The Spark

“The emancipation of the working class will only be achieved by the working class itself.” — Karl Marx

Education for sale

Mar 5, 2007

The federal government is threatening to cut close to two billion dollars a year from the University of Phoenix, money it has been receiving as student financial aid. Phoenix is the largest for-profit system of colleges in the country, with 300,000 students in 39 states. Such financial problems, along with some lawsuits, have driven down Phoenix’s stock price.

Not too long ago Phoenix was a darling of the stock market. It made high profits by delivering a “low cost” education. At Phoenix, students spent a total of 20 to 24 hours per semester. The regular college courses average 40 hours per class per semester. It also saves money on staff, employing part-timers for almost every class. These teachers do not necessarily have the qualifications of full-time professors and they receive relatively low pay and no benefits. Phoenix also saves money by using office buildings near freeways for their sites, so they don’t have the expense of campuses or any of the facilities to be found at two-year and four-year colleges.

Those students choosing Phoenix are often adults who work full-time. They can’t afford the $9,600 in tuition and fees that Phoenix charges. So they have to take out loans and financial aid, much of which is provided by the federal government and banks. Their profits come from squeezing their students and pocketing the government subsidy. Education becomes a money machine for a private company like Acorn, which owns Phoenix.

In fact, the methods used to recruit students was the cause of a lawsuit against the University of Phoenix in 2003. Two counselors accused Phoenix of paying them based on how many students they recruited. It paid almost 10 million dollars to settle the matter, without admitting any wrong-doing. This embarrassment from this suit, as well as thousands of complaints from students and staff have led the federal government to consider withdrawing its financial aid.

The University of Phoenix is part of a 26-billion-dollar a year industry of proprietary, or for-profit schools. Working adults sacrifice time and money in hopes of improving their job prospects and gaining a bit of culture.

But all too often they are swindled.