Apollo Group: Earnings Up, Enrollment Down
STEVE INSKEEP, host:
Let's talk about education now, the for-profit education industry. One of the big players, the Apollo Group reported a drop in the number of new students. The company, which owns the University of Phoenix, says it continues to make plenty of money but the weak enrollment figures may continue as it searches for students who are more likely to graduate.
Here's NPR's Larry Abramson.
LARRY ABRAMSON: The Apollo Group stock has been trading at the lowest price in years, thanks to the threat of stiffer regulations from Washington. The Department of Education wants schools like the University of Phoenix to focus much more on making sure students can repay their loans and to slow down their aggressive recruiting.
In an earnings call Monday, executives at the largest for-profit educator say they're doing just that.
Chief financial officer Brian Swartz says the number of new recruits dropped 42 percent compared with a year ago, and he says that trend will grow.
Mr. BRIAN SWARTZ (CFO, University of Phoenix): Because of the large decline in new enrollment, coupled with the graduation of some of our existing student population, we expect increasing decline in total enrollment as we move through the year.
ABRAMSON: The question now is whether investors will stay loyal to Phoenix and other for-profits, which have lost the explosive growth that led to the high stock prices of the last decade. Much will depend on the details of new government rules expected out as soon as next month.
For-profit giant Strayer University just announced a 20-percent drop in new enrollments compared with a year ago.
Larry Abramson, NPR News.
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