Editor’s note: This story was updated to include comments University of Arizona President Robert Robbins and a university spokesperson made after the story was published.
Students at a University of Arizona-affiliated online school who receive education benefits from the Veterans Benefits Administration “may want to consider transferring to another program or school,” the VA wrote in a letter to students Thursday.
That’s because the University of Arizona Global Campus is experiencing a sudden lapse in its ability to collect military education benefits. According to the letter, the VA doesn’t want the 3,500-some students who use their GI Bill to pay to attend UA Global Campus to lose out on the full extent of the offerings they earned through their military service. Those students brought about $16.5 million in revenue to the school in 2020.
UA Global Campus President and CEO Paul Pastorek said in a statement that the school “will do everything in our power to keep students in the classroom” during the lapse.
But this is the latest in a string of concerning developments for UA Global Campus and its 28,000 students. A majority of those students are nontraditional college students, many from disadvantaged backgrounds, using some form of federal aid to pay for their education.
Now, a dozen education advocacy groups want the U.S. Department of Education to stop UA Global Campus’ ability to collect federal financial aid, “to protect the integrity of the student loan system.”
This comes one month after a California judge’s ruling about the for-profit Ashford University, which is what UA Global Campus was called before the UA acquired its assets and turned it into a nonprofit in 2020. In the latest of several legal actions brought against the school over the past decade, the judge ordered Ashford and its former parent company Zovio to pay $22.4 million in restitution for lying to students about the cost and quality of an Ashford education.
On top of that, UA Global Campus is dealing with ongoing accreditation issues as well as the plummeting market performance of Zovio, which is in a 15-year contract with UA Global Campus through which it receives 19.5% of the school’s tuition revenue for providing recruitment, financial aid, technology and academic support services.
All of this has education advocates sounding the alarm about the school the UA is making plans to absorb as part of a broader effort to grow its online education footprint.
Call to cut off federal aid
“If I were a student, I would certainly not enroll right now given all of the uncertainty,” said Bob Shireman, a senior fellow at the Century Foundation who’s been an outspoken critic of the UA Global Campus deal. “The UA’s reputation has already been tarnished and the University of Arizona needs to extract itself from its marriage with Zovio and do right by its students.”
Several days ago, Shireman joined with 11 other advocacy organizations, including the American Federation of Teachers and the Center for Responsible Lending, in co-signing a call to action to the U.S. Department of Education.
They asked the department to “immediately restrict UAGC’s access to federal student aid,” unless and until “an appeal overturns the numerous findings of fraud,” referencing the California judge’s March 3 ruling about Ashford and Zovio.
The letter cited a federal law that says if a school “has been judicially determined to have committed fraud” involving Title IV funding (which includes multiple forms of federal education aid, like Pell Grants and federal student loans), it is ineligible to receive those funds.
The letter also offered precedent for such action, reminding the department that in 2016, it cut off Title IV funding for the for-profit Minnesota School of Business and its related school, Globe University, after a court found the schools guilty of consumer protection violations.
Despite one former UA Global Campus employee’s deposition that called the UA-affiliated school the same institution as Ashford “under a different name,” the judge’s March ruling against Ashford and Zovio said there was not not “sufficient evidence of ongoing misconduct” postdating 2017, when the lawsuit was filed.
That’s the point UA Global Campus officials are highlighting in the wake of the letter to the education department.
“This letter is referencing several old allegations and mischaracterizes many facts,” Linda Roberston, spokeswoman for UA Global Campus, said in an email. “UAGC, affiliated with the University of Arizona, is a new school with a new leadership team, new guidelines and procedures and a student centric focus.”
At a news conference Monday, after this story was originally published, UA President Robert Robbins offered some more perspective on where things stand with UA Global Campus.
“I feel good about the path UAGC is on," Robbins said. "(B)ut these issues definitely need to be resolved."
While he said that the UA is “daily speaking with our UAGC colleagues to better understand and monitor where they are with these variety of barriers they have to contend with,” he added that he’s “concerned for sure,” not only about the lapse in veterans aid at UA Global Campus, but also the financial stability of the online school and Zovio, its accreditation issues and how all of this could affect the reputation of the UA.
Zovio in ‘peril’
But given Zovio’s prominent involvement with the school’s daily operations, David Halperin, an independent lawyer and higher education advocate who also signed the letter to the education department, said he’s not sure how true that is.
“Zovio is still the guts of UAGC,” he said.
In his view, what’s most disturbing about the UA’s partnership with Zovio “is that they’re essentially creating a predatory money-maker that takes money from low-income people who will have to pay back loans and using it to subsidize the education of more privileged people who are able to get admitted to the main campus.”
Pam Scott, a spokeswoman for the UA, offered this response to Halperin's comments after the original publication of this story.
His claims "are nothing more than patently false allegations and unsupported opinions of someone who has absolutely no firsthand knowledge of UAGC’s Board, executive leadership, policies and procedures, affiliation with UA, or relationship with Zovio," Scott said in an email. "Ironically Mr. Halperin’s comments and efforts could ultimately harm the very students he purports to support by undermining UA’s efforts to bring UAGC into the University of Arizona."
Halperin responded in part, "While I have indeed made some effort to learn about the various things UA claims that I don't understand about UA, I also can assure you that I know about Zovio and Ashford. I know that multiple law enforcement agencies concluded that Zovio was deceiving and ripping off students — veterans, single moms, and others — at Ashford, and last month after a full trial, a California court agreed. Yet the University of Arizona, with all the options in the world, selected Zovio and Ashford to be its online school."
Halperin, who wants to see the UA help UAGC students find other schools to go to or get them refunds, said there are signs that Zovio’s investors at least “are finally coming to their senses about the peril this company is in because of its own bad behavior.”
After reporting a 38.6% year-over-year drop in earnings during the third quarter of 2021, Zovio, which is a publicly traded company, canceled its planned call with investors to discuss its fourth quarter earnings last week. Zovio did not respond to the Arizona Daily Star’s request for comment about that decision.
It’s not clear if the education department, which has yet to recognize UA Global Campus’ nonprofit status, will consider Zovio’s financial predicament. But when the Star asked the department how seriously it was taking the letter Halperin and others recently sent, a spokesperson said it’s “committed to rigorous oversight of high-risk institutions that may be at risk of closure,” and that it “closely review(s) lawsuits, investigations, and other actions by our state partners to ensure appropriate measures are taken.”
The results of that review are still pending.
What is known, however, is that because the UA and the UA Foundation now provide the financial backing for the online school, the University of Arizona is now jointly and severally liable — possibly for as much as $1 billion, according to a previous statement from UA President Robert Robbins — should the department cut off UA Global Campus’ federal aid.
Students ‘feeling the pain’
The fact that federal veterans aid, which is not part of Title IV funding, is already unavailable to UA Global Campus is worrying enough to some education advocates.
“The reality is that there are thousands of schools in America and none of them are facing this unique situation that is purely based on the decisions of UAGC,” said William Hubbard, vice president for veterans and military policy at Veterans Education Success, which is one of the advocacy organizations that signed the letter to the education department.
“It’s shocking that they’d be so reckless with the well-being of their students, but it’s not surprising based on their long history of bad behavior,” he said. “Unfortunately at the end of the day, their students are the ones who are feeling the pain.”
The lapse in VA benefits, which includes housing allowances, happened after the California State Approving Agency for Veteran Education notified the school on March 31 that it would no longer approve VA benefits after the school moved its headquarters from California to Arizona.
The school applied for benefits eligibility with the Arizona State Approving Agency back in December, expecting that decision to be made by now, but the body has yet to approve the application.
“We understand that many are waiting for our decision on this. Our ultimate responsibility is to serve and take care of military-affiliated students,” the Arizona State Approving Agency said in an email to the Star. “We do that by doing our due diligence and ensuring schools meet all the standards required per the U.S. Code and all applicable regulations.”
In a letter sent to the VA, Veterans Education Success President Carrie Wofford asked the organization to “not entertain any other state approving agency’s request to resume approval of UAGC programs.”
As the school awaits the approving agency’s decision, UA Global Campus is offering grants to cover the gap created for GI Bill recipients, though it’s not paying for housing allowances.
Without that housing stipend many students “would be forced to work a second, or even third job to make ends meet,” Hubbard said. “Staying in school would no longer be an option.”
‘Stop digging this hole’
The education and well-being of UA Global Campus students are also a top concern of UA faculty members, a vocal faction of which have opposed the deal from the outset and accused administrators of not including faculty, as they are obligated to do, in the decision-making process.
At the Arizona Board of Regents meeting Thursday, Leila Hudson, a UA faculty senator and incoming chair of the faculty, called on the board, which publicly endorsed the UA’s decision to absorb UA Global Campus, to carry out “an orderly unwinding of this morally unacceptable and financially dangerous situation” in “the full bright sunshine of Arizona, not behind closed doors.”
In an interview with the Star, Hudson considered that cutting off federal funding for the online school, per the letter sent to the education department, would “help prevent future students from being drawn into it.”
She acknowledged, however, that it would also leave “the students who are currently enrolled in this entity in yet another layer of entanglement and victimization.”
But with everything she knows about Zovio and its history with students, she said, “it might be appropriate to simply stop digging this hole.”
