This week, similar news broke about the University of Phoenix, a wholly owned subsidiary of the Apollo Group. The Federal Trade Commission (FTC) issued a civil investigative demand subpoena to Apollo, demanding "information on a broad spectrum of matters, including marketing, recruiting, enrollment, financial aid, tuition, academic programs, billing and debt collection, as well other facets of the business" (internal quotations omitted). (The Denver Post)
Information about the FTC probe can be found here, here, here, and here.
"The for-profit, publicly traded company is the largest recipient of federal student aid for veterans and often a sponsor at military education and employment events. Since 2009, when the GI Bill expanded student aid benefits for veterans, the University of Phoenix online program has collected more than $488 million in tuition and fees for veterans, a figure that dwarfs nearly every other institution identified as a GI recipient by the Department of Veterans Affairs." (CNBC)
Now, in a free market system, it's okay for an entity to take in $488 million for the sale of products. And opponents of the FTC probe say that it's a politically-motivated move unethically designed to target an organization that is lawfully operating within a system in which its model has been wildly successful. Further, fans of the Apollo Group and its University of Phoenix say that the two organizations have provided hundreds of thousands of adults -- including many veterans -- with learning and degree opportunities they had a hard time finding elsewhere.
Yet, while all of that may be true, the FTC and other governmental entities have a legitimate interest in understanding the veracity of such claims. When $488 million federal dollars go to a single for-profit entity -- even if such an expenditure is to directly benefit veterans -- there understandably should be some tough questions that require good answers.
That said, while the Corinthian story ended with the closing of Corinthian's doors, there remains a reasonable likelihood that the FTC's probe of the University of Phoenix will end with no further action on the part of the FTC.
What do you think?
Posted by Parker Fulton
Credit to The Denver Post, CNBC, CNN Money, and CBS News