Instead of trying to expand enrollment, Apollo Group’s University of Phoenix will concentrate on increasing graduation rates, company officials said in an Oct. 13 conference call, Immediately, the stock nosedived, dragging down the stock of other for-profit higher education companies, notes California Watch.
. . . Apollo says it is expanding a free orientation program, increasing the accuracy of marketing statements so that students aren’t misled, and changing the way enrollment advisers are compensated so that their pay is not tied to the number of students they enroll.
But if it sounded like good news for students, it sounded like trouble to Wall Street. The changes to Apollo’s business model, coupled with a great deal of negative press in the last several months, could result in a steep enrollment decline, Apollo executives said. They estimated this quarter’s figures could be down 40 percent or more compared to last year at this time.
The value of the company’s shares dropped by 25 percent. Overall, the publicly traded for-profit sector lost 20 percent of its value.