Federal

Apollo Group Fined

By Rhea R. Borja — October 01, 2004 1 min read
  • Save to favorites
  • Print

The for-profit education company Apollo Group Inc. will be required to pay a $9.8 million fine to the U.S. Department of Education, after the agency recently concluded that the University of Phoenix, a subsidiary of the company, violated federal regulations that prohibit tying employee pay to student enrollment.

Even though it agreed to pay the fine, the Phoenix-based Apollo Group denied any wrongdoing.

See Also

A 45-page Education Department report, obtained by Education Week under the Freedom of Information Act, says that University of Phoenix recruiters worked in a high-pressure sales environment and were paid solely according to how many students they enrolled. It also details what the department contends were management’s aggressive tactics to meet enrollment quotas as well as practices to deceive federal regulators.

“Many [recruiters] expressed that while uop at one time focused on the student and stressed ethical conduct, the culture now is one where the emphasis is on increasing numbers, the stock price, and meeting Wall Street’s expectations,” the report says.

But the Apollo Group disagreed with the findings.

“The department’s report was preliminary and most of the allegations … were subsequently proven to be false, misleading, or inaccurate,” Terri Bishop, the senior vice president of public affairs for the company, said in a written statement.

Education Department officials were unavailable for comment last week.

The $9.8 million settlement comes on top of another $4.4 million the company must pay the Education Department after the agency audited the Apollo Group’s Institute for Professional Development.

The university’s student enrollment has skyrocketed from 17,571 in 1991 to more than 323,000 this year. The university, which teaches working adults, has 150 campuses in 30 states, Puerto Rico, Canada, and online.

The amount of federal aid its students received rose from $338 million in 1999 to $869 million last year, and the default rate on uop students’ loans grew from 4.6 percent to 5.8 percent from 1999 to 2001.

Revenue has also risen dramatically for the company, from $69 million in 1991 to $1.3 billion last year. The company’s stock price fell 7 percent to $72.85 per share last week.

Related Tags:

Events

School Climate & Safety K-12 Essentials Forum Strengthen Students’ Connections to School
Join this free event to learn how schools are creating the space for students to form strong bonds with each other and trusted adults.
This content is provided by our sponsor. It is not written by and does not necessarily reflect the views of Education Week's editorial staff.
Sponsor
Student Well-Being Webinar
Reframing Behavior: Neuroscience-Based Practices for Positive Support
Reframing Behavior helps teachers see the “why” of behavior through a neuroscience lens and provides practices that fit into a school day.
Content provided by Crisis Prevention Institute
This content is provided by our sponsor. It is not written by and does not necessarily reflect the views of Education Week's editorial staff.
Sponsor
Mathematics Webinar
Math for All: Strategies for Inclusive Instruction and Student Success
Looking for ways to make math matter for all your students? Gain strategies that help them make the connection as well as the grade.
Content provided by NMSI

EdWeek Top School Jobs

Teacher Jobs
Search over ten thousand teaching jobs nationwide — elementary, middle, high school and more.
View Jobs
Principal Jobs
Find hundreds of jobs for principals, assistant principals, and other school leadership roles.
View Jobs
Administrator Jobs
Over a thousand district-level jobs: superintendents, directors, more.
View Jobs
Support Staff Jobs
Search thousands of jobs, from paraprofessionals to counselors and more.
View Jobs

Read Next

Federal Biden Calls for Teacher Pay Raises, Expanded Pre-K in State of the Union
President Joe Biden highlighted a number of his education priorities in a high-stakes speech as he seeks a second term.
5 min read
President Joe Biden delivers the State of the Union address to a joint session of Congress at the Capitol on March 7, 2024, in Washington.
President Joe Biden delivers the State of the Union address to a joint session of Congress at the Capitol on March 7, 2024, in Washington.
Shawn Thew/Pool via AP
Federal Low-Performing Schools Are Left to Languish by Districts and States, Watchdog Finds
Fewer than half of district plans for improving struggling schools meet bare minimum requirements.
11 min read
A group of silhouettes looks across a grid with a public school on the other side.
Vanessa Solis/Education Week via Canva
Federal Biden Admin. Says New K-12 Agenda Tackles Absenteeism, Tutoring, Extended Learning
The White House unveiled a set of K-12 priorities at the start of an election year.
4 min read
U.S. Education Secretary Miguel Cardona participates in a roundtable discussion with students from Dartmouth College on Jan. 10, 2024, on the school's campus, in Hanover, N.H.
U.S. Education Secretary Miguel Cardona participates in a roundtable discussion with students from Dartmouth College on Jan. 10, 2024, on the school's campus, in Hanover, N.H.
Steven Senne/AP
Federal Lawmakers Want to Reauthorize a Major Education Research Law. What Stands in the Way?
Lawmakers have tried and failed to reauthorize the Education Sciences Reform Act over the past nearly two decades.
7 min read
Sen. Bill Cassidy, R-La., left, joins Senate Health, Education, Labor and Pensions Committee Chairman Bernie Sanders, I-Vt., left, as Starbucks founder Howard Schultz answers questions about the company's actions during an ongoing employee unionizing campaign, at the Capitol in Washington, on March 29, 2023.
Sen. Bill Cassidy, R-La., left, joins Senate Health, Education, Labor and Pensions Committee Chairman Bernie Sanders, I-Vt., left, at the Capitol in Washington, on March 29, 2023. The two lawmakers sponsored a bill to reauthorize the Education Sciences Reform Act.
J. Scott Applewhite/AP