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By Dennis McCafferty TechCapital Writer Thursday, September 10, 1998; Page D07 Horace Greeley's age-old advice for success is turned on its ear in Arizona. Instead of "Go West, young man" the message at the University of Phoenix is "Go East." Specifically, go east to the nation's capital to offer undergraduate and post-graduate courses in business management and many areas of technology. And add "quickly" to the message. The school expects to have its first classrooms open and courses underway by January 1999, in either suburban Washington or suburban Baltimore. Other locations will follow throughout Virginia. But don't expect a campus. Why get trapped in the trappings of traditional academia? Instead, the nontraditional school will exclusively target adult students with full-time jobs. To create courses, school officials ask employers how their workers could benefit by returning to the classroom. Then the university recruits at those businesses. As soon as 15 students sign up, school is in session. "We move faster, absolutely," says Charles M. Seigel, the university's vice president of national affairs. "We're a for-profit company. We have a whole different outlook." Instead of traditional tenured professors with little experience in the business world, University of Phoenix instructors are full-time professionals who practice what they teach every day. Classes are taught in leased office buildings and the library is online. Courses are held one night a week for four hours. The contrast to the norm in the academic world prompted nearly a dozen Maryland colleges and universities to raise objections when Phoenix U. successfully sought state approval in the spring, but the clamor has since died down. "Maryland schools are doing a good job," says Todd Nelson, 39, who, as president of Apollo Group Inc., oversees more than 110 campuses and learning centers in 32 states, Puerto Rico and London, under the University of Phoenix and other educational subsidiaries. "But there's enough of a need that's not being met. Especially for what we do." Sometimes, the need isn't a call for more techie stuff but a plea for better communications skills, Nelson says. "Employers want their employees to get out and actually talk to the guy next to them without getting into a fight." Business management and technology are the university's bread and butter — 70 percent of students work in information technology-related fields as employees or managers. Undergraduate degrees cover information systems and marketing; graduate programs include an MBA in technology management and a master of science in computer information systems. (More information is available at www.uophx.edu.) Students have come from the likes of Oracle, AT&T and Microsoft. Unlike a Wharton School or other traditional graduate institution, the University of Phoenix downplays theory in favor of nuts-and-bolts practical applications. The school's primary constituency is a work force looking to advance from the job they have — say, the year 2000 date code correction programmer who'd rather be designing and overseeing the company's entire year 2000 game plan. Or the mid-level manager looking to move up from within, or take a leap with his own ideas. One US West employee wrote about buying and selling cellular air time for his business thesis and ended up using it to launch his own company. The abundance of professional students leads to unusual dynamics. They aren't likely to cut class. In fact, if a professor cuts a session short, the students are likely on the phone the next day complaining that they want their money's worth. For the University of Phoenix, first accredited in 1978, this nontraditional approach is powering fast growth. In 1993, it had just under 25,000 degree-seeking students. By May of this year, there were more than 56,000. The online classes are a popular option, with Web-linked students totaling 5,000 now, up from 1,500 five years ago. Online is the future, university officials say, with the connected student body growing at 50 percent a year compared to the 20 percent growth seen in face-to-face classes. "What's driving this school is the pace of change in technology," says Terri Hedegaard, the university's vice president of distance learning. "This is driving adults back into the education market. These adults are technology-savvy and they want options that will give them flexibility. They frequently travel, so they can't connect to campus-based programs." Online classes reduce real estate costs and can prompt higher profit margins. But the class size can be smaller — a course offering needs a threshold of 10 students to open for business instead of the 15 for a normal class setting. Wall Street definitely likes the approach. University of Phoenix parent Apollo Group Inc. went public on Nasdaq Dec. 6, 1994, at a split-adjusted price of $1.63 a share — and was recently selling at just over $33. In 1997, the company netted an estimated $33.4 million on revenues of $283.3 million, compared to a net of $1.14 million on revenues of $97.5 million in 1993. University officials are now considering opening additional classroom clusters in Northern Virginia, D.C., Richmond and perhaps Virginia's Tidewater area. They talk of having all intended campuses in place before 1999 is over. Reid Miles, a managing director at the venture capital firm Blue Water Capital in McLean, Va., says if the university grows as fast as Nelson envisions, it will fill a vast need in the region. "Certainly, in the technology community, you have a growing base of professionals who will benefit from that training," says Miles, who is also on the board of New York-based Technology Education Network, a distance-learning, business-to-business training company. "This has been a significant factor in the growth of venture capital in the New England and West Coast areas." And local academia? In Maryland, acceptance is slowly sinking in. In April, George Marx, vice chancellor for the university system of Maryland's 13 state institutions tersely described the University of Phoenix with less than collegial words. Today, he perceives a somewhat more open-minded community of educators. "Because of the new technology, there's a great deal of crossing of territories through the Internet," he says. Traditional academic structures "are less important than the general accreditation for the university." Which has never slowed down the University of Phoenix. "We're coming," says Nelson, sending a gentle but clear signal, "and we're going to be a good neighbor."
© Copyright 1998 The Washington Post Company |
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