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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.
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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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You know I started thinking about how mad University of Phoenix made me when they refused to take my phone calls after they pre-charged my employer for classes I did'nt take and put me in collections status, that I did a little research. I found an attorney in Northern California that is filing a class action lawsuit against the school. Her name is Nancy G. Krop and her website link is: http://www.kroplaw.com/uop/index.html
There are many court documents and Main stream News organization article and report links to address the U of P.
These reports are from many respected and are not "left wing" as many of the employees and supports of U of P say in their posts. The Los Angeles Times, The New York Times, CBS News 60 Mins.,and University of Phoenix's own home town newspaper, The Arizona Republic......
I grew up in East Palo Alto, a town that is only 2 square miles, and in the early 90’s East Palo Alto was declared murder capitol of the world for 3 years straight. I watched people get stabbed and grew up listening to gun shots and attending funerals. People in my neighborhood were not given a chance at the American dream. Instead we were told by the media, some teachers and negative influences that we would end up dead, in jail, selling drugs or a victim to gang violence.
The truth of the matter is 2 years ago I was unemployed looking at jobs online and I became very discouraged. My reason for being discouraged was due to the fact that all of the jobs I wanted to apply for required one thing, a Bachelors degree. While continuing my search on yahoo jobs I was exposed to a link to click on and request information from colleges about earning my degree. I received a call back from the University of Phoenix in less than 5 minutes and set an appointment to meet with my enrollment advisor the very next day.
When I met with her she was very professional and all she wanted to do was talk about my life, my goals, my dreams and my family. The thing that stood out the most was how well she listened to what I had to say and provided direction according to my needs. I simply shared with her that I have a wife and a daughter at home who is relying on me to make something positive happen for our family. I told her if she could show me how I could earn my degree and work full time that not only would my wife be on board but I would be on board as well.
A long story short I started class a month later because I chose to. I decided that now was the time for me to make a positive change in my life. I decided that I was tired of struggling and wondering how my future was going to turn out. I decided to stop blaming others for my current position and become proactive about my future.
I was able to escape that fait and find myself starting a new chapter in my life by finishing my degree at the University of Phoenix. Little did I know that listening to counselors introduce themselves and share their stories of success of how they overcame the odds and earned their degree would change my life forever. I walked up to the enrollment manager and shared that I really enjoyed her staff’s stories. She invited me in to a group interview and a couple months later I became a University of Phoenix employee. If I had not made a choice to get up and do something with my life and finish my degree I would have never had the opportunity to become an employee as well. My family and I are able to eat dinner, pay our bills and live because God used a company like university of Phoenix to give a guy like me a chance at a better life.
This is the story NPR failed to air. There are thousands of stories of people like me who would never be able to step foot on a "prestigious" college campus. University of Phoenix day in and day out for 30 years continue to take a risk and provide education for the underserved and unappreciated population.
Sure there have probably been counselors who have misrepresented University of Phoenix when guiding students. Those counselors are no longer here and if they are I can assure you that their time with this company is and will be short lived. Instead of focusing on a few negative testimonies why not interview some of the hundreds of people who have earned their degree instead of choosing to become drug dealers. Why not interview high school drop outs, who earned their GED, were rejected by some state and other private institutions but now they own their own business because University of Phoenix gave them a chance at higher learning.
I am hurt and offended not only based on the fact that I myself am a University of Phoenix student and employee but I am an advent listener of NPR in the Sacramento, California region. I love to listen to talk of the nation, market place, fresh air and especially jazz after 7:00 p.m. (at least 3 nights per week). I have always encouraged friends and family to tune into NPR because NPR consistently provides an "unbiased", fresh approach to news from around the world. Boy was I wrong. The funny thing is I was really considering that night when the 1st segment of this ruthless attack against us aired to become a member who supports NPR rather than just a listener. I’m not to sure if I will support NPR now. It is not deceptive or aggressive sales tactics that make the University of Phoenix great. It is the people who genuinely care about changing lives and watching lives and families transformed. Are you really doing the same?
Very interesting. I searched for and read ProPublica's article and it is very biased against UOP. It does mention that other schools have other problems and does not name any of the other schools. It is a hit piece on UOP.
I was recruited at a job fair in Concord for the MBA program. They were looking for teachers, but encouraged me to enroll. Unlike the article, I was not rushed into anything and I was told new classes start every week. Unlike the students mentioned in the article, I read everything I signed and was certainly aware of the risks I was taking in applying for student loans. Read before you sign. It is my responsibility to read, not the University's.
The article seemed to imply that UOP has a responsibility to graduate its students once they take loans. Not so. The loan is how you pay for the services UOP provides. It is the student's responsibility to do the reading, resolve problems with teachers and groups and get things done on time. Class is open 24 hours each day. Post something to the discussion board whether you read the material or not.
Dropout rates are always high at every school. I attended DeVry for my Bachelor's in Accounting. In March, 1992, I started in a class of 120 students my freshman year. About 60 of those were Accounting students. The rest were BSOPs majors. Three years later (we went to school all year), I was one of four who jumped up on that stage and got my diploma. Eight people were added to our number and these eight were student who fell back or did the night school part-time.
At UOP, 11 people attended my first class. About 21 months later, I was one of two people to graduate. The two of us merged with other classes who took some weeks off for us to catch up with them, but we made it. Only determined, self-motivated students will graduate. I took three years for my Bachelor's. DeVry had a tough accounting program. But I succeeded because one night I took the initiative and started the Principles I course from Chapter 1 one night when my grades looked about mid-trimester like I may not pass this course. That one night, reading from Chapter 1 and drawing a map, pulled my grade from a low D to an A- (90.05) by the end of the course. After that night, Accounting made perfect sense and I knew I picked the right major. The 14 accounting courses after that were easy.
My sister, on the other hand, aced her SATs and was high school salutatorian, but took five years to graduate through three colleges. She could not pick a major she liked and finally made her own degree, a hybrid of Communications based on the classes she had taken so far.
Dropout rates are high at every school. I am certain Stanford and Harvard do not graduate most of the students who enroll there either. Studying requires commitment, even if you are only taking one class at a time for six weeks! The dropout problem is universal.
Any large organization will have bad apples. UOP should use the opportunity to tighten its recruiting policies and police its recruiters regularly. But the problems mentioned in the article do not match the university I attended. I was not recruited anyway. ProPublica clearly has a grudge against the University of Phoenix. Perhaps a disgruntled dropout wrote the article who did not bother to read his student loan agreements before signing them.
As for accreditation issues, let me say that the California Board of Accountancy did accept both DeVry and University of Phoenix as fully accredited schools when I applied for licensure and the AICPA recognizes both schools to when applying to take the CPA exam.
To the gentleman who taught at UOP and would not hire someone from there, I think you are quite wrong sir. I personally learned a whole lot from UOP and isn't that what it's all about...learning? In all honesty, the truth will come out if the student did not apply themselves even if everyone was given an automatic "A" because in the end, when it comes time to apply for a job, those people who didn't apply themselves will NOT be able to do the job! I went to school to learn, not to see how high of a GPA I could get. I work for a large corporation who respects me and my work and I also have my business that I'm starting up with several clients. It's about learning. I could not attend a college because the closest college to me was 2 hours away one-way, so am I suppose to not pursue my dreams? I have to also say that some of my instructors at UOP were excellent and some were not. It is up to the instructor to give the proper grades and if an instructor gives the B or C, then it is the instructor's fault, not the person who told them to do it.
I work at a college that is associated with the Apollo Group and I must say, I do not like it at all (being associated with them, that is).
This was a great article and truly gives some insight on the world of Financial Aid, UOP, the Apollo Group, and Non-term schools (which is what the adult program at UOP is).
I have had to talk to irate student after student who talked to these recruiters that are paid by the Apollo Group. They tell them things such as they will get full PELL, and because they have children they will receive Lottery Grants, and other such mess, and that they will not need a loan. Its Bull. Most all students at private higher cost colleges will have to take out loans.
I feel as if future students are mislead and I do believe that students do not realize they are taking out loans. They are told to just do a bunch of paperwork, mostly on line.
It is unfortunate that most do not read what they are filling out. And that is the case with most things - people don't take the time to find out the details.
Apollo Groups is in contract through their "branches" with colleges all over the U.S. Their main targets are working adults, which is great, because this is a group who is interested in going back to college but is unsure how they can while working, raising a family, etc.
Apollo Group receives money from the colleges they work with as a yearly amount of the contract. They then receive a percentage of all funds that come into the college for the student (A portion of their loan, grants, etc). We had a student who was pregnant with twins, due in a month, who was told it was ok to start and she would be fine - high pressure sales. The student did not do well and had to leave the program, as we expected she would. Instead of saying, wait a few months, when your ready, and you will be able to start, the Apollo Group employees pressured her into starting. From our perspective, they only care about the amount of students that start the program, and not the retention rate.
If the percentage from the article is true, less than 30%, I believe it, and see first hand why.
I have nothing against for profit, but I have a problem with having "for profit" over "for student".
I'v seen a few comments about University of Phoenix being a diploma mill. Let's explore what a diploma mill is: What is a diploma mill?
Diploma mill: An institution of higher education operating without supervision of a state or professional agency and granting diplomas which are either fraudulent or because of the lack of proper standards worthless. —Webster’s Third New International Dictionary
Diploma mills (or degree mills) are substandard or fraudulent “colleges†that offer potential students degrees with little or no serious work. Some are simple frauds: a mailbox to which people send money in exchange for paper that purports to be a college degree. Others require some nominal work from the student but do not require college-level course work that is normally required for a degree.
There has been a substantial amount of media coverage about the problem of Diploma mills in recent months. Diploma mills (or degree mills) are substandard or fraudulent “colleges†that offer potential students degrees with little or no serious work. Among other activities, the Office of Degree Authorization is responsible for terminating substandard or fraudulent degree activities.
The United States Senate conducted hearings on the diploma mill problem in May, 2004 and in September, 2004. See the Senate web site for details
The Chronicle of Higher Education published several well-researched articles about diploma mills in its June 25, 2004 edition. Online access to the Chronicle is available only to members, but a single copy of that issue may be available for purchase for $8.00 US. Contact the Circulation Department.
The Chronicle of Higher Education
Circulation Department
1255 - 23rd Street, NW
Washington, DC 20037-1190
Visa, MasterCard and American Express accepted.
Phone 202-466-1032
Fax 202-223-6292
How do diploma mills operate?
An extensive description of how certain well-known diploma mills work through the Internet and the Web while obscuring their owners' true identities. Based on research for ODA by Dr. George Gollin." See outline for details.
Why are degree mills a problem?
“Mail drop†degree mills are simply fraud, a way for unscrupulous hucksters to make money while providing no service. More substantive degree mills devalue college degrees by making them available without college-level work. This makes all degrees suspect and confuses employers and professional licensing boards that need to know whether a person has an appropriate educational background.
How can I tell whether an institution is a degree mill?
Most degree mills have certain characteristics. A good overview of these is available from University of Illinois at: http://www.hep.uiuc.edu/home/g-gollin/pigeons/. The Council on Higher Education Accreditation at has an excellent overview of the issue at www.chea.org.
Are non-degree or non-credit classes regulated by ODA?
Some institutions offer classes in Oregon that may carry college credit but which are not intended to lead to a degree. Such offerings are not reviewed in detail but ODA does maintain a list of such authorized institutions. Non-credit training does not require ODA approval (except in some circumstances when offered by an Oregon-based public institution). In general, ODA does not investigate or regulate non-credit offerings. Contact the Career Schools office of the Oregon Department of Education regarding non-credit schools.
Are degree mills legal in Oregon?
No. Some states have lax standards that allow almost anyone to operate a “college,†but Oregon has strong state laws that provide penalties for people operating degree mills. Nevertheless, some people try to start degree mills in Oregon. The Oregon Office of Degree Authorization, a unit of the Oregon Student Assistance Commission, exists in part to find and stop such activities.
If I receive or notice a solicitation from a college in Oregon that might be a degree mill, what should I do?
Contact the Oregon Office of Degree Authorization, which will investigate the situation and either stop the degree mill from operating or, if the institution is legitimate and has, through an oversight, not gone through the state approval process, assist the institution to comply with Oregon law.
Are all unaccredited colleges degree mills?
Not all unaccredited colleges are necessarily degree mills in the traditional sense of the term. Some unaccredited colleges provide legitimate academic work. However, unless these colleges are approved by ODA, degrees from them cannot be used for public or licensed employment in Oregon. The reason is that state laws under which such institutions are approved vary markedly from state to state. Some states have high standards, some states have lax standards or no enforcement capability. Degrees from non-public institutions located in the latter states should be viewed with great caution unless the institution is accredited by a federally recognized accrediting entity.
Does an ".edu" address mean that a school is legitimate?
No. Some diploma mills and unaccredited schools have been able to obtain ".edu" extensions and there is currently no action underway to make them cease using such extensions. An ".edu" extension means nothing regarding a school's quality or legitimacy.
Which States are considered to have low or doubtful standards?
Idaho, Hawaii, Montana, Alabama, Wyoming, Mississippi and California have either no meaningful standards, excessive loopholes or poor enforcement owing to local policy or insufficient staff. Degrees issued by unaccredited private colleges in Alabama, Idaho, Mississippi or Wyoming should be evaluated with great caution. In particular, Mississippi has no oversight standards.
According to this description most of the for profit colleges attacked by this article are not diploma mills but legitimate institutions that fulfill a public need. If their academic standards were so low how could they retain accreditation from the same governing bodies that retain the right to deny accreditation to any institution that they wish without repercussions. This sounds like frivolous journalism to me.
As a current student at UoP working on my Master's degree, I can agree with people on both sides of this argument. As for those that say the students at UoP are "bottom of the barrel," some are. I have had classes with some of them. It boggles my mind reading some of their work. But this is going to happen at ANY university that does not have an extensive application process. That being said, there are many students that I have encountered that are very in touch with being in a graduate program and putting forth an effort worth a graduate degree.
For those that simply say that they would not hire a UoP student solely based on the means by which they earned a degree, ask to see their work first. If you require a sample of work, you will be able to see whether or not you want to talk to them.
For those that think an Online degree is easier than going to class, it has its pros and its cons. A pro is that I do not have to be at a certain building in a certain room for a period of time every few days. As I tell the people I work with, I am technically in class 24hrs a day. The con from this is that because I am not in a class raising my hand to participate, I must do so online. Not counting assignments, I write the equivalent of a 10 page paper every week to simply be in attendance and participate in discussion. If I had chosen to go a "traditional" route, I might have to write a 10 page paper every 4-6 weeks, if that (counting assignments).
To Michele Rambo, I am sorry that it did not work out for you. However, you probably should have had some knowledge that you were getting loans.
To Katherine Clark, doing tasks like that island thingie will like help you see what kind of thinker you are. Although it is a basic activity, the results will be relevant years later.
And finally, to Amy Scott, nice job. You got your point out and responded to by many people. Some that support you and many others that do not. In the future, see if you can get points from both sides. As for your data reporting, providing direct sources and the dates you received them will help support your points. I understand that it was a broadcast, but you could have stated where you found some of that data.
As a current University of Phoenix student, I have some objections to this story and I find it hard to believe that a person could apply for financial aid and not be aware they've applied for a loan. I'm nearly finished with my associate's degree and just renewed my financial aid application for the third and final time to cover my last few classes. In addition to having my counselors explain the financial aid application process and the cost of tuition prior to me starting school, my FAFSA application and the school's own financial aid application required me to select a lender and to choose whether or not I wanted to apply for loans, grants, or both. I also signed a promissory note for the loan and was asked to enter in a loan amount on each occasion that I had to update my financial aid forms. Each time I've applied for financial aid, I've also received statements in the mail from FAFSA, from the lender, and from the school detailing the amounts of my loan as well as the terms. I continue to receive notifications periodically from my lender for my total loan balance and also interest statements that I use for my taxes. Not only that, but just talking to other students keeps you pretty well informed that you're borrowing money that will ultimately need to be repaid. The process was pretty much the same as when I first did the FAFSA with my son, but the difference was that I actually understood what it was I was applying for and how it worked when I did it for myself. I love NPR, but it seems like they went out of their way here to report a one-sided and questionable story. This casts a shadow over the entire organization for me.
Journalism is dead in this country, it really is! Negative press sells advertising. Follow the money my friends….ask yourself why does this article want me to hate UoP? Why do they want me to feel bad for people who signed their names to countless documents but refuse to take responsibility? Why is making a profit a bad thing in this country? This country was founded on capitalism, right? Why do journalists want to demonize money? This article for all it’s supposed “investigation†is slanted to the left, the far left. Where is the balance? Where are the interviews from hundreds of thousands of students that have graduated from the University of Phoenix? Why don’t we ever hear about average people and their issues why is it we only stand up and take notice when the story centers on a “poor minorityâ€? As though everyone else has to own up to their responsibility but if you are a poor minority you don’t. Am I to believe there is a “Financial Aid fairy†that comes to the minorities and the poor and pays for all their education? Why don’t we as a collective group realize and agree that bad people exist but they come in all shapes, colors & social economic backgrounds and you don’t necessarily to be educated. Let’s teach our children, “trust but verify†or “show meâ€. If we as a collective group just decided to follow the money and ask a couple of questions like what is the agenda of this writer? Why does this reporter want me to believe in him? Who is this group and what makes them the authority on this subject?
What is NPR’s agenda? Do you know NPR main funding is from the federal government? Do you know President Obama and his administration hates private anything, especially if it makes money? Did you know the current administration is trying to eliminate the FFELP student loan program? The FFELP program gives the student a choice in what lender they want to have service their student loan based on their comfort zone. What will happen to the employees that currently work in the private banks, will their jobs be eliminated? If the government gets their way they are going to convert all the FFELP student loans to Direct Loan; no more choice and higher interest rates.
Bottom line, NPR stands for the National Public Radio, partners with PBS, Public Broadcasting Service, i.e. the government, follow the money. Who stands to profit if for “profit schools†get bad press? Did you know that the generous billionaires Herb & Marion Sandler are the funders of ProPublica publications? Did you know Herb and Marion sold their World Savings for $4 million in 1963 and building it into mighty Golden West Financial Corp., one of the largest home mortgage lenders in the country? In 2006, they lost Golden West, which had over $125 billion in assets, to Wachovia for $24 billion. Wachovia, which made the terrible decision to purchase the company’s portfolio of subprime loans, teetered on the edge of bankruptcy when the housing market collapsed. It reported losing $24 billion in the third quarter of 2008 and was ubsequently acquired by Wells Fargo at the end of 2008 for a paltry $12.7 billion. Makes ya go HMmmmmmmm. Did you know early this year, the couple found their way onto Time magazine’s list of 25 People to Blame for the Financial Crisis.†Golden West had been a pioneer in the creation of exotic mortgage products such as the option adjustable-rate mortgages, known as ARMs. (Chumley 2009) Personally, before NPR or ProPublica throws mud I think they better clean up their own house.
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