Educational CyberPlayGround ®

Distance Learning thought Not as good as traditional classroom learning

STUDY FOR FREE - Find a free online program

The Education Department said that the $9.8-million fine was the largest it has ever assessed. Typically, a spokeswoman said, it levies financial penalties of $2-million to $3-million. Size, of course, is relative. For a company with annual revenues approaching $1.8-billion, one stock analyst noted, the fine paid by Apollo is "chump change." Phoenx University, is part of the Apollo Group, a publicly traded corporation.

Investigations of and lawsuits against colleges and companies in the for-profit higher-education industry have increased in recent months. Here is a glance at who is looking at whom:

U.S. Department of Justice
* Career Education Corporation is being investigated by the in Chicago.
* ITT Educational Services is being investigated by the U.S. attorney in Houston.

U.S. Securities and Exchange Commission
* The SEC, which regulates financial activities of companies, is either investigating or conducting informal probes of Career Education, Corinthian Colleges, and ITT.

U.S. Department of Education
* The department had imposed restrictions on the awarding of federal loans and grants by one of Corinthian's Bryman Colleges, in San Jose, Calif., after finding that the
institution was not complying with federal financial-aid
procedures. The restrictions, which had been in place since December, were lifted last month.
* In September the department also settled with the Apollo Group following a yearlong investigation into recruiting practices at its University of Phoenix. The department said the $9.8-million ine was the largest it had ever levied. The settlement involved no admission of wrongdoing.

California Attorney General
* The division that investigates allegations of fraud involving government money is examining the activities of ITT.
* The consumer-protection division is looking into the practices of a number of for-profit colleges and companies, including Corinthian.

Accrediting Bodies
* The Southern Association of Colleges and Schools, which accredits seven campuses of Career Education's American InterContinental University, has put them on warning status because of continuing problems with "institutional effectiveness."
* The Accrediting Commission for Community and Junior Colleges, part of the Western Association of Schools and Colleges, has put the two campuses of Career Education's Brooks College on probation.

Class-action lawsuits
* Shareholders of ITT and Career Education are seeking class-action status for lawsuits that accuse the companies of using misleading financial information to artificially inflate the value of their stock.
* Students at Florida Metropolitan University, which is owned by Corinthian, are seeking class certification for their claims that the company misled them about the transferability of credits from FMU.

Do for-profit colleges spend too much on bus ads? 6/25/2010
Disclosure: The Washington Post Co. has a stake in the outcome of this regulatory episode as the owner of Kaplan Higher Education, a big player in the for-profit sector. Conclusion: The data, on balance, yield a "mixed portrait" of the sector that "calls into question the taxpayer return on their multibillion-dollar investment."
The "Emerging Risk?" report from the Senate Health, Education, Labor and Pensions (HELP) Committee, convened for its first hearing on whether the sector requires greater government oversight. Sen. Tom Harkin, the Iowa Democrat who chairs the committee, said the "limited amount of publicly available data" available for study illustrates "an alarming trend in this industry.

"Taxpayers are investing billions of dollars in for-profit colleges, yet student debt and default rates at these schools are disproportionally higher than at non-profit and public universities," Harkin said in a statement. "This data begs for oversight of this industry, which will begin with our first hearing today."

The Obama administration wants a regulation that would discourage the institutions from compensating recruiters based on a head count of students recruited, and another to restrict programs whose graduates have unreasonably high levels of student debt relative to their earning power.

In fewer than 20 pages, the report pulls together a fairly comprehensive portrait of the data points that have congressional regulators worried.

1. For-profit colleges have exploded in enrollment. The 14 publicly traded companies in the industry enrolled 1.4 million students as of 2008, up from 200,000 students in eight companies 10 years earlier.

2. Online education is fueling the boom, facilitated by a 2005 rule change that allowed schools to furnish more than half their courses online.

3. For-profits gobble up student aid. The institutions enroll 10 percent of students but receive 23 percent of federal aid.

(Industry leaders say that's because the sector serves a disproportionate share of low-income and self-supporting students, a point its critics do not dispute. The report notes that for-profits "actively recruit primarily low-income students.)

4. For-profit colleges spend barely half of their budget on education and nearly one-third on recruiting and marketing, spending heavily "on television advertisements, billboards, phone solicitation, and web marketing." Some publicly traded schools spend as little as 32 percent on education.

5. Large numbers of students cycle through for-profit colleges. Completion rates are a mystery in the for-profit sector. But available data show the for-profits tend to enroll more students over the course of an academic year than their total starting enrollment. One school studied started the year with 62,000 students, enrolled another 117,000 students and ended the year with 86,000 students. Where did the rest go?

6. As previously noted on this blog, for-profit students borrow more than other students, and one-quarter of 2008 graduates borrowed more than $40,000.

(For-profit leaders note, again, that they serve a largely low-income student population, hence the loans.)

"Employers Remain Slow to Embrace Online Degrees" 8/06
In its latest report on employers' views of online colleges, The New York Times offers some news that will encourage the Phoenixes and Kaplans of the world -- and some that should give them pause. More and more online learners are applying for hotly contested jobs, the Times reports. The Central Intelligence Agency, for example, estimates that between 5 and 10 percent of its new recruits have taken at least some courses over the Web. But online education's reputation still suffers: Stories of diploma mills and the University of Phoenix's allegedly over-the-top student-recruiting tactics have left many employers reluctant to hire virtual learners. In one recent study, 96 percent of employers said they would choose an applicant who went to a bricks-and-mortar college over one who obtained his or her degree online.

Distance Learning | courses | mba | programs and educational degree

You may find this very interesting. Those who go to college for their degree at Big American Company, Inc, may find that their college is closed and they have wasted x years of academic work when the company owning their college is bought by Even Bigger American Company, Inc. Will there be lawsuits and other fallout????

U. of Phoenix Buys Naming Rights to a Pro-Football Stadium
"This just underscores how much of a marketing titan they are," said Sean Gallagher, an analyst of the higher-education market with Eduventures Inc., a consulting company that works with for-profit colleges. "This is saying that Phoenix is in the same category as those large-scale marketers" that use such deals to build their brand-awareness, he said.

Admissions Group Revises Guide on Students' Rights, Warning Against 'High-Pressure Sales Tactics'
Students should not have to deal with "high-pressure sales tactics" from colleges during the application process, according the National Association for College Admission Counseling's recently revised admissions guidelines for students. The association, known as Nacac, announced on Thursday that it had added the new language to its brochure "Students' Rights and Responsibilities in the College Admission Process," following allegations that the for-profit University of Phoenix had paid recruiters based on the number of students they enrolled. Under the Higher Education Act, it is illegal for institutions that receive federal student aid to pay incentives to recruiters for signing up students.

Federal Appeals Court Reinstates False-Claims Lawsuit Against U. of Phoenix
In a ruling whose consequences could eventually strike a staggering financial blow to the University of Phoenix, the Ninth U.S. Circuit Court of Appeals reinstated a lawsuit on Tuesday that alleges that the nation's largest university obtained federal funds under false pretenses. The complaint, filed in 2003 under the federal False Claims Act,
alleges that the university wrongfully obtained a minimum of
$3-billion in federal funds during the six years before the lawsuit was filed. Of that, perhaps $1.5-billion is recoverable, said Nancy G. Krop, a lawyer for two former recruiters for the university, who filed the suit. If the university is found liable under the law, it could be ordered to pay up to three times that amount. "They lied to get the money. That's the whole case in a nutshell."

Harcourt Higher Education closing 6 Aug 2001

"The Thomson Corporation has announced that it will not continue to operate Harcourt Higher Education: An Online College as an independent degree-granting institution. Harcourt Higher Education will close on August 27, 2001. The closing is the result of a change of ownership, which occurred on July 13, 2001, when the Thomson Corporation purchased the online college from Harcourt General, Inc.

We are now part of Thomson Learning. For more information on the acquisition click here <>"

They say it's a simple result of the acquisition. Gartner thinks otherwise....
The summary can be found at

Research Summary:
Title : Fate of Online University Teaches Lesson
Author(s): Marti Harris
Last Revision Date : 03 Aug 01
Summary :
The closure of Harcourt Higher Education, a for-profit online university, illustrates the pitfalls of competing with established institutions of higher education on their own turf.


"Earlier studies of distance learning concluded that these technologies were not significantly different from regular classroom learning in terms of effectiveness. Policy-makers reasoned that if online instruction is no worse than traditional instruction in terms of student outcomes, then online education initiatives could be justified on the basis of cost efficiency or need to provide access to learners in settings where face-to-face instruction is not feasible. The question of the relative efficacy of online and face-to-face instruction needs to be revisited, however, in light of today's online learning applications, which can take advantage of a wide range of Web resources, including not only multimedia but also Web-based applications and new collaboration technologies."
The U.S. Department of Education's report, "Evaluation of Evidence-Based Practices in Online Learning: A Meta-Analysis and Review of Online Learning Studies" (2009), provides a summary of a literature search of more than a thousand empirical studies of online learning published from 1996 through July 2008. Analysis of these studies found that "on average, students in online learning conditions performed better than those receiving face-to-face instruction."
As a publication of the U.S. government, the report is in the public domain; authorization to reproduce this report in whole or in part is granted.