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Underserved Students Make Progress at For-profit Institutions

In their first annual academic report, the University of Phoenix (UPX) asserts that its students, as a group, make significant progress in basic content areas between freshman and senior year.

“University of Phoenix students often enter their studies with lower scores in the general education areas as compared to [students at] more exclusive institutions but perform at levels comparable to seniors at other institutions by the time they graduate,” the report states. Additionally, it asserts that despite low academic skills among students entering the program and increased risk factors for completion, completion rates for the university are comparable to those reported nationally.

The report is the latest among efforts by for-profit colleges to prove their viability as low-cost, high-quality educational alternatives to traditional postsecondary institutions, while those in traditional education sectors question the mission and educational outcomes of these commercial institutions. The report also coincided with a conference last week on for-profit institutions, which have grown exponentially in recent years.

Since 1976, for-profit enrollment has grown at an annual rate of about 11 percent, increasing by nearly 23, according the Department of Education. The for-profit market share of higher education has gone from 0.4 percent to nearly 6 percent in that time frame.

This growth suggests traditional institutions are failing to meet the needs of certain demographics, for-profit industry leaders say.

“We are not trying to be increasingly selective in identifying students who will be successful, putting our stamp on them and giving them a socialization into the professional and managerial class,” said Mark Pelesh, executive vice president for legislative and regulatory affairs at Corinthian Colleges Inc. (CCI), one of the largest postsecondary education companies in North America.

“We are trying to get results for students the traditional educational system has failed … . Our students tend to be older. They are more racially diverse. They are independent. They have greater financial need,” he said.

During the conference on for-profit higher education, hosted by the American Enterprise Institute for Public Policy Research, a Washington-based conservative think tank, Pelesh contended that the profit motive of education can stimulate better results.

“Folks seem to think that the profit motive would somehow imply exploitation,” said Pelesh. “I beg to differ. Retention enhances our financial results. We estimate in our diploma programs that a 1 percent improvement in retention will increase revenue by 4 percent.”

Quoting Margaret Spellings and her Commission on the Future of Higher Education, Pelesh said, “What the public, consumers, employers and our students care about is results and the ownership structure of the institution.”

Still, with profits driving procedures, the question of educational policy at for-profit colleges becomes an issue.

UPX’s report includes comparisons on the Standardized Assessment of Information Literacy Skills (SAILS), which 1,170 Phoenix students took. The university found that UPX students performed better than students at all participating SAILS colleges in searching, evaluating sources, and understanding economic, legal and social issues, while scoring significantly below others in documenting sources.

All primary providers of higher education in the United States must report

data on enrollment, program completions and graduation rates as well as other institutional information to the Department of Education for publication in the Integrated Postsecondary Education Data System, or IPEDS.

The issue for institutions such as UPX is that IPEDS data is calculated using “first-time students.” These are students who start at one institution and complete their entire degree at that same institution. That student is an anomaly at UPX, the report states.

UPX began as a degree-completion institution, an institution that students sought out to finish what they had started. Until the advent of the associate degree program at UPX, students with zero transfer credits were a rarity. Therefore, the completion rates reported to IPEDS differ from the completion rates calculated by using the true population of UPX, most of which does not fall within the IPEDS definition.

Despite increased risk factors for completion and lower skills among incoming students, completion rates for the university are comparable to those reported nationally in the areas of critical thinking, reading and math.

UPX’s report also touts the school’s commitment to diversity. In 2007, the University of Phoenix was listed by the magazine Diverse: Issues in Higher Education as having graduated the largest number of underrepresented students in master’s degree programs.

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