University of Phoenix, Oracle, and the Russian Cybercrime Crisis That Should Never Have Been Allowed to Happen

The University of Phoenix breach is more than another entry in the long list of attacks on higher education. It is the clearest evidence yet of how private equity, aging enterprise software, and institutional neglect have converged to create a catastrophic cybersecurity landscape across American colleges and universities. What happened in the summer of 2025 was not an unavoidable act of foreign aggression. It was the culmination of years of cost-cutting, inadequate oversight, and a misplaced faith in legacy vendors that no longer control their own risks.

The story begins with the Russian-speaking Clop cyber-extortion group, one of the most sophisticated data-theft organizations operating today. In early August, Clop quietly began exploiting a previously unknown vulnerability in Oracle’s E-Business Suite, a platform widely used for payroll, procurement, student employment, vendor relations, and financial aid administration. Oracle’s EBS system, decades old and deeply embedded across higher education, was never designed for modern threat environments. As soon as Clop identified the flaw—later assigned CVE-2025-61882—the group launched a coordinated campaign that compromised dozens of major institutions before Oracle even acknowledged the problem.

Among the most heavily affected institutions was the University of Phoenix. Attackers gained access to administrative systems and exfiltrated highly sensitive data: names, Social Security numbers, bank accounts, routing numbers, vendor records, and financial-aid related information belonging to students, faculty, staff, and contractors. The breach took place in August, but Phoenix did not disclose the incident until November 21, and only after Clop publicly listed the university on its extortion site. Even after forced disclosure, Phoenix offered only vague assurances about “unauthorized access” and refused to provide concrete numbers or a full accounting of what had been stolen.

Phoenix was not alone. Harvard University confirmed that Clop had stolen more than a terabyte of data from its Oracle systems. Dartmouth College acknowledged that personal and financial information for more than a thousand individuals had been accessed, though the total is almost certainly much higher. At the University of Pennsylvania, administrators said only that unauthorized access had occurred, declining to detail the scale. What links these incidents is not prestige, geography, or mission. It is dependency on Oracle’s aging administrative software and a sector-wide failure to adapt to a threat environment dominated by globally coordinated cybercrime operations.

But Phoenix stands apart from its peers because Phoenix, Apollo Global Management, and The Vistria Group should have known better. This institution has long operated at a scale more comparable to a financial-services company than a school. It handles vast volumes of sensitive data connected to federal student aid, identity verification, private loans, tuition reimbursement programs, and employer partnerships. A university with this profile should have been treating cybersecurity as a core institutional function, not an afterthought.

Apollo Global Management, which owned Phoenix during a period of enrollment decline and regulatory exposure, was fully aware of the vulnerabilities associated with online enrollment, financial-aid processing, and aging ERP infrastructure. Apollo’s business model is built on risk analysis and mitigation, yet it consistently underinvested in sustainable IT modernization while focusing on financial engineering and cost extraction. Phoenix emerged from Apollo’s ownership with significant technical debt and a compliance culture centered on limiting institutional liability rather than strengthening institutional defenses.

When The Vistria Group, through Phoenix Education Partners, acquired the university, it promised a new era of stability and digital transformation. Instead, it delivered a familiar private-equity formula: leaner operations, staff reductions, increased reliance on contractors, and deferred infrastructure investment. All of this occurred as ransomware groups such as Clop, LockBit, BlackCat, and Vice Society were escalating attacks on universities. The MOVEit crisis, the Accellion breach, and dozens of ransomware incidents had already demonstrated that higher education was an increasingly profitable target. Vistria had every signal necessary to understand the stakes, yet Phoenix entered the summer of 2025 with outdated Oracle systems, slow patch deployment, inadequate monitoring, and minimal segmentation between financial-aid and general administrative systems.

The breach was not a surprise. It was an inevitability. A university holding the sensitive financial and identity data of hundreds of thousands of current and former students, staff, and vendors cannot protect itself with minimal investment and outdated architecture. When Clop exploited Oracle’s flaw, Phoenix lacked the tools to detect lateral movement early, the expertise to identify unusual activity quickly, and the governance structure to respond decisively. The institution did not discover the breach on its own; it reacted only when a criminal syndicate announced its presence to the world.

This incident exposes a broader truth about higher education infrastructure in the United States. Universities have grown dependent on enterprise vendors whose systems are increasingly brittle and whose security models no longer meet contemporary requirements. Meanwhile, private-equity owners emphasize cost containment and short-term returns over long-term stability. The University of Phoenix breach is the result of those conditions converging with a global cybercrime ecosystem that is more organized, better funded, and more technically agile than the institutions it targets.

Students, faculty, staff, and vendors will bear the consequences for years. Many will face identity theft, fraudulent activity, and the lingering fear that their most sensitive information is circulating indefinitely on criminal marketplaces. Phoenix, like other affected institutions, will offer credit monitoring and generic assurances. But the public disclosures arrived too late, and the underlying failures were years in the making.

Phoenix should have known better.
Apollo Global Management should have known better.
The Vistria Group should have known better.
And American higher education should finally recognize that it can no longer treat cybersecurity as a line-item expense. It is now one of the central pillars of institutional survival.

Sources
Bleeping Computer
Security Affairs
The Register
CPO Magazine
The Record
University of Phoenix breach notifications
Clop leak site monitoring data

HEI Investigation: ED FOIA Digging Up Suspected FAFSA Fraud at the University of Phoenix

26-00809-F

The Higher Education Inquirer (HEI) is requesting:

1. All OIG investigations, reviews, case summaries, fraud-ring investigations, or closed case files (including referrals from Federal Student Aid) from January 1, 2008 to the present that involve or reference:

*the University of Phoenix (any campus or online division),

*Apollo Group, Apollo Education Group, or Phoenix Education Partners (PXED), or

*any individual or organized group that used the University of Phoenix to commit FAFSA fraud, including but not limited to identity theft, false FAFSA applications, fabricated enrollment for Title IV eligibility, Pell-runner schemes, or fraud connected to distance-education programs.

2. Any OIG audit reports, program reviews, draft findings, risk assessments, or internal memoranda from January 1, 2008 to the present that evaluate the vulnerability of the University of Phoenix to:

*FAFSA fraud

*Pell Grant fraud

*Title IV fraud rings

*identity-based financial aid fraud

*“Pell runner” activity

*online/distance-education fraud schemes linked to FAFSA misuse.

3. All institutional-level fraud-referral files, Student Aid Reports (SARs) flagged for suspected fraud, or records of suspicious-activity referrals submitted to OIG or generated internally by OIG relating to FAFSA fraud or suspected FAFSA manipulation at the University of Phoenix (January 1, 2008–present).

4. Any aggregate or institution-specific data summaries listing the number of FAFSA-related fraud referrals, confirmed FAFSA fraud cases, or Title IV fraud-ring participants associated with the University of Phoenix.

5. All communications between OIG and Federal Student Aid (FSA) from January 1, 2008 to the present that reference the University of Phoenix in connection with:

*FAFSA fraud

*Pell Grant fraud 

*fraud-ring activity

*suspected manipulation of federal aid eligibility, or abnormal application-risk patterns associated with University of Phoenix applicants

This request is limited to closed investigations and final reports to avoid any interference with ongoing law-enforcement matters. If portions of any records must be withheld, please release all reasonably segregable non-exempt material. (Date Range for Record Search: From 12/31/2008 To 12/04/2025)

Same Predators, New Logo: PXED — A $22 Billion Student‑Debt Gamble Investors Should Beware

Warning to Investors: Phoenix Education Partners (PXED) may present itself as a cutting‑edge solution in career-focused higher education, but it’s built on the same extractive infrastructure that powered the University of Phoenix. With nearly a million students still owing an estimated $22 billion in federal loans, backing PXED isn’t just a financial bet — it’s a moral and reputational risk.

PXED’s leadership includes powerful private-equity players: Martin H. Nesbitt (Co‑CEO of Vistria, PXED trustee, and friend of Barak Obama), Adnan Nisar (Vistria), and Theodore Kwon and Itai Wallach (Apollo Global Management). Also in the mix is Chris Lynne, PXED’s president and a former Phoenix CFO intimately familiar with UOP’s controversial enrollment and marketing strategies. These are not educational reformers — they are dealmakers aiming to extract value from a student-debt pipeline.

[Image: Power Player Marty Nesbitt]

Higher Education Inquirer’s College Meltdown Index highlights how PXED fits into a broader financialization of higher education. Rather than reforming the University of Phoenix, its backers have resurrected it under a new brand — one that continues to enroll vulnerable adult learners, harvest federal aid, and operate with considerably less public oversight. 

Whistleblowers previously documented that Phoenix pressured recruitment staff to falsify student credentials, enrolling people who wouldn’t otherwise qualify for federal aid. Courses were allegedly kept deliberately easy — not to teach, but to keep students “active” enough to trigger aid disbursements. Internal marketing also exaggerated job prospects and corporate partnerships (e.g., with Microsoft and AT&T) to entice students. 

PXED may lean on a three‑year default rate (often cited around 12–13%), but that number is deeply misleading. Many UOP students stay stuck in deferment, forbearance, or income-driven repayment, masking the real long-term risk of non-payment. This is not just a short-term liability — it’s a potentially massive, multiyear financial exposure for PXED’s backers.

There was a significant FTC settlement that canceled $141 million in student debt and refunded $50 million to some students. But the scale of harm far exceeds that payout. Untold numbers of borrowers still have unresolved Borrower Defense claims, and the reputational risk remains profound.

Beyond financial concerns, there’s a major ethical dimension. HEI’s Divestment from Predatory Education argument makes a compelling case that investing in companies like PXED — or in loan servicers that profit from student debt — is not just risky, but morally indefensible. According to HEI, institutional investors (including university endowments, pension funds, and foundations) are complicit in a system that monetizes students’ aspirations and perpetuates financial harm. 

For investors, the message is clear: Phoenix is not merely an education play — it’s a high-stakes, ethically fraught extraction machine built on a legacy of indebtedness and regulatory vulnerability.

Unless PXED commits to real transparency, independent reporting on student outcomes, and accountability mechanisms — including reparations or debt relief — it should be approached not as a social-growth story, but as a dangerous gamble.

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Sources

• HEI. “Divestment from Predatory Education Stocks: A Moral Imperative.” Higher Education Inquirer

• HEI. “The College Meltdown Index: Profiting from the Wreckage of American Higher Education.” Higher Education Inquirer

• HEI. “What Do the University of Phoenix and Risepoint Have in Common? The Answer Is a Compelling Story of Greed and Politics.” Higher Education Inquirer

• HEI. “University of Phoenix Uses ‘Sandwich Moms’ to Sell a Debt Trap.” Higher Education Inquirer

• HEI. “New Data Show Nearly a Million University of Phoenix Debtors Owe $21.6 Billion.” Higher Education

The College Meltdown Index: Profiting from the Wreckage of American Higher Education

“Education, once defended as a public good, now functions as a vehicle for private gain.”

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From Collapse to Contagion

The College Meltdown never truly ended—it evolved.

After a decade of spectacular for-profit implosions, the higher education sector has reconstituted itself around new instruments of profit: debt servicing, edtech speculation, and corporate “partnerships” that disguise privatization as innovation.

The College Meltdown Index—tracking a mix of education providers, servicers, and learning platforms—reveals a sector in quiet decay.

Legacy for-profits like National American University (NAUH) and Aspen Group (ASPU) trade at penny-stock levels, while Lincoln Educational (LINC) and Perdoceo (PRDO) stumble through cost-cutting cycles.

Even the supposed disruptors—Chegg (CHGG), Udemy (UDMY), and Coursera (COUR)—are faltering as user growth plateaus and AI reshapes their value proposition.

Meanwhile, SoFi (SOFI), Sallie Mae (SLM), and Maximus (MMS) thrive—not through learning, but through the management of debt.

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The Meltdown Graveyard

Below lies a sampling of the education sector’s ghost tickers—the silent casualties of a system that turned public trust into private loss.

Symbol	Institution	Status	Approx. Closure/Delisting
CLAS.U	Class Technologies	Defunct	2024
INST	Instructure (pre-acquisition)	Acquired by Thoma Bravo	2020
TWOUQ	2U, Inc.	Bankrupt	2025
CPLA	Capella University	Merged with Strayer (Strategic Ed.)	2018
ESI-OLD	ITT Technical Institute	Defunct	2016
EDMC	Education Management Corporation	Defunct	2018
COCO-OLD	Corinthian Colleges	Defunct	2015
APOL	Apollo Education Group (U. of Phoenix)	Taken Private	2017

Each ticker represents not only a failed business model—but a generation of indebted students.

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The Phoenix That Shouldn’t Have Risen

No institution better symbolizes this moral decay than the University of Phoenix and Phoenix Education Partners (PXED).

At its height, Phoenix enrolled nearly half a million students. By 2017, following federal investigations and mass defaults, Apollo Education Group—its parent company—collapsed under scrutiny.

But rather than disappearing, Phoenix was quietly resurrected through a private equity buyout led by Apollo Global Management, Vistria Group, and Najafi Companies.

Freed from public oversight, the university continued to enroll vulnerable adult learners, harvesting federal aid while shedding accountability.

In 2023, the University of Idaho’s proposed acquisition of Phoenix provoked national outrage, forcing state officials to confront a basic question: Should a public university absorb a for-profit brand built on exploitation?

The deal collapsed—but the temptation to monetize Phoenix’s infrastructure remains. In 2025, a small portion became publicly traded.  Its call centers and online systems remain models of enrollment efficiency, designed to extract just enough engagement to secure tuition payments.

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From Education to Extraction

The sector’s transformation reveals a deeper moral hazard.

If students succeed, investors profit.
If students fail, federal subsidies and servicer contracts ensure the money keeps flowing.

Executives face no downside. Shareholders are protected. The losses fall on students and taxpayers.

In this sense, the “meltdown” is not a market failure—it’s a market design.

“The winners are those who most efficiently extract value from hope.”

Public universities increasingly partner with private Online Program Managers (OPMs), leasing their brands to companies that control marketing, pricing, and student data. The once-clear line between public and for-profit education has blurred beyond recognition.

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The Quiet Winners of Collapse

A few companies continue to prosper by aligning with “practical” or “mission-safe” sectors:

• Adtalem (ATGE) in nursing and health education,

• Grand Canyon Education (LOPE) in faith-branded online degrees,

• Bright Horizons (BFAM) in corporate childcare and workforce training.

Yet all remain heavily dependent on public dollars and tax incentives. The state subsidizes their existence; the market collects the rewards.

Meanwhile, 2U’s bankruptcy leaves elite universities scrambling to explain how a publicly traded OPM, once championed as the future of online learning, could disintegrate overnight—taking with it a network of high-priced “nonprofit” certificate programs.

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A Reckoning Deferred

The College Meltdown Index exposes a system that has internalized its own failures.
Fraud has been replaced by financial engineering, transparency by outsourcing, and accountability by spin.

The real collapse is not in the market—but in moral logic. Education, once the cornerstone of social mobility, has become a speculative instrument traded between hedge funds and holding companies.

Until policymakers—and universities themselves—confront the ethics of profit in higher education, the meltdown will persist, slowly consuming what remains of the public good.

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“The real question is not whether the system will collapse, but who will rebuild it—and for whom.”

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Sources:

• Higher Education Inquirer, College Meltdown 2.0 Index (Nov. 2025)

• SEC Filings (2010–2025)

• U.S. Department of Education, Heightened Cash Monitoring Reports

• An American Sickness – Elisabeth Rosenthal

• The Goosestep – Upton Sinclair

• Medical Apartheid – Harriet A. Washington

• Body and Soul – Alondra Nelson

• The Immortal Life of Henrietta Lacks – Rebecca Skloot

BORROWERS AGAINST APOLLO EVENT, FRIDAY NOVEMBER 7TH, NEW YORK CITY (HELU, AAUP, AFT)

[Editor's Note: Readers can sign up for the event at BORROWERS AGAINST APOLLO.  Ensure that you click on "Switch account" to submit the form from your Google account.]

BORROWERS AGAINST APOLLO

WHO:  American Association of University Professors (AAUP), NYU AAUP, Higher Ed Labor Union (HELU), The Professional Staff Congress-  City University of New York (PSC-CUNY), NY Metro Coalition for Higher Ed,  Sunrise Movement,  Hands Off  NYC,  American Federation of Teachers (AFT) union, and student loan borrowers. 

WHEN: Friday - November 7 at 11AM

LOCATION: Apollo Global Headquarters - 9 West 57th Street, New York, NY 10019

QUESTIONS? ApolloAction25@gmail.com 

Higher Ed Unions, Student Unions, and For-Profit College Borrowers Unite Against Trump’s “Higher Education Compact”

Several higher education unions, student unions, and former students of for-profit colleges are organizing in opposition to the Trump administration’s proposed “higher education compact”—a plan heavily shaped and promoted by private-equity billionaire Marc Rowan.

Rowan, the CEO of Apollo Global Management, has played a central role in advancing this proposal. Apollo owns several predatory for-profit institutions, including the University of Phoenix, one of the most notorious offenders in the industry.

In a recent New York Times op-ed, Rowan took public credit for the compact, writing:

“The evidence is overwhelming: outrageous costs and prolonged indebtedness for students; poor outcomes, with too many students left unable to find meaningful work after graduating…”

Yet, under Rowan’s leadership, the University of Phoenix has become the largest source of Borrower Defense claims of any for-profit school, with more than 100,000 pending applications as of July 2025. Borrower Defense is a federal protection that allows students to seek loan forgiveness if their school misled them or violated state or federal law.

The University of Phoenix has faced multiple law enforcement investigations for deceptive recruiting tactics that targeted veterans, service members, and working adults nationwide. The school’s misconduct led to a $191 million settlement with the Federal Trade Commission for falsely claiming partnerships with major employers. More recently, the university attempted to portray itself as a public institution while seeking to sell to two states—both of which ultimately rejected the deal after public backlash.

While Rowan’s personal fortune exceeds $7 billion, borrowers continue to shoulder crushing debt from degrees that delivered little to no value. His leadership has fueled a system that profits from student harm—and now, through this compact, he is setting his sights on reshaping major public universities.

We refuse to stay silent. Borrowers, students, and educators are standing together to demand accountability and defend higher education from predatory perpetrators.

JOIN THE FIGHT AGAINST FOR-PROFIT COLLEGE GREED – NOVEMBER 7

The for-profit college industry has harmed countless students — and it’s time they hear directly from us. Join us outside Apollo Global Management Headquarters on Friday, November 7 at 11:00 a.m. to make your voice heard and demand accountability.

We’re calling on borrowers from for-profit schools who were misled or left in debt by this predatory system. Travel support may be available for anyone within train distance of New York City. We’ll provide shirts, posters, and everything you need to show up strong. (Apollo’s offices are about 20 minutes from Penn Station by subway.)

We’re also looking for University of Phoenix borrowers willing to speak publicly or to the press about their experiences. Additional travel assistance can be arranged for those coming from outside the NYC area.

If you’re ready to share your story and take a stand, reach out today. Together, we can show Apollo — and the entire for-profit college industry — that borrowers are not backing down.

CAN’T MAKE IT BUT WANT TO GET INVOLVED?

We’re always looking to connect with borrowers and allies. There are many ways to take part in this fight — from sharing your story and supporting organizing efforts to helping spread the word. Reach out to learn how you can get involved and join the movement for justice in higher education.

Todd S. Nelson: Massive Wealth Built on Soul-Crushing Student Loan Debt

Todd S. Nelson rose from academic beginnings—a B.S. from Brigham Young University and an MBA from the University of Nevada, Reno—to dominate the for-profit higher education space. Over nearly four decades, Nelson has amassed vast personal wealth leading University of Phoenix, Education Management Corporation (EDMC), and Perdoceo Education, even as each institution left embattled students and regulatory fallout in its wake.

Under Nelson’s leadership, Apollo Group (parent of University of Phoenix) mountains of revenue—$2.2 billion and over 300,000 students by 2006—coincided with a $41 million payday in that year alone. He resigned amid pressure over deceptive admissions practices.

Nelson’s move to EDMC in 2007 triggered another enrollment explosion—from 82,000 to over 160,000 students by 2011—propelled by federal student aid. Annual revenues reached nearly $2.8 billion, even as employees were alleged to be encouraged to enroll “anyone and everyone” to meet quotas. This aggressive focus on recruitment came with enormous personal compensation—approximately $13.1 million annually—while students endured mounting debt and dwindling outcomes.

A 2015 landmark settlement exposed EDMC’s alleged violations under the False Claims Act. The Justice Department accused the company of operating as a “recruitment mill,” illegally funneling federal funds through false certifications. EDMC agreed to pay $95.5 million in damages and forgive more than $102 million in student loans, affecting about 80,000 former students—averaging around $1,370 per student.Internal documents and court filings paint a grim picture: incentive-based pay for recruiters, breach of fiduciary duties, and a business model the trustee called “fundamentally fraudulent.”

Nelson’s chapter at Career Education Corporation (later Perdoceo) echoed the same script. Campuses shuttered, including Le Cordon Bleu and Sanford-Brown, left students stranded with untransferable credits—and yet Nelson’s compensation remained soaring. In 2019, he earned $7.4 million and held about $12 million in equity.

Whistleblower accounts from inside Perdoceo’s operations are damning. One former recruiter described pressure to enroll students “by any means necessary,” including coercive calls and emotional manipulation—often targeting vulnerable applicants with low income or lacking basic readiness. Despite those practices, Perdoceo reaped profits, with Nelson publicly touting revenue growth even as the Department of Education issued a formal notice in May 2021: thousands of borrower defense claims were pending against the company, alleging misrepresentations on credits, employment prospects, and accreditation.

Further regulatory investigations deepened through early 2022, focusing on recruiting, marketing, and financial aid practices—yet no executive accountability has followed.

The narrative that emerges is stark: Todd S. Nelson repeatedly led institutions to profit-fueled expansion using students’ federal dollars, while suppressing outcomes and exposing students to debilitating debt. Lawsuits, settlements, and investigative reports expose deceptive enrollment practices, false claims, and regulatory violations—but the executives—including Nelson—walk away with wealth and are rarely held personally responsible.

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Sources

• Wikipedia: Todd S. Nelson—compensation figures and resignation amid scrutiny.

• TribLIVE: Allegations of “anyone and everyone” being enrolled to meet quotas under Nelson’s reign at EDMC.

• Career Education Review: Insights on quality decline amid enrollment growth at EDMC and Perdoceo.

• Department of Justice and NASFAA: 2015 EDMC settlement—$95.5 million damages, $102 million in loan forgiveness for hundreds of thousands.

• Bankruptcy court filings: Allegations of fraudulent business model and incentive-driven recruitment.

• Republic Report & USA Today: Whistleblower testimony on Perdoceo’s predatory recruiting tactics.

Apollo Wants Investors to Buy Back the University of Phoenix. They Shouldn’t. (David Halperin)

Having failed to complete deals to sell the troubled giant for-profit University of Phoenix to major state universities in Arkansas and Idaho — after people in those states got cold feet — the school’s owner, private equity behemoth Apollo Global Management, just before the holiday weekend announced an initial public offering for the school. 

Phoenix’s parent company had been publicly traded until AGM and two other firms took the company private in 2017. Now they have gone back to Wall Street to re-sell the school to investors. 

But should investors want to buy this operation? The presence of the heavily-advertised University of Phoenix in the college market has been bad for U.S. students, taxpayers, and the economy, because it has led many students to enroll in a school that often deceives people, and often leaves students with heavy debts and without the careers they sought — when they could be using taxpayer support and their own money to enroll in better value programs. 

Moral and macro-economic concerns aside, it’s not even clear that buying Phoenix will be good for investor bottom lines. 

The University of Phoenix, which has received tens of billions from federal taxpayers for student grants and loans — at times more than $2 billion in a single year — has faced numerous law enforcement investigations and actions for its deceptive recruiting of veterans, military service members, and other students across the country.

Most notably, in 2019, Phoenix reached a record $191 million settlement with the Federal Trade Commission, which claimed the school had lured students with false claims about partnerships with major employers. Phoenix ran ads falsely indicating that the school had deals with companies including AT&T, Yahoo!, Microsoft, Twitter, and the American Red Cross to create job opportunities for its students and tailor school programs for such jobs, when that was not the case. The deceptive claim went to the heart of prospective students’ motivations for enrolling. Andrew Smith, then the Director of the FTC’s Bureau of Consumer Protection, said at the time of the agreement, “Students making important decisions about their education need the facts, not fantasy job opportunities that do not exist.”

And last year California’s attorney general reached a settlement with Phoenix to resolve allegations that the school’s aggressive recruitment tactics directed at military students violated consumer protection laws. 

The now almost entirely online school did a two-year dance with the University of Idaho that drew immense criticism from lawmakers, executive branch officials, newspaper editorial boards, and others in that state before the deal was finally called off in June.

Bloomberg reported earlier this year that an IPO might value the University of Phoenix operation, which had $810 million in revenue for 2023-24 (81 percent of that from federal taxpayer dollars), at $1.5 billion to $1.7 billion. And the new Trump administration has signaled in multiple ways that it is reducing protections for students against predatory college abuses, a development that may make investors more willing to buy a piece of a school like Phoenix.

But new federal legislation requires schools to provide some financial value for students. Also, state attorneys general, who have curbed and even slayed a number of for-profit giants over a decade, are watching; the media understands this issue, as it did not in the last wild west era fifteen years ago; and more potential students are wary after a generation of abuses.

So it may end up being much tougher to thrive in the predatory college business than some might think. 

David Halperin

Attorney and Counselor

Washington, DC  

[Editor's note: This article originally appeared on Republic Report.]

Pigs on Parade: The University of Phoenix IPO

Apollo Global Management and Vistria have an offer only a pig would consider: the Phoenix Education Partners IPO.

Touted by Morgan Stanley, Goldman Sachs, Bank of Montreal, Jefferies, and Apollo Global Securities, the offering of Phoenix Education Partners brings the University of Phoenix (PXED) back to public markets—but few fans remain in the audience.

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A Decade of Decline: From Expansion to Erosion

In the early 2000s, the University of Phoenix was hailed as a pioneering force in adult education—cozy campuses near freeway exits and an advanced online infrastructure for working learners earned praise. Its founder John Sperling was seen as visionary.

But by 2010 enrollment had already begun plummeting after reaching nearly 470,000 students, and the school’s academic quality and recruiting ethics were under the microscope. Critics decried “The Matrix,” a perverse scheme where recruiters were aggressively incentivized to push enrollments—no matter the cost.

By 2018, more than 450 locations had shuttered, enrollment was down by approximately 80%, and half the remaining sites were no longer accepting new students. Even Hawaii, Jersey City, Detroit, and other major cities were on the closure list.

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Regulatory Fallout: Lawsuits, Settlements, and Borrower Defenses

From the early 2010s onward, the University of Phoenix (aka UoPX) saw an avalanche of legal scrutiny. In 2019, the FTC leveled a $191 million settlement against it for misleading advertising, including deceptive claims about job placement and corporate partnerships.

By late 2023, 73,740 borrower-defense claims had been filed by former students under federal programs. Many of these were settled under the Sweet v. Cardona class action, with estimates of the university’s potential liability ranging from $200 million to over $1 billion. Meanwhile, nearly one million debtors owed a combined $21.6 billion in student loans—about $22,000 per borrower on average.

Another flashpoint: UoPX agreed to pay $4.5 million in 2024 to settle investigations by California’s Attorney General over military-targeted recruiting tactics.

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The Ownership Unicorn: Apollo, Vistria, and Political Backing

After Apollo Global Management and the Vistria Group acquired UoPX in 2016, the school became a commodified unit in a larger private equity portfolio. The deal brought in figures like Tony Miller, a political insider, as chairman—signaling strategic power play as much as financial management.

Vistria’s broader stable included Risepoint (previously Academic Partnerships), meaning both UoPX and OPM entities were controlled by one private-equity firm—drawing criticism for creating a “for-profit, online-education industrial complex.”

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The IPO Circus: “Pigs on Parade”

Enter the Phoenix Education Partners IPO (PXED), steered onto the market with all the pomp of a carnival but none of the substance. The front-line banks—Morgan Stanley, Goldman Sachs, BMO, Jefferies, Apollo Global Securities—are being paid handsomely to dress up this distressed asset as a growth opportunity.

But here’s what those colorful floats hide:

• Collapse, not comeback. Enrollment and campus infrastructure have withered.

• Debt, not opportunity. Nearly a million debt-laden alumni owe $21.6 billion.

• Liability, not credibility. Borrower defense claims and state investigations continue to mount.

• Profit, not public good. Ownership is consolidated in private equity with political access, not academic mission.

This is a pig in parade attire. Investors are being asked to cheer for ribbon-cutting and banners, while the mud-stained hooves of exploitative business models trudge behind.

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The HEI Verdict

This PXED IPO isn’t a pivot toward better education—it’s a rebrand of an exploitative legacy. From aggressive recruitment of vulnerable populations (“sandwich moms,” military servicemembers) to mounting legal liabilities, the University of Phoenix remains the same broken system.

Investors, regulators, and the public must not be dazzled by slick packaging. The real story is one of failed promises, students carrying lifelong debt, and private equity cashing out. In education, as in livestock, parades are meant to show off—just make sure you're not cheering at the wrong spectacle.

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Sources

• Higher Education Inquirer. Search: University of Phoenix

• Higher Education Inquirer. “The Slow-Motion Collapse of America’s Largest University” (2018)

• Higher Education Inquirer. “University of Phoenix Collapse Kept Quiet” (2019)

• Higher Education Inquirer. “Fraud Claims Against University of Phoenix” (2023)

• Higher Education Inquirer. “University of Phoenix Uses ‘Sandwich Moms’ in Recruiting” (2025)

• Higher Education Inquirer. “What Do the University of Phoenix and Risepoint Have in Common?” (2025)

• Federal Trade Commission. “FTC Obtains $191 Million Settlement from University of Phoenix” (2019)

• Sweet v. Cardona Settlement Documents (2022–2023)

• California Attorney General. “University of Phoenix to Pay $4.5 Million Over Deceptive Military Recruiting” (2024)

The Dirty World of Billionaire Leon Black and Jeffrey Epstein: Profits Over People

Leon Black, the billionaire co-founder and former chief executive officer of Apollo Global Management, maintained a financial relationship with convicted sex offender Jeffrey Epstein that lasted for years and ultimately contributed to Black’s resignation from the firm. Why should HEI be covering this old story?  Because the theme, of profits over people, is a major theme in the dirty world of business that permeates US higher education. 

Profits Over People

Apollo Global Management, the firm Black co-founded, is one of the world’s largest alternative asset managers, with hundreds of billions of dollars in assets under management across private equity, credit, and real estate. In 2016, Apollo, along with the Vistria Group and Najafi Companies, acquired Apollo Education Group, the parent company of the University of Phoenix, for over $1.1 billion. The University of Phoenix remains under the control of these owners and continues to operate as a for-profit institution.

Critics of private equity and venture capital in education argue that such firms are driven by short-term profitability rather than long-term institutional quality. This can lead to aggressive marketing, high tuition, cuts to faculty and staff, and diminished student outcomes. In the case of Apollo Global Management’s ownership of the University of Phoenix, concerns have persisted about the potential for cost-cutting and profit-maximizing strategies to undermine the educational mission. For-profit colleges owned by large investment firms have been accused in the past of prioritizing shareholder returns over student success, adding another layer to the public scrutiny of both Apollo and the institutions it controls.

Ties Between Leon Black and Jeffrey Epstein

Between 2012 and 2017, Black paid Jeffrey Epstein approximately $158 million for what he described as financial advice, including tax and estate planning services. A March 2025 report from the Senate Finance Committee revealed that the total amount transferred to Epstein was closer to $170 million, about $12 million more than previously disclosed. In 2023, Black agreed to pay $62.5 million to the U.S. Virgin Islands to settle claims that some of his payments to Epstein were used to support Epstein’s illicit operations. Black has said publicly that his association with Epstein was a “horrible mistake” and has emphasized that had he known more about Epstein’s criminal activities, he would have cut ties sooner.

Although Black has described his relationship with Jeffrey Epstein as limited, records show that Epstein became one of the original trustees of the Leon Black Family Foundation in 1997. Black also contributed a handwritten poem to a 2003 “50th birthday book” for Epstein, an item that included greetings from other prominent figures. In January 2021, following an independent review by the law firm Dechert LLP that detailed the payments to Epstein, Black announced that he would step down as CEO of Apollo Global Management.

Black has faced several legal challenges connected to allegations of sexual misconduct, many of which reference Epstein. In 2023, “Jane Doe” filed a lawsuit claiming she was assaulted by Black at Epstein’s Manhattan townhouse; in April 2025, her lawyers sought to withdraw from the case. In another case, accuser Cheri Pierson alleged rape but withdrew her lawsuit in early 2024. A separate suit filed by Guzel Ganieva, which accused Black of abuse and coercion involving Epstein, was dismissed in 2023. Black has consistently denied any wrongdoing.

Sources
Business Insider
The Daily Beast
ABC News
Wikipedia – Leon Black
Wikipedia – Apollo Global Management
EdSurge
Republic Report

EANGUS: Nonprofit Shill for University of Phoenix

The Enlisted Association of the National Guard of the United States (EANGUS), which claims to advocate for enlisted National Guard members, has long presented itself as a supporter of military families and career advancement. However, its ongoing partnership with for-profit institutions like the University of Phoenix raises serious questions about whose interests the organization truly serves.

On August 13, the University of Phoenix announced the winners of the 2025 EANGUS Future Phoenix Scholarship, which awards full tuition for bachelor’s or master’s programs to current enlisted National Guard servicemembers and their immediate family members. The winners—Nitasa Freund, Isabella Hunsicker, and John Wellington—were celebrated in press materials that emphasized the school’s commitment to veteran students.

University of Phoenix framed the scholarships as a way to “empower our members to turn their service-driven experience into academic achievement,” while EANGUS Executive Director John Gipe described the partnership as helping military members “step forward not just for the individual, but for the communities they continue to serve.”

But the reality behind these programs is far less altruistic. University of Phoenix, owned by the for-profit Apollo Global Management, has a long history of predatory recruitment practices targeting military and veteran populations. The school has faced multiple federal investigations and lawsuits over deceptive marketing, inflated job placement claims, and aggressive enrollment tactics that funnel servicemembers into costly, high-debt programs.

EANGUS’s role in promoting scholarships to the University of Phoenix illustrates how military associations can be co-opted by for-profit educational interests. By lending credibility and direct access to servicemembers, EANGUS effectively functions as a shill, steering military personnel and their families toward programs that often prioritize corporate profit over educational quality or genuine career outcomes.

Scholarship recipients’ stories, highlighted in University of Phoenix press materials, are framed as evidence of success. Nitasa Freund, a National Guard Staff Sergeant, is pursuing a master’s in criminal justice; John Wellington, a 101st Signal Battalion Company First Sergeant, is returning to higher education after decades of service; and Isabella Hunsicker is studying psychology. These narratives, while compelling, mask the broader systemic risks associated with enrolling in high-cost for-profit programs that may saddle veterans with unmanageable debt.

For an organization that claims to represent the interests of enlisted service members, EANGUS’s alignment with a for-profit education juggernaut raises ethical concerns. Military families seeking higher education deserve advocacy that prioritizes transparency, quality, and long-term outcomes—not promotion of institutions with a documented history of exploiting the very population they claim to serve.

As for-profit colleges continue to target veterans and military families, it is incumbent on military associations, watchdogs, and policymakers to scrutinize partnerships that appear charitable on the surface but may perpetuate financial harm behind the scenes. EANGUS’s ongoing collaboration with University of Phoenix is a stark reminder that even well-intentioned organizations can become complicit in corporate profiteering when oversight and accountability are lacking.

Sources:

• University of Phoenix Press Release, August 13, 2025

• EANGUS Official Website

• Apollo Global Management, University of Phoenix corporate information

• Government Accountability Office and Department of Education reports on for-profit colleges

University of Phoenix Uses “Sandwich Moms” to Sell a Debt Trap

In a recent blog post republished on LinkedIn, the University of Phoenix casts itself as a champion for the “sandwich generation” of working mothers—those who are simultaneously raising children and caring for aging parents. The post, co-branded with the lifestyle platform Motherly, portrays the for-profit university as a source of hope for exhausted, career-stalled caregivers. It offers empathy, statistics, and stories about resilience. But what it doesn’t offer is transparency about the financial harm the University of Phoenix has caused to hundreds of thousands of women just like them.

Behind the compassionate messaging is a decades-long record of exploitation, debt, and broken promises. According to data obtained through Freedom of Information Act requests and analyzed by the Higher Education Inquirer, nearly one million former University of Phoenix students owe a combined $21.6 billion in student loan debt. That includes many single mothers and caregivers who were targeted by Phoenix recruiters with promises of flexible degrees and life-changing job opportunities.

The average borrower carries more than $22,000 in federal student debt, and many have seen little to no return on that investment. Worse, tens of thousands of former students have filed Borrower Defense claims with the U.S. Department of Education, asserting that they were defrauded by the university. At least 19,000 of these claims have already been approved as part of the Sweet v. Cardona class action settlement. Phoenix was one of dozens of schools whose practices were deemed harmful enough to merit loan cancellation.

Despite this troubling history, the University of Phoenix continues to market itself as a solution to the very problems it helps perpetuate. The blog post in question focuses on how caregiving responsibilities are limiting women’s careers and how many moms are afraid to speak openly about their dual roles at work. These are serious and well-documented social issues. But the proposed solution—enrolling in a Phoenix program—too often leads to more financial pressure rather than less.

The Higher Education Inquirer has filed multiple FOIA requests related to the University of Phoenix and its pending acquisition by the University of Idaho through Apollo Global Management and the Vistria Group. These include documents related to the total student debt associated with the university, the volume and status of fraud claims, and protective provisions tied to federal liabilities. Taxpayers in Idaho may soon be responsible for this debt legacy, should the controversial acquisition proceed.

None of this is disclosed in Phoenix’s marketing materials. There is no mention of the $191 million settlement with the Federal Trade Commission for deceptive advertising. There is no reference to the school's declining enrollment, cratering reputation, or the tens of thousands of students who left without a degree. Instead, sandwich generation moms are offered inspiration and vague promises of career advancement through convenient online programs.

But convenience is no substitute for credibility. What mothers need are real systemic supports: paid family leave, affordable childcare and eldercare, union protections, and public investment in affordable education. They don’t need another layer of student loan debt imposed by a university with a well-documented record of exploiting their aspirations.

Phoenix’s message may resonate emotionally, but it is ultimately a predatory sales pitch disguised as empowerment. Until for-profit schools like Phoenix are held fully accountable—and until working families have access to genuine public alternatives—we must remain critical of marketing campaigns that prey on the vulnerable.

Sources
Higher Education Inquirer. “New Data Show Nearly a Million University of Phoenix Debtors Owe $21.6 Billion.” July 2024. https://www.highereducationinquirer.org/2024/07/new-data-show-nearly-million-university.html
Higher Education Inquirer. “Pending FOIAs Regarding the University of Phoenix.” December 2024. https://www.highereducationinquirer.org/2024/12/pending-foias-regarding-university-of.html
Federal Trade Commission. “University of Phoenix and Parent Company to Pay $191 Million to Settle FTC Charges.” December 2019. https://www.ftc.gov/news-events/news/press-releases/2019/12/university-phoenix-parent-company-pay-191-million-settle-ftc-charges-they-deceived-prospective-students
U.S. Department of Education. College Scorecard. https://collegescorecard.ed.gov/

What do the University of Phoenix and Risepoint have in common? The answer is a compelling story of greed and politics.

In the increasingly commodified world of higher education, the University of Phoenix and Risepoint (formerly Academic Partnerships) represent parallel tales of how private equity, political influence, and deceptive practices have shaped the online college landscape. While their paths have diverged in branding and institutional affiliation, the underlying motives and outcomes share disturbing similarities.

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The University of Phoenix: A Legacy of Legal and Ethical Trouble

The University of Phoenix (UOP) has been a central player in the for-profit college boom, particularly during and after the 2000s. Under the ownership of Apollo Education Group, and later the Vistria Group, UOP has faced a relentless stream of lawsuits, regulatory scrutiny, and public outrage.

In 2019, the Federal Trade Commission (FTC) reached a $191 million settlement with UOP over allegations of deceptive advertising. UOP falsely claimed partnerships with major corporations like Microsoft, AT&T, and Twitter to entice students. The result was $50 million in restitution and $141 million in student debt relief.

But the legal troubles didn’t stop there. In 2022 and 2023, the U.S. Department of Education included UOP in a broader class action that granted $37 million in borrower defense discharges. These claims stemmed from deceptive marketing and predatory recruitment practices.

Meanwhile, in 2024, the California Attorney General settled with UOP for $4.5 million over allegations of illegally targeting military service members between 2012 and 2015. The university’s controversial relationship with the military community also led to a temporary VA suspension of GI Bill enrollments in 2020.

The legal history includes False Claims Act suits brought by whistleblowers, including former employees alleging falsified records, incentive-based recruiter pay, and exaggerated graduation and job placement statistics. In 2019, Apollo Education settled a securities fraud lawsuit for $7.4 million.

More recently, UOP has been embroiled in political controversy in Idaho. In 2023 and 2024, the Idaho Attorney General challenged the state's attempt to acquire UOP, citing Open Meetings Act violations and lack of transparency. Though a federal judge initially dismissed the suit, Idaho’s Supreme Court allowed an appeal to proceed.

Through all of this, Vistria Group—UOP’s private equity owner since 2017—has reaped massive profits. Vistria was co-founded by Marty Nesbitt, a close confidant of Barack Obama, underscoring the bipartisan political protection that shields for-profit education from lasting accountability.

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Risepoint and the Online Program Management Model

Risepoint, formerly Academic Partnerships (AP), tells a similarly troubling story, albeit from the Online Program Manager (OPM) side of the education-industrial complex. Founded in 2007 by Randy Best, a well-connected Republican donor with ties to Jeb Bush, AP helped universities build online degree programs in exchange for a significant cut of tuition—sometimes up to 50%.

This tuition-share model, though legal, has raised ethical red flags. Critics argue it diverts millions in public education dollars into private hands, inflates student debt, and incentivizes aggressive, misleading recruitment. The most infamous case was the University of Texas-Arlington, which paid AP more than $178 million over five years. President Vistasp Karbhari resigned in 2020 after it was revealed he had taken international trips funded by AP.

Risepoint was acquired by Vistria Group in 2019, placing it in the same portfolio as the University of Phoenix and other education businesses. The firm’s growing influence in higher education—fueled by Democratic-aligned private equity—reflects a deeper entanglement of politics, policy, and profiteering.

In 2024, Minnesota became the first state to ban new tuition-share agreements with OPMs like Risepoint. This legislative action followed backlash from a controversial deal between Risepoint and St. Cloud State University, where critics accused the firm of extracting excessive revenue while offering questionable value.

Further pressure came from the federal level. In 2024, Senators Elizabeth Warren, Sherrod Brown, and Tina Smith issued letters to major OPMs demanding transparency about recruitment tactics and tuition-share models. The Department of Education followed in January 2025 with new guidance restricting misleading marketing by OPMs, including impersonation of university staff.

Despite this, Risepoint continued expanding. In late 2023, the company purchased Wiley’s online program business for $150 million, signaling consolidation in a turbulent industry. Yet a 2024 report showed 147 OPM-university contracts had been terminated in 2023, and new contracts fell by over 50%.

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What Ties Them Together: Vistria Group

Vistria Group sits at the center of both sagas. The Chicago-based private equity firm has made education—especially online and for-profit education—a core pillar of its investment strategy. With connections to both Democratic and Republican power brokers, Vistria has deftly navigated the regulatory landscape while profiting from public education dollars.

Its ownership of the University of Phoenix and Risepoint demonstrates a clear strategy: acquire distressed or controversial education companies, clean up their public image, and extract revenue while avoiding deep reforms. Through Vistria, private equity gains access to billions in federal student aid with minimal oversight and a bipartisan shield.

The result is a higher education ecosystem where political influence, corporate profit, and public exploitation collide. And whether through online degrees from the University of Phoenix or public-private partnerships with Risepoint, students are often the ones left bearing the cost.

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As scrutiny intensifies and state and federal lawmakers demand reform, the futures of Risepoint and the University of Phoenix remain uncertain. But one thing is clear: their shared story reveals how higher education has become a battleground of greed, power, and politics.

Higher Education Inquirer continues to follow IPO/sale of University of Phoenix

On March 6, 2025, Apollo and Vistria publicly announced a possible IPO or sale of the University of Phoenix.  These companies have been trying to sell the University of Phoenix since 2021, but there have been no takers. The owners claim the school is worth $1.5B to $1.7B, but we (and experts we know) are skeptical, given the financials we have seen so far. The University of Phoenix was previously on sale for about $500M-$700M but the University of Arkansas System, the State of Idaho, and apparently other colleges declined the offers. 

The University of Phoenix offers subprime education to folks, historically targeting servicemembers, veterans, and people of color. While some students may profit from these robocollege credentials, one wonders what these workers actually learn. The current student-teacher ratio at the University of Phoenix, according to the US Department of Education, is 132 to 1.   

The University of Phoenix has faced a number of scandals, sometimes getting away with no penalty, and other times paying large fines.  

In 2023 we made a Freedom of Action (FOIA) request to the US Department of Education (ED) to get Phoenix's most recent audited financials. In March 2025, more than 20 months later, we were provided with a 35-page report, audited by Deloitte, with numbers from 2021 and 2022. 

HEI has filed a number of FOIAs with ED and discovered that almost 1 million former University of Phoenix students owe approximately $21.6 Billion in student loan debt. In addition, about 19,000 borrowers have had their student loans forgiven as a result of the Sweet v Cardona Borrower Defense to Repayment case.  According to ED FOIA 23-02373-F, more than 73,000 have filed fraud claims against the school. 

This month the Higher Education Inquirer followed up with a Freedom of Information request with the ED to obtain more up-to-date financial numbers for the University of Phoenix. We hope they will be responsive and timely enough to get the word out to the public.