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For-profit colleges respond to increased scrutiny

ST. LOUIS (AP) — They gather in a generic suburban office park, working-class students chasing a fast track to success: a college degree.

But the message at the University of Phoenix orientation is not quite what these secretaries, mental health aides, working moms and single dads expect.

"We want you to decide if this is right for you," says Sam Fitzgerald, director of academic affairs at the school's four St. Louis campuses. "We're here to help you figure it out."

That candor would have been anathema not too long ago in the lucrative world of for-profit colleges, where recruiters received hefty bonuses and often oversold career prospects.

Yet these are new times for the industry that now accommodates one in every eight American college students, either in class or online. Lawmakers in Congress are probing its excesses, from high loan default rates to reports of exploitative sales pitches to wounded veterans.

The Obama administration in June unveiled new rules that could cut off government aid for programs where too few students repay their loans or acquire decent-paying jobs. Disenchantment — and lawsuits — continue among both former students and skittish investors.

"They have a huge bulls-eye on them," said Kevin Kinser, an associate professor at the State University of New York at Albany who studies the industry. "They can't risk business as usual anymore."

The for-profit industry, which prefers the term "career colleges" or "proprietary" schools, grew rapidly over the last decade amid renewed calls to increase the nation's college graduation rate and a need to help laid-off workers find new careers. The private sector's slice of federal aid money grew from $4.6 billion to more than $26 billion between 2000 and 2010.

Now, the industry will see if it can still make healthy profits from its challenging demographic __ low income workers, older students and those with spotty academic backgrounds— while being much more accountable for its results.

The changes are most apparent at the University of Phoenix and its corporate parent, Apollo Group Inc., which, with nearly 400,000 students, ranks atop the industry.

The school has created its own social network, PhoenixConnect, to better link its far-flung students as well as 600,000 alumni who could help those students and graduates find jobs. It boasts of new alumni association chapters, hundreds of student clubs and mentorship programs.

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