The company went public in 1994. It faces stiff competition from at least 10 other publicly traded companies, including DeVry (DV), ITT Educational Services (ESI) Strayer Education (STRA), Corinthian Colleges (COCO) and Career Education (CECO).

Some confuse for-profit schools with diploma mills, from which any dummy can buy a PhD. That’s a mistake, because good for-profit schools teach students what they need to know in order to advance. The University of Phoenix is accredited by the Higher Learning Commission and is a member of the North Central Association.

In October 2007, Apollo Group formed a joint venture with Carlyle Group, a private equity firm, to pursue international investments. In March, Apollo completed the acquisition of an accredited, private arts and communications university in Chile. Apollo Group is also active in Puerto Rico, Canada, Mexico and the Netherlands.

Typically, for-profit schools, including the University of Phoenix, rely on part-time instructors. This draws fire from schools that pride themselves on Nobel Laureates and rigorous academic standards, but many traditional schools also increasingly rely on adjunct staff or contract instructors to hold costs down.

Tight budgets have given rise to the academic nomad - often a PhD who bounces from school to school every few years because there are so few tenure track jobs available.

Traditional schools build snob appeal by rejecting most applicants, turning the for-profit business model on its head. Harvard, for example, accepted 1,948 of 27,462 applicants for the 2008-09 academic year, or about 7%. Berkeley, a state school, draws from about the top 10% of California’s high school graduates. It offered fall 2008 admission to 10,387 of 48,462 of freshman applicants, or about 21.4%.

For-profit schools advertise for students and help them with federal loan applications, leading critics to charge that they suck up money and offer students little in return. The University of Phoenix is one of the largest recipients of federally supported student aid in the country; 4 years ago, it raked in about $1.8 billion in federally sponsored student loans.

The school’s graduation rate is about 16%, well below the 50% achieved at traditional schools (97% at Harvard). But that may not be catastrophic because the University of Phoenix opens its doors to students who may not have a shot at traditional schools. In any case, attending college part-time while holding a full-time job is a long, tough slog.

Critics say an unusually large number of students at for-profit schools default on their loans. But at a for-profit school, the math is simple: More students means higher revenue. This may not be so different from the endless fundraising done by university presidents at snobby schools - except that taxpayers are on the hook if a student at a for-profit school defaults on a federal loan.