NPR’s Marketplace is running a two-part series on whether the cost of a degree at the University of Phoenix, the largest for-profit college in the country, is worth it. The first part of the series focuses on Phoenix’s shady recruitment and financial aid practices—and the consequences for students and taxpayers of students taking out federal loans that they don’t, or can’t, repay.
Students may be hurting from too much student loan debt, but it’s not a problem for the University of Phoenix, which, according to the story, earned $3 billion last year. The vast majority of that money came straight from the federal government in the form of grants and loans to students. And there are no consequences to Phoenix if students have trouble repaying their loans – Phoenix gets the money up front and doesn’t lose money if students default after they leave school.
Surely, the University of Phoenix would do better in the long run by providing a quality education at a reasonable price—students would be more likely to stay (it’s cheaper to keep a customer than find a new one, right?), they would tell their friends about the great deal they got on a worthwhile degree, and all these pesky news stories about fraudulent behavior would stop. Perhaps most importantly, Phoenix could substantially reduce its political risk (the federal government could, after all, stop the grant and loan money train at any time).
But it’s much easier to churn through students and get student loan money than to invest in retention programs and high quality instruction. One gives you quick financial returns, while the other takes a while to see the results.
I don’t think there’s anything inherently wrong with making a profit on providing a college degree, assuming the profit motive results in better service and higher quality for students (the benefits of increased competition, right?). But, I’m starting to wonder if it is possible for a publicly held for-profit company, one with shareholders that are far removed from the business of educating students, to balance the interests of students with the interests of shareholders. And ultimately shareholders will come first—even if it means sacriticing the long-term success of the company for a short-term financial gain.
Lowering Student Loan Default Rates: What One Consortium of Historically Black Institutions Did to Succeed 
College and Career-Ready: Using Outcomes Data to Hold High Schools Accountable for Student Success
03/19/10 | Ben Miller is quoted on college graduation rates and the NCAA Tournament in the Detroit Free Press.
03/19/10 | Linda Perlstein links to Education Sector's "College- and Career-Ready" event.
03/17/10 | Ben Miller's column on graduation rates and NCAA Tournament eligibility is mentioned on The Wall Street Journal's The Daily Fix.
03/17/10 | Kevin Carey's critique of Diane Ravitch's latest book is quoted in Doublethink's Conventional Folly blog.
03/15/10 | Ben Miller pens an op-ed for US News & World Report on using graduation rates to determine NCAA Tournament eligibility.
I started with UOP online in 2000 and finished up in 2004. In 2004 I was let go from my work and was unemployed or very under employed for 18 months. I live in Ohio which has been hit hard by the economic downturn. My school loan debt keeps increasing because my employment does not pay enough so I’ve been on deferment since being out of school. My loans are now so high, I’m not sure I’ll ever to be able to pay them off. I’m truly convinced that the whole adult education degree program is a scam by higher education. I’ve yet to see any evidence that the four years of living hell that I went through to earn my degree did any good. I’m to where I’m embarrassed to tell people where I got my degree from because people will just laugh. I’m resentful because the promises made of getting a degree would give you a leg up, when actually, I made more money prior to getting my degree than after.
I think that it would be useful to expand the reporting to include other for profit learning institutions, like DeVry “University”. I had a very negative experience with DeVry during my sophamore at the University of Wisconsin-Stout. I was conviced, by a DeVry recruiter, to transfer from UW-Stout with promises that I would complete my degree “faster” and with more focus on my core studies. When I arrived in Atlanta for orientaion I immediately realized that I had made a mistake. My impression was that the primary objective of the DeVry staff was to get students to sign the financial aid check. Noone could address the concerns about the discrepancies between what the recruiter told me and what I was seeing the first day. Needless to say, I did not sign the financial check, and I turned around and drove back to Wisconsin to complete my B.S. I did lose more than a semester of time in the process and eventually payed more financial aid loan money back as a result. However, I count myself as being lucky to have had some experience with a “real” university to be able to see what was going on before I signed the financial aid check over to them. I felt sorry for all the freshmen that had come to attend DeVry but there was nothing I could do for them. I’m sure that many of them never completed their studies. However, isn’t it true that most students fail to complete their degree? How does the drop-out rate for these for profit “Universities” compare to state and private colleges? I would like to know what the placement rates are for these graduates and if employers find their education valueable. What does this say about the accreditaion commission, since University of Phoenix is accredited.
In 2002 I left University of Phoenix because of their poor financial dealings.
I had applied for 2 student loans. During the time of my enrollment I called in to delay starting a class due to being out of the country. I was told I could put a hold on my acct and when I returned I was given a start date to start my class. During this time my Second student loan showed up at UOP. Because I was not in a class at the time the student loan showed up at UOP the money was sent back leaving me with at $3000 debt I was told I needed to pay back asap. In returning back to school I was allowed to start on the date that had been given to me finished that class and was on my way to taking another class. I showed up to the class and knew instantly I needed to drop that particular class. I went in to the school and asked to be dropped and enrolled in another class. Well I end up getting charged for the whole term of the class I dropped. It was at this time I went into the School and was in question about the class I was being charged for that I found out about the $3000.00 debt that was at hand due to my student loan being returned due to poor communication and poor financial handling within UOP’s department. I had been told that at the time the school had been experinecing a lot of people leaving their jobs wich left the right hand not knowing what the left hand was doing. I wrote letters all the way up as far as I could go. I was told the debt was my fault and needed to pay. No help was offered not even meeting me half way due to UOP’s neglegance in their finance dept. I am currently trying to work with the school now and pay off the debt and came across this article. Any help or further information you can give me on how to deal with UOP in this crazy mess would be very helpful and appreciated.