The University of Phoenix is expecting sanction from the HLC

According to this article from Inside Higher Education:

Burying the Lede | Inside Higher Ed

The Bloomberg news report referenced in the Inside Higher Education article is:

Apollo Quarterly Net Income Drops as Enrollment Declined - Bloomberg

 

Does that mean University of Phoenix's accreditation will be jeopardized?

 

Potentially, yes.

There are a wide range of sanctions which the HLC can administer, Sanction can range from a monitoring report - where the institution writes a report on recommendations made by the accrediting team, to show cause, where the institution is in serious jeopardy.

If the CEO of Apollo is mentioning possible sanction, I'm leaning towards Probation or Show Cause.

 

It sounds like UoP's accreditor has identified problems, but that UoP will get a chance to fix those problems.
Here's what the story actually says:

HLC has two sanctions: "placed on notice" and "probation". If UoP is "placed on notice", that would be less severe than being put on "probation".

At this time, HLC hasn't announced anything about UoP's accreditation. The only information available is what UoP itself has disclosed.

Note that UoP is being proactive here. They are announcing a potential accreditation issue before HLC has stated it publicly.

In contrast, it has been suggested that Bridgepoint Education (owners of Ashford) concealed potential accreditation issues. They are facing lots of lawsuits from angry investors as a result.

 

Too much money is involved, so nothing will happen. Any deficiencies that are identified (if any) will be promptly fixed.

 

Agree with the decision for UoP to be proactive here. Also as an FYI, the sanction decision will not be made until UoP has a chance to review the report from the accrediting team. UoP will have the opportunity to submit proposed corrections, clarifications, etc. Once the report is done, then HLC will announce what if any action will be taken.

So while the CEO of UoP believes the sanction will be On Notice, HLC may issue another sanction. We'll need to wait for the process to play out.

Again, a good decision by the UoP to put the possibility of sanction out there. Not that it will stop lawsuits, but unlike Ashford, where there are strong indications that there was insider selling right up to the WASC decision, UoP should be able to say that they let the public know promptly of a possible adverse action.

Shawn

 

But the news won't help UoP's enrollment, which is already in a tailspin. UoP also announced its enrollment for the Sep-Nov 2012 quarter (which is the first quarter of UoP's 2013 fiscal year). Enrollments dropped for the 10th consecutive quarter:

476,500 3Q 2010
470,800 4Q 2010
438,100 1Q 2011
405,300 2Q 2011
398,400 3Q 2011
380,800 4Q 2011
373,100 1Q 2012
355,800 2Q 2012
346,300 3Q 2012
328,400 4Q 2012
319,700 1Q 2013

UoP has lost more than 150,000 students since its peak in 2010.

 

Here is the full statement from Apollo Group's earnings call to investors yesterday. Speaker is Gregory W. Cappelli, the CEO:

APOL stock was trading around $20.50 to $21.00 before the announcement. It then dropped immediately, but only to around $18.75 to $19.25. So investors don't like the news, but they don't seem to be panicking; the drop in the stock price was relatively modest. In contrast, BPI stock fell by around 50% last year when the news about Ashford's accreditation problems suddenly became public (and BPI stock has still not recovered).

 

This offers more evidence that the for-profit education bubble is popping. We have been predicting this here for awhile now and I doubt that it ever completely re-inflates.

 

Too big to fail.

 

How does UoP plan to correct their falling enrollments? According to yesterday's investor call, they do have a plan. Does it involve lower tuition, or better teaching? Let's see:

So expect more UoP commercials.

Incidentally, UoP was recently ranked as the No. 1 advertiser on Google. They spend about $170,000 per day on Google ads -- more than any other company (including Amazon, Hotels.com, Expedia, etc).

 

Great (sigh), more UOP ads. They spend more money on advertising than educating -- Raison d'être -- their students. No wonder they are going downhill.

 

I've got some experience in this area. I was a full-time Campus Chair for a year at UoP and an adjunct for an additional 2 years. I don't know what the HLC is concerned about, but here's my take:

Often, when a school gets in trouble with an RA, it's due to money, management, or both. Money probably isn't the case here.

UoP's learning model, while admirable in theory, is not so hot in practice. Classroom students are limited to 20 hours per course (undergrad) or 24 hours (grad). The rest of their learning takes place in self-directed learning teams. There are so many problems with executing and controlling this, I don't know where to begin. Let me just say that basing an entire university on that model is stupid. (The online equivalent isn't any better.)

UoP originally didn't accept students who had not completed 2 years of school. Then it limited enrollments to those with at least 20 s.h. elsewhere. Then it finally went after the people who'd never been to college at all. But as an open-enrollment school, that means that a whole lot of people (tuition-paying, BTW) who should not be there are attending and paying. And since the first 5 classes for these people are totally easy, and since it takes enrolling in only 3 to reach UoP's break-even point for students, they're usually okay. (Dropping enrollments might have an effect on the break-even point. My data is from a time when UoP's enrollments were about 200K.) So....

I wouldn't be surprised if the HLC's criticisms are focused on that new-to-college group. The drop-out rates for them are horrendous. New MBA students, meanwhile, were--IMHO--ready to go. I taught in both undergraduate and MBA programs and the difference was remarkable. So was the difference between students starting their UoP bachelor's programs and those near completion. Night and day. Part of that was the difficult process of earning a degree this way. The other part was that students got better as they went along. But a huge part was the weeding out of students early in the program--students who'd paid good money but who never should have been there to begin with. Students who had already paid for several courses and no longer represented a loss to UoP.

We'll see.

 

Rich, I started facilitating for UoP in 1999, through 2004. I taught both graduate and undergraduate courses, but preferred the entry level GEN courses (prior to Axia) because it was very satisfying to help them to become productive online students. I agree with your comments about the open admissions, but many of them DID make it through. However, even more were unprepared for online college education.

I did see these issues:

Husband and wife using same computer, enrolled in same class. Wife eventually dropped due to lack of participation. She was logging in on her husband's account and doing work from it - she could not understand why she needed a separate login.

A seriously disabled student, who did not get accommodation. He should have never been enrolled as a regular student.

Students without computers or the office suite of software (I referred them to OpenOffice)

Students with multiple personal problems that prevented them from completing classes (some of the problems were real, some were excuses)

Students who did not know how to use computers

Students who needed remedial reading and writing classes


I think that if UoP focused on a low-cost remedial "boot camp" for marginal students, another entire segment of the population can be reached. This is needed for some even before they enroll into Axia.....

 

You can't enroll into Axia anymore. Apollo eliminated it as a separate division in June 2011, and merged it into UoP Online.

I have no direct experience with Axia or UoP, but my impression is that they are now doing less to tailor their programs to different segments of the population (not more). Perhaps it is more efficient to have a single uniform system.

 

Letter from UOP President:

January 11, 2013

Dear Faculty,

You may have heard some discussion about the University's accreditation this week, and I know many of you have questions about our status with the Higher Learning Commission (HLC). I want to update you on this topic.

First, I want to be very clear: University of Phoenix remains fully accredited by HLC, without sanction. Our accreditation as a degree-granting institution has not changed.

Every college and university accredited by HLC must undergo a review process from time to time, in which a peer review team works with the institution to examine virtually every aspect of operations, including academics, administration and student services. We have been working closely with HLC for the past year as UOPX goes through this very process, and we are proud of the institutional quality we have demonstrated.

We anticipate receiving the HLC review team's initial findings soon, in the form of a draft report that will outline our strengths as a university, as well as those areas which – in the review team's opinion – we need to address. From there, we will review the report, note to HLC any factual errors it contains and respond to any findings that we believe are erroneous or mistaken, before the full HLC Board considers our reaffirmation.

Recently we were informed by HLC that, amongst all our areas of strength, the review team has identified a few areas in which it feels we can improve as an institution. HLC indicated that the review team may recommend that University of Phoenix be placed on “notice,” meaning that there are areas of the University that the HLC’s review team believes, if allowed to continue, might put us out of compliance with accreditation criteria. We are fully committed to transparency and accountability as a university, and we are prepared to address any concerns identified by the review team that are accepted by HLC.

We will keep you updated as appropriate, as the reaffirmation process continues.

In the meantime, let's continue to provide a world-class education experience to each and every student we serve. I am proud of all of you, and of the quality education we’ve provided at University of Phoenix for more than 30 years.

Best,
Bill

 

Just gonna post that.

 

The statement from UoP says absolutely nothing. They describe the process and what being "on notice" means, but say nothing about what they're being put on notice about.

I expect this will play a lot in the media because UoP is their archtype for both distance education and for-profit universities plus UoP is the U.S.'s largest university.

The publicity won't be good for enrollments.

 

Rich,

Obviously, this news will not help UoP enrollment.

While I agree with you in part about the statement being vague, until UoP receives official notice of sanction, I don't believe UoP should speculate on what the sanctions will be, in what areas, etc., in the public arena.

There is a back and forth process between the site visit and the HLC determination for clarification, etc., and there will be revisions from the draft report to the final report.

Shawn

 

I agree. It just reads like damage control and expectations-setting. Pure PR. UoP is not noted for its candor anyway, and this just adds to it. We'll see how straight-up they are when the HLC hands down its findings.