Department of Education Goes After University of Phoenix

By Julianne Hing Jul 18, 2014

First the U.S. Department of Education took a regulatory hatchet to Corinthian Colleges. Now they’re coming after the biggest for-profit college of them all–University of Phoenix. 

This week University of Phoenix’s parent company Apollo Group announced that the federal agency will begin a federal review on August 4 of the corporation’s use of federal student aid and loan money, the Huffington Post reported. Some for-profit colleges receive nearly 90 percent of their revenue from students’ federal aid and loans, and in recent years the industry has come under fire for fleecing students of taxpayer money while sending students out the door with loans they’re unable to repay and barely improved job prospects. Nearly half of federal student loan defaults come from students in the for-profit sector even though they account for just 13 percent of higher education enrollment in the nation.

The Department of Education is turning to the Apollo Group after taking decisive action against Corinthian Colleges, another large for-profit schools corporation. In early July the 102-campus corporation was forced to sell off and wind down the operation of its campuses.

The heyday of for-profit colleges, which experienced unprecedented growth in the mid-2000s by enrolling a disproportionately high number of African-American, Latino, women, and older or returning students, appears to be over. The industry has taken a serious enrollment hit since the recession and because of stepped up federal scrutiny over industry practices.

Read Colorlines’ coverage of the Department of Education action against Corinthian Colleges earlier this month.