The Apollo Group has announced that enrollments at its flagship institution, the University of Phoenix, have dropped by a whopping 40%.
According to Bloomberg News, the biggest education company in the U.S. has been forced to withdraw its 2011 earnings forecast due to the declining student numbers and “increased regulatory scrutiny.”
The Obama Administration has been promising to crack down on for-profit higher education in the U.S. following revelations that many institutions offer poor quality and engage in deceptive recruitment practices. The Government Accountability Office reported in August that recruiters at for-profit colleges operated by Apollo and other companies unduly pressured students to sign up for courses because their pay was tied to enrollment.
In a statement, Apollo warned shareholders that “ongoing regulatory and other scrutiny which has led to heightened media attention” is likely to “adversely impact its operating metrics and financial results.”
I guess that’s a diplomatic way of saying they’ve been caught with their pants down.