Phoenix feels heat over probation threat

Accreditation change could leave US for-profit’s finances in ashes. John Morgan writes

March 14, 2013

The owner of the US’ biggest for-profit university fears it could face reputational and financial damage from an accreditation dispute that is already being used by a British union to attack the UK’s leading for- profit college.

The University of Phoenix, owned by the Apollo Group, has been told by US accrediting organisation the Higher Learning Commission that it is recommended for probation because the institution has “insufficient autonomy” from its owner. This would mean additional monitoring, including another “comprehensive evaluation visit” by the HLC.

In the UK, the news prompted the University and College Union to write to Vince Cable, the business secretary, with concerns about the application for university title being lodged by BPP University College, which is owned by Apollo Global, an Apollo Group subsidiary.

In the letter, the UCU urges Mr Cable to shelve BPP’s application for university title pending an investigation into its “relationship with its parent companies” and the resolution of Phoenix’s accreditation.

“At risk are both the interests of BPP students and the international credibility of the UK university title,” it says.

A report filed by Apollo Group to the US Securities and Exchange Commission spells out the consequences of probation for Phoenix along with Western International University, another Apollo subsidiary facing similar action.

Reputational damage from such a move may “negatively impact their ability to recruit and enrol students and to recruit and retain faculty and staff”, meaning “our business could be materially and adversely affected”, the report says.

The HLC board is expected to make its final decision in June about whether to enter Phoenix into a two-year probation period.

The university intends to “challenge and appeal” the probation recommendation, the firm says.

Mark Brenner, chief of staff at Apollo Group, told Times Higher Education: “From an academic standpoint…we were graded very highly.” However, the HLC “did express concern with governance”.

He argued that changes in recent years meant that while Phoenix’s board includes “a number of individuals from the Apollo Group leadership team”, the “chairman, vice-chairman and a majority of the directors are…independent with no other affiliation to Apollo Group”.

Accreditation for an institution, gained through peer review, means students can access US federal, and sometimes state, funding.

Last year’s Senate report into the for-profit higher education industry, led by Iowa Democrat Tom Harkin, criticised for-profits’ reliance on taxpayer funding. It argued that accreditation agencies had “struggled to effectively evaluate institutions driven by business principles that emphasize growth and revenue maximization rather than academic improvement or integrity”.

Mr Brenner said that even if Phoenix went into probation, it would continue to be accredited. But “for sure there would be an impact on reputation”, he added.

Peter Crisp, dean of BPP Law School, highlighted the different regulatory systems in the US and UK and said “comparisons are inappropriate at best, and quite unhelpful”.

He said BPP had separated academic and corporate governance in 2004, adding that “only quality providers with appropriate governance…get degree-awarding powers”, a status BPP gained in 2007.

Mr Crisp also accused the UCU of being “disingenuous” with regard to its letter to Mr Cable.

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Reader's comments (3)

Here is the rest of what Mr. Mark Brenner said on behalf of Apollo Group, Inc.: "Important to note that there will be no change in the accreditation status of University of Phoenix until the review and appeals are complete. We are confident that all concerns expressed by HLC can and will be successfully addressed in due course. The draft report includes a number of positive findings and observations. For example, the HLC review team notes in its draft report that University of Phoenix is well resourced and innovative, and has a number of strengths, including a high level of relevant student services, technology and systems that benefit students. In fact, University of Phoenix was found to be in compliance with substantially all criteria associated with academic matters. While we plan to challenge and appeal the review team’s recommended sanctions, we also intend to work closely with HLC to achieve agreement and resolution. We are confident that University of Phoenix will be successful in achieving institutional reaffirmation. It's important to point out that the level of independence exercised by University of Phoenix relative to its parent, Apollo Group, has only increased since the prior reviews by HLC in 2000 and 2002 that specifically addressed and approved our governance structure. HLC has indicated that it believes this appeals process will be complete by the end of June 2013, although it is possible that the process could extend beyond that date." (For further information, readers may email
I received this email from the UOP today, and then felt I should post it here.. Update on University of Phoenix accreditation status Dear students: Over the past year and a half, University of Phoenix has participated in a rigorous accreditation reaffirmation process with The Higher Learning Commission (HLC), our institutional accreditor. Our accreditation is a central part of the University that ensures our programs, policies and operations are in line with a set of overarching educational standards. I’m very pleased to let you know that University of Phoenix’s institutional accreditation has been reaffirmed by HLC. HLC informed us this week that, while we will undergo a routine comprehensive evaluation in 2016–2017, our accreditation has been reaffirmed through our next reaffirmation visit, which is scheduled for 2022–2023 — the maximum period possible. It is gratifying to learn that our status as an accredited degree-granting institution has been reaffirmed by HLC, and I am immensely proud of every member of the University of Phoenix community who contributed to this very positive outcome. As part of our reaccreditation, we were informed by HLC that the University has been placed on Notice status, meaning there are certain areas we must address over the next two years to ensure continued compliance with the HLC’s Criteria for Accreditation. Specifically, HLC identified three areas — institutional governance, student assessment, and doctoral and faculty scholarship — which serve as the basis for the Notice status. I am confident that we will successfully address all of HLC’s concerns in the coming months and throughout 2014. For more information on this status, you may review HLC’s website, which contains a Public Disclosure Notice and may be accessed here. It is important to emphasize that HLC found University of Phoenix to be in compliance with substantially all criteria associated with academic matters, and that we remain accredited as a University, as we have since 1978. I’m pleased to share this news on behalf of the entire University of Phoenix community and will continue to provide updated information as it becomes available. Thank you for your hard work, dedication and commitment. Your success is at the center of everything we do. Regards, Bill Pepicello President, University of Phoenix
The Public Disclosure Notice link:

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