We see phenomena pop up, burn brightly and then disappear. People like to point to this in business and laugh over Pets.com and the like, but those groups are memorable because of the lunacy involved. It is common to see giant phenoms explode in size, overreach, and then be sliced back in scale to a long term natural size. Capital demands it, so capital can skew institutions but also reveal their flaws.
Look at what happened to the University of Phoenix (UP). After taking the for-profit university model to a nationwide network that became an SNL punchline, UP’s parent company saw the stock zoom to nearly triple digits. It now has gone private at a staggeringly low price of $10/share. Its parent company years later still reports shrinking revenues. Revenue is still a concern due to cratering student enrollment. The problem going forward is enrollment in the face of fewer American teenagers, but this did not purely go private due to a reorganization push.
When UP’s parent firm went public, it was all fun and games as money poured in to catch that sweet secular boom in college enrollment. UP used a valiant pitch to normies to justify its existence, “use the web to make college accessible for all” while behaving like a boiler room for real estate or penny stock sales. Their boiler room tactics were applied to potential students.
They compensated their enrollers on how many people they sucked into UP. Once enrolled, they would explain how much a student qualified for loans without matching it up to what they actually needed for that semester or their course load. This was all just using the students as a conduit for UP to suck off the government teat. Walmart and McDonald’s use the EBT underclass as nationwide conduit for a transfer of wealth. UP was doing the very same but with nondischargeable debt. It is far more devious than Walmart of MickeyDs because of this.
UP’s trajectory actually revealed the con of all of education as it stands today. Criticism of UP was they were not totally honest with students about courses, about the education process, about debt and about their potential job prospects. These criticisms can be leveled at traditional universities but no one did so because the media-academia complex is one team. One criticism of UP was that they did not care about graduation or completion rates. Check the graduation rates of community colleges, HBCUs and even second tier state schools. It’s similar.
The problem for UP was that they threatened the traditional system, which right now outside of STEM is nothing but certificates to get white collar jobs. The good life as a Boomer would put it was all college was resting on, and that my friends is a slender reed. Whether UP was being devious or not, it was only a matter of time before the media would attack for-profit universities, for regulatory regimes to start pressing them and for universities to offer the same online experience, albeit at a much more expensive price tag.
This privatization was more to avoid the rules and regulations that come with being a publicly traded firm. It will also take the firm out of the media spotlight as well. As far as a turnaround, UP has laid off half of its staff at privatization and continues shedding employees. Cost cutting has been going into effect already, so now it is adjusting the firm to a lower enrollment that is not reliant on getting the absolute fringe marginal student. UP will exist and continue but in a smaller form with less visibility. They need to retrench and forget that marginal student that is just the next body in the door.
They will leave that student to the government protected university cartel with its media salesmen. C’mon, don’t be a loser, go to university. Don’t you want the good life?