The For-Profit Education Of Apollo’s John Sperling

With 400,000 students taking classes online or at one of 200 campuses, the University of Phoenix is America’s largest private college.

It’s the principal subsidiary of Apollo Group (APOL), which took in $4.9 billion in revenue last year and leads the for-profit education sector it spawned.

But in the early 1970s, it was just a budding idea of a San Jose State University humanities professor named John Sperling.

Sperling’s vision: Provide working adults with a better way to finish college degrees than in night schools that threw them in the same pool with young undergrads.

"They would go one night a week for eight years and then drop out. It just didn’t work for them," Sperling told IBD. "I wanted to create a model that did work for them."

His better mousetrap:
1. Locate classes on commuter routes.
2. Hire qualified instructors who worked in the fields they’d teach.
3. Pack courses into six weeks to keep students focused.

He had strict rules: Only one excused absence, for example.

"If you lost a leg, that was acceptable. The next leg was not acceptable," Sterling said.

Sterling wanted classes to be small, interactive and engaging. His template was King’s College in Cambridge, England, where while earning his Ph.D. he learned most while arguing for hours with fellow students outside big lecture halls — in pubs.

"It was debate from the time I first picked up my glass of beer and set it down," he said.

To facilitate lively discussion in his new adult-education enterprise, Sterling had students read their essays in class; classmates would weigh in with their thoughts. (No beer allowed.)

"He invented an industry that didn’t really exist," said Signal Hill analyst Trace Urdan, who covers the for-profit education industry. "It was wildly successful."

Sperling’s original insight "was that adult education was a backwater," Urdan said. "The University of Phoenix was built on the premise that the needs of working adults were not being met."

Sperling fought critics and naysayers every step of the way.

When the university started an online program in 1986, "almost everyone predicted failure," he said. "They said it was not legitimate (education). I reacted the same way I react today: ‘Try it!’"

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