University of Phoenix to close 115 locations

The University of Phoenix, the nation’s largest for-profit university, is closing 115 of its brick-and-mortar locations, including 25 main campuses and 90 smaller satellite learning centers. The closings will affect some 13,000 students, about 4 percent of its student body of 328,000.
      

It is also laying off about 800 employees out of a staff of 17,000, according to Mark Brenner, senior vice president for communications at the Apollo Group, which owns the university.

 

After the closings, which are to be completed next year, the University of Phoenix will be left with a nationwide network of 112 locations and a physical presence in 36 states, the District of Columbia and Puerto Rico.

 

Apollo stock closed Wednesday at $21.40, down $6.09, a 22 percent decline.

 

Enrollments at the University of Phoenix and in the for-profit sector over all have been declining in the last two years, partly because of growing competition from other online providers, including nonprofit and public universities, and a steady drumroll of negative publicity about the sector’s recruiting abuses, low graduation rates and high default rates.

 

 In Milwaukee, Everest College, owned by Corinthian College Inc.announced it was closing less than two years after its controversial opening after regulators disclosed that the college had an abysmal 5% job placement rate and a drop out rate of more than 50%. Sanford Brown, another for-profit with a nefarious reputation, has also announced that it is closing its Milwaukee campus        

 

Late last month, Kaplan Higher Education, a division of the Washington Post Company, announced that it was closing nine of its campuses and consolidating four others into nearby locations. The company did not give a reason, but in an August filing with the Securities and Exchange Commission it disclosed that an accrediting commission had warned that its campuses in Baltimore, Indianapolis and Dayton could lose their accreditation — and with it, eligibility for the federal student aid that makes up more than 80 percent of Kaplan’s revenues — for failure to meet student achievement requirements.

 

As the negative publicity about for-profits mounted — including many charges that the schools enrolled students who had almost no chance of succeeding, to get their federal student aid — both Kaplan and the University of Phoenix announced new programs, offering some form of free trial, to ensure that they enrolled only students who had a reasonable likelihood of success. Those programs cut substantially into their enrollment numbers.

 

“We’ve said publicly that about 20 percent of the students in our free three-week online orientation program either don’t complete the program or don’t enroll,” said Mr. Brenner.

To help boost enrollment, the University of Phoenix last week announced a tuition freeze for students who remain consistently enrolled.

 

Students affected by the University of Phoenix closings will have the option of transferring to the university’s online classes — about three-quarters of its students are online — or moving to a nearby site. Students are now being notified of the changes, and a hot line has been set up at (866) 992-3302 for those with questions.

 

Based on an article by Tamar Lewin in the New York Times, October, 15, 2012