The report lists a series of concrete examples of how for-profit higher education is failing:

The University of Phoenix – the nation’s largest for-profit postsecondary education provider [...]]]> In a scathing report, the U.S.-based Education Trust is accusing American for-profit colleges of making out like bandits while students are left with crippling levels of debt.

The report lists a series of concrete examples of how for-profit higher education is failing:

The University of Phoenix – the nation’s largest for-profit postsecondary education provider – collected more than $1 billion in federal Pell Grant aid last year. In 2008, however, its six-year graduation rate was just 9 percent. At individual Phoenix institutions, the highest student-success rate was 33 percent at the New Mexico campus; the lowest rate was just 4 percent at the Cleveland and Wichita campuses.

In 2008, 31 percent of the students attending DeVry University graduated in six years.

The six-year graduation rate at Westwood College was 27 percent in 2008.

The report concludes that for-profit colleges are operating on a business model founded on “systemic failure.”

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.”

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.

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

The context for [...]]]> Colleagues around the world may be aware of the massive cuts in UK higher education funding announced just before Christmas. On 22 December, the government announced that £135 million would be cut from higher education funding for 2010-11, on top of £180 million in “efficiency savings” that are already being implemented.

The context for these cuts was set by Lord Mandelson, who has responsibility for university funding at the end of last year, when he said that the pursuing the government’s skills agenda in the context of cuts in public spending would mean a new level of reliance on private funding and the private sector: ”Growth based so heavily on state funding cannot continue….That is why the development of a diverse set of funding streams is important if the quality of higher education is to be maintained or improved.” “In future”, he said, “new priorities will be chiefly supported by redistribution fo existing funds and the leverage of private investment rather than provision of new money”. Higher Ambitions, p. 22: http://www.bis.gov.uk/wp-content/uploads/publications/Higher-Ambitions.pdf)

Lord Mandelson and the government are clear that universities must increase their dependence on private income via student fees, on endowments and on partnerships with the private sector. Indeed, more than this, he was explicit that the private sector and companies like BPP, now owned by the US company Apollo, which itself owns the University of Phoenix, would play a bigger role in higher education. “Alongside the development of our publicly funded universities we also see an important role for private providers over the next 10-15 years. The government has made it possible for such providers to gain degree awarding powers. We see no reason why this type of provision should not grow in the future”. (Higher Ambitions, p. 104).  

As well as stimulating the growth of the private sector, these cuts will accelerate the job cutting and institutional re-engineering sweeping the sector. UCU has estimated that around 5000 jobs are already at risk and that these additional funding cuts will threaten another 9000 over the next few years. Together with the other unions in support services, UCU is defending to protect jobs at a national level and supporting branches in fighting back at local level wherever cuts are proposed. You can see the blogsite of the joint higher education unions here: http://defendhighereducation.org.uk/

To read more about UCU’s campaigning against job cuts and privatisation, click here: http://www.ucu.org.uk/defendeducation

and here: http://www.ucu.org.uk/stopprivatisation

For more on the recent funding cuts, click here: http://www.ucu.org.uk/index.cfm?articleid=4371&from=1676

For Lord Mandelson’s Higher Ambitions document, click here: http://www.bis.gov.uk/wp-content/uploads/publications/Higher-Ambitions.pdf)

***What’s happening in your country? Is tertiary education under threat as a consequence of the global economic recession?***

The admissions officers allege the University of Phoenix obtained federal student aid under false pretenses.

In a news release issued October 27 by the University’s parent [...]]]> The largest for-profit university in the United States is reportedly prepared to spend more than $80 million to settle a six-year-old whistle-blowing case filed by former admissions officers.

The admissions officers allege the University of Phoenix obtained federal student aid under false pretenses.

In a news release issued October 27 by the University’s parent company, the Apollo Group, it was reported that $80.5 million was the “best estimate of the loss to be incurred in connection with this matter, including associated expenses.”

In response to concerns about student drop-out rates, the company also announced that it was instituting new procedures to improve retention.

Buried near the end of the news release was the announcement that the U.S. Securities and Exchange Commission had begun an “informal inquiry” into how the Apollo Group reports its revenues to investors.

The Apollo Group also owns BPP Professional Education which in 2007 became the first for-profit degree provider in the U.K.