 
them they cared about the military. They also cared about the fact that 
they had potential students who would sign up and spend their TA 
benefits at the University of Phoenix. It paid off for them. The 
University of Phoenix is the fourth largest recipient of Department of 
Defense tuition assistance funds. In fiscal year 2014 the University of 
Phoenix received more than $20 million from these benefits. It is not 
surprising then that the company would be so concerned about the 
decision by the Department of Defense to put them on probation. It 
means they will lose access to millions of dollars from these military 
families, and it was reflected when their stock went down in value.
  Since the Department of Defense took action against the company, the 
University of Phoenix stock value has plummeted nearly 50 percent. In 
its decision, the Department of Defense also cited concerns related to 
ongoing investigations of this same University of Phoenix by the 
Federal Trade Commission and the attorney general of the State of 
California. In fact, there are two ongoing investigations of the 
University of Phoenix by the Federal Trade Commission, one is related 
to deceptive marketing and advertising, and a second is related to 
safeguarding student and staff personal information.
  In addition to the attorney general in California, at least two other 
States are also investigating the company. The U.S. Securities and 
Exchange Commission and the Department of Education inspector general 
also have ongoing investigations at the University of Phoenix.
  The Department of Defense is not alone. Many agencies, Federal and 
State, are investigating this major for-profit university. They do have 
some friends though, and one of them is the Wall Street Journal.
  Last week, on the same day an editorial of a similar tone appeared in 
the Wall Street Journal, a few of my colleagues in the Senate sent a 
letter to the Secretary of Defense, Ash Carter, telling him to lay off 
the University of Phoenix despite the fact that the Department noted 
the violations were of such frequency and such scope that they were 
``disconcerting.'' My colleagues in the Senate think the Department of 
Defense's decision to protect servicemembers and to put this university 
under probation was ``unfair.''
  There is no question that the Department of Defense has a duty and a 
responsibility to protect members of the military and their families 
from exploitation. They have established rules under the Voluntary 
Military Education Program, and now my colleagues in the Senate are 
writing letters to the Department of Defense saying: Look the other 
way. The letter they sent criticized the Department for its concern 
over the University of Phoenix's continued participation in Voluntary 
Military Education Program in light of the multiple ongoing 
investigations. I think it would be grossly

[[Page S7554]]

irresponsible for the Department of Defense to back off of this 
protection of our military because of a letter from Members of the 
Senate.
  The broad and ongoing regulatory scrutiny of the University of 
Phoenix gives the Department of Defense legitimate cause for concern 
when it comes to the company's future participation in the Voluntary 
Military Education Program.
  My colleagues in their letter said: ``The TA program is critical to 
our nation's servicemembers' educational and career opportunities.'' I 
couldn't agree more. That is exactly why the Department of Defense 
should ignore the demand of my Senate colleagues and exactly why they 
should not turn a blind eye to the University of Phoenix's violations.
  In order to provide quality educational options for servicemembers 
and to ensure that taxpayer dollars are not being wasted, we must 
promote integrity in the program, and the highest priority should not 
be the profitability of a for-profit university, such as the University 
of Phoenix. The highest priority is quality education and training for 
the members of the military. I thank the Department of Defense for 
taking this bold action and encourage them to remain steadfast in 
protecting students, military members, their families, and taxpayers 
when it comes to future decisions related to the University of 
Phoenix's participation in the Voluntary Military Education Program.
  I yield the floor.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Ms. HEITKAMP. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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