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California Association of Private Postsecondary Schools

Education Department Will Examine Apollo Group's Student-Aid Verification

06/28/2012

The Chronicle of Higher Education - June 27, 2012 - by Julia Love

The Education Department will conduct a review of the University of Phoenix to make sure that it complied with federal financial-aid rules requiring colleges to verify data supplied by students.

The review was disclosed by the Apollo Group, which owns the University of Phoenix, in a filing on Wednesday with the U.S. Securities and Exchange Commission. The University of Phoenix serves about 346,000 students nationwide.

Starting July 16, the department will review the university's reporting for the 2010-11 award year, as well as the information for 2011-12 that has been reported so far.

An initial analysis by the Education Department of the university's reporting for the 2010-11 award year indicated that the Phoenix had misreported so-called "status codes."

After students submit the Free Application for Federal Student Aid form, the Education Department's central processing system flags certain applications for verification. Universities must then get additional documentation from those students to confirm that the information supplied is accurate. Once the information has been verified, universities change a code on the application that indicates that status.

Per federal regulations, universities are legally obliged to verify student-provided information before awarding student aid.

"The verification process helps ensure the integrity of the aid programs, and that only eligible students are receiving the aid," said Deborah F. Cochrane, a program director at the Institute for College Access and Success, a nonprofit group that conducts higher-education research and advocacy.

For-profit colleges have been scrutinized in recent years for their rates of students who find gainful employment and for their high levels of student debt, and the Obama administration has tightened regulations on the sector. After years of explosive growth, enrollment at many for-profits is declining. The colleges must meet federal guidelines to continue receiving financial aid.

"As always, we're committed to working with the Department of Education and complying with any and all regulations," said Richard P. Castellano, Apollo's director of public affairs.

The Department of Education did not return calls seeking comment.