Have you actually priced these guys? My ex-wife used them back in 2001-2003 to finish up a BSN degree, and paid an obscene amount of cash each month to do it. They also adopted that neat little trick the state colleges have of requiring 'bridge classes' and of discounting certain courses taken (in favor of pricier ones they provide), so sometimes you're taking superfluous classes and in some cases re-taking classes you'd already taken.
One thing I do wonder about though... most of the oft-touted 'free' community college courses are more towards getting an Associates' degree, whereas Phoenix' big advertising push is for folks who want to convert their 2-year degree into a 4-year one, or to convert a Bachelors' into a Masters'.
Personally, I think their biggest competition is the recent growth of small state-accredited colleges going online, expanding their presence, and pushing to provide the same thing Phoenix does. Many of these colleges have provided this sort of thing remotely (albeit not online, but by 'traveling prof') to military members for decades, but have recently decided to get a piece of the civilian market now.
The thing is, what matters isn't the final bill. What matters, in recent years, has been the apparent short-term affordability of such institutions.
Two things have been happening in higher education in the last 15 years. One, a recession drove many people out of the work force, and a lot of those people instead turned to higher education while they were idling as a way to improve their marketability and also kind of hit the 'pause' button on working until things improved. And two, most of those people did it by taking on student debt. For-profit schools flourished during this time, because they understood that the name of the game to growing their enrollments was at least as much about how to finance the education as it was about the nature of the education itself.
But now, two other things are happening that counteract each of those effects. One, the job market is growing steadily, and even more importantly, people are returning to the work force. That's how it's possible for more and more net job creation to take place, and yet for unemployment (the number of people *looking for work* who are unemployed) to rise at the same time. And two, everyone has suddenly caught on to the fact that people are racking up massive amounts of debt to finance these classes, without really gaining all that much in the way of job opportunity. So the drive towards education using this model fades, and a counterforce starts pushing away from it.
Really, this was inevitable...it's almost like there was a "higher education bubble" that is bursting as we watch. Instead of it being funded by subprime mortgages and shady income verification, it has been funded by aggressive student loan processes and overstated promises by many institutions.