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Allegations against U of Phoenix persist
A University of Phoenix sign.
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Katherine Clark with her boyfriend Daniel Ray and their dog Cadence.
Michele Rambo, 23, of Grand Prairie, Texas.
TEXT OF STORY
Kai Ryssdal: While most businesses are still trying to find their way out of the recession, for-profit higher education is doing quite fine, thanks very much. Enrollments are up 20 percent, profits are up as well. But that doesn't mean there aren't any problems.
The biggest for-profit schools get most of their revenue from federal student loans. The billions of dollars their customers borrow to pay tuition. The University of Phoenix is the biggest for-profit school out there, probably the best known as well.
A few years ago, it paid the government $10 million over accusations about its high-pressure recruiting tactics. Now it's put aside another $80 million to settle a lawsuit about the same thing.
And a joint Marketplace ProPublica investigation shows some for-profit schools are still abusing the system. Sharona Coutts and Amy Scott reported our two-part series. Here's Amy:
AMY SCOTT: You've seen the ads on mass transit, Facebook and TV, promising job retraining, online classes, flexible schedules.
UNIVERSITY OF PHOENIX AD: I was the first in my family to graduate from college. But I won't be the last.
Hundreds of thousands of Americans have been drawn to for-profit colleges like the University of Phoenix.
UNIVERSITY OF PHOENIX AD: And I am a Phoenix.
Phoenix isn't the only school that profits from the stream of federal student aid. But it's the single biggest recipient. Last fiscal year, 86 percent of its revenue came from the federal government. That's more than $3 billion. But who's benefiting from all that money?
MICHELE RAMBO: My name is Michele Rambo, and I live in Grand Prairie, Texas.
Rambo signed up at the University of Phoenix in Dallas a few years ago.
RAMBO: I did tell them that I was pregnant and they were like, oh, well that just solves everything, you know, you qualify for a grant, you're covered. And I'm like, so I don't have to pay anything? And they told me no.
Classes went well. She got good grades. She was almost finished with her associate degree when a school counselor called about moving her on to a bachelor's program.
RAMBO: And one of the questions that she asked me completely stopped the whole conversation. She had asked me, so what kind of loan do you have?
Rambo thought she didn't have a loan. But when she enrolled, she signed what she thought was a form inquiring about federal aid.
Turns out it was an application for loans that'll cost her $18,000 when she graduates.
RAMBO: It was scary. It still is scary. I'm still scared. I still don't even know what I'm going to do yet.
So how could this happen?
It turns out the enrollment counselors at the University of Phoenix get paid in part based on how many students they recruit. The university's negotiating the settlement of a lawsuit that claims employees were pressured to sign people up.
Bill Pepicello is president of the University of Phoenix. He says his school goes out of its way to ensure counselors don't mislead students.
BILL PEPICELLO: We train our financial counselors very carefully to provide an array of options for students, and to try to be as specific as they can as to what the implications of each of those are.
One financial aid expert told us it's not uncommon for students to sign a bunch of paperwork without really understanding the terms of their loans.
Sound familiar?
At a recent hearing, Congressman George Miller of California likened problems in student lending to another recent crisis.
GEORGE MILLER: I'm a little worried that we're developing a process here that looks a lot like sort of subprime student loans. And knowing that these people don't have the capacity to pay it back, knowing that they may not have the ability to benefit from this education, we go ahead and extend them the credit...
What he means by not benefiting, is that many students saddled with debt don't finish their degrees. 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. But whether students drop out or graduate, they still leave school burdened with debt. And it's debt they can't escape.
BARMAK NASSIRIAN: It is very important to understand, student loans are the most collectible obligation in the United States.
Barmak Nassirian is with the American Association of Collegiate Registrars and Admissions Officers.
NASSIRIAN: Students who default on their student loans have their Social Security benefits intercepted, have their tax returns intercepted, have their wages garnished. They are ruined for life.
The Department of Education says more and more students are falling behind on their loans. For-profit schools have a higher default rate than the average.
Harris Miller represents many for-profit schools as CEO of the Career College Association, a lobby group in Washington, D.C. He says defaults are higher at his schools not because they're for-profit, but because they sign up poor people. People who might not otherwise have a shot at college.
HARRIS MILLER: The simple fact is if your institution is willing to accept lower income students, which our institutions are, which community colleges are, which minority serving institutions are, they have higher default rates.
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.
I went to see Katherine Clark at her home in Seal Beach, Calif. She signed up for a business management degree at the University of Phoenix. She says the program included courses like "Skills for Lifelong Learning."
KATHERINE CLARK: Like they had worksheets where it was like if you're deserted on an island, and you have a list of things, put them in order of how they would be important to you. And I'm just like are you kidding? What am I ever going to use this for?
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.
CLARK: In total, I've paid out of my pocket, $3521. And I still owe $600.
Scott: And what did you get in return?
Clark: Absolutely nothing.
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.
NASSIRIAN: In too many instances we see keyboarding skills transcribed as Computer Science 101, we have seen working with Microsoft Windows transcribed as a Theoretical Course in Operating Systems, and the like.
Clark was so disappointed she dropped out after a course and a half. University of Phoenix officials say out of more than 420,000 current students, a few anecdotes don't tell the whole story.
But Marketplace and ProPublica have heard other troubling accounts. Tomorrow you'll hear allegations of some abusive tactics for signing students up.
With Sharona Coutts of ProPublica, I'm Amy Scott for Marketplace.
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I am always shocked to find people who want to tear down an establishment that brings education to the masses. I think it would seem a logical assumption that someone who is not smart enough to know when they apply for a loan, would also not be smart enough to complete their education. News Flash: College is not for everyone. When you are the size of UOPX, guess what, you will have a higher number of defaults. It is quite comical that the bulk of commentary against that school results from students enrolling and finding out IT IS A REAL SCHOOL. People put down online educations, and then defend those who cannot succeed there. Open enrollment does not mean that it is easy. I checked and the school is accredited at a Regional level. If you do not know what that means, go ask the school you went to and you will know that it is the same level or higher than yours. As far as defaulting on student loans, why is UOPX being blamed for Title IV funding regulations that are imposed by the Government? It is interesting to me that people think there is some conspiracy, like the Department of Education does not review their practices like any other school. I went to a traditional state University and I got straight A's attending class sometimes and showing up for exams only. At UOPX, you have to attend class four days a week and actively engage in the discussion or you are dropped from class. This is why I hesitate after I called them because it seems like such a commitment. I am tired of hearing complaints from people who simply found out that college is not for them and lack accountability. Of course people want to put down an education that was received online. It is 100% fear based. Who wants to compete with that many graduates? Traditional schools are suffering and are desperate for students. My school just short of harrasses me to go back for my Masters. If you put down online education, that is how you ensure that your degree continues to hold value. Let's get real people, what are you so afraid of? This is high school sociology in its truest form. Traditional Universities are the cool crowd who keeps their status through exclusion of others. The Online Universities are the nerdy kids who are smart and nice, but nobody took the time to get to know them. Plus, why is no one mentioning the fact that MOST traditional schools are offering more and more of their courses online every semester....only they have no clue how to run them properly.
Like others, I completed an exercise similar to the "desert island" cited here in an executive education program - at an Ivy League graduate school.
It's unfortunate that some individuals lack personal accountability for reading materials provided to them. It also appears those same individuals did not complete, or otherwise demonstrate commitment to, their education, which undermines their credibility in my opinion.
You have an interesting article, however, I think you are forgetting about some of the lenders that are no longer allowed to administer loans under the student loan programs.
I had my options about where I attended Grad school for my MBA. University of Phoenix was the same price as the state school I was considering and there was no difference in the financial aid package. University of Phoenix was just more convenient in allowing me to work full time while I attended classes, so I did not have to commute 75 miles, one way.
I had full knowledge of the student loans that I would receive.
And if you want to discuss something of consequence. My mortgage lender required me to defer my student loans for at least one year in order for my husband and I to be approved for our loan. The only way to do that was to go back to school. I chose to do the two years so I could at least have something to show for it. So effectively, my mortgage lender required me to go in debt by another $15,000 and increase my loan payments in the future, because they felt my husband's and my income was too low for a $600 mortgage payment.
I learned quite a bit from my education at UOP and am glad that I went there. I had issues with my counselors being changed frequently, but I got a far greater learning experience because the classes were so diverse in culture and in work backgrounds.
What is interesting with this story is that the journalists purposefully chose this subject because of the potential exposure she could possibly get for "unveiling the truth" about for-profit universities. Give me a break, It's laughable. Is American Public media really hurting that bad for news stories these days? I am assuming sweeps is coming up and she was looking for a nomination. I received my undergrad degree from Northern Arizona University, (A public school in journalism. Fancy that. ) Basic journalism one on one expresses that it is the job of a respected journalist to provide all of the facts before running a story or else it is considered slander and or defamation of character. There are classes based in ethics in reporting and yet the two young women behind this story failed to provide any rebuttal from the accused. What this story also lacks is a comparison model between the cost of traditional v.s. for -profit schools. What you'd be surprised to learn is that several universities hike up tuition almost quarterly. I went to Glendale community college for my associates degree and my tuition rate increased 4 times while in attendance. It was never explained by a finance counselor how the hikes in tuition affected my funding, nor did I have proper help from my academic counselor. As a result, I continued to incorrectly borrow money, as well as take classes that had zilch to do with my associates degree. I learned quickly post community college that it is my responsibility to educate myself in reference to my lending and academic progress. It is pure laziness on behalf of the student to gain understanding. Especially when the University provides individuals capable to answer any and all questions that you may have. I personally am a huge fan of traditional schooling, and it wasn't until recently that I started attending Western International University. (An online for profit educational institution.) WIU is also a subsidiary to Univ of Phoenix. (FYI) I have a dedicated enrollment counselor that has my best interests regarding choosing a masters program to enroll in. I have an academic counselor that has thoroughly explained what classes I will be attending, and a financial counselor that very clearly represented all of the paper work I signed before signing up for fin-aid to help me pursue my masters degree.( Which is pretty dang expensive.) I had a 3 person team that guided me through every step of my enrollment process. One of the young ladies in the story seems only interested in finagling funds from an institution she knows makes money. The aforementioned students exemplify a modern case of ambulance chasers. In their laziness they refuse to accept the responsibility of not researching all of the information before they signed the papers. Furthermore, a lot of students look at the refunds from the loans as free money, and get upset when it is time to pay them back.(The audacity!!! lol) What better way to get even if your upset about repayment than slandering the institution. It is unfortunate that less than 1% is being represented in this story.The only thing being exposed here is your unethical journalism tactics. You should be real proud American Public Media. If you are looking for a journalist with ethics and credentials see my above email address and give me a shout.
It is interesting to me that much of the attempted rebuttal toward supporters of University of Phoenix seem to think living in Phoenix automatically means the commenter is an employee of the university.
As a new student to University of Phoenix, one who both knows to read binding documents and knows not to sign one should it contain information with which I do not feel comfortable, I have very little sympathy for those who refuse to learn how to manage either, or to ask questions.
As a technologies professional, I know many graduates of University of Phoenix from around the country. It was this personal experience of the quality of graduates combined with my own research that made the university the choice for me.
This article seems to attempt to convict the university for predatory activities. However, anyone reading finds it clear that the real issue is an irresponsible and all too willing minority who apparently believe that it is acceptable to act in ignorance (be it willful or otherwise) and expect anyone but themselves to deal with the consequences.
Suffice to say, I am profoundly unimpressed with this article (my first read of this outlet) and, if this is what passes as "journalism" here, I suspect it will be my last as well.
University of Phoenix may be expensive, but it provides an opportunity for working adults to further their education. I am disappointed to read stories like this because I am a UOP graduate. I feel like my decision to be educated at UOP is being degraded, when if fact, it is the reason for my success.
This story seems to be a bit one sided and unbalanced. When an individual is sitting at home with no job or education and has a family to raise, the community college setting may not be the best fit for that person. If that individual is working full-time with a family to raise, then completing their education becomes an obstacle because many schools do not offer the flexibility to attend full time classes while working full time. I can say from experience that most people are not traditional students and I myself was not a traditional student. Not everyone understood the importance of ACT and SAT scores while in high school, so they were not able to attend a traditional state college or university. While University of Phoenix has many executives and professionals who attend classes, there are also many individuals who have never had a chance of going to college because they thought a GED or a low HS grade point average would keep them from doing so. University of Phoenix gives everyone the opportunity to earn a degree from a regionally accredited University and the school works hard to retain and assist students in accomplishing the goal of graduating. Do you need student loans? Yes. Since when has education become free in our nation? I did not get the memo. It is an investment in your future. If someone does not put in 100% into their course work the results will not be as strong. This is the same for any school. UOP has almost half a million students nation wide. One student and a disgruntled employee should not carry the flag that represents this University.
What is interesting with this story is that the journalists purposefully chose this subject because of the potential exposure she could possibly get for "unveiling the truth" about for-profit universities. Give me a break, It's laughable. Is American Public media really hurting that bad for news stories these days? I am assuming sweeps is coming up and she was looking for a nomination. I received my undergrad degree from Northern Arizona University, (A public school in journalism. Fancy that. ) Basic journalism one on one expresses that it is the job of a respected journalist provide all of the facts before running a story or else it is considered slander and or defamation of character. There are classes based in ethics in reporting and yet the two young women behind this story failed to provide any rebuttal from the accused. What this story also lacks is a comparison model between the cost of traditional v.s. for -profit schools. What you'd be surprised to learn is that several universities hike up tuition almost quarterly. I went to Glendale community college for my associates degree and my tuition rate increased 4 times while in attendance. I was never explained by a finance counselor there how the hikes in tuition affected me funding nor did I not have proper help from my academic counselor, so I continued to incorrectly borrow money, as well as take classes that had zilch to do with my associates degree. I learned quickly post community college that it is my responsibility to educate myself in reference to my lending and academic progress. It is pure laziness on behalf of the student to gain understanding. Especially when the University provides individuals capable to answer and and all questions that you may have.I personally am a huge fan of traditional schooling, and it wasn't until recently that I started attending Western International University. (A for profit educational institution.) WIU is also a subsidiary to Univ of Phoenix. (FYI) I have a dedicated enrollment counselor that has my best interests regarding choosing a masters program to enroll in. I have an academic counselor that has thoroughly explained what classes I will be attending, and a financial counselor that very clearly represented all of the paper work I signed before signing up for fin-aid to help me pursue my masters.( Which is pretty dang expensive.) I had a 3 person team that guided me through every step of my enrollment process. The young lady in the story seems only interested in finagling funds from an institution she knows makes money. The aforementioned students exemplify a modern case of ambulance chasers. In their laziness they refuse to accept the responsibility of not researching all of the information before they signed the papers. Furthermore, a lot of students look at the refunds from the loans as free money, and get upset when it is time to pay them back. What better way to get even if your upset than slandering the institution. It is unfortunate that less than 1% is being represented in this story as the journalist purposefully chose to allow one sentence of rebuttal by the univ of phoenix rebuttal comment. The only thing being exposed here is your unethical journalism tactics. You should be real proud American Public Media. If you are looking for a journalist with ethics and credentials see my above email address and give me a shout.
Dear Amy and Sharona,
Good start, but I certainly hope that in your future segments you will also consider reporting on:
1. Lives that have been positively changed from an education at the University of Phoenix
2. Accomplishment of University of Phoenix graduates, some of whom are recognized inventors, authors, entrepreneurs, professionals, etc.
3. The return-on-investment over a lifetime from an education at the University of Phoenix
It is far easier to cast aspersions than to dig for the hard truths. Thoughts?
I listened to your story last night in compllete dismay. What you purported to be a profile of for-profit higher education instead was a biased and imbalanced piece of reporting aimed squarely at University of Phoenix.
You referenced a small number of disgruntled drop-outs. At the same time you say the school serves 420,000 paying students. HUH?
Check your math. Clearly you misrepresented the quality of education and the integrity of Univ. of Phoenix business practices. You also forgot to mention even one other college by name in your so-called investigation.
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