Education Policy Program Links
Topics
- Accreditation
- Admissions
- Athletics
- Auctions
- Bankruptcy
- College Costs
- Congress
- Credit Crunch
- Department of Education
- Direct Lending
- Endowments
- For-Profit Colleges
- Guaranty Agencies
- Guest Post
- Institutional Aid
- Mailbag
- NASFAA
- Non-Profit Lenders
- Private Loans
- Sallie Mae
- Student Aid
- Student Loan Scandals
- Tax Breaks
- Veterans
- Weekly Roundup
User login
Memo to Duncan: Investigate the University of Phoenix
Soon after Arne Duncan is officially sworn in as the new U.S. Secretary of Education, he should make a real and immediate break with the past by opening an investigation into allegations that the University of Phoenix (UOP), the country's largest chain of for-profit colleges, has deliberately and improperly attempted to manipulate its cohort default rate and, by doing so, put students in harm's way. 
The allegations came to light last week when the details of a federal class action lawsuit brought in December by three former University of Phoenix students became public. According to the lawsuit, which was filed in the U.S. District Court in Little Rock, Ark., the university has been paying off the federal loans of students who drop out soon after enrolling without their "knowledge or consent." The institution then allegedly turned around and demanded immediate repayment from these former students of tuition owed.
These practices, which appear to violate the Higher Education Act, harm students by denying them more-generous loan repayment terms offered by the federal government. The University of Phoenix "deprives students of the benefits of the terms on which they borrowed money (i.e. low interest and six month grace period in which to start paying) and saddles them with an immediate debt and payment terms which were never acceded to by the student by contract or otherwise," the lawsuit states. "Unsuspecting students are routinely bombarded with calls, letters and e-mails from UOP to collect tuition along with threats that refusal to pay will result in referral to collection agencies and negative reports on their credit."
The university engaged in these practices, according to the lawsuit, to "artificially deflate" its cohort default rates by ensuring that students who drop out from its programs can not default on their federal student loans. This allegedly helps the institution remain below the threshold at which it would face federal sanctions, including the potential loss of federal financial aid funds (lesser penalties include a requirement for the school to delay for 30 days the release of federal student loan proceeds for first time borrowers and a permanent loss of eligibility to participate in "school as lender" program, which the university has been heavily involved in). Numerous studies have shown that student loan borrowers who drop out of college are at a much greater risk of defaulting on their debt than those who complete their programs.
While only three former students filed the class action lawsuit, the plaintiffs estimate "that there are thousands of borrowers" who have been treated similarly by the university. And these practices do not appear to be isolated at the University of Phoenix. In May, the Department of Education's Inspector General recommended punitive action against another proprietary institution, the New York-based Technical Career Institute, for engaging in nearly identical activities. In a report last week on the UOP case, The Chronicle of Higher Education noted that "other for-profit colleges follow similar payback policies."
One of the first things that Duncan should do in his new job is to call for an immediate investigation into the allegations against the University of Phoenix, as well as a broader inquiry to determine whether the practices alleged in this case are widespread throughout the for-profit higher education sector.
For too long, the Department of Education, under the Bush administration, looked the other way as accusations of improprieties and wrongdoing have occurred at our nation's for-profit colleges and trade schools. Low-income and working-class students have suffered as a result of such neglect.
Hopefully the Obama administration will put the interests of students before those of deep-pocketed trade school lobbyists. That would - dare we say it -- be change we can believe in.
UOP
Because the University of Phoenix is the largest school in the country, they are always a target. Of course, with that many students, their are going to be occassional problems. I really don't feel sorry for the students. It just shows an unwillingness to finish what they started.
How narrow Minded You are
Are you kidding me?? I transfered school after finding out the University of Pheonix only had 6 web design classes in my associates prograhm, and 21 writting courses. 6 web design classes could hardly teach me what I would need to know for my degree to be worth anything.
I am glad they are being investigated.
Maybe you should enroll in classes then you to could see how much of a scam they are.
Agreed- I have spoken with
Agreed- I have spoken with many people in situations such as yours. They are very deceptive with some of their marketing practices and I absolutely thing they should be investigated.
If UOP was a scam, how is it they have been around for 30yrs
Axia College and University of Phoenix are the only institutions of higher education in the world using DSM technology to efficiently and cost-effectively deliver complex-multi-device networking experiences anytime, anywhere. All AAIT programs consist of a 42-credit general education foundation and an 18-credit concentration in a specific technology discipline.* 42 credits – General Education 18 credits – AAIT concentration............Courses in the AAIT/WD concentration provide live, hands-on experience in:
§Developing websites using Adobe Dreamweaver®CS4 and Sun™ Java
§Using Web forms and style sheets to enhance websites
§Developing Web applications using NetBeans Java™ Integrated Development Environment (IDE)
§Producing Web images using Adobe Photoshop®CS4
§Publishing your own personal website
§Developing and integrating Adobe Flash® animation, full motion video
§Managing information systems components and security
§Building software applications using the Software Development Lifecycle ..........It's an awesome program and I will have 100+ hrs. experience with this live IT equipment. There is no other school that has that, I checked. I would suggest you take a little more time investigating a school than the time you took to write this blog.......... An associates degree is lower level classes including 6 classes that give you the knowledge of your major before entering into your BA, upper level classes, the ones that are the MOST important!! Do yourself a favor, do a little reading you might find it will help you out.
UOP
You have to be joking! I was going to college for my Associates Degree in accounting and when I discovered I was pregnant I transfered to the University of Phoenix Axia College. The school started me in classes and told me I would start where I left off at the previous college. I soon discovered this was false information and they hadn't even received my transfer credits yet. I ended up having to retake classes I had already taken (and received full credit towards my degree) at a traditional ground college! At this point I had no choice but to continue the classes unless I wanted to withdrawal and owe money! After, I gave birth to my baby and tried to transfer back to the original college I was getting my degree at, the UOP informed me that I had to either finish classes I had not given them permission to enrole me in OR pay them out-of-pocket the cost of the classes. I asked "why?" and they told me because the money from the student loans I had taken out to pay them would be sent back to the lendor and leave me to pay UOP!!! This amazed me that the college could do this...after some short research, come to find out they can not.
This is not an occasional problem! I have every intent to finish what I have started! The majority of the students this is happening to are trying to finish what they have started, but how could they(including myself) with an outstanding bill this so called college, UOP, is trying to wrongfully get from its' students. This is an outrage and I am writing every person I feel should be dealing with this huge RIP OFF!
Shaila, I'm so sorry you had
Shaila,
I'm so sorry you had to go through that stress during pregnancy. I almost cracked under the pressure they put on their students. I just received my letter telling me the UofP had sent my financial aid back to my lender. I received notification on a Thursday and two days later I received a letter stating that I owed the University over $2000. which was due (get this) TWO DAYS LATER! I may not be a college graduate, but I'm pretty sure someone is lying to me here. The letter stated that these are the terms agreed to in my E-contract. I have contacted an attorney but I'm afraid these nervy jerks are going to ruin my credit rating before I can get anything done. Can you tell me how you found out they are not able to do this?
And for those of you who are commenting FOR UoP: this stuff is real, guys. This school really is as bad as people say. I hate to admit that I was taken in, but that is what this school does, and they are pretty good at it. Their reputation has been earned, one unsuspecting student at a time. Still skeptical? Contact admissions and try to get anything but a scripted response which has obviously been approved by their legal department. Oh, and don't "e-sign" anything!
I do feel really sorry for
I do feel really sorry for these students. How can you say they had the unwillingness to finish? Have you been to UOP? They sign you up so fast and when you start to take the classes they are so easy that you don't even understand why they are offered. I should have done the same thing but instead I put myself into debt with them. Good for them.
get real. This school cold
get real. This school cold called me, I agreed to take 1 class to see if I could juggle school, 3 kids, and a full time job. 3 weeks later my son became very ill and I had to drop out. He needed me. This unethical school took out loan money, signed me up for classes I did not agree to and destroyed my credit. Not every drop out is lazy. Life throws out many different obstacles and paying for an education with a school who has thousands of complaints from students regarding nearly identical complaints should be taken very seriously!
This is so untrue. This
This is so untrue. This University has many issues and they are ripping students off. There are too many of the same complaints.
UoP are total scammers!
I had to withdraw in 3 weeks because my son became ill and was in the hospital. While the school was billing me for the entire $1495, they also took out loan money in my name apparently signing me up for other classes I did not know about and 4 years later after hearing nothing about it, I have not 1, not 2 but 3 bad accounts on my credit file as a result. UoP is reporting this bad account, Bank of NY is reporting this as a bad account and now CA Student Aid is reporting it as a bad account. All with different open dates, all with different amounts as if they are 3 different accounts. They have destroyed my credit.
This has been an 8 month ordeal so far and I lost the ability to qualify for a mortgage as a result!!! Apparently they wanted to double dip and bill me at the same time as getting a loan and although I did agree to take that 1 class...they signed me up for some criminal justice program I never knew about. Please tell me...I am a mother of 3 and a busy small business owner...why on Earth would they think I would want to take criminal justice?!!?
And in order for them to keep the loan money I had to be passing. I somehow earned 3 credits in only 3 weeks and had a C average even though I wasn't in class...I was at the hospital with my sick son.
Stephen Burd joins the three
Stephen Burd joins the three plaintiffs in perpetuating what amounts to be an irresponsible and misleading argument that disregards the fact that University of Phoenix is subject to significant regulatory scrutiny, as is any authorized participant in federal student financial aid programs under Title IV of the Higher Education Act. University of Phoenix’s policies and procedures for the calculation and return of Title IV funds are routinely audited by the U.S Department of Education – and their compliance was affirmed as recently as January 2008. Full detail on the audit may be found on page 26 in parent Apollo Group’s 10-K filed October 28, 2008 and available here http://phx.corporate-ir.net/phoenix.zhtml?c=79624&p=irol-sec&secCat01.1_.... Because University of Phoenix is designed to serve nontraditional, working students, it recognizes the very real potential for work or family obligations to interrupt students’ coursework and has designed its financial aid refund policies accordingly and as specified by Department of Education requirements.
How can I join
There are many of us out there who have been misled by the University of Phoenix. I am very concerned about their practices here in the state of michigan where many of us are unemployed and have services offered to us by the state. In my case, they told myself and the Michigan Works office that they would participate in the programs offered to me. It was not until late in my third class they told me that I needed to pay out of pocket for my next class or take a leave of absence and attend another college to make up 3 credits so that I could get more money from "sallie mae". So please tell me how I can tell the unemployed people of the state of michigan, "if it sounds to good to be true is usually is" How can I join? Kelli
the same is happening to me
How can I join ? the same thing is happening to me now. they told me I have to pay out of pocket after flunking the second set of classes. I don"t have this kind of money. what a scam.
REPLY
UOP is a RIP OFF. Don't give me that crap about Departmet of Education standards. Working with non-traditional students is not the focus. Getting money under the pretense of education is a joke at best. I will never get over the trauma of forking over $30,000 and 15 months of my life to get nothing in return!!!! I have since gone to another online university and obtained a Masters degree. Go figure.
APOL: scam or social benefit?
"Give a man a fish, you feed him for a day. Teach a man to fish, you feed him for life." A better educated work force will likely be more productive and employable. There is a social benefit to having ourselves and our neighbors gainfully employed rather than on the dole. Access to education is desirable and most people would agree that government can have a role in its promotion.
The concerns here are not whether government assistance is good or bad, but whether the taxpayer should be subsidizing extraordinary profits at certain schools where "education" is secondary to enrollment. Are we teaching the man to fish or merely signing him up for an expensive fishing course that he is unlikely to benefit from or even finish?
Many observers see that Apollo Group (APOL) and its peers are mostly in the business of enrolling students, with less concern over educating them properly. With staggering drop-out rates, low employment results, and high (when unmanipulated) default rates, it's unclear whether APOL is delivering value to the customer (student) or to the financer (taxpayer).
Indeed, APOL receives periodic audits as part of Title IV. No doubt, Bernie Madoff and Enron before him were audited too. You'll have to forgive those of us skeptical of government oversight, particularly as the door between for-profit schools, their well-paid lobbyists, and the DOE revolves so quickly. You will remember Ms Stroup, former director of post-secondary education at DOE. Where was she working before that? Oh yeah, APOL. It's all so cozy.
It would be interesting to see how many students APOL et al would sign up in a true free-market setting, where there wasn't a big government program to game...
Response
PQuillen, I totally agree with your sentiments and can verify since I'm a current employee. The one thing about University of Phoenix is that is does offer quality education with some of the most dedicated instructors you can find. It's unfortunate that the "company" places more emphasis on enrolling students rather than educating them. We call ourselves a private for profit institution but we are seriously misusing title IV funds. Recruiting pay can range anywhere from 3$0,000-120,000 based on how many people you can enroll over periods of 6 months. Lately their have been phone calls to the university throughout the country trying to gauge more of how the compensation works for recruiters and the university continues to be misleading. They are trying to prepare us (employees) on verbage and where to direct those calls to out of fear that someone may get the right person to tell them all the right things. I enjoy working for UOP because I believe in education. What I don't believe in is manipulating Title IV for the capital gains.
What instructors?
The UofPhx does not have instructors - the people "teaching" their courses are former students. Furthermore, they are not even called instructors anymore but facilitators. So where is the real education? If I wanted to buy an "education", I would go to Barnes&Nobles and purchase the books (basically what the UofPhx does - gives you materials and leave you on your own), and save myself tens of thousands of dollars of financial headaches!
Response to "What instructors?"
I am an instructor at UOP. I never attended UOP and therefore cannot be called a former student. I have taught for over 20 years at traditional universities, HBCUs, and UOP. And yes, I facilitate my students' learning through many methods. If by "real education" you mean lecturing; that is only one (and according to research one of the least effective) methods of the learning process. It is unfortunate that your experience at UOP was not what you thought it would be. But, UOP is not for every student and it should not be.
Instructors
Seriously...I wouldn't be proud to teach at UoP. My instructor could barely spell in English. And now I am seeing employers turning their noses at anybody who has a degree with UoP. The failure to produce quality education with outrageous prices and unethical business practices is a place you should never be proud of being a part of.
Fraud
I started out with Axia College, which I thought was a beginning of a bachelor degree. It has been 3 years and UofP has decided to once again extend my education. They take classes away saying that they were equivalent to those I took at Axia. My classes were shortened so I would graduate 3/10, they lengthened to 5/10 then shortened to 4/10 and now it is 6/10. What is going on? They advertise and stated to me I need 120 credits to graduate and that this would only take 18 months for each degree; now it is taking me 50 - not 36. Not to mention the money it will cost me to repay my loans. I was offered a job contingent upon receiving my degree and now I will lose it. What happened in truth in contract law?
UofP
I can tell you that as former faculty at UOP it is a corporation and NOT an institution of higher learning. They abide by typical corporate practices that are focused on making huge profits. Very few faculty members are qualified. You can't get good teachers dedicated to students in that environment.
questions about this lawsuit
This university has cost me about 7 grand and I still don't have a degree. To top it off, the degree I was trying to obtain has nothing to do with the field I wanted to persue, which I was lied to promising it was. I was studying to get a associates degree in criminal justice. This would be great for a cop, not a lawyer from what I have gathered. I need to do more research, however I want more information about this lawsuit, because I may be another victim of this university. Please let me know any info you do.
Glad I didn't enroll
I was going to enroll with them to finish up my degree in web design but, now after reading this I'm glad I did not. I work for a drug rehab and I don't have a lot of spare time but, the time I do have for study I would like it be well spent along with my hard earned money.
understanding financial aid
If you read your Stafford loan application, you will see that financial aid will technically pay for a failed class, but then you will need to retake it (and pay for it)and financial aid covers an academic year. if you take out a certain amount of financial aid and use it to attend school, online or at a campus of any university, the same rules apply. community colleges are very different because people typically only need a pell grant bc tuition is less than a private university. A COLLEGE DEGREE IS NOT FREE! far too often, students do not truly understand how Title IV funding works and relate their experiences to community colleges, not private universities. if i had dropped out of school at my traditional school i attended for my undergrad, i would have a balance on my account. if i do not finish something and sign a contract that i have read and agreed to(especially while borrowing government funding to complete my degree), i am responsible for any obligations.
Title IV funding is not
Title IV funding is not something to be taken lightly. You have to read the fine print, which is all on your financial aid applications. It clearly spells out what the rules and regulations are about taking out Stafford Loans and PELL grants, all which are governed by the Deptartment of Education NOT the school. If you don't understand what you are reading, ask...and if your enrollment isn't helping you ask to speak to finance. They are not paid (the finance people) based off of numbers of students, so you will get a more honest answer if your enrollment isn't giving you one already. If you do not like what you are hearing, don't enroll. You don't have to turn into a so called victim, if you do your part and find out what you are getting yourself into. If you can't get through the application for admission or the financial aid application, then maybe college is not for you.
Just Read
I had a frustrating experience with the university concerning financial aid and the whole return to lender thing. I was pissed. Then I read what I had previously signed without reading. Whoops. It comes down to personal responsibility. Take responsibility for your own actions and deal with it, people.
Please anyone considering
Please anyone considering enrolling in the UOP program, RECONSIDER! This is a VERY costly program for the quality provided. I do not expect to get anything free and I am well aware that college is not cheap but I am absolutely disgusted over what they charge for their courses! I think this program needs to be investigated and I am writing a letter to my congressman. PLEASE do your homework on this before you throw away your money!
Accredited through HCL and NCA
I have two simple questions. Why are they still accredited through The Higher Learning Commission and the North Central Association of Colleges and Schools? Don't they have specific guidelines to follow?
UOP is a Joke
I had enrolled in there doctoral program, I got sick and could not attend the last week and a half of class. I contacted my enrollment counselor who in return said she would contact my instructor, and academic counselor. Nothing happen, financial aid said the would waive the fee but because I have to re enrolled they are billing me 745.00 for a three week course where school personnel dropped the ball. This university is like all the other people who rip off people and nothing happens.
RIP OFF
I read somewhere in another post about the unfair practices of UOP. I'd like to add my own. I am a former student working on a Masters degree in Special Education. No one told me until I was completing the program that Michigan doesn't recognize education obtained from UOP because it's not consistent with the state of Michigan standards. That's another matter. What I have a complaint with is the fact that after completing student teaching and passing the first seminar with an A, I took the final seminar course and received the grade of B-. The dean of the college who was the instructor in the course refused to talk to me. Knowing that the grade of B- would be in essence a failing grade. I passed the state basic skills test. I have even taught for the past 2 years, but I don't have a certificate or a Masters degree because UOP wants me to pay more money to take student teaching over again. My question is what good is the quality (I laugh) of the education if it all boils down to money? I appealed to the board of directors to no avail. I am telling everyone I know not to spend money with UOP. I would be interested in a class action lawsuit.
Is this true regarding the
Is this true regarding the state of Michigan does not recognize a University of Phoenix degree? If this is true, the state of Michigan can prove their case against the U. of Phoenix saying that their degrees are non-substantial, which in my opinion, it obviously means they're unaccredited and that only says two-things about this fraudulent university, diploma mill. Can someone please shoot the phoenix and kill it already!
Return to Lender - misconceptions
I was reading the article and you may have noticed that since the date of this article all charges in this case have been dismissed. The Department of Education states that a student must complete at least 60.1% of the classes that a financial aid disbursement was meant for before the college that received the funds can keep them. So the school really doesn't have a choice. The reason that this happens more in private institutions is because of the scrutiny they get from the Department of Education. All colleges should be doing it and the ones that aren't will have to at some point or their students could lose their title IV funding (stafford loans and PELL grants).
I'm glad I didn't enroll
I went to the FT Lauderdale campus of UoP two years ago just to get information about their degree programs and do you know they were trying to sign me up for classes? I told them I'm only interested in Legal Studies and/or Paralegal and the rep insisted that I register for the criminal justice administration program. I told him sorry but, I'm not interested in that particular field. Then the financial aid rep came out and asked if I had my taxes I said what do I need that for? I'm not here to enroll I ONLY want information. Th rep kept emphasizing that I had nothing to lose register today because there isn't an app. fee. Who cares?! I'm not going to base a decision on being rushed and not having to pay a fee. Afterwards the admission rep was using rebuttal after rebuttal this is when I soon realized it's not something right with that school. I kindly told him thanks for everything but, I'm not interested have a good day. He then told me I can start and save money by not having to take 8 classes...I kept right on walking and never looked back. For one I don't like to be rushed int things 2 I didn't like the vibe from the school it really didn't even look like a school(they share buildings with other companies) 3 the curriculum that he did show me looked bogus and 4 I found out the same day that a lot of employers' WON'T accept an UoP degree. I woul never,ever refer anyone to that piece of crap. Even if they were my worst enemy.
University of Phoenix is awesome!
Axia College and University of Phoenix are the only institutions of higher education in the world using DSM technology to efficiently and cost-effectively deliver complex-multi-device networking experiences anytime, anywhere. All AAIT programs consist of a 42-credit general education foundation and an 18-credit concentration in a specific technology discipline.* 42 credits – General Education 18 credits – AAIT concentration............Courses in the AAIT/WD concentration provide live, hands-on experience in: §Developing websites using Adobe Dreamweaver®CS4 and Sun™ Java §Using Web forms and style sheets to enhance websites §Developing Web applications using NetBeans Java™ Integrated Development Environment (IDE) §Producing Web images using Adobe Photoshop®CS4 §Publishing your own personal website §Developing and integrating Adobe Flash® animation, full motion video §Managing information systems components and security §Building software applications using the Software Development Lifecycle ..........It's an awesome program and I will have 100+ hrs. experience with this live IT equipment. There is no other school that has that, I checked. I would suggest you take a little more time investigating a school than the time you took to write this blog..........
UOP is NOT for Everyone
I am a current instructor/facilitator at UOP. To lump all instructors and all students into any category is generalizing. The reality is that UOP is not intended for all students or all instructors.
The campus where I teach has many qualified and dedicated faculty; but we also have some who just come for a paycheck. Our campus also has students who work hard, make the most of the education available, and earn their degrees; but there are also students who do not have the requisite skills for college-level work or just put in the barest effort.
Any college or university that employs unethical practices should be looked at very closely, not just the for-profit ones. These practices can and do happen at institutions of higher learning of all kinds.
So I ask that those who want to paint all campuses of UOP, all students, and all faculty with the same brush; to stop and realize that there are examples of good and bad within all these categories at UOP. But most importantly, UOP is not and should not be for everyone.
Is UoP due for another audit?
http://www.ed.gov/about/offices/list/oig/auditreports/a09e0015.pdf
2005 Audit of UoP
Post new comment