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Education Trust Reports as Few as Five Percent of Online Bachelor Degree Students Graduate from University of Phoenix



Education Trust, a non-profit research group that analyzes statistics on the cost and return of American higher education programs, has issued an eye-opening report on how the largest for-profit universities in America compare to their public and private non-profit peers.

Some of the largest online university systems in the USA are cited unfavorably in the Education Trust’s report, including America’s largest enroller of online students: The University of Phoenix Online.

The report faults the University of Phoenix for its graduation rate of only 5% for online bachelor degree students who enroll through the online programs of this university system. The national graduate rate average among the ten largest for profit bachelor degree colleges is about 20%.The report makes clear that not all for-profit colleges suffer from low graduation rates. ITT Technical Institute, for example, showed a higher than average grad rate (66%) among all campuses surveyed. DeVry University showed 31%.

Overall, however, the statistics do not speak well for the profit education industry and its servicing of bachelor degree students. The report, “Subprime Opportunity: The Unfulfilled Promise of For-Profit Colleges and Universities,” analyzed data from the U.S. Department of Higher Education to conclude:

  • In 2008, for-profit colleges offering bachelor’s degrees graduated an average of 22 percent of their first-time, full-time, degree-seeking students. The comparative number for those seeking bachelor’s degrees at public institutions was 55 percent while private nonprofits graduated 65 percent.
  • Median debt of bachelor’s degree recipients from for-profit universities in 2007-08 stood at $31,190 (2007-08); The for profit debt load was close to twice that of bachelor graduates at private nonprofit colleges ($17,040) and more than three and a half times that of public college degree completers ($7,960).
  • For-profits boosted enrollments 236 percent over the decade from 1998-99 through 2008-09, far outpacing modest growth in public and private nonprofit institutions. The majority of this growth came from increases in online education programs.

The report echoes concerns expressed by Congress in 2010 that for profit schools, most of whom receive about 85% of their funding from government student loan and grant programs, are over-selling and under-delivering when it comes to the promise that college degrees can and will improve the financial lives of bachelor degree recipients.

The Education Trust faults the for profit college industry, both online and in residential formats, with saddling bachelor degree students, especially low income students and students of color, with high debt loads, low degree completion rates, and high student loan default rates.

Congress is currently working to redefine the conditions online and residential colleges must meet to continue receiving government financial aid funds and Pell Grants. Gainful employment—or the idea that an online school must demonstrate that its graduates have a reasonable chance of obtaining jobs which pay well enough to justify high student loan debt—is one of the higher education aid rules under debate by Congress.

One bright spot in the report for the for-profit college sector: students enrolled in two-year (associate degree or certificate programs) at for profit schools show a significantly higher graduate rate (60%) than students enrolled in public community colleges, where the rate is only 22%. Distance students at for-profit schools may want to obtain an associate degree before pursuing an online college bachelor degree, given the graduation rate is much higher.


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