Last week, the Huff Post reported that a team of accreditors recommended that the University of Phoenix, an online university, be placed on probation. The team did this because of concern for the profit making structure of the University. The University of Phoenix is a subsidiary of Apollo Group, a for profit investment company. The accreditation agency, itself a private non profit, expressed concern that Apollo controls the board of Phoenix and may make profit based decisions that are improper for an academic institution. .
I do not get it. Why shouldn’t Phoenix make money? Stanford University just announced that it received one billion dollars from its donors last year. This money is “not profit” because Stanford does not pay dividends. Of course, the Supreme Court says that corporations ARE people. Why is it OK for “Mr.” Stanford to make money but not for “Mr. Apollo”? Hell, at least Mr. Apollo pay taxes!
I guess c all believe that Mr. Stanford is a very honorable corporate person and he (or is Stanford a Ms. ?) uses all of his money to benefit humanity. Mr. Apollo is suspect and needs to be watched very carefully.
How does this relate to Western Governor’s University? WGU is another kind of corporate being … a non profit corporate person. Like Mr. Stanford, Mr. WGU is presumed to be a saint … serving only the public welfare since WGU does not have investors.
Not having investors frees Mr. WGU fro0 oversight by the Securities and Exchange Commission. The SEC started Phoenix’s recent problems. The Commission expressed concern because the regional accreditation review team’d findings could hurt profits at the corporate parent, Mr. Apollo.
The accreditation agency, So, the Higher Learning Commission, put Phoenix on probation.The Higher Learning Commission had a real reason for concern. Ashford University, once a small, non profit, 300-student Catholic school in Iowa, was bought out for its accreditation. The investors morphed Ashford into a massive online institution serving nearly 90,000 students. Regional accreditors however, denied Ashford’s bid for re-accreditation last year, arguing that the school had low graduation rates and was spending much more money on new student recruitment than educating current students.
Ashford is not alone. During the Great Recession, millions of students have sought to improve their fortunes by earning a college degree. Most of this effort was paid for with federal funds … scholarships and loans. All colleges must be accredited in order to remain eligible for federal student aid. The regional accreditors function for the federal government by certifying such things as academic courses and quality.
Standards for accreditation are, to say the least, suspect.These accreditation agencies accredit everything from certificates from cosmetology schools to PhDs in Neuroscience. Members of Congress have criticized the accreditation system as a rubber-stamp regulatory process that does little to protect taxpayer investments in higher education. This criticism is borne out by Congressional and Administration findings that the for profits have low graduation rates and high rates of student loan defaults. More than 22 percent of students at for-profit colleges defaulted on federal loans within three years — nearly twice the rate of students at public institutions, according to federal data.
The University of Phoenix had a three-year default rate of more than 26 percent, according to the most recent federal data. In contrast, WGU, as a non profit, does not have to release its data!
Of course, as a beneficent non Profit, Mr. WGU also does not have to deal with the SEC. This is true even though the President of WGU makes around a million dollars each year while sitting on the boards of the companies that make most the online coursewares WGU resells as degree programs. WGU resident Bob Mendenhal also does not comply with our own state requirements for pubic officials. These standards would block him from serving on these boards that sell stuff to WGU. WGU fought hard to be designated a Washington State School but is somehow free of the regulations the rest of the system must meet.
The Ashford and Phoenix stories raise an importunate question. These schools claim to achieve an efficient, profit making model mainly by using few faculty. WGU, a non profit, claims even more efficiency by using almost no faculty. If WGU were a conventional university, would its faculty free model win accreditation? Would WGU survive accreditation if it had to meet the same standards as its profit making peers?