(He took college classes at one of those for profit online schools aimed at military, I forget which one.)
The for-profit colleges are heavily targeting military folks since military education benefits don't fall under the Federal Title IV financial aid program funds. Education financial aid to military members is a different pool of money.
Colleges are legally prevented from getting more than 90% of their cash-basis revenue from Title IV funds and many of the for-profit colleges are starting to get near that ceiling. If a college goes over that 90% and stays there then the college won't be allowed to accept any Title IV funding, effectively putting it out of business. Here are some excerpts from Apollo Group's 10-K (Apollo Group is the parent company of University of Phoenix):90/10 Rule
To remain eligible to participate in Title IV programs, proprietary institutions of higher education must comply with the so-called “90/10 Rule” under the Higher Education Act, as reauthorized, and must derive 90% or less of their cash basis revenue, as defined in the rule, from Title IV programs. The 90/10 Rule percentage for University of Phoenix for fiscal year 2013 was 83%. The 90/10 Rule percentage for University of Phoenix remains high and could exceed 90% in the future depending on the degree to which its various initiatives are effective, the impact of future changes in its enrollment mix, and regulatory and other factors outside our control, including any reduction in military benefit programs or changes in the treatment of such funding for purposes of the 90/10 Rule calculation.In addition to Title IV student financial aid
, qualifying U.S. active military and veterans and their family members are eligible for federal student aid from various Department of Defense programs, including under the Post-9/11 GI Bill.
The decrease in the University of Phoenix 90/10 Rule percentage is attributable to changes in student mix and their associated available sources of tuition funding. As the University’s enrollment has declined in recent years, the proportion of its student body that uses a lower percentage of Title IV funds for eligible tuition and fees, such as students that receive tuition assistance from employers or that participate in military benefit programs, has increased.
Apollo Group 10-K:http://www.sec.gov/Archives/edgar/data/929887/000092988713000150/apol-aug312013x10k.htm