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University of Phoenix enrollment drops because of changes to enrollment, recruiting practices

Published: Saturday, Dec. 4 2010 10:56 p.m. MST

SALT LAKE CITY — New enrollment at University of Phoenix, the nation's largest for-profit college, could plunge more than 40 percent as the school changes the way it recruits and retains students in response to mounting criticism. It also announced on Nov. 29 that it has eliminated approximately 700 full-time positions throughout the country as it adjusts to the changes.

Representatives from the University of Phoenix, which has five campuses in Utah, recently met with the Deseret News to explain how the school is changing the way it recruits students. The mostly online school, which has about 470,800 students across the nation and more than 200 campuses, is also implementing new financial counseling and a mandatory orientation for at-risk students.

The changes come at a time in which for-profit schools like the University of Phoenix are increasingly coming under attack. A report released last week found that only 22 percent of full-time students at for-profit schools graduate within six years. Students at public and private nonprofit colleges and universities, by comparison, graduate at rates two to three times higher — 55 and 65 percent respectively.

According to the report, "Subprime Opportunity," by the Education Trust, only 9 percent of first-time, full-time bachelor's degree students graduate within six years. For those who go to Phoenix's online schools, the rate is even worse — only 5 percent graduate within six years.

Another study, also released last week, found that nearly 25 percent of students who graduate from for-profit schools left with debt levels of more than $40,000 in 2008, compared with 5 percent at public schools and 14 percent at private institutions.

Although such numbers don't take into account the part-time students at for-profit schools, they do represent a gap that has brought negative attention to schools like the University of Phoenix, which is taking a proactive approach to reform.

For starters, the school is now separating enrollment results from recruiters' compensation.

Previously the school's compensation for recruiters was based on something called the "Matrix," a collection of various factors that included how many people a recruiter signed up for degree programs.

That has all changed now with a new compensation plan for student advisers, which is what the University of Phoenix calls recruiters. "Effective Sept. 1, 2010, we eliminated any compensation of our enrollment student advisers … tied to enrollment results," University of Phoenix spokesman Ryan Rauzon told the Deseret News. "We are the first to do so among proprietary schools, and it is an important change that is clearly something that regulators and policy makers in Washington want to see."

Rauzon said advisers are evaluated now on the service they provide to a prospective student, particularly their helping a student fully understand the rigors of a degree program.

Admissions personnel were the bulk of the 700 positions recently eliminated at University of Phoenix — including four in Utah — a reduction of about 4.3 percent of its full-time, non-faculty employees. A statement from the university said they have "accelerated the shift in our approach to student admissions, and have refined our business model. These staffing reductions are intended to better align our operations with these business decisions."

N. Darris Howe, the vice president and state director for University of Phoenix's Utah campuses, said the student advisers are to focus on what a student wants, and what degrees are available that would meet those wants. The advisers also explain what would be required to complete the degree and then help prospective students through the application process — including financing.

The second change is a new university orientation program, which began Nov. 1. All new students at University of Phoenix who come in with less than 24 credit hours — roughly a year of college — are required to take a free two-hour-a-day three-week-long orientation class.

The orientation lasts three weeks because the university saw a significant number of students drop out of various degree programs in that three-week window. "Life, you could say, got in the way," Rauzon said. "In those three weeks students would come to terms with how hard the degree course was or if their jobs or family obligation got in the way. This university orientation three-week course now prepares students to walk in the door and start their degree program with their eyes wide open — knowing what it is going to take from a time commitment and from a life change to complete their program."

Meredith Curley, the dean of education for University of Phoenix's college of education, said the three-week orientation also helps student get to know faculty and computer systems.

The result is that one in five of the people who go through the free orientation class decide not to sign up for a degree program, which explains the university's recent temporary enrollment drop. Those that remain are theoretically more likely to continue on with their studies once they start their degree program.

The third change addresses critics who say students take on a lot of debt without understanding what impact that could have on their lives. "We agree," Rauzon said.

The Pew study that came out last week found that in almost every field of study, "students at private for-profit schools are more likely to borrow and tend to borrow larger amounts than students at public and private not-for-profit schools."

In response, the University of Phoenix says it is now offering better financial aid counseling and is encouraging students to only take on debt that they can pay off. The school's website explains that its "financial literacy program" gives students a set of tools to better understand the direct and indirect costs of their education. One tool is a financial aid calculator for students to "better manage debt levels." The website claims that since University of Phoenix launched these tools, the number of students who take out the maximum loan amount has dropped by about 30 percent.

"We are effectively starting now, prolonging the preparation time, this kind of ramp-up before a prospective student becomes an enrolled student. And that carries with it some implications to how many students we enroll," Rauzon said.

In the first quarter of fiscal 2011, Rauzon said, they are anticipating a 40 percent decline year-over-year in new degreed enrollment (not total current enrollment). "There is a short-term negative financial impact," he said. "We hope it will provide a stable platform for long-term growth, with better students prepared to complete their programs."

e-mail: mdegroote@desnews.com

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