The state’s treasurer and attorney general claim the University of Phoenix prepared misleading  financial statements. The for-profit college allegedly overstated [...]]]> The news just keeps getter worse for the Apollo Group and its flagship University of Phoenix. The state of Oregon has announced that it’s suing the company for $US 10 million for securities fraud.

The state’s treasurer and attorney general claim the University of Phoenix prepared misleading  financial statements. The for-profit college allegedly overstated its revenue between 2007 and 2010 by failing to account for losses that were a result of student withdrawals from classes. That practice, the state says, cost the Oregon Public Employee Retirement Fund roughly $10 million.

Oregon’s Attorney General John Kroger put it bluntly: “Companies that cook their books will have to answer to Oregon in court.”

A recent article in the Globe and Mail newspaper highlights how some Canadian institutions, facing budgetary constraints, have [...]]]> The US Congress has been investigating the unethical recruitment of students by many private for-profit institutions. In Canada, the spotlight is now being shone on the international student recruitment practices of our public universities and colleges.

A recent article in the Globe and Mail newspaper highlights how some Canadian institutions, facing budgetary constraints, have outsourced international student recruitment to private agencies. Foremost among these is Aoji Education Group, a Beijing-based company that says it sends 10,000 Chinese students a year to Canada, Australia, the UK, and the US.

Universities and colleges pay Aoji a commission equal to 10% of the tuition fees charged a student. That creates a built-in incentive for headhunters to sign up as many students as they can find, even if they don’t fully meet admission requirements. The result is that parents are often sold a bill of goods, thinking their children are bound for a university classroom when in fact they end up in non-credit English-language courses. Some families have spent as much as $20,000 without having 1 university-level credit to show for it.

A former Aoji employee put it bluntly: “The students think they’re signing a deal with the university. They’re not. They’re signing a deal with an entrepreneur who signed a deal with the university.”

A final footnote to this: Aoji is now recruiting for Fraser International College and the International College of Manitoba, the Navitas-run private colleges affiliated with Simon Fraser University and the University of Manitoba.

According to Bloomberg News, the biggest education company in the U.S. has been forced to withdraw its 2011 earnings forecast due to the declining student numbers and “increased regulatory scrutiny.”

The Obama Administration [...]]]> The Apollo Group has announced that enrollments at its flagship institution, the University of Phoenix, have dropped by a whopping 40%.

According to Bloomberg News, the biggest education company in the U.S. has been forced to withdraw its 2011 earnings forecast due to the declining student numbers and “increased regulatory scrutiny.”

The Obama Administration has been promising to crack down on for-profit higher education in the U.S. following revelations that many institutions offer poor quality and engage in deceptive recruitment practices. The Government Accountability Office reported in August that recruiters at for-profit colleges operated by Apollo and other companies unduly pressured students to sign up for courses because their pay was tied to enrollment.

In a statement, Apollo warned shareholders that “ongoing regulatory and other scrutiny which has led to heightened media attention” is likely to “adversely impact its operating metrics and financial results.”

I guess that’s a diplomatic way of saying they’ve been caught with their pants down.

“Some 62% of Post revenues [...]]]> An interesting report in the Observer newspaper on 22 August picked up that Kaplan’s parent company, the Washington Post, saw its share price fall to the lowest point this year as the row about defaults on student loans among private sector students in the USA continues. Peter Preston’s report noted:

“Some 62% of Post revenues last year come from the Kaplan private education empire it owns: 600 institutions in 30 countries, 1 million students, 31,000 staff. It’s a profitable empire over two dozen major sites in the UK alone. Think Liverpool, Leicester and Bradford, as well as Holborn College.

But in the US, its former students seem a bit slow at repaying their loans – repayment rates are 28% as opposed to 54% of alumni at public colleges – and federal financial aid is in jeopardy. So the share price plummets.”

Read the full story here: http://www.guardian.co.uk/media/2010/aug/22/washington-post-studen-loan-trouble

As the Times [...]]]> UCU warned the Conservative-Liberal Democrat coalition government that encouraging the growth of private universities would damage the UK’s international reputation and invite serious questions about standards. BPP, the subsidiary of Apollo which has degree awarding powers, has been lobbying the government heavily to relax the regulations on who can call themselves a university.

As the Times Higher reported on 24 June, the government has faced ”intense lobbying by BPP, and other private providers, to bring in changes that would help them compete on a “level playing field” with publicly funded institutions. Suggestions include allowing the private sector better access to the student loans system, making it easier for them to call themselves universities, and wider distribution of degree-awarding powers.”

http://www.timeshighereducation.co.uk/story.asp?sectioncode=26&storycode=412183&c=1

BPP has secured the government’s agreement that it will be allowed to call itself a ‘university college’ – an ambiguous title that does not require it to fulfil the current requirements of ‘university title’.

The union ran a poll of 500 professors which showed that an overwhelming majority (96%) did not believe it should be easier for private companies to call themselves universities.

UCU general secretary, Sally Hunt, said: “Encouraging the growth of private providers and making it easier for them to call themselves universities would be a disaster for the UK’s academic reputation. It would also represent a huge threat to academic freedom and standards.”

In September UCU produced a report outlining its concerns over the expansion of private providers in UK higher education. A copy of Privatising our Universities can be found at http://tinyurl.com/2uad6g5

Further reading:

http://tinyurl.com/34qa6lc – press release

http://tinyurl.com/27ujcqz – Telegraph

In January 2010, Australia-based Navitas sealed its first U.S. deal, a 10-year contract with Western Kentucky University.  Since then,  the company has signed three more  agreements – with the Universities of [...]]]> Inside Higher Ed reports that U.S. colleges are increasingly turning to for-profit pathway programs for international students in a bid to boost revenues.

In January 2010, Australia-based Navitas sealed its first U.S. deal, a 10-year contract with Western Kentucky University.  Since then,  the company has signed three more  agreements – with the Universities of Massachusetts at Boston, Dartmouth and Lowell.

Students entering the Navitas program at Western Kentucky will need deep pockets.  According to the fee schedule, the costs are over $22,000 for three semesters, plus a mandatory $1,000 medical insurance charge. The pre-master’s program is nearly $10,000 and runs just one semester.

With the U.S. recession clobbering college finances, other for-profit pathway providers are swooping down upon campuses across the country with promises of bountiful new revenue streams from full fee-paying international students. Study Group International, recently purchased by a U.S. private equity firm, is setting up programs at Dean and Fisher Colleges, and Madison University. Meanwhile, Kaplan International which already runs a “Global Pathways Program” at Northeastern University opened its second program earlier this year at the University of Utah.  And UK-based INTO has signed long-term contracts with Oregon State University and the University of South Florida.

INTO’s joint ventures with Oregon State and South Florida generated headlines earlier this year when the Commission on English Language Accreditation initially revoked the accreditation of the two universities’ English language institutes after they were taken over by INTO.

Ironically, the rising number of private pathways programs comes at a time when the U.S. Congress is looking at new rules to reign in the more questionable practices of many for-profit colleges. Surely it’s time to shine a similar light on Navitas, Study Group, Kaplan and INTO?