Phoenix Takes a Nosedive: Major For-Profit College Accreditation in Jeopardy

The University of Phoenix disclosed late Tuesday that it may be put “on notice” by the organization that accredits the for-profit college.

The school, which has more than 300,000 students nationwide, is currently undergoing a regularly scheduled review by the Higher Learning Commission. The review is expected to conclude later this year.

Accreditation not only serves as a marker of institutional quality, it also plays a central role in a school’s eligibility for federal financial aid dollars — funds that are a critical piece of the University of Phoenix’s business model.

According to the Higher Learning Commission Web site, “An institution is placed on notice if it is found to be pursuing a course of action that could result in its being unable to meet one or more Criteria for Accreditation.”

If an institution ultimately does not address the conditions leading to the notice action, the commission may withdraw its accreditation, according to the commission’s policy book.

Discussing the University of Phoenix’s accreditation review on a company earnings call yesterday, executive Greg Cappelli told investors, “We were advised informally by HLC [the Higher Learning Commission] just this morning that we should be receiving a draft report in the near term. We believe this draft report will include a recommendation to place University of Phoenix ‘on notice’ status with HLC, with respect to several areas of concern, which will require follow up reports and corrective actions.”

Cappelli, the CEO of the Apollo Group, the University of Phoenix’s parent company, further commented: “Because we don’t have the draft report yet, we don’t intend to comment further at this time, but when we actually receive the draft, there’s a process for us to review and respond to the report, prior to any final decision being made by HLC.”

Cappelli explained that “on notice” status “means that the peer review team has identified some concerns.” He added: “If they were to persist, that could place any institution, including ours, in this case, out of compliance with HLC’s criteria. If this is the final action after a review process and whatnot, we would be required to take corrective action and certainly to file a written report showing that we fixed this condition over a period of time.”

“When we get that information, there will be a process to review it and to disclose as appropriate,” he said.

A spokesman for the Higher Learning Commission declined to comment on the development. According to a public statement the HLC released in December, the Commission has completed the “first phase” of its University of Phoenix evaluation, which included visits to the school and meetings with faculty, staff, and students.

“[N]o outcomes of the evaluation are deemed official or made public until the conclusion of the process,” the statement noted.

University of Phoenix spokesman Ryan Rauzon told The American Independent in an email that “there is no current change in the accreditation” of the school and that “at this point there is no impact to students.”

The nation’s largest for-profit college, the University of Phoenix has been struggling with declining enrollment and revenue amid increased scrutiny of the industry.

The American Independent reported in December that the school hopes to attract new students by establishing more than 100 partnerships with community colleges across the country.

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