U of PHOENIX REQUIRES NEW TESTING (GMAT, ORT, MAT, etc)

Discussion in 'General Distance Learning Discussions' started by tomball, Jan 14, 2010.

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  1. tomball

    tomball New Member

    NEW YORK (Dow Jones)--Apollo Group Inc.'s (APOL) University of Phoenix is testing a massive orientation program to weed out students who can't handle the rigors of college, effectively turning down tuition checks from students whose money might be better spent elsewhere. The program is more than an exercise in kindness, though. Apollo is looking to cut its risk profile, boost retention, improve its image and, ultimately, increase earnings. University of Phoenix, which has grown dramatically in the past two years, now says having fewer students, most of whom last longer, is more cost-effective than having a large student body with frequent turnover.

    "If we think about what drives our returns for our shareholders, it's our returns for our students," said co-Chief Executive Greg Cappelli. "We start with what's right for the student."

    Trace Urdan, a managing director at Signal Hill Capital Group, said the initiative is about helping the bottom line. "It's a quality issue cloaked in a morality issue," Urdan, an equity analyst, said.

    The move comes as underemployed and unemployed workers hungry for new skills, paired with sometimes-overzealous recruiters, have left many for-profit schools struggling with a student body ill-prepared to balance school, work and life. The industry has come under heat as schools gobble up a larger portion of federal student loan dollars despite dismal graduation rates. While nearly half of the 455,000 University of Phoenix students are in associate-degree programs, up from 18% in 2006, fewer than a third graduate from them in three years.

    The country's biggest university acknowledges its plan will hurt its earnings, at least for the time being, but won't estimate the expected impact, noting the program is still in test stages.

    The free three-week University Orientation program, which Cappelli said "could be" made mandatory for students with little prior exposure to college, is being given to students at bricks-and-mortar campuses and in virtual classrooms nationwide. The class teaches time management and topics like navigating the school's library.

    The program, which began over the summer, has "many thousands of students" so far, Cappelli said. Apollo declined to project what percentage of its students, or how many, it expects to enroll in the program.

    Brandon Dobell, an analyst with William Blair and Co., estimates the program cut enrollment growth by 300 to 500 basis points in the most recent quarter, meaning the growth figure would have been 17% to 19% rather than the company-reported 14%.

    But the company thinks any short-term losses are worth it down the road.

    "Our management team is actively focused on lowering our risk profile," said Charles B. Edelstein, co-chief executive, in a conference call with investors last week, referring both to the industry's tight regulatory environment and to the role student outcomes play in the bottom line.

    The Department of Education in December released figures showing that three years out of school, about 16% of University of Phoenix students defaulted on their federal loans. That figure is much lower than the for-profit school average, but it still tarnishes the school's image. Prospective students are less likely to enroll if they see graduates can't pay back their debt.

    Apollo's bad-debt expense rose to 4.9% of revenue in the fiscal first quarter from 3.6% a year earlier. Some analysts see that number hitting double digits in the coming quarters.

    Dobell expects increased retention to start outpacing the enrollment decline relatively quickly, seeing positive effects from the new initiative within the calendar year.

    "This is going to be a better, more profitable, more predictable business," Dobell said of the school once the program is fully in place.

    -By Melissa Korn, Dow Jones Newswires; 212-416-2271; [email protected]


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    Last edited by a moderator: Jan 14, 2010
  2. PhD2B

    PhD2B Dazed and Confused

    I am no fan of standardized tests. While the new standard may help boost their image, I don't think it will make as big of a difference as they are hoping for. U of P may become one of those schools that requires a standardized test for admittance, but has no minimum score for admissions. If this becomes the case, then the test will only serve as a check in the box.
     
  3. emmzee

    emmzee New Member

    "The free three-week University Orientation program, which Cappelli said "could be" made mandatory for students with little prior exposure to college, is being given to students at bricks-and-mortar campuses and in virtual classrooms nationwide. The class teaches time management and topics like navigating the school's library."

    I don't see any mention of testing ("GMAT, ORT, MAT, etc") here ... it sounds like a pretty standard "study skills" kind of course, of the sort that I took during the first week or two of my B&M university studies. If someone can't handle learning about how to use the library, I agree, enrolling in university courses is probably a waste of their time ...
     

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