Earlier this month, Business Insider reported that Apollo Education Group, the for-profit education company that operates the University of Phoenix, “is getting destroyed” on the stock market.
Dawn Bilodeau, Chief of the Defense Department’s Voluntary Education Program, had released the following statement: “The institution will not be authorized access to DoD installations for the purposes of participating in any recruitment-type activities. Further, no new or transfer students at the institution will be permitted to receive DoD tuition assistance.” She did add, however, that the enrollment of continuing students will not be affected, at least for now.
In response to this decision, Apollo attempted to downplay the situation, asserting that the Department of Defense had “put it on probation for using its logos without permission and holding events on military installations without the proper clearance.”
Technically, that statement is true.
But, very clearly, investors have taken the decision by the Department of Defense as a signal that the federal government is continuing to tighten the screws on an institution that has not only accounted for more student-loan debt than any other college or university but that has relied almost exclusively on student loans for its revenue. It has routinely reported that its annual revenue from federal student aid has been just below the permissible maximum of 90% of its total revenues.
Over this past year, the stock price for Apollo Education Group has been declining even more dramatically than its enrollment, which has declined by somewhere between one-half to two-thirds over the last several years.
I think that it is worth pointing out the obvious, yet again. Those who tout the benefits of privatization almost always assert that private corporations can do things more effectively and efficiently than public institutions. But what is becoming clear from the performance of the for-profit colleges and universities, the charter schools, and the privatized prisons is that the corporations that are sucking huge profits from public revenues have, with a startling uniformity, failed to deliver on the results that their advocates have so confidently promised.