University of Phoenix

University of Phoenix, for-profit institution of higher learning based in Phoenix, Arizona, that offers classes primarily online. One of the largest universities of its kind in the United States, it spurred the rise of for-profit postsecondary schools in the late 1990s. It is owned by Apollo Education Group, Inc.

The University of Phoenix was founded as a brick-and-mortar institution in 1976 by John Sperling, who sought to make higher education more accessible to working adult students. To that end, he stipulated that enrollees be at least 23 years old and have both work experience and some college credit; the university eventually changed its requirements to allow anyone with a high-school diploma or equivalent to attend. After a lacklustre start—it had only eight students when classes were first held in 1977—Phoenix was accredited in 1978, and two years later it opened a campus in San Jose, California. In 1989 Phoenix began offering an online program, which became the school’s main focus.

While the University of Phoenix enjoyed steady growth, it entered a period of dramatic expansion in 1994, when the parent company—Apollo Education Group, which had also been founded by Sperling—went public and brought a large influx of money into the university. According to Apollo, in 2000 the school’s enrollment was more than 100,000, and in 2010 it had risen to almost 600,000; other sources, however, gave the latter figure as 450,000–470,000. The largest for-profit school in the United States, Phoenix was also one of the country’s biggest university systems. In addition to its online program, it operated more than 200 campuses and learning centres worldwide, with its first foreign campus opening in Vancouver in 1998. The university offered instruction within eight colleges and schools—including business, education, health professions, and social sciences—and it granted associate’s, bachelor’s, and master’s degrees as well as doctorates.

The university’s success spurred the growth of for-profit schools in the late 1990s, and they became a major force in postsecondary education. However, the sector soon came under scrutiny, especially from the U.S. government, which provided most of the schools’ funds; it was estimated that some 85 percent of Phoenix’s revenue was from federal student loan programs. Critics noted that students attending for-profit schools—who were often poor or veterans—typically carried more debt than those in nonprofit institutions, and they had the highest rate of student loan defaults. In addition, those attending for-profit schools had higher drop-out rates; in 2008 only 9 percent of first-time full-time students seeking a bachelor’s degree at Phoenix graduated in six years.

After 2010 the university saw its enrollment steadily decline, dropping to some 200,000 students in 2015, and during that same period it reduced its locations to approximately 100 campuses in the United States and Puerto Rico. In 2015 the Federal Trade Commission (FTC) began investigating the school for deceptive business and marketing practices. This was followed by a further decrease in enrollment, resulting in the university having fewer than 140,000 students in 2017, the same year that the sale of Apollo Education Group, Inc., to a private investment group was finalized. The FTC investigation ended in 2019 after Phoenix agreed to pay a $50 million fine and cancel more than $140 million in student debts. During this time, enrollment continued to fall, and the university closed its remaining campuses except for the one located in Phoenix.