University of Phoenix Under Federal Investigation


The University of Phoenix is under federal investigation for possible deceptive or unfair business practices, its parent company announced July 29.

Apollo Education Group which owns The University of Phoenix, as well as Western International University, Carnegie Learning, and College for Financial Planning announced the Federal Trade Commission investigation in a filing with the U.S. Securities and Exchange commission.

According to the filing, the investigation is to "determine if certain unnamed persons, partnerships, corporations, or others have engaged or are engaging in deceptive or unfair acts or practices in or affecting commerce in the advertising, marketing, or sale of secondary or postsecondary educational products or services or educational accreditation products or services."

The investigation requires Apollo to "produce documents and information regarding a broad spectrum of the business and practices of its wholly-owned subsidiary, University of Phoenix, Inc., including in respect of marketing, recruiting, enrollment, financial aid, tuition and fees, academic programs, academic advising, student retention, billing and debt collection, complaints, accreditation, training, military recruitment, and other compliance matters, for the time period of January 1, 2011 to the present."

According to the filing, "Apollo is evaluating the demand and intends to cooperate fully with the FTC" A spokesperson declined further comment.

Apollo group is the latest in a string of for-profit colleges being investigated by federal authorities for alleged impropriety. On May 12, the SEC announced fraud charges against ITT Tech and two of its top executives for allegedly lying to investors in an alleged scheme to cover up losses from student loans; and in April the Department of Education levied $30 million in fines against Corinthian Colleges for inflating job placement numbers at its subsidiary colleges after an investigation for allegations of fraud. Corinthian shut down all 28 of its locations including Heald College, Everest College and WyoTech, leaving hundreds of veterans in the lurch after the parent company declared bankruptcy

The University of Phoenix is far and away the largest recipient of GI Bill funds, collecting over $500 million in Post-9/11 GI Bill benefits since the program's inception in 2009.

VA statistics show that the University of Phoenix enrolled some 49,000 students under the Post-9/11 GI Bill in fiscal 2014, more than twice as many as the second place entire  California Community Colleges system. In fiscal year 2014 Phoenix also received more than $344 million from GI Bill benefits, almost as much as the 4 next highest institutions combined.

However, the University of Phoenix is struggling to keep enrollment up, losing almost half of its students over the past five years and it has fired 900 employees since September. It has closed more than 100 campuses in recent years and expects its enrollment to decline from the current 206,000  to about 150,000 next year.

Show Full Article