May 2, 2016

Ellen DeGeneres Shills For For-Profit College Facing Law Enforcement Probes

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Today on her television show, in honor of the upcoming Mother’s Day, Ellen DeGeneres gave a $25,000 college scholarship to Courtney, an Oklahoma stay-at-home mom who wants to be an ultrasound technician.  That’s fantastic.

Except that the scholarship is to attend the for-profit University of Phoenix, which even with a $25,000 scholarship could turn out to be a bad deal for Courtney.  The University of Phoenix is currently the subject of investigations by multiple federal and state law enforcement agencies. And Department of Education data has shown that the University of Phoenix’s graduation rate for first-time, full-time students is about 16 percent; that graduation rate for the school’s online programs is about 4 percent.

DeGeneres’s award of the scholarship was clearly a paid promotion, highlighted not only on TV but also her show’s website home page and special University of Phoenix page, as well as its Instagram page.  DeGeneres announced in the same breath that the University of Phoenix would be giving out 10 full-tuition scholarships.

[UPDATE 05-04-16: By late yesterday, the posts about the award of the University of Phoenix scholarship had been deleted from the “The Ellen DeGeneres Show”‘s Instagram and Twitter, as well as from the front page of her website. No explanation as to why. The page on Ellen’s site promoting the scholarships is still up. Student advocates had raised concerns publicly, and Marketwatch wrote about the controversy yesterday.]

The University of Phoenix, which has been getting $2 billion to nearly $4 billion a year in taxpayer funds, has a troubling record of spending too little on instruction, charging high prices, and leaving many students worse off than when they enrolled.

After an investigative media report last June highlighted troubling, potentially unlawful recruiting practices by the University of Phoenix directed at military service members, the Defense Department in October put the school on probation, kicking the school’s recruiters off bases and suspending student tuition assistance to the company. The report found that the University of Phoenix, which is owned by Apollo Education Group, paid the military for exclusive access to bases through sponsoring concerts and other events, sidestepping President Obama’s 2012 executive order aimed at preventing for-profit colleges from gaining preferential access to U.S. troops. The school also reportedly held “résumé workshops” for troops that seemed to serve as recruiting sessions, and it handed out “challenge coins” that included University of Phoenix logos on one side and, without the required permission, military branch insignias on the other side.

In January, following an aggressive public push to lift this ban by Senate armed services committee chairman John McCain (R), the Pentagon reversed course, ending the probation, and simply put the school on “heightened compliance review” for a year.

But while some students do well at the University of Phoenix, and the school has some fine instructors, the institution, especially in the past fifteen years, has left many other students worse off. As John Murphy, co-founder of the company, explained in a 2013 book, the University of Phoenix lost its way when it moved beyond its mission of training and credentialing working adults. Instead, lured by too-easy federal aid money, the company joined other predatory companies in seeking to enroll recent high school graduates, low-income single parents, and young service members and veterans, into programs that often were not strong enough to help those students succeed.

The 2012 comprehensive report on for-profit colleges by then-Senator Tom Harkin (D-IA) found that the University of Phoenix spent $892 per student on instruction in 2009, compared to $2,225 per student on marketing, and $2,535 per student on profit. “This,” the report found “is one of the lowest amounts spent on instruction per student of any company analyzed.”

Around 25 percent of University of Phoenix students default on their loans within three years of leaving school.

Paul Rieckhoff, founder and CEO of Iraq and Afghanistan Veterans of America, has said that the University of Phoenix has been the “worst by far” for-profit college in terms of taking advantage of the vets who are members of his organization. A letter sent last fall to Secretary of Defense Ash Carter from more than 30 veterans, civil rights, and consumer organizations supported the Pentagon’s investigation and cited, as support, the complaints of hundreds service members and veterans “who experienced deceptive recruiting” by the University of Phoenix.

At the time of the Pentagon suspension action last fall, four state attorneys general, along with Federal Trade Commission, the Department of Education, the Consumer Financial Protection Bureau, and the Securities and Exchange Commission were all already investigating or suing the University of Phoenix for fraud and other misconduct.

The school’s parent company, Apollo, is in turmoil right now, desperately trying to reinvent its image with the public and ramp up revenues as it seeks to sell itself to a group of private equity firms.

Ellen DeGeneres is not the first celebrity to shill for the troubled University of Phoenix — Suze Orman, Al Sharpton, and others have taken turns.  (The University of Phoenix was the lead sponsor of Education Nation, an event hosted for years by NBC, whose owned-and-operated local stations have a syndication deal with DeGeneres’s show.)

This article also appears on Huffington Post.