Once synonymous with the idea of online education the University of Phoenix, struggling with sagging profits and low enrollment, announced on Tuesday it will be removing most of its associate programs, closing many physical locations, and setting admission requirements for the first time in its history in an effort to remain a viable business.
The move comes after the closure of other for-profit education companies that have increasingly come under fire for high drop out rates, expensive tuition and bleak job prospects for graduates.
In 2010, the school enrolled 460,000 students, and approximately 150,000 will be left by 2016 due to the changes. Pheonix’s enrollment rates have been falling steadily, and the plans were announced on Monday by the Apollo Education Group, Phoenix's parent.
Apollo announced that it purchased controlling interest in a coding boot camp called the Iron Yard, that offers training (but not degrees). Kaplan Inc. bought another company last year called Dev Bootcamp. These programs do not received federal student funding, but are becoming more popular.
The adjustments were arranged in order to address retention issues at the schools, said Gregory W. Cappelli, Apollo’s chief executive. These problems have been constant since an associate-level college was created.
The growth of online education and colossal marketing budgets boosted enrollments significantly at the university, but graduation rates fell and student have defaulted on their loans. Cappelli said that other changes over the years, such as orientations, had solved some issues. They were not enough to help the quality of the school’s academics, however, and that injured profits.
Cappelli said the goal was to improve the school overall, and "its brand, its reputation, its ability to recruit at a lower cost." He also hoped the alterations would help the political and regulatory pressures that Phoenix has dealt with due to scrutiny against for-profit colleges.
A few associate career programs will stay, but Phoenix and Apollo will increase certificate programs, “some of which stack into degrees,” said Cappelli. Which campuses will close has not been announced, but he hopes major metro areas will still have locations.
Despite the evolution in online learning, Phoenix and its parent group will make these significant changes to address poor graduation and retention rates.