UoP Responds to Marketplace’s Allegations

On November 3 and 4, National Public Radio (NPR)-syndicated Marketplace aired an uncharacteristic piece of journalism for the highly regarded American Public Media — a wholly imbalanced, subjective, salacious story about University of Phoenix. This type of hit-and-run journalism ordinarily would not air on the likes of Marketplace, so why did it? In an unusual move, Marketplace outsourced its investigative reporting to ProPublica, a partisan and experimental investigative newsroom known for "muckraking tactics" and "hatchet jobs." For more on what others are saying about ProPublica, click through to website.

Evidently in the eyes of ProPublica, University of Phoenix’s for-profit – as in free market – model negates our social agenda to increase access to higher education and is cause to categorically reject every positive piece of factual information provided by University of Phoenix. Refusing to be deterred by the facts, which are provided below, ProPublica produced – and Marketplace aired – a two-part series founded on nothing more than a series of anecdotes from five of our 17,000 employees (.03 percent of our employee population) and from 12 of our 443,000 students (.0027 percent of our student population).

We referred ProPublica to thousands of positive stories from University of Phoenix students; they were ignored. We shared the results of our most recent student satisfaction surveys, which range from the 90 to 96th percentile; they were discarded. We offered a tour of any of our enrollment facilities across the country in order to observe our enrollment counselors at work; it was snubbed. We suggested ProPublica anonymously call any of our thousands of enrollment counselors to test the enrollment-related allegations of students to be featured in their story; if calls were made, they did not support ProPublica’s story and were cast aside. University of Phoenix requested that ProPublica obtain Family Educational Rights and Privacy Act (FERPA) releases for any students to be featured in its story so that we could research and respond to specific student situations; they refused to do so, legally prohibiting us from providing our side of the story.

ProPublica has tarnished the degrees of nontraditional students served by University of Phoenix – those students who need to work full-time and/or raise a family while attending school, many of whom are minorities, first generation college students, single parents and active duty military personnel. University of Phoenix is providing options and opportunities, which otherwise would not exist for our students, and at a time when our conventional public system of higher education is proving increasingly untenable and inaccessible. Marketplace should be ashamed.

The Facts

ProPublica: Phoenix isn’t the only school that profits from the stream of federal student aid. But it’s the single biggest recipient.

Fact: Financial aid is awarded to students, not institutions, who may take their financial aid to any institution of their choosing should they be admitted. Given the size of University of Phoenix’s student population – more than 440,000 students today, dispersed across hundreds of campuses and learning centers across the country as well as online – as a group, they are the largest recipient of federal financial aid in the country. Our students are the most honest arbiters of our academic quality and they will always be the final arbiters of where they wish to spend their tuition dollars.

ProPublica: The for-profit industry says about 60 percent of its students graduate from two-year programs. The University of Phoenix says its rate is less than half that.

Fact: University of Phoenix’s graduation rates are comparable to national averages: 27 percent of our students graduate at the associate degree level, which is the same as the national rate; 38 percent of our students graduate at the bachelor’s level, compared to 43 percent nationally; and 60 percent of our students graduate at the graduate level versus 61 percent nationally. But the real story that should have been told is that in a comparison of students who enter college with “risk factors” that often contribute to their dropping out, University of Phoenix’s rates of completion for a bachelor’s degree are substantially higher than for institutions overall.

ProPublica: It turns out the enrollment counselors at the University of Phoenix get paid in part based on how many students they recruit.

Fact: Just as academic institutions are entitled to pay teachers based upon how well they teach, grade students based upon how well they perform, and pay executives based upon the school’s success, so too is it entirely appropriate and lawful for schools to pay recruiters in part based upon how well they perform their job – i.e., recruit students. Indeed, this is a basic premise of American industry, and was recently confirmed by the Ninth Circuit Court of Appeals. As one of the judges noted in oral argument on the appeal, if academic institutions could not pay recruiters based upon their ability to recruit students, “you could never have any performance criteria for that particular job” and it would be the “one job where they can’t consider how well you’re doing your job.” Any other view would be antithetical to American industry.

ProPublica: But whether students drop out or graduate, they still leave school burdened with debt. And it’s debt they can’t escape.

Fact: Our student debt loads are within national averages compared to both public and private, non-profit four-year colleges and universities, with our students averaging between $14,200-25,221 in loans compared to the national average of $13,266-26,208 as reported by the Institute for College Access and Success’ October 2008 report, Student Debt and the Class of 2007. Our default rate has consistently remained below the national average for comparable schools. University of Phoenix’s official FY 2007 cohort default rate of 9.3 percent, as published by the U.S. Department of Education, remains below the national average of 9.8 percent for comparable schools (4+ years) and below the national average of 11.0 percent for all proprietary schools combined. While this is a 29 percent increase over our previous year rate of 7.2 percent, default rates increased for all types of schools – public, private, and proprietary, as well as 4-year and 2-year alike. The FY 2007 national student loan cohort default rate increased to 6.7 percent, up from 5.2 percent, also a 29 percent increase over the 2006 rate.

ProPublica: The taxpayer actually makes money from the interest on these loans. But critics of the system say students often lose out. Not only are they deep in debt, they don’t always have much to show for it.

Fact: University of Phoenix graduates earn significant increases in their personal income as a result of their degrees. In 2008, graduates of our associate degree programs earned an average increase of 19 percent in their personal income; graduates of our bachelor’s degree programs earned an average increase of 28 percent in their personal income; and our master’s degree program graduates earned an average increase of 25 percent in their personal income[1].

ProPublica: Clark didn’t qualify for federal student aid. So she paid some of the bill with credit cards. The rest she owes to a private lender, Sallie Mae.

Fact: University of Phoenix made the deliberate decision not to engage in private lending because we believed it was not in the best interests of our students. For Fiscal Year 2009, private loans accounted for less than 1 percent of parent Apollo Group’s net revenue.

ProPublica: The Apollo Group, which owns the University of Phoenix, made just shy of half-a-billion dollars in profit last year. But Barmak Nassirian says no one’s keeping a close eye on the quality of the education for-profit schools like Phoenix provide.

Fact: University of Phoenix is committed to transparency in our educational operations and welcomes regulatory examination. In fact, we are one of, if not the most, examined institution in the country. Since our inception, University of Phoenix has participated in 30 accreditation visits by regional accrediting bodies, 35 evaluations by state education agencies, and undergone 10 administrative reviews by U.S. Department of Education. At our last Higher Learning Commission accreditation visit, University of Phoenix was awarded a 10-year grant of accreditation – the longest period of time for which an institution can receive approval without an interim review visit. University of Phoenix is committed to academic excellence. We are required to meet the same standards for academic quality as conventional four-year colleges and universities and, as a for-profit institution, meet the highest of regulatory requirements. The university is regionally accredited by the Higher Learning Commission and is a member of the North Central Association, one of six regional accrediting bodies considered to be the gold standard of accreditation. Regional accreditation is every bit as rigorous for University of Phoenix as it is for the other colleges and universities accredited by the North Central Association, which include Northwestern University, University of Notre Dame, University of Michigan, Ohio State University and University of Arizona, to name a few.

ProPublica: They’ve been hounded by enrollment counselors from for-profit colleges… But ProPublica and Marketplace have uncovered several instances where recruiters crossed the line.

Fact: It is important to note that our National Qualifying Center follows up with potential students only after prospective students initiate contact with the University either by telephone, reply card or email. Once potential students are reached by telephone, they are transferred to an enrollment advisor to more fully explore their educational options. Once a student enrolls, we encourage our enrollment advisors to keep in contact with new University of Phoenix students during their first few courses to assist with their transition into the University and to offer additional support and resources if needed. Upon enrollment at University of Phoenix, every student is assigned a graduation team comprised of an enrollment, a financial and an academic advisor. The graduation team actively supports the student throughout his or her University of Phoenix experience, providing the coaching, resources and tools necessary to ensure academic success.

ProPublica: People would say you know I saw the CSI, and I want to do that… Burke says he got frequent calls from fans of the popular TV show (CSI). He says supervisors told him to steer them to the criminal justice program. That might qualify them to work as prison guards. But not as forensic criminologists.

Fact: University of Phoenix policy requires that our enrollment representatives advise students of all the educational options available that would best meet their needs and schedules. In fact, our enrollment advisors undergo yearly compliance training sessions, which include a variety of enrollment-related topics, such as student engagement, ethics/misadvisement, among other compliance matters. These sessions provide our enrollment advisors with guidelines for how best to advise and support our students throughout their time at the University. From January 1, 2009 to the present, approximately 5,850 of our 6,000 enrollment advisors have gone through more than 260 compliance training sessions.

Should the University find an enrollment advisor purposely mis-advising or misleading students, prompt and appropriate action would be taken.

ProPublica: But one of the biggest complaints students had was that counselors misled them about credits… One of the things that we were told to do was, you say we are regionally accredited, which means they’re transferable anywhere, which isn’t true. They’re eligible for transferability.

Fact: University of Phoenix is regionally accredited by The Higher Learning Commission and is a member of the North Central Association. Credits or degrees earned at one regionally accredited university are generally fully accepted in transfer by other regionally accredited colleges. However, it’s ultimately up to the accepting institution to decide which credits will be accepted.


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