Education reform targeting loan practices at for-profit universities has prompted changes in online university enrollment policies, but not many of the waves generated have affected corporate learning programs.
Last November, the U.S. Department of Education established rules to prevent students at for-profit colleges from defaulting on their loans. According to the Department of Education, students at for-profit institutions represent 11 percent of all higher education students, 26 percent of all student loans, and 43 percent of all loan defaulters. The reform will cut off federal aid to for-profit universities whose students are unable to pay their loans within a 10-year period, and the repayment cannot exceed 8 percent of their starting salaries.
In response to reforms, the University of Phoenix began giving a three-week test drive called Univ 101 at no cost to the students so those with fewer than 24 credit hours could get a feel for the university. If the students do not perform well in the trial, they are allowed to retry, but if their second try is not successful, they will not be admitted. “That was a big, big shift for us because for the first time we’re going to turn a student away and say you tried, you tried it a second time — it didn’t work,” said Bob Beeman, vice president for workforce solutions for the University Of Phoenix.
The university also began monitoring call centers for keywords to make sure sales representatives accurately portray the organization. “[The reform] was a good thing for the industry because there were some practices out there that were questionable,” Beeman said. “When you have thousands of enrollment advisers, there is a certain amount of training, a certain amount of oversight.”
Talk of questionable recruiting practices did affect the university’s corporate relationships. Beeman said one company cut ties, but most chose to remain partners despite media scrutiny as the school worked to institute reforms.
“We heard from a lot of partners, ‘We know what University of Phoenix is about and we know you and we trust you,’” said Alex Clark, the university’s vice president of public affairs. He said the school will continue to cooperate with the attorney general of any state looking to investigate its practices.
From a partnership perspective, Beeman said, it’s hard to get trust and easy to lose it, but the university tries to keep communication lines open.
“We spend an awful lot of time with our clients just listening,” Beeman said. “The point of that is to build a relationship. Our approach is not to go in and try and get them to be the sole source provider for the University of Phoenix. We know our modality, our structure, our brand. Some folks will be attracted to that and some folks will have a different opinion. So, on the very front end we listen and build a relationship. We’re after a partnership, not a vendor relationship.”
Ultimately, any online university’s purpose is to educate students, many of whom are working adults. “Our employee population told us online universities were an attractive option to them because they’re interested in continuing their education, but it allows them to do it in an environment that is convenient for their schedules,” said Rich Cordivari, vice president of learning and development for AlliedBarton Security Services.
AlliedBarton has partnerships with the University of Phoenix, DeVry University, Capella University and American International University. When it came to choosing partners, Cordivari said reform and the issues surrounding it were part of the decision process. However, the interpersonal part of the relationship was key. Positive feedback from employees was just as important.
“It’s a bit of [a] leap of faith, I understand,” Cordivari said. “As the person signing the contract I’m responsible for the end result. To a degree you put your neck on the line, and I wouldn’t have done that if I didn’t trust them to a degree.”
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