University of Phoenix could get schooled

The Higher Learning Commission recommends putting the for-profit college on probation for being more focused on earnings than education.

By Jason Notte Feb 26, 2013 3:16PM
A student walks towards the main building on the University of Phoenix campus in Phoenix, Ariz. on Oct. 14, 2010 (© Joshua Lott/Bloomberg via Getty Images)For-profit universities that balance their books with their applicants' federal student aid are getting a closer look from both university governing bodies and the federal government. In the University of Phoenix's case, they're taking that look through a high-powered scope with clearly defined crosshairs.

The Higher Learning Commission, a Midwest college accrediting body, recommended Monday that the 319,000-student University of Phoenix be placed on probation for having "insufficient autonomy" from its Apollo Group (APOL) parent company and for its inability "to assure the university's integrity." Translation: The for-profit schools are paying more attention to the "for-profit" part of their name than the "schools" portion.

In a filing with the Securities and Exchange Commission, Apollo Group says it plans to appeal the decision. It added that its parent-company relationship with the University of Phoenix is "customary" and that it's "neither remarkable nor improper for a parent corporation to exercise appropriate influence of its wholly-owned subsidiary."

For a subsidiary, perhaps, but most subsidiaries don't provide 90% of their parent company's revenue by wooing federal funding under the premise that they're providing education. That hasn't sat well with President Barack Obama's administration, Congress or state attorneys general who question for-profit institutions' high tuition, low graduation rates and high number of student loan defaults.

The University of Phoenix alone took 84% of its revenue from federal financial aid programs last year. That's $3.2 billion in taxpayer money, according SEC filings. Meanwhile, the school shells out for commercials, highway billboards and $155 million through 2026 to keep its name on University of Phoenix Stadium in Glendale, Ariz., home field for the NFL's Arizona Cardinals. Federal data show that not only do 22% of for-profit college students default on their loans -- which is more than double the rate of public colleges -- but 26% of University of Phoenix students defaulted on federal loans within the last three years.

The Higher Learning Commission's decision isn't final and won't be until June, but putting the University of Phoenix on probation would be a big step toward stripping it of the accreditation necessary to receive federal aid.

Apollo Group saw this coming after University of Phoenix enrollment dropped from 460,000 in 2010 to 319,000 last month. In its SEC filing, the company notes that if it's placed on probation, its reputation "could be adversely affected, which in turn may negatively impact (the) ability to recruit and enroll students and to recruit and retain faculty and staff."

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Feb 26, 2013 4:06PM
Sadly. Phoenix has preyed on the veterans returning from Iraq and Afghanistan - taking advantage of their GI education allowances and in return giving them a sub-standard education.
Feb 26, 2013 4:46PM
Probation is too soft.  Shut 'em down.
Feb 26, 2013 4:39PM
I attended on campus and online courses through UoP; incurred +$35k in student loans that I struggle to repay. At the end of my curriculum, their unprofessional staff committed a series of errors that prevented me from completing my degree unless I paid up $1,100 (cash that I did not have) and gave me 3 days to do it. When I couldn't pay in full, they sent me to collections at the end of the month although I offered to make payments.

Although UoP can be a helpful option for working moms, etc., you cannot rely on their administrative staff to do their job correctly. In the event something does go very wrong, good luck talking to anyone in charge... They keep their on-site management and/or dean inaccessible to students.
Feb 26, 2013 4:59PM
Funny thing is, most state colleges see this as an advantage that they are lacking, and have taken the for profit model and run crazy with it.
Feb 26, 2013 3:57PM
That there exists a for-profit, post-K-12 industry says nothing so much as we have lost our way.
Feb 26, 2013 4:08PM

The University of Phoenix alone took 84% of its revenue from federal financial aid programs last year


We the unwilling consumer (tax payers) were fleeced by them through deatbeats with the consent of the worthless federal government.

Feb 26, 2013 6:46PM

3 Points:


#1  I don'f care what type of college program you undertake, you get out of it what you put into it.

#2  I have degrees from  Phoenix, Colorado State, and University of Wisconsin.  I can tell you with no reservation that my MBA from Colorado State is not worthy of wiping my **** on it.  BS in Business from Phoenix is more than paid for itself 5 times over.  I also learned far more at Phoenix (100% on-line) that I did at CSU.  I have a DVM from Wisconsin.  When I see a resume from Phoenix I do my due diligence to make sure the candidate is for real but I have class mates from CSU MBA program that I would not hire to drive an ice cream truck.

 #3  Don't think for 1 second that state universities, private universities, or even Ivy leagues are any more or less corrupt than University of Phoenix.  They all chase a profit - Phoenix just does it openly while the rest operate in the shadows.  I'd much rather learn from a seasoned professional than a liberal politically driven, overpaid, under experienced, tenured professor who is not judged on their performance but rather the volume of students "indoctrinated".


how do I start one of these for profit schools???


get together a few laid off professionals unable to find work turn them into professors and

bang we are rolling in $2 billion a year for life.

Feb 26, 2013 6:45PM

Taxpayer1, are you aware that many traditional universities are offering degree programs that are completed strictly in the online environment.  Obviously you aren't, or you would not make a comment like that.  You have know way of knowing if someone has completed their degree in this manner unless they have attended one of the diploma mill schools such as UoP.  I would also like to add, that for you to be in charge of hiring puts your company in jeopardy of being sued.  Your comment reeks of discrimination, and it would not surprise me if there are other discriminatory practices happening during the screening and/or hiring process.  You are just one of the many people that are in positions involving human resources that should not be there. 

Feb 26, 2013 6:20PM
All "schools" like this one deserve close scrutiny and while the feds are at it maybe they should take a closer look at the "non-profit" Blue Cross and Blue Shield. They spend a lot of money on advertising and sponsorships too, yet they seem to need rate increases every year. In the meantime many families are bled dry by premiums, deductibles and co-pays. 
Feb 26, 2013 5:37PM

Most people can find a cheaper and better option than any of the for profits. Give me a state university system over them anyday. I know someone who works for a for profit and she is looking for a new job because of the pressure put on her to "sign people up". Several times she has explained why a student dropped out(Pregnant) and  was told to call her anyway.

Feb 26, 2013 5:21PM
I agree with "Taxpayer 1" as well as "Rico Tafari" - shut this source of pain both for taxpayers and students down - put them out of business!
Feb 26, 2013 5:49PM
"the company notes that if it's placed on probation, its reputation "could be adversely affected, which in turn may negatively impact (the) ability to recruit and enroll students and to recruit and retain faculty and staff."

They say this like it is the government's fault for their failure. They need to spend more on the students and making sure that the student get jobs to insure their funding. Performance = profit. This is capitalism at its purest form and if they can't perform and complete with public schools then they shouldn't get the money. IF they were to get the money regardless of their performance, like they are advocating, then that would be more like socialism.
Feb 26, 2013 6:28PM

we've all known for many years that Phoenix is a "buy the degree" program, NOT a valuable credentialed program. 


pay your money - get the degree.  FINANCE the "degree" and help them make even more money

Feb 26, 2013 7:13PM

Enough of this hating!! I have an MBA from Phoenix. I am damn proud of it. Because.....I worked my **** off. I achieved a 3.92 GPA.

I am a retired military man, and was on duty the night 9/11 went down. This was the best option for me to continue my education.

You get what you put into it. Bottom line: Folks don't expect a free ride. And, I will be damned if the 18 grueling months I spent in grad school don't mean something positive for myself, my family, and my country.

Feb 26, 2013 5:55PM
No clue why people still go to the shadier for-profits (some are okay, many are not). There are plenty of not-for-profits that have online schools--you just have to pick the one that suits you best.
Feb 26, 2013 7:01PM
It's long past time these crooks were exposed.  There should be no such thing as a private for-profit university unless it can demonstrate equal or better academic results.  I worked for one of these at one time--and the pressure from the administration was to give nothing but 'A's and, occasional 'B's, so that the unmotivated students could get better jobs due to higher academic credentials.  These schools are mostly a scam and a ripoff to businesses (who complain their employees can neither read nor write) and to students who think they are competent when they are not.
Feb 26, 2013 5:17PM
This is "capitalism excess" applied to higher education.  No disrespect intended for the sincere folks who look to options like this, mid-career changers, adult students, parents, etc.
Feb 27, 2013 11:15AM

"but putting the University of Phoenix on probation would be a big step toward stripping it of the accreditation necessary to receive federal aid"


Stripping UOPX of their accreditation will indeed hurt UOPX.  It will also hurt the thousands of students that graduated from UOPX successfully by tarnishing their hard-earned education and making their degree(s) worthless for gaining employment or transferring into other schools to continue their education. 


Instead of going after UOPX and hurting their successful students, we should focus on holding the individuals accountable for paying back their loans and make the process for providing loans more informative and possibly more selective.  

Feb 26, 2013 3:57PM
I won't even look at a resume from this place or any other on-line college.
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