U. of Phoenix Expects to Be Placed on Probation by Its Accreditor

February 25, 2013

The University of Phoenix expects to be placed on probation by its accreditor this spring, the university's parent corporation announced on Monday.

The proprietary college, which enrolls students both online and at more than 100 campuses across the country, is accredited by the Higher Learning Commission of the North Central Association of Colleges and Schools, one of the nation's six regional accrediting organizations.

The university's owner, the Apollo Group Inc., made the announcement in a filing with the U.S. Securities and Exchange Commission, saying that a team of reviewers from the Higher Learning Commission had concluded that the university had insufficient autonomy from its corporate parent.

Aside from the governance issue, the university was largely in compliance with the accreditor's standards, the filing said, though a draft report from the accrediting team also raised concerns about graduation and retention rates, assessing student learning, and the university's reliance on federal student aid, among other things.

Accreditors also recommended probation for Western International University, another subsidiary of the Apollo Group.

The recommendation to place Phoenix on probation was something of a surprise because Apollo announced in January that it expected the accreditor to put the university on notice, a less-serious status.

In a written response to the draft recommendation, Mark Brenner, chief of staff for the Apollo Group, said that the company would appeal the recommendations for both universities, but would also work closely with the accreditor to resolve the problems.

"We are confident that University of Phoenix and Western International University will be successful in achieving institutional reaffirmation," said Mr. Brenner in a written statement.

Another Crackdown

If the Higher Learning Commission's Board of Trustees approves putting Phoenix on probation, the university will probably have until the fall of 2014 to come into compliance with the accreditor's standards. The accreditation team also recommended that the university submit a report within three months outlining its plan to resolve the accreditor's concerns.

While it's unlikely that the Higher Learning Commission will eventually reject the university's accreditation, the recommendations mark the latest action by the accreditor to crack down on for-profit colleges. In 2010 the commission rejected the sale of a small nonprofit college to a group of investors—the kind of sale that had been approved by the commission several times in previous years. The institution, Dana College in Nebraska, was forced to shut down.

The commission has also taken a hard line on universities owned by Argosy Inc. and Bridgepoint Inc., which have most of their corporate operations outside the 19-state region that the accreditor oversees. The two companies subsequently applied for their colleges to be accredited by the Western Association of Schools and Colleges, another regional accreditor.

After the Western Association rejected Bridgepoint's application to accredit Ashford University, the Higher Learning Commission used that organization's findings to put Ashford under "special monitoring" status. The accreditor is expected to decide this month if it will continue to accredit the college, with or without some sanction, or, in an extreme move, withdraw accreditation.