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
Special Education Webinar
Hidden Costs of Special Ed Vacancies: Solutions for Your District
When provider vacancies hit, students feel it first. Hear what district leaders are doing to keep IEP-related services on track.
Content provided by Huddle Up
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
Privacy & Security Webinar
How Technology Is Reshaping Childhood
How do we protect kids online while embracing innovation? Learn about navigating safety, privacy, and opportunity in the Digital Age.
Content provided by Connect x Protect
Budget & Finance Webinar Creative Approaches to K-12 Budget Realities
What are districts prioritizing in 2026? New survey data reveals emerging K-12 budgeting trends.

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 Opinion We Need Better Data to Understand What Happens to Students After High School
Here are the two things we need before we can answer how well we’re preparing students.
Jennifer Bell-Ellwanger & Sara Schapiro
4 min read
Future data arrow concept with student looking out to a tangle of possibilities. Choice. grow chart up decisions. Pathways.
Vanessa Solis/Education Week + Getty
Federal Opinion How the Institute of Education Sciences Could Better Serve Schools
“It’s been all over the place,” explains the scholar tasked with reimagining IES.
4 min read
The United States Capitol building as a bookcase filled with red, white, and blue policy books in a Washington DC landscape.
Luca D'Urbino for Education Week
Federal Senate Days Are Numbered for Top Republican Charged With Ed. Dept. Oversight
Sen. Bill Cassidy was vying for a third term in the Senate but lost his primary over the weekend.
4 min read
Sen. Bill Cassidy, R-La., right, hugs a supporter during an election night watch party Saturday, May 16, 2026, in Baton Rouge, La.
Sen. Bill Cassidy, R-La., right, hugs a supporter during an election night watch party on Saturday, May 16, 2026, in Baton Rouge, La. Cassidy leads the Senate committee charged with education policy. He was vying for a third Senate term but lost his primary over the weekend.
Gerald Herbert/AP
Federal Opinion Trump's K-12 Leader: Let’s Improve Assessment Without Sacrificing Accountability
The Ed. Dept. is shrinking the federal footprint but raising academic expectations, says Kirsten Baesler.
Kirsten Baesler
4 min read
A pencil leaning against the wall. The shadow of a ladder shade reflected on the wall.
Education Week + E+/Getty