News

Online college pays fine

While the Internet-class-intensive University of Phoenix’s facilities may consist of old movie theaters and vacated business buildings, with billboards and other advertisements carpeting the country, it has become the nation’s most successful for-profit university.

However, the university was fined more than $9 million by a U.S. Department of Education lawsuit because of possible improper recruiting methods.

The institution’s parent company, the Apollo Group, settled a lawsuit in September with the Department of Education for $9.8 million and no admission of wrongdoing before the case went to trial. The department was seeking nearly $3 billion in damages, but instead took the settlement, the largest fine ever received by the department, The Chronicle of Higher Education reported.

The Department of Education accused the institution of violating the Higher Education Act by paying recruiters based on the numbers of students they enroll.

The institution also faces allegations of misleading the Department of Education and evading detection of its improper incentive-compensation system.

“The U.S. Department of Education has raised some legitimate issues,” Clifton Conrad, a University of Wisconsin professor, said in an e-mail. “At the same time, I am strongly persuaded that some of the for-profits do as good or better a job than the so-called non-profits.”

Arizona State University Associate Professor Dr. Ron Glass does not share this view.

“Most people in academia have felt that they are an unscrupulous marketing company providing a low-quality McDonalds-like education,” Glass said.

Glass noted for some students, the for-profit institutions provide a niche program that big state schools cannot afford to have because not enough students are interested in such programs.

Some lawmakers are considering proposals that would allow for-profit colleges to more easily qualify for federal grants and loans, The Chronicle of Higher Education reported.

Conrad said that while in the short run, for-profit institutions such as University of Phoenix would not have negative effects on UW, in the long run UW may lose some students to for-profit schools.

“I do think that we will lose some students, but nothing compared to less prestigious universities, such as regional universities and invisible liberal arts colleges,” he said.

Glass said he did not feel that the for-profits would have as much of an effect in Arizona, where the Republican-controlled legislature has under-funded the state schools for the past two decades.

“Our class sizes have been getting bigger and bigger. Student fees have risen. All have been driven by the Republican want to foster the for-profit competition,” Glass said.

The University of Phoenix has become the nation’s most profitable post-secondary education institution in the nation. The university was founded by Dr. John Sperling, a “Cambridge-educated economist and professor-turned-entrepreneur” in 1976, according to its website.

Sperling conducted field-based research while he was at San Jose State University, where he found many adult students were not in state university systems, and turned to focus on education in ways that “complemented both their experience and current professional responsibilities,” the website stated.

A spokeswoman from the University of Phoenix did not return phone calls Tuesday.