Most of us know about the mystical phoenix from Greek myth because of Fawkes, the companion of Dumbledore, and Harry Potter's ally in his battle against "He-who-must-not-be-named." Fawkes is a bird with magical healing powers who periodically bursts into flames and then rises up anew from the ashes.
Phoenix is also the largest city in Arizona and the University of Phoenix is a football stadium named after a for-profit college without a football team. This post is about the last Phoenix, the for-profit "university". It looks like it may burst into "flames" soon, but let's hope this bird never rises up from its ashes!
The University of Phoenix's owner, the Apollo Education Group, is exploring plans to change the legal status of the "school" from publicly traded to privately held. It seems Apollo, named after another mythical Greek figure, is in financial trouble. It recently sold itself for $1.1 billion to a group of investors that includes a private equity company with ties to senior officials in the Obama administration. The new owners claim their goal is to "clean up" the for-profit education industry. But according to Senator Richard Durbin, a Democrat from Illinois, the major impact of the sale will be to deny the public knowledge about how it is operating. "The sale of Apollo Education Group," said Durbin, "means that the largest for profit-chain in America is essentially going dark. We'll know less than ever about the operations of one of the most heavily subsidized universities in America."
According to the New York Times, Apollo and Phoenix both are the target of "state and federal investigations into allegations of shady recruiting, deceptive advertising and questionable financial aid practices." The University of Phoenix and other for-profit "educational" institutions have received billions of federal dollars in federal from programs intended to help veterans and low-income students. But the students end up with heavy debt and few marketable skills. A Defense Department ban that prohibited Phoenix from recruiting on military bases was recently revoked, but the company remains under heightened scrutiny. The Times also reports that enrollment at these schools "has been falling and profits shrinking, casting doubt on the future health of the industry."
The future may not be good for Phoenix, which has been suffering through cutbacks including fewer campus sites, lay-offs, and declining enrollment. In one year its quarterly balance sheet dropped from plus $64 million to an operating lose of $45 million. Barmak Nassirian, director of federal policy analysis at the American Association of State Colleges and Universities, evaluated the deal and concluded that the investors paid 30% more than is "by the company's recent record of anemic earnings and worsening forecasts." According to Nassirian, putting the company "back on steroids" would require "overpromising and under-delivering," which got Phoenix and Apollo in trouble in the first place."