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

For-Profit Colleges Target the Military

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

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Military enrollment at exclusively online for-profits is soaring. American Military has 36,772 active-duty students, up from 632 in 2000, it says. It has the most Air Force and Marine Corps students of any college. Closely held Columbia Southern says it has 9,582 service members, up from 649 in 2002. Closely held TUI in Cypress, Calif., has more than doubled active-duty enrollment to 7,665 in the first quarter of 2009, from 3,661 in 2004, it says. Six public and private nonprofit colleges hold face-to-face classes on Camp Lejeune, but none has the highest active-duty enrollment there. That distinction belongs to online-only American Military, with 1,623 students, up from 11 in 1999. Phoenix's online enrollment there has risen to 296 from 15 over the same period.

J.B. Beavers, a retired Marine colonel who headed educational services at Camp Lejeune from 2001 to 2006, rejected requests from online for-profits for office space in the base's education center. "I had a jaundiced eye on all of the online for-profits," he says. Beavers' successor, Songer, changed course and gave offices to American Military and Phoenix, which together receive 47% of all the tuition assistance for Camp Lejeune students. "If I have a problem, I can call the school at a very high level," says Songer. "If they weren't on the base, I wouldn't have that leverage."

The active-duty enrollment surge at for-profit schools has led to a slump at public and nonprofit schools. The University of Oklahoma, once the leading provider of graduate degrees to service members, has lost half its military enrollment in a decade, says James Pappas, the university's vice-president for outreach. "A decade from now, you may not find traditional national public and private universities in military education," Pappas says. "That's one of the real dangers."

While many colleges adopt what are known as "military-friendly" practices, the online for-profits go further than most. They accelerate courses and degrees for service members, trimming requirements and granting abundant transfer credits. At Phoenix, members of the armed forces can earn an associate's degree by taking as little as one five-week online class, "Written Communication." They can make up for the other 19 courses required for the degree with credits for classes taken elsewhere, military experience including basic training, and passing grades on tests that gauge knowledge of a subject area.

Civilians seeking the same degree must take at least six Phoenix courses and can use credits from outside sources for no more than 14. Traditionally, two-year students must take 10 courses, or half the required load, from the school that awards their degrees, so it can vouch for their training, says the registrar association's Nassirian. Only a handful of active-duty students choose Phoenix's one-course option, called the Associate of Arts Degree Through Credit Recognition, says Mike Bibbee, the university's head of military programs.

At Columbia Southern, students can finish a course in three weeks and gain credit for as many as three classes taken at other colleges in which they received grades as low as D. All exams are open-book. "It would be quite unorthodox for traditional institutions to grant transfer credit to coursework completed below a grade of C," Nassirian says. There are public universities—the University of Alabama, in Tuscaloosa, for example—that do accept Ds for transfer credits. Columbia Southern's Cooper says academic quality is comparable to a state or nonprofit university.

At American Military, most students take eight-week classes. On Oct. 16 several Marines waited their turn on benches outside American Military's office in the education center at Camp Lejeune. Inside, AMU education coordinator Brian Miller made his pitch to Jyher Lazarre, 19, of Orlando, and Hyunwoo Kim, 20, of Leonia, N.J. Of 20 courses needed for a two-year degree, they could satisfy eight through basic training and other military experience, Miller said. They could test out of seven more, leaving them to take five classes. "I can cut the time of this degree literally in half," Miller told them. "It's going to make you competitive toward promotion as well."

Two policy changes opened the military-education market. In 1999 the Defense Dept. broadened eligibility for reimbursement to include more for-profit colleges. Then it increased funding in 2002 from 75% to 100% of tuition up to the $250-per-credit ceiling.

These moves coincided with the rise of Internet courses. For-profits were ahead of most traditional colleges in online education, which helps service members deployed worldwide keep up their studies. While public schools such as Maryland now offer online courses, they often have stricter requirements. In fiscal 2008, the first year that the Defense Dept. collected such data, 64% of active-duty students took distance-education classes. Soldiers even take online classes in war zones. In Afghanistan, Army Sergeant Patrick Peake earned a bachelor's degree in criminal justice from American Military, enrolling in as many as four online courses at a time. Cavalry scouts "set up a wireless connection at the mud-brick building we were at," Peake, 29, says. After studying counter-terrorism, Peake says, he told friends in Army intelligence about terrorist groups in the region. "This dumb grunt helped them out a little," he says.

Unlike most traditional schools, for-profits vie for students by offering freebies. American Military undergraduates may sell the free textbooks they're given to the school's vendor after use for $30 to $50 per book, Miller says. Columbia Southern's Cooper says the school is considering a similar buyback program.

Grantham, the seventh-biggest recipient of undergraduate tuition money from the Army in fiscal 2008, gave new Dell (DELL) laptops from March to July to active-duty students who had completed at least four courses with grades of C or better. The free computers were part of a pilot research project on student retention, says Tim Arrington, Grantham director of military programs. Michael Lambert, executive director of the Distance Education & Training Council, which accredits Grantham, advised the school to stop the laptop largesse. "The concern is, schools will outdo each other and we'll have an arms race. Free laptops, free Kindles, free iPods, all coming out of taxpayers' pockets," says Lambert.

Career Blazers Learning Center, a New York-based vocational school, gave away laptops loaded with instructional software to Marines about to be deployed to combat zones, owner Paul Viboch says. It also hired former Marines as recruiters and paid referral fees to students for signing up other service members. Entire units enrolled, and Career Blazers received $4.5 million in tuition assistance from the Marine Corps in 2006, the most of any post-secondary provider.

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Career Blazers charged $4,500—the maximum that the military reimburses in a year—for self-paced lessons on how to perform basic computer applications or balance checkbooks. Because much of the material was available for less expense at workshops or community college classes on bases, "the military overpaid for laptops," says Johanna Rose, an education technician at Camp Lejeune. Relocated to Martinsburg, W.Va., and renamed Martinsburg Institute, Career Blazers stopped giving away laptops three months ago. Its tuition assistance from the Marine Corps slipped to $616,000 in fiscal 2009 as education officials on some Marine bases discouraged service members from enrolling. "I was too successful, too quickly," Viboch says.