THE STREET: The University of Phoenix Shrinks Student Body as ED’s Gainful Employment Rules Take Effect
Career College Central Summary:
For-profit colleges have counted on two things: federal money and an uninterrupted flow of students. Now the University of Phoenix (UOP), one of the biggest names in the for-profit college world, said last month that it will close most of its associate degree programs and, for the first time, set academic requirements for admission that will lead to a reduction in the number of students.
On the heels of the AA degree shutdown came a real estate liquidation. Last Tuesday it was announced that Dial America, a New Jersey-based telemarketer and call center provider, sub-leased 50,000 square feet of UOP office space in Phoenix that will house 150 workers. Dial America has similar locations in Rochester, N.Y.; El Paso, Texas; Jacksonville and Orlando. Other real estate-related investments included UOP’s purchase of the naming right to the stadium that the NFL’s Arizona Cardinals call home.
Come 2016, UOP is expected to be left with about 150,000 students, a steep drop from the 460,000 it had in 2010. For the period ending May 31, its enrollment was 206,900, compared with 241,900 the year before. The planned changes and enrollment figures were announced during a June 29 earnings release by the university’s parent company, the Apollo Education Group (APOL), which derives about 90% of its revenue from UOP.
Apollo also disclosed that in June it bought a controlling interest in The Iron Yard, a digital trade school based in Greenville, S.C. that trains code developers for information technology gigs but doesn’t confer degrees. These so-called “coding boot camps” are not eligible for federal student aid—a sign that UOP may be planning for life without access to the federal government’s largesse.
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