In Depth December 30, 2009, 5:00PM EST

For-Profit Colleges Target the Military

Online universities are raking in millions by signing up soldiers as students. But how valuable is the education they're delivering?

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Peake earned his bachelor's online while serving with the U.S. Army in Afghanistan Steve Jones

By Daniel Golden

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Drake says an attractive Ashford recruiter got the attention of wounded Marines Bryan Regan

Songer, director of lifelong learning at Camp Lejeune, says most online for-profits do a very good job Bryan Regan

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U.S. Marine Corporal James Long knows he's enrolled at Ashford University. He just can't remember what course he's taking. The 22-year-old from Dalton, Ga., suffered a traumatic brain injury, impairing his ability to concentrate, when artillery shells hit his Humvee in Iraq in 2006. He signed up for Ashford, one of at least a dozen for-profit colleges making money off active-duty military with subsidies from American taxpayers, after its recruiter gave a sales pitch this year at a barracks housing the Wounded Warrior Battalion at Camp Lejeune in North Carolina.

Long isn't alone. Ashford ranked sixth in Marine Corps enrollment in the year ended Sept. 30, 2009, with 1,018 students. At Camp Lejeune, Ashford had 119 active-duty students, up from 25 the previous year, and 6 in fiscal 2007.

Since 1947 the Defense Dept. has subsidized college tuition for active-duty service members, a benefit intended to boost recruitment and retention. State universities, community colleges, and private nonprofit colleges have traditionally dominated the market. They provide classes on bases under agreements with the military services, and their programs undergo federal review.

Now for-profit colleges specializing in online degrees are making substantial inroads. Their online programs don't require federal contracts and aren't subject to the same scrutiny. Some of them feature easy courses and fast degrees, or entice service members to enroll with free textbooks or laptops. The for-profit schools account for 29% of college enrollments and 40% of the half-billion-dollar annual tab in federal tuition assistance for active-duty students, according to Defense Dept. and military data. The shift is leading to educational shortcuts and overzealous marketing, says Greg von Lehmen, chief academic officer of the University of Maryland University College, the adult-education branch of the state school and one of the oldest and biggest providers of education for military personnel. UMUC competes with the for-profits for active-duty students.

"In these schools, the rule is faster and easier," von Lehmen says. "They're characterized by increasingly compressed course lengths and low academic expectations. One has to ask: Is the Department of Defense getting what it is seeking?" At Apollo Group's (APOL) University of Phoenix, the biggest for-profit college in the U.S., some active-duty military personnel can earn an associate's degree, which typically takes two years of study, in five weeks.

Of the dozen colleges with the biggest active-duty enrollment, five are for-profits that conduct most or all of their courses online. Three—American Military University, 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. Publicly funded community colleges offer classes on military bases for as little as $50 a credit.

Taxpayers picked up $474 million for college tuition for 400,000 active-duty personnel in the year ended Sept. 30, 2008, more than triple the spending a decade earlier, Defense Dept. statistics show. While degrees from any accredited college provide a boost toward military promotion, credentials from online, for-profit schools can be less helpful in getting civilian jobs, especially in a tight labor market. "I'm afraid that the ease with which these outfits hand out diplomas is matched only by the disappointment of their graduates when they find out how little their degrees are actually worth," says Barmak Nassirian, associate executive director of the American Association of Collegiate Registrars and Admissions Officers in Washington, which includes members from both nonproft and for-profit colleges.

Mike Shields, a retired Marine Corps colonel and human resources director for U.S. field operations for Schindler Elevator, the North American arm of Switzerland's Schindler Group, says he rejects about 50 military candidates each year for the company's management development program because their graduate degrees come from online for-profits. "We don't even consider them," Shields says. "For the caliber of individuals and credentials we're looking for, we need what we feel is a more broadened and in-depth educational experience." He does hire service members with online degrees for jobs on nonleadership tracks, he says.

Most online for-profits, such as American Public Education's (APEI) American Military University, "do a very good job taking care of students," says Robert Songer, director of lifelong learning at Camp Lejeune. American Military and its counterpart American Public University recently won a national award for quality in online education. But Songer says several schools have become a concern on military bases because of practices that exploit soldiers and the federal subsidies they are promised. "Some of these schools prey on Marines," he says. "Day and night, they call you, they e-mail you. These servicemen get caught in that. Nobody in their families ever went to college. They don't know about college."

Executives at for-profit colleges say they pay more attention to customer service than traditional schools do, and their online format suits military students who move frequently. "It's about flexibility and options," says Rick Cooper, vice-president for military and corporate programs at Columbia Southern University in Orange Beach, Ala. "You can enroll any day of the week, any week of the year." That's not the only allure. Columbia Southern allows soldiers to transfer credits from other institutions for classes in which they earned grades as low as D. Grantham University in Kansas City, Mo., has handed out free laptops, and American Military in Charles Town, W.Va., gives free textbooks as recruitment inducements.