University of Phoenix to Shutter 115 Locations | Hacker News Reader

University of Phoenix to Shutter 115 Locations

nytimes.com

29 points001sky29 comments

For-profit universities and the "free" federal dollars they collect are the very reason why we have exorbitant inflation in the education sector that is incommensurate with general inflation.

Except for the Tier I elite universities, there is no reason for a college education to cost $40k-$50k a year.

What is worse, student loans are the one type of debt that cannot be cleared through bankruptcy, meaning that millions of young adults of our generation will suffer decades of reduced incomes as they try to dig themselves out of debt for degrees that did not result in high-paying jobs.

That's a rather pat explanation that doesn't seem to explain things such as the rampant rise of tuition at state colleges and universities.

The fact that the comparables are rising in price, and aid is available, makes the hikes at state schools thinkable.

The budget problems in states then force the issue.

Federal subsidies aren't the only reason for higher-educational inflation but there are growing hints that subsidies get largely captured by fee-increases. See for example these discussions:

http://www.bloomberg.com/news/2011-12-09/u-s-universities-fe...

http://www.mindingthecampus.com/originals/2012/02/why_they_s...

So the price rises to find equilibrium with the amount of financial aid available.

Similar to the cost of health care in the US.

Your argument lacks sense. Care to elaborate on how greater supply leads to higher prices?

He should have left out the for profit universities as part of the problem (they're a symptom not the cause). It's all about the free federal dollars. The parallels to the housing bust are pretty clear. Cheap and widely available mortgages led to exorbitant housing prices and an eventual bust. Cheap, widely available, and undischargable loans for education are leading to exorbitant education costs. It'll be interesting to see how this bubble ends.

just addressed that in another comment. another side effect is increased revenues to these institutions caused a rampant increase in spending across the board - personnel, buildings, facilities, departments, etc. - that are now no longer sustainable.

It's not so much as greater supply as artificial price insensitivity as it relates to increased tuition rates. Because the federal government will continue to cover the loans, it creates incentives for institutions to collectively raise rates since they know students - i.e. their customers - are essentially price insensitive (borrowing future dollars to pay for an exorbitant education today).

Making it easy to pay with someone else's money (whether or not it must be paid back later) distorts pricing in any market.

The problem will eventually correct itself, albeit with widespread economic pain.

This "university" is on the cusp of losing its accreditation in a number of places. They have a bad reputation for preying on under qualified students who otherwise couldn't get in to college, taking their money and dumping them.

It is particularly pervasive in gi bill students.

Their business model though profitable has dubious ethical traits to it.

Disclaimer both my parents work at public universities and I've been around academia my whole life

All I can say is "finally."

Dumping? Not. Those who do what it takes to learn the material pass; those who don't, don't. An unwillingness to pass those unwilling to learn is not "dumping". More than enough learning resources are provided & available; most of those I fail are just plain unwilling to learn.

They accept students who aren't READY for college level education. Kids who don't have the basis to be able to learn.

Unready is one thing. Unwilling is something else - and seriously underdiscussed.

There goes the student loan bubble (http://www.zerohedge.com/news/inside-student-loan-debt-bubbl...). So is real estate the next bubble? Or will it be web 3.0?

Hooray! For-profit universities are almost uniformly a scam.

What would you call Coursera and Udacity then? Because they're both for-profit...

They aren't accredited.

So in your opinion it's the accreditation that makes U of Phoenix bad?

No, U of Phoenix makes u of Phoenix bad. That they have been able to be accredited just makes it worse.

Both are essentially aggregators of not-for-profit university lectures. Education is a weird thing. We don't know how to do it well, and we don't know how to ensure it is taking place, but every for-profit university (new online ones possibly excepted, I don't know) is designed to take as much money from possible from consumers who are, by definition, uninformed.

Non-profit institutions have a goal of education and/or research. For-profit education is designed to soak the uninformed, with the exception of education that is for person A, but purchased by person B. In that case, it is possible for person B to be an informed buyer.

Basically, the market for education is subject to many market failures. For-profits exploit these to the detriment of all.

It's made both the founder[1], John Sperling, and his son Peter billionaires[2][3].

[1] http://en.wikipedia.org/wiki/John_Sperling

[2] http://www.forbes.com/profile/john-sperling/

[3] http://www.forbes.com/profile/peter-sperling/

There was actually an interesting npr story on UofP. I think it is http://download.publicradio.org/podcast/americanradioworks/p...

They had locations?

American Radio Works just ran a program on UoP / The Apollo Group. Doesn't appear that there's a stream or transcript though.

University of Phoenix opened offices frequently in office buildings near freeways and other accessible areas to create physical points of presence. Most education remains online.

http://www.ideastream.org/programs/entry/48203

Is that so they can get free advertising on the highway signs that show nearby universities? I always thought that was a very clever trick.

Good question. I don't know if those signs are free, but I suspect that as branding and advertising, they're cheap and high-profile.

how can shuttering over half their physical locations affect only 4 percent of their students and just over 5 percent of their staff?

I'm pretty sure they're primarily an online university and the locations were for testing and some classes.

I only visited their campus in Phoenix once though.

Edit: The article actually confirms that most of the students are online, and it's closing "satellite learning centers".

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