The (Not-So) Hidden Agenda Of For-Profit Universities

The University of PhoenixThe University of Phoenix managed to help defeat legislation that would have allowed Arizona community colleges to offer four-year degrees. According to an article on the Huffington Post, the University of Phoenix lobbied against the legislation, because allowing bachelor’s degrees to come out of community colleges would “undercut its business model.” The University of Phoenix — and other for-profit educational institutions — get their students from the same demographic as community colleges, namely working adults. Many for-profit universities have limited accreditation (if they actually have any at all), are more expensive than community colleges, and are run more as businesses than as institutions of education.

University of Phoenix spokespeople claim to have worked against the legislation to prevent repetition of programs and — of course — tax hikes and budget strains. But six years ago, University of Phoenix Founder John Sperling praised one of his executives for “killing the … four-year degree program in Arizona.”

The University of Phoenix promotes an image of partnering with community colleges, presumably in hopes that students with two-year degrees may eventually go on to a four-year program (hopefully with University of Phoenix). Unfortunately Phoenix — and other for-profit higher educational institutions — are expensive (even with financial aid), and they over-promise and under-deliver. For-profit is exactly what it says; these universities are in the business of making money first and educating students second, despite the public images they carefully cultivate. The University of Phoenix itself has come under fire many times for its recruiting practices, which students allege includes false claims about their degree programs and licenses.

The recruiting practices in question include paying their recruiters based on the number of students they enroll. As a school that gets 90% or more of its revenue from federal student loans, paying recruiters in such a way that encourages them to lie to potential students is both illegal and unethical. The institution paid the Department of Education $10 million in 2004 to settle such claims, but they have apparently continued their practices.

This demonstrates their “money first, students second” attitude. For-profit organizations are in the business of making money, regardless of what they sell. All colleges and universities make a good chunk of their money by enrolling students, but for-profit universities have the profit motive alongside that, pressuring them to enroll as many students in as short a time as possible, to make the most money possible.

As far as expense goes, for-profit universities can cost upwards of $25,000 more than community colleges do, for a similar number of semester or quarter hours. For an institution like the University of Phoenix, with degree and license programs that may or may not be accepted and recognized by various organizations, including state licensing boards, the degree is just not worth the cost. At a community college, at least the degree would be more worth the money spent to obtain it.

Furthermore — according to the results of a two-year investigation by the Senate Health, Education, Labor and Pensions Committee — for-profit universities spend more money per student on marketing than they do on actual instruction. Just like any for-profit business; more money is poured into marketing than just about anything else. In 2009, the Apollo Group, the parent company of the University of Phoenix, spent $2,225 per student on marketing, and just $892 per student on instruction.

While it’s true that allowing community colleges to provide four-year degrees would put further strain on any state’s already-stretched education budget, the University of Phoenix and other for-profits have no business lobbying against such measures, since they would at least give working students a better choice. Community colleges, while not likely to provide the same quality of education as a traditional, four-year university, can provide a higher-quality education at a lower cost than the for-profit universities can, by dint of the fact that they’re educational institutions and not profit-seeking businesses.