Fed Up at the University of Phoenix

It's bad enough having to take out large federal student loans to go to college. It's even worse if federal loans aren't enough, and you need to take out private loans too. But it's utterly tragic if you take on all that debt and then find out that you have been misled about the quality of the educational program in which you have enrolled.

According to an article that ran this month in The New York Times, scores of students are dropping out of the University of Phoenix, the largest chain of for-profit colleges in the country, fed up because their academic experiences bear no resemblance to the promises that were made to them by "duplicitous" recruiters. Most of these students are leaving hugely indebted.

"Many students say they have had infuriating experiences at the university before dropping out, contributing to the poor graduation rate," the article states. "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 University of Phoenix, which enrolls 300,000 students through its more than 250 campuses and learning centers across the country, is the largest higher-education institution in the nation and the top recipient of federal financial aid dollars. The university relies on a larger share of part-time instructors than most colleges, and its students spend only four hours a week in class as part of the "accelerated schedule" it offers. Concerns about its quality are not just being expressed by students and journalists. Such concerns led the Intel Corporation to drop the university from the tuition-reimbursement program it offers its employees.

The New York Times says that "the relentless pressure for higher profits" has "eroded academic quality" and led to improper recruiting practices at the University of Phoenix. But in this regard, the university, which is owned by a publicly traded corporation known as the Apollo Group, is hardly alone.

Over the last several years, some of the largest publicly-traded, for-profit higher education companies -- such as Apollo, Career Education Corporation, Corinthian Colleges, and ITT Educational Services -- have come under scrutiny from federal and state regulators and have faced numerous class-action lawsuits by former employees, shareholders, and students over allegations that they have engaged in aggressive and misleading recruiting and admissions tactics to inflate their enrollment numbers, while providing academic offerings of dubious value.

Regardless of whether these companies have engaged in wrongdoing, the questions about their admissions practices and academic quality are symptomatic of the kind of problems that occur when higher education gets mixed up with Wall Street. To keep their stock prices up and investors happy, the for-profit higher education companies must constantly show that they are expanding, even if doing so is not good for the colleges or their students.

"The pressure to enroll that Wall Street places on these companies is almost unbearable," David Hawkins, director of public policy at the National Association for College Admission Counseling, said in an article in The Chronicle of Higher Education last year that investigated allegations of improper recruiting practices at the Los Angeles branch of American Intercontinental University, one of Career Education's flagship institutions. "Unfortunately, we're seeing plenty of evidence that the 'recruit at any cost' mentality is becoming more the rule than the exception."

The U.S. Education Department certainly found this to be the case in 2004, when reviewers there wrote a scathing report about how the corporate bosses at the University of Phoenix pressure and intimidate their recruiters to put "asses in the classes," including those of unqualified students.

What's amazing is that these allegations of improprieties have largely fallen on deaf ears in the nation's capital. In fact, during the last two sessions of Congress, Republican leaders championed legislation that would have reduced the government's oversight of for-profit colleges. Apparently, these lawmakers were more intent on rewarding the deep-pocketed lobbyists and leaders of these publicly-traded corporations than protecting vulnerable students.

Meanwhile, a commission, appointed by Education Secretary Margaret Spellings, to critique higher education singled out for-profit colleges for praise, without acknowledging the serious charges that have been leveled against some of these companies.

Now as Congress prepares to take up legislation to reauthorize the Higher Education Act again, Higher Ed Watch is hopeful that the new Democratic leadership will put the interests of students ahead of those of corporate lobbyists and resist efforts to reduce the government's oversight over the industry.

But perhaps the Democrats should go further and "take a harder look" at the publicly-traded for-profit colleges, as an editorial in The New York Times suggested last week. Perhaps the Democrats should reconsider whether it's really in the public's best interest to continue to provide huge subsidies, in the form of federal grants and loans, to help low- and moderate-income students go to colleges that are much more interested in rewarding investors on Wall Street than educating students.

Otherwise, countless numbers of students will continue to leave these institutions each year buried in debt but without the skills they need to pursue careers in the fields in which they sought training. That would be a tragedy.