With profits on a sharp decline, University of Phoenix is doing what any publicly traded corporation would do—cutting its losses. Except the University of Phoenix is not just any company selling widgets and doodads. It’s the nation’s largest for-profit university, and it plans on closing 115 brick and mortar campuses, a move which the company’s owners estimate will affect some 13,000 students.
The news, announced Wednesday, comes on the heels of a dismal fourth quarter revenue report from the for-profit giant’s parent company, the Apollo Group. Revenue for that quarter dropped by 60 percent, the AP reported. The drop in revenue followed a parallel drop in enrollment. At its height the University of Phoenix had 400,000 students enrolled in programs offering everything from certificates to Ph.D.’s to students. Current enrollment is 328,000.
University of Phoenix President Bill Pepicello attributed the enrollment drop to the stagnating economy and students’ unwillingness to invest in their education at a time when their futures were so “uncertain.” But the enrollment drop has also coincided with the institution of federal regulations seeking to rein in the for-profit college industry.
For-profit school students are disproportionately likely to come from low-income families and be the first in their families to go to college. They’re also more likely to be saddled with expensive debt that they end up defaulting on. Student loan debt is especially dangerous and notoriously difficult to discharge—unlike credit card debt it can’t be discharged by declaring bankruptcy. Because of this, the federal government has moved to enact regulations that demand more transparency for students before they sign away tens of thousands of dollars, and their financial futures, to these corporations.
The regulations came just as the industry was ballooning, largely on the backs of students of color. Enrollment in the for-profit sector’s four-year colleges rose 43 percent between 2004 and 2009. During that same period of time, black student enrollment increased a whopping 218 percent.
Check out our Colorlines.com infographic for a snapshot of how students of color are fitting into the changing landscape of higher education.