Recently the Apollo Group received notice from the Higher Learning Commission (HLC) of the North Central Association that University of Phoenix and Western International University were place on probation during the re-accreditation process. According to the HLC, probation is "a public status signifying that conditions exist at an accredited institution that make it no longer in compliance with one or more of the Commission's Criteria for Accreditation. The period of probation is not more than two years.... During the probation period, the university's accreditation status continues and it has the opportunity to remedy the concerns that led to the probation."
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The inability of either university to be accredited by the Higher Learning Commission of the North Central Association means that these universities would have difficulty in obtaining federal student loans and students would have difficulty when transferring credits or, in some cases, getting a job.
University of Phoenix is the Goliath of for-profit with over 400,000 students and over $ 4 billion in revenue (2011 Annual Report) most of which are due to student loans. While University of Phoenix serves a good purpose in providing a quality education for those students who are not accepted by other quality not-for profit universities, they, like many other for profit universities, have been accused of forcing students not ready for university studies to enroll. Students not ready for university studies often drop out, leaving without a degree and with student loan debts they are not able to pay. The Obama Administration and the Department of Education would like to see “gainful employment” as a result of their student lending and grants.
The Apollo Group has found itself in the middle of the controversy as to whether or not for profit universities add value or just add more indebtedness to an already alarming number of defaulting student loans. This is a political hot potato that has been brewing for over three years. The HLC has as its hands full as University of Phoenix has some 200 locations not only in the US but also in Germany, Japan, and Puerto Rico. In addition, University of Phoenix is the largest provider of online education. So the Accreditation Team must visit these locations as well as assess how the university provides quality online education.
It is unclear exactly why University of Phoenix and Western International University was placed on probation. One of reason seems to be that more governance is needed by the Apollo Group over the two universities. What this means is unclear. However, if University of Phoenix is the bell weather of the accreditation process for for-profit universities, others like Capella, Walden and Strayer may also be in chopping waters with their accreditation process.