February 12, 2007
Troubles brew at for-profit University of Phoenix
The University of Phoenix, the largest for-profit university in the United States is facing more and more accusations of shoddy practices. Read the beginning of the article below, for more information. The entire article can be found here.
Note: The vast majority of college in the United States are non-profit institutions. Only a small percentage are for-profit. The difference between the two is that for-profit schools, as the name implies, must continue to turn a profit for their investors. Traditional universities do not have investors and do not have stocks traded on Wall Street.
Troubles Grow for a University Built on Profits
By SAM DILLON
Published: February 11, 2007
PHOENIX — The University of Phoenix became the nation’s largest private university by delivering high profits to investors and a solid, albeit low-overhead, education to midcareer workers seeking college degrees.
But its reputation is fraying as prominent educators, students and some of its own former administrators say the relentless pressure for higher profits, at a university that gets more federal student financial aid than any other, has eroded academic quality.
According to federal statistics and government audits, the university relies more on part-time instructors than all but a few other postsecondary institutions, and its accelerated academic schedule races students through course work in about half the time of traditional universities. The university says that its graduation rate, using the federal standard, is 16 percent, which is among the nation’s lowest, according to Department of Education data. But the university has dozens of campuses, and at many, the rate is even lower.
In an interview, William J. Pepicello, the university’s new president, defended its academic quality and said it met the needs of working students who had been largely ignored by traditional colleges.
But many students say they have had infuriating experiences at the university before dropping out, contributing to the poor graduation rate. In recent interviews, current and former students in Arizona, California, Colorado, Florida, Michigan, Pennsylvania, Texas and Washington who studied at University of Phoenix campuses in those states or online complained of instructional shortcuts, unqualified professors and recruiting abuses. Many of their comments echoed experiences reported by thousands of other students on consumer Web sites.
The complaints have built through months of turmoil. The president resigned, as did the chief executive and other top officers at the Apollo Group, the university’s parent corporation. A federal court reinstated a lawsuit accusing the university of fraudulently obtaining hundreds of millions of dollars in financial aid. The university denies wrongdoing. Apollo stock fell so far that in November, CNBC featured it on a “Biggest Losers” segment. The stock has since gained back some ground. In November, the Intel Corporation excluded the university from its tuition reimbursement program, saying it lacked top-notch accreditation.
It adds up to a damaging turnaround for an institution that rocketed from makeshift origins here in 1976 to become the nation’s largest private university, with 300,000 students on campuses in 39 states and online. Its fortunes are closely watched because it is the giant of for-profit postsecondary education; it received $1.8 billion in federal student aid in 2004-5.
“Wall Street has put them under inordinate pressure to keep up the profits, and my take on it is that they succumbed to that,” said David W. Breneman, dean of the Curry School of Education at the University of Virginia. “They seem to have really stumbled.”
In the interview, Dr. Pepicello shrugged off the bad news. Many top corporations still pay for employees to attend the university, he said, and the exodus of top officials has resulted from a healthy search for new directions. “We are reinventing ourselves,” Dr. Pepicello said.
The government measures graduation rates as the percentage of first-time undergraduates who obtain a degree within six years. On average across all American universities, the rate is 55 percent. Dr. Pepicello said this was a poor yardstick for comparing other universities with his, which serves mostly older students who started college elsewhere. Alongside the 16 percent rate, the university Web site also publishes a 59 percent graduation rate, but that is based on nonstandard calculations and does not allow comparison with other universities, he said. The official rates at some University of Phoenix campuses are extremely low — 6 percent at the Southern California campus, 4 percent among online students — and he acknowledged extraordinary attrition among younger students.
“We have not done as good a job as we could,” he said, adding that the university was creating tutoring and other services to help keep students.