Just to follow up on this: looks like things might not be going so well for the parent company of the University of Phoenix:
The Securities and Exchange Commission is investigating how Apollo books revenue, the company said Oct. 27. Apollo recorded a charge of $80.5 million to cover costs it expects to pay to settle a lawsuit alleging that it violated federal student recruitment rules. Profit in the quarter ended Aug. 31 fell 60 percent largely because of that charge.
Why would one want to see U Phoenix and it’s associates fail? Well, for one thing, it doesn’t generally graduate its students:
While Phoenix has succeeded in drawing students, most don’t graduate, leaving them without degrees and often burdened by loans. Only 8.9 percent of Phoenix students without prior college experience complete a degree in six years, including 5 percent of those who attend classes online, according to the National Center for Education Statistics, in Washington.
Apparently the governing lesson of the institution profiting from the financial crisis (through the unemployed attempting to return to school) is much the same as the lesson of the crisis itself:
Tom Corbett, a former director of online enrollment at Phoenix who provided an affidavit in the lawsuit, said in an interview that the school’s recruiters were like brokers peddling subprime mortgages.
“The University of Phoenix’s management culture is fueled by greed, the same as the housing scenario,” Corbett said. “There was no emphasis on the student’s actual values, goals, background, experiences.”
Of course, it’s hard to convincingly regulate these problems out of free market finance. On the other hand, there’s been a commitment to not for profit post secondary ed in the US for generations. Surely things like this just don’t need to happen.