This phoenix rises not from ashes but from need

New Mexico Business Journal, April, 1995 by Tim McGivern

The University of Phoenix is, of course, in Phoenix, but it is also in Albuquerque, Santa Fe, Los Alamos, Santa Teresa and six states. It offers degrees and makes money, too.

When people think of booming business in New Mexico, industries such as food and lodging services, high tech, construction and government research and defense contracts are the usual suspects.

However, judging by the University of Phoenix's rapid growth across the state, perhaps education should be added to the list. The way Phoenix does it, education is surely a profit-making business.

"There is a high need for what we do and not a whole lot of competition - we're growing faster than we can keep up," says Brian Mueller, vice president and director of the University of Phoenix in New Mexico. "Like most businesses, we realize that for us to be successful, rather than have customers come to us, we've got to take our program offerings to customers." Notice he said "customers," not "students."

By designing curriculum that meets an increasing need for bachelor's and master's degrees among working professionals, Phoenix has adapted to market demands and encountered few obstacles along the way. And there's another decidedly nonacademic term: "market demands."

Since the Albuquerque main campus opened in 1985 with 52 students, more than a thousand students from New Mexico have graduated with degrees in subjects such as business administration, accounting, finance, marketing, and nursing. Some 950 are currently enrolled statewide (including classroom facilities at Kirtland Air Force Base), and the number projects beyond 1,000 by next year.

Another satellite campus opened in Santa Fe in 1990 with 35 students by the end of the first year, and classes were offered in Los Alamos almost immediately. Combined enrollment in 1994 is 170. In August yet another facility opened in Santa Teresa to serve the Las Cruces-El Paso area and has enrolled more than 150 students. And another branch is in the works for the Farmington area and will open some time in 1995.

An Accredited School. Rapid growth has defined Phoenix's operation since it received accreditation in 1978 from the Commission on Institutions of Higher Education of the North Central Association of Colleges and Schools - the same system that certifies the University of Arizona and the University of New Mexico among others.

The university first opened its doors in Phoenix and rapidly spread across Arizona and then into other states. Presently the University registers 18,000 students and operates campuses in Colorado, Nevada, California, Utah, Hawaii and Puerto Rico, in addition to New Mexico and Arizona. That enrollment makes Phoenix the 12th largest private institution in the country.

As evidence for their aggressive financial goals, Apollo Group, Inc. - the parent company - filed an initial public stock offering. The IPO shows the company, listed with NASDAQ, (symbol: APOL) hopes to sell 3.2 million shares of Class A common stock by early this year. The stock has been fluctuating between $11 and $13 a share since December.

The IPO also reveals that from August 1990 to August 1994, Apollo's annual revenues increased from $53 million to $125 million and net income moved from a $440,000 loss to a $4.9 million profit. And they say there's no money to be made in education.

Founder Is in Control. The founder of Apollo Group is John Sperling who, with his son Peter, an Apollo vice president, run the company. The eider Sperling holds a Ph.D in economics from Cambridge University in England and was a faculty member at San Jose State University in the 60s before establishing Phoenix. He continues to own more than 80 percent of the Class-B voting shares and 60 percent of the Class-A shares with his son.

Although Phoenix has its critics who view them as nontraditional in some of its educational methods, a number of schools are beginning to follow its educatioual model to maximize revenues. The ostensibly new trends of creating training programs for corporations, designing programs exclusively for working professionals, and offering correspondence courses on the internet are approaches Phoenix has been using for years.

In January the University of New Mexico began a B.B.A. "Fast Track" program that offers only night classes off-campus at the Continuing Education Center in Albuquerque. The class is structured for adults who work during normal business hours, but already have completed two years general coursework.

"Business community leaders have asked us to respond to working students' needs, and the provost was able to provide funding," says Jacqueline Hood, associate dean at UNM's Anderson School of Management. "We want to provide service of education to the New Mexico public; Phoenix's role is to make money. I see that as radically different."

Although UNM's program, like Phoenix's, will hold classes only at night, UNM's 3 credit-hour course requires 40 hours of in-class learning over an eight-week period; Phoenix requires 20 hours in-class over a five-week period to earn 3 credits.