From the Bloomberg article:
Apollo Global Management Inc. is known for its no-holds-barred deal making. But not long ago, the private equity firm pitched itself to pension funds and other wealthy institutions as an emerging force in "impact" investing, the movement to make money while also turning the world into a better place.
Apollo says it has put the U. of Phoenix's bad practices behind it. It cites a drop in student loan default rates, which are better than the national average for for-profit schools and only a bit above the average for all schools. Apollo says the college installed new management, invested more than $600 million in technology to support students, and eliminated 80 associate degree programs, which has poor records for job placement or improving students' earnings. It cut marketing spending to focus more on student retention, which Apollo says has improved.
But, there is a reason to be skeptical of buyout funds as stewards of higher ed. Based on data from before the U. of Phoenix sale, a 2020 study by Assistant Professor of Sociology, Charlie Eaton, and other researchers from University of California at Merced and other schools found private equity ownership led to declining graduation rates and greater levels of student debt at for-profit colleges.
More than 3,000 consumers have complained to the Federal Trade Commission about the U. of Phoenix since the 2017, acquisition, according to data released under the U.S. Freedom of Information Act. Their grievances include harassing sales calls and emails, being shortchanged on federal financial aid, and getting pushed to sign up for unnecessary classes. Apollo says many of the complaints are from students who began or completed their studies before the change in ownership. Some complaints are from military personnel and veterans, long a big source of students for the U. of Phoenix.
The Biden administration has indicated it may renew a crackdown on for-profits, and traditional colleges are competing with beefed-up online offerings. It may not matter much for Apollo, given the value it's already reaped from the deal.
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