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

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
Artificial Intelligence Webinar
Managing AI in Schools: Practical Strategies for Districts
How should districts govern AI in schools? Learn practical strategies for policies, safety, transparency, as well as responsible adoption.
Content provided by Lightspeed Systems
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
Reading & Literacy Webinar
Unlocking Success for Struggling Adolescent Readers
The Science of Reading transformed K-3 literacy. Now it's time to extend that focus to students in grades 6 through 12.
Content provided by STARI
Jobs Virtual Career Fair for Teachers and K-12 Staff
Find teaching jobs and K-12 education jubs at the EdWeek Top School Jobs virtual career fair.

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 Q&A Why the Heritage Foundation Is Targeting Plyler v. Doe
Lora Ries explains how the Supreme Court could overturn the 1982 Plyler v. Doe decision.
4 min read
A woman embraces her child outside a House hearing room during protests against a bill that would allow public and charter schools to deny immigrant students from enrolling for classes in Nashville, Tenn., March 11, 2025.
A woman embraces her child outside a hearing room at the Tennessee State Capitol during protests against a bill that would have allowed public and charter schools to deny immigrant students from enrolling in school, in Nashville, Tenn., on March 11, 2025. Lawmakers are expected to vote on an amended version of the bill that would require schools to collect students' immigration status information.
George Walker IV/AP
Federal Opinion What Our Students Deserve From New Homeland Security Secretary Mullin
The National Academy of Education calls for policy changes to ensure safer learning environments.
National Academy of Education Board of Directors
5 min read
President Donald Trump shakes hands with Homeland Security Secretary Markwayne Mullin during his swearing-in in the Oval Office of the White House, Tuesday, March 24, 2026, in Washington.
President Donald Trump shakes hands with Homeland Security Secretary Markwayne Mullin during his swearing-in on March 24, 2026, in Washington.
Alex Brandon/AP
Federal Melania Trump Shares the Spotlight With a Robot at White House Education Event
The humanoid robot Figure 03 made history as the first robot to walk the White House red carpet.
1 min read
First lady Melania Trump arrives, accompanied by a robot, to attend the "Fostering the Future Together Global Coalition Summit," with other first spouses, at the White House, Wednesday, March 25, 2026, in Washington.
First lady Melania Trump arrives, accompanied by a robot, to attend the "Fostering the Future Together Global Coalition Summit" with other first spouses at the White House on Wednesday, March 25, 2026, in Washington.
Jacquelyn Martin/AP
Federal Where Are Ed. Dept. Programs Moving? Answers to Frequently Asked Questions
More than 100 programs run by the U.S. Department of Education are shifting to other agencies.
14 min read
Image of an office chair moving over a map of Washington D.C.
Laura Baker/Education Week + Getty