The U.S. Army via Compfight

The government sequester is hitting soldiers hard, with the armed services recently cutting off tuition assistance to active duty soldiers who haven’t yet enrolled in programs. Wall Street analysts are expecting this to hit certain for-profit colleges such as APEI (American Public Education) very hard. We print several details below. We start with a letter that Chief Master Sgt. of the Air Force James A. Cody sent out to airmen (friends of WiredAcademic sent it our way). It indicates further crimping:

As you know, our Nation and our Air Force are working through some significant fiscal challenges. The combined effects of continuing resolution and sequestration are forcing some very tough decisions. Unfortunately we’ll likely be forced to furlough nearly 180,000 civilian Airmen for 16 hours per pay period for the remainder of the fiscal year starting in April. This is one of many impacts on your units and our Airmen and Families. Given this
environment we’ve had to make the decision to suspend military Tuition Assistance (TA) for the remainder of this fiscal year. Effective 1700 EST, 11 March, Active Duty Airmen will no longer be able to submit requests for Tuition Assistance.Believe me, this was a tough decision because our Air Force truly values education. This is evidenced by our requirement for a Community College of the Air Force (CCAF) degree for senior rater endorsement (SRE) eligibility.
SRE means a great deal in the promotion of Master Sergeant to Senior Master Sergeant, and this will not change.  We understand suspension of TA benefits makes things tougher, but there are other ways for Airmen to complete CCAF degrees. CLEP exams, the G.I. Bill, scholarships, and federal grants are some options.

We remain as committed as ever to ensuring Airmen have the opportunity and means to pursue educational goals.  We’re still looking at the impacts for FY14 and will do our best to have TA reinstated, although we’ll likely need to review the eligibility requirements to ensure sustainability. We owe you more information on this and will provide details as soon as we can. 

Meanwhile, Wall Street education analyst Jeffrey Meuler at Baird Equity Research sent out a note, expressing worry for one of the companies he studies - American Public Education (stock symbol APEI). He’s expecting to downgrade the stock. The reason why?

• DOD Tuition Assistance accounted for 37% of APEI’s net course registrations in the fourth quarter.
• Online education post-secondary education with 89 degree offerings targeting military is a main business of APEI.
• APEI’s two schools - American Military University and American Public University - have more active duty military members enrolled per capita than any other school.
• The school’s mission is “Educate Those Who Serve.” APEI has 15% market share as post-secondary provider to military students, the largest player in the space.

The Associated Press reports:

RALEIGH, N.C. — The U.S. Air Force joined other military branches Tuesday in suspending tuition assistance that thousands of active-duty service members rely on to pay for college classes.

Air Force spokeswoman Lt. Col. Laurel Tingley said airmen were notified by email that new applications for tuition assistance won’t be accepted because of the $85 billion in automatic federal spending cuts that went into effect March 1.

The U.S. Army, U.S. Marine Corps and U.S. Coast Guard quietly suspended their assistance programs last week. A decision by the U.S. Navy is pending.

The tuition assistance programs pay up to $250 per semester hour for active duty personnel, or as much as $4,500 per year. Payments already approved under the program will still be paid, but the changes are expected to leave military personnel scrambling to figure out how to pay for classes for the summer and fall semesters…

Via HuffingtonPost

American Council on Education reports: 

The Army and Marine Corps have announced they are suspending new enrollments in their Tuition Assistance (TA) programs due to sequestration, the massive cuts to federal discretionary spending that took effect March 1.

The TA programs provide up to $4,500 per fiscal year for active-duty troops who are attending high school completion courses and certificate programs, or are working toward college degrees. The change will not affect service members who currently receive tuition assistance.

The Navy and Air Force have not yet made public plans to follow suit, although Inside Higher Ed reports that they are considering similar cuts. (UPDATE: As of March 12, the Coast Guard and Air Force have now suspended their TA programs.)

In other sequestration news, the Education Department issued guidance last week on what the automatic budget cuts would mean for federal financial aid programs. Funding will be reduced for the Federal Work-Study Program and for the Supplemental Educational Opportunity Grant Program beginning in the fall if sequestration remains in effect.

Via ACE

Army Times reports: 

The tuition assistance program is one of the Army’s most popular in-service benefits, with some 201,000 Regular Army, National Guard and Army Reserve soldiers participating in traditional classroom and online courses at 3,100 colleges and universities nationwide. “Soldiers who are in courses now can complete those courses, but they will not be allowed to enroll in new courses,” said Lt. Col. Tom Alexander, spokesman for the Army’s personnel chief. “This suspension is necessary given the significant budget execution challenges caused by the combined effects of a possible yearlong continuing resolution and sequestration.”

… Campbell said the brass will “relook” at restarting the program “when we can.” But he said 2013 is the Army’s “hardest year.” That could leave the program closed until Oct. 1 or beyond.

During fiscal 2012, the Army spent $373 million on tuition assistance payments. Under the TA payment formula, payments are capped at $250 per semester-hour of instruction, up to an annual total of $4,500.

While the TA program is suspended, soldiers can pursue education goals using their Veterans Affairs Department benefits, if eligible, that include the Montgomery GI Bill-Active Duty, Montgomery Bill-Selected Reserve, Reserve Assistance Program and the Post 9/11 GI Bill. Other education funding sources also may be appropriate, such as grants, scholarships and the state tuition assistance programs available to some National Guard soldiers. Pentagon officials strongly urge soldiers affected by the TA shutdown to contact their local Army education center to assess their options.

Via ArmyTimes