by Diane Ravitch, 2/10/16
A group of investors with close ties to the Obama administration have taken control of the University of Phoenix and other for-profit “universities.”
“The troubled for-profit education company that owns the giant University of Phoenix agreed on Monday to be bought for $1.1 billion by a group of investors that includes a private equity firm with close ties to the Obama administration.
“The university and its owner, the Apollo Education Group, have been subject to a series of state and federal investigations into allegations of shady recruiting, deceptive advertising and questionable financial aid practices.
“In recent years, many for-profit educational institutions that have received billions of dollars in federal aid, including the University of Phoenix, have been pummeled by criticisms that they preyed upon veterans and low-income students, saddling them with outsize student loan debt and subpar instruction.
“Moreover, at many of these schools, enrollment has been falling and profits shrinking, casting doubt on the future health of the industry.
“The investors in the Apollo Education Group include the Chicago-based investment firm Vistria Group, the Phoenix-based Najafi Companies, and funds affiliated with Apollo Global Management, which is not connected to the Apollo Education Group….
“Vistria’s founder is Marty Nesbitt, one of President Obama’s closest friends and the chairman of the Obama Foundation. Mr. Nesbitt is also a longtime business partner of Penny Pritzker, the commerce secretary.
“A Vistria partner and its chief operating officer, Tony Miller, was deputy secretary of the United States Department of Education between 2009 and 2013. He has been tapped to become the new chairman of Apollo Education Group in August, when the deal is scheduled to be completed.”
If you watched the video of the congressional panel quizzing John King about the ethical “lapses” of Chief Information Officer Danny Harris, you may recall that King said that deputy secretary Miller had cleared Harris.
Now we understand why the for-profit higher education industry has gotten a free pass.