University of Phoenix Plans To Go Public
Credit: Jorge Villalba / iStock Unreleased / Getty Images- The University of Phoenix is a for-profit company, meaning alongside education, it prioritizes making a profit.
- The university said it will prioritize long-term student outcomes over short-term investor interest.
- Since 2017, the university has improved student satisfaction, retention, loan default rates, and six-year graduation rates, according to documents submitted for its initial public offering filing.
The company that owns the University of Phoenix wants to take the for-profit college public.
Online learning provider Phoenix Education Partners filed for an initial public offering in the United States on Aug. 29. The company provides online programs for working adults in the U.S. through its subsidiary, the University of Phoenix.
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University of Phoenix President Chris Lynne said in a letter included in the filing that he believes this is the next step in providing accessible, high-quality education.
“We believe the steps we’ve taken have positioned the University of Phoenix for a bright future, and we are excited about the next chapter of our journey as we continue to transform lives through accessible, high-quality education,” Lynne said.
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Students’ Success Remains Priority
Founded in 1976, the private, for-profit University of Phoenix is one of the largest online education providers with some 72 undergraduate and graduate degree programs.
Even though publicly traded companies have obligations to their shareholders, the institution indicated in the Risk Factors section of the filing that its strategy is to prioritize positive student outcomes and the long-term success of students over the short-term interests of stockholders.
“We believe this focus on student outcomes and success will benefit the university in the long-term,” the filing states.
“However, these anticipated long-term benefits may be slow to materialize or may not materialize at all. Our student-centric approach may have an adverse impact on our operational and financial performance and negatively impact our stock price.”
The university’s financial performance depends on its ability to enroll and retain students, the filing states.
Among the listed factors that could hurt students are a decrease in the economic benefits derived from degree programs, low pass rates for professional licenses, and employer dissatisfaction with the quality of students completing degree programs.
Federal Funding a Potential Risk for Investors in For-Profit College
The university also warned its potential shareholders of the risks of investing in a highly regulated industry, including profit limits by the “90/10” rule, student outcomes, loan defaulting, and misrepresentative advertising tactics.
Higher education institutions must abide by the “90/10” rule to qualify for federal financial aid.
This rule means that the university must not derive more than 90% of its cash basis revenue for two consecutive years from Title IV programs or other federal financial aid programs like military tuition assistance and veterans’ education benefits.
Under President Donald Trump’s One Big Beautiful Bill, the university could also lose access to federal financial aid if graduates don’t meet minimum postgraduation earnings, according to the filing.
Under the sweeping new accountability measure, the Department of Education (ED) can cut off access to federal student loans for undergraduate degree programs that fail to lead to earnings better than the median pay of a working adult with just a high school diploma. Graduate programs must lead to earnings equal to the typical worker with a bachelor’s degree in the same field of study.