If you thought that Apollo Education Group, the parent company of the University of Phoenix, was finally out of hot water with the authorities these days, think again. Apollo is now facing an investigation by the Federal Trade Commission, just as the Higher Learning Commission has finally lifted the “Notice” status it placed on the company’s schools two years ago.
In 2013, the HLC confirmed accreditation of UOP and Apollo’s other for-profit college, Western International University, through 2022-23, but it also put them on “Notice” for two years, due to questions about faculty, student assessment and general governance of the schools. This “Notice” status was removed from the colleges in July of this year.
But later that same month, there was a “Civil Investigative Demand” issued against Apollo by the FTC, specifically looking into allegations of deceptive advertising to potential and enrolled students. The investigation calls for the company to provide investigators with information related to the University of Phoenix’s business practices dating from the first of 2011 through today. The documents that the FTC have requested cover everything from financial aid, recruitment and academic advising to student retention rates, billing and debt collection practices.
All of this comes at an especially bad time for Apollo, as enrollment and revenue for the schools have continued to drop sharply in recent years. In 2014, the company showed 241,900 students enrolled in their colleges, compared to only 206,900 enrolled for the current year. Meanwhile, Apollo’s filings with the Securities and Exchange Commission for the three months up to May 31 of this year indicate that its net income was $48 million, down from $66 million for the same time period in 2014.
There’s no question that the images of both UOP and Western International have been badly tarnished by the allegations against them, leading Apollo CEO Greg Cappelli to do whatever he can to try and improve the numbers. This has included laying off some 1,500 workers this year, most of whom served as enrollment counselors for the schools.
So far however, these measures haven’t been enough to stop a freefall in the company’s stock, which has dropped from a 52-week high of $34.55 in December 2014 to its current price of $11.70 a share. In the end, it would appear that the past actions of Apollo Education Group may finally be catching up them.
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