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For-profit academic institutions like University of Phoenix are paring down, but will it be enough?

By: Joe Cardillo

Student loan debt is on a lot of people’s’ minds. It’s been a large part of the current presidential primary races, and some employers are even beginning to offer student loan repayment as a benefit the same they would offer health care or time off.

But where is all of that debt coming from? According to a whitepaper from the Brookings Institute last year, a big chunk of the increase can be attributed to for-profit institutions.


University of Phoenix, which has a campus in New Mexico, is one of the bigger players. After years of growth they’ve seen a slowdown in enrollment, includingcuts of nearly 500 people announced last week.

A spokesperson for University of Phoenix said that they do not report state-by-state full-time-equivalent employee figures or total degreed enrollment numbers, but pointed at a statement last August from President Timothy Slottowto faculty and staff that reiterated the focus on existing campuses, including New Mexico locations in Albuquerque, Santa Teresa, and El Paso.

Slottow said the University of Phoenix will invest in resources and facilities such as high-tech IT labs, counseling centers and entrepreneurship centers. He also said it will invest in its existing nursing labs to explore the concept of a dedicated health care campus.

Doug Brown, who is a retired professor and former dean at UNM Anderson School of Management, says that while for-profit colleges offer some advantages, not all of them have a good track record.

“There’s no reason why for-profit universities can’t deliver good value, but they generally have not,” said Brown. “Some of the business models have encouraged high debt and low graduation…they’ve been pretty customer friendly in their fundamental approach but it’s an un-level playing field with nonprofits that are burdened with regulations. They’ve really got to deliver a quality education that matches the expectations of the workplace, for example, making sure nursing programs include clinical experience.”

Brown also said that appropriate accreditation is a key point, noting that “[An accreditation like] AACSB for business schools is blue tip.”

New Mexico Attorney General Hector Balderas, who recently joined other attorney generals in scrutinizing accreditation of for-profit colleges, pointed to a similar set of factors.

“I’d hope for-profit institutions would operate the way they were intended to in order to benefit New Mexico consumers in some cases,” said Balderas. “For example, they offered flexibility that traditional colleges did not offer; they also offered short-term certificate programs that could help people to succeed in a vocation or trade. However, due to a variety of complex factors — particularly erosion of crucial regulatory reforms — the industry blossomed into the predatory giant it has become.”

According to the National Center for Education Statistics, enrollment in for-profit institutions has trended downward, with 1.4 million students enrolled in 2013 – a 21 percent decrease from 2010.

For-profit academic institutions like University of Phoenix are paring down, but will it be enough?