Company Overview: The company provides online and on-campus post-secondary education geared primarily towards working adults. Its flagship institution, University of Phoenix, has an alumni network of 700,000 people. Founded in 1973 by John Sperling, it has grown to become the world’s largest private education provider. It offers undergraduate, master’s and doctoral degrees in numerous fields. In 2007, it formed a joint venture with the Carlyle Group to expand its market internationally. The goal was to utilize e-learning to educate the masses in the developing world, where the number of post-secondary institutions is not able to meet demand. The current CEO of the company is Gregory W. Cappelli. Dr. Sperling still serves on the Board as Executive Chairman.

Current Issues: 1. Public perception about proprietary education providers and, more specifically, online learning. Due to the inconsistent quality of education provided by different proprietary schools, the overall image and reputation of the industry is not that great. These for-profit institutions are often viewed as diploma mills. Here are some comments I’ve personally heard about them: “They’ll graduate anyone that can afford to pay the tuition” and “the quality of education that you receive is inferior to a traditional university”. Similarly for online programs, regardless of whether they’re from a profit or non-profit institution, many people don’t feel that they provide the same interaction as a brick and mortar school and therefore you don’t get the full learning experience. 2. High dropout rate. The industry is prone to a high level of student dropouts. Students start a degree program without fully understanding the time commitment that is involved. The acceptance rate at proprietary schools is almost 100% so just about anyone can get in. Also, anyone who is a US citizen or resident can qualify