Forging Partnership with For-Profit College, Walmart Chooses Carefully

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In 2008, Walmart started looking for a way to connect its employees with affordable and practical college opportunities. American Public Education, Inc., a for-profit that controls American Public University System (APUS), was looking to diversify its clientele. In June of 2010, Walmart announced its Lifelong Learning project, in which employees would receive a subsidized rate for classes at APUS.

The partnership between them has shown modest impact since its launch in June; a few hundred employees have enrolled in APUS classes since June, according to Walmart spokesperson Phillip Keene. But any educational opportunity made available by a company with 1.4 million employees, many of them youth and young adults, is worth examining.

Picking APUS

The idea of Walmart’s Lifelong Learning program is to offer Walmart employees the opportunity to pursue associate’s, bachelor’s or master’s degrees. Information from Walmart’s national employee survey made one thing clear early on in the planning, said senior director Alicia Ledlie: the company should focus on a partnership with an online college. The employee survey showed 72 percent of respondents said they preferred to take classes online to sitting in a classroom.

Of the online-specializing schools, APUS made sense to Ledlie due to its good accreditations history. It has the highly sought regional accreditation, unlike other schools that boast less meaningful national accreditation (see For-Profit Skepticism, by Elaine Korry).

Walmart’s announcement of the Lifelong Learning came amidst a summer of bad news for APUS and its for-profit brethren. A month before the launch, Steve Eisman announced that he intended to short the stock of most major for-profits that were publicly traded. It was a fairly jarring announcement, considering that Eisman had just finished reaping hundreds of millions by correctly forecasting the crash of the housing market.

In August, the Government Accountability Office released a report that revealed questionable marketing and enrollment practices among many for-profits. Exactly a year earlier, the GAO issued a report about the high student loan default rates among students who attended for-profit colleges when compared to other colleges.

Early signs indicate that APUS is not facing nearly the same risks, both to investors and students, as other career college behemoths. The latest Department of Education numbers show APUS’s student loan default rates are 5.2 percent: well below the 12.9 percent rate at the nation’s largest for-profit college, University of Phoenix, the 17.2 percent rate at Kaplan University and the 11.6 percent national average at all for-profit schools.  

The median federal debt for APUS students entering repayment is $4,436 with a 47 percent loan repayment rate, which is one third the national average median debt of $13,482 among online schools and above the national average repayment rate of for-profit students (40 percent).

Ledlie said APUS’s financials and its course variety – the school offers 79 different degree programs – were the primary reasons Walmart chose to work with the company.

“We tried in lots of different ways to understand APUS themselves, understanding that they are for-profit and understanding that there are lots of questions taking place right now about for-profits,” Ledlie said. “Again and again when we did that research, we continued to find APUS not only met our criteria but continued to display themselves as being very cost-conscious and very aware of student outcomes. For all those reasons we felt that they would be a good partner.”

One of those methods was for Walmart to conduct its own mystery shopper program to see if an APUS associate would give them the “hard sell,” one of the career college practices under investigation right now. Ledlie said APUS passed the test.

Another source of information was a former U.S. Department of Education undersecretary who currently sits on Walmart’s external advisory board, Sara Martinez Tucker.

How Lifelong Learning Works

Walmart employees pay the full price for their classes and then receive an APUS rebate for 15 percent of the cost. That leads to a reduced rate of $212.50 per undergraduate credit and $255 per graduate credit. All textbooks are available to all APUS undergraduate students for free online as e-books, said APUS public relations director Brian Muys.

Eventually, Walmart spokesperson Phillip Keene said, the retailer also plans on spending an additional $50 million to boost the program over the next three years, likely through tuition assistance.

APUS foots the bill for the 15 percent discount, Muys said, but that is well worth the expense considering the potential of an exclusive relationship with one of America’s largest employers. It also offers invaluable access and promotion to a company that wants to grow its civilian business. The American Public University System includes American Military University, which started in 1991, and American Public University (2002), which American Public Education started in 2002 to serve civilian students. Right now, the military client base is much larger: two-thirds of the 77,000 APUS students are in the armed forces, most of them on active duty.

At the moment, the whole thing is a work in progress. Only about 400 of Walmart’s employees have enrolled in APUS classes since June, and that was mostly from word-of-mouth, according to Keene. The company plans on a massive in-store awareness campaign of APUS opportunities early next year, once the holiday madness settles down, he said.

  • Emily Morgan

    For-profits draw in so many non-traditional students because they have no admissions standards and this group is typically eligible for the highest levels of federal financial aid. But when they bring them in, they aren’t able to offer the support and services that these students need, thus, the students do not do well out of college, if they graduate at all. In order to reach non-trad students, we must invest more money in our community college system, which does have the resources to offer the multiple remedial math and english courses that these students need and aren’t getting at for profits. For-profits care only that – their profit, not their students taking out cash advance to manage the monthly payments on student loans, and they are attempting to profit from a crucial social service by drawing public dollars out of the system and then not providing an education in return.