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
School & District Management Webinar
Too Many Initiatives, Not Enough Alignment: A Change Management Playbook for Leaders
Learn how leadership teams can increase alignment and evaluate every program, practice, and purchase against a clear strategic plan.
Content provided by Otus
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
Beyond Teacher Tools: Exploring AI for Student Success
Teacher AI tools only show assigned work. See how TrekAi's student-facing approach reveals authentic learning needs and drives real success.
Content provided by TrekAi
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
College & Workforce Readiness Webinar
Building for the Future: Igniting Middle Schoolers’ Interest in Skilled Trades & Future-Ready Skills
Ignite middle schoolers’ interest in skilled trades with hands-on learning and real-world projects that build future-ready skills.
Content provided by Project Lead The Way

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 Ed. Dept. Hangs Banner of Charlie Kirk Alongside MLK Jr., Ben Franklin
It's part of a celebration of the nation's 250th anniversary.
1 min read
New banners of Booker T. Washington, Catharine Beecher and Charlie Kirk hang from the Department of Education, Sunday, March 1, 2026, in Washington.
New banners of Booker T. Washington, Catharine Beecher, and Charlie Kirk hang from the U.S. Department of Education on March 1, 2026, in Washington.
Allison Robbert/AP
Federal Ed. Dept. Wants to Revamp Assistance Program It Calls 'Duplicative,' 'Confusing'
The department's Comprehensive Centers have already been through a year of shakeups.
3 min read
A first grade classroom at a school in Colorado Springs, on Feb. 12, 2026.
A 1st grade classroom at a school in Colorado Springs, Colo., on Feb. 12, 2026. The U.S. Department of Education released a proposal to rework a decades-old program charged with helping states and school districts problem-solve and deploy new initiatives, calling the current structure “duplicative” and “confusing.”
Kevin Mohatt for Education Week
Federal Will the Ed. Dept. Act on Recommendations to Overhaul Its Research Arm?
An adviser's report called for more coherence and sped-up research awards at the Institute of Education Sciences.
6 min read
The U.S. Department of Education building is pictured on Oct. 24, 2025, in Washington, D.C.
The U.S. Department of Education building in Washington is pictured on Oct. 24, 2025. A new report from a department adviser calls for major overhauls to the agency's research arm to facilitate timely research and easier-to-use guides for educators and state leaders.
Maansi Srivastava for Education Week
Federal Trump Talks Up AI in State of the Union, But Not Much Else About Education
The president didn't mention two of his cornerstone education policies from the past year.
4 min read
President Donald Trump enters to deliver the State of the Union address to a joint session of Congress in the House chamber at the U.S. Capitol in Washington, Tuesday, Feb. 24, 2026.
President Donald Trump enters to deliver the State of the Union address to a joint session of Congress in the House chamber at the U.S. Capitol in Washington, Tuesday, Feb. 24, 2026. The president devoted little time in the speech to discussing his education policies.
Kenny Holston/The New York Times via AP, Pool