As of recently, the Apollo Group, a huge for-profit education company that runs the University of Phoenix and Western International University, has been under review. This is because the Obama administration instituted new rules barring pay-for-enrollment deals among student recruiters at for-profit colleges. This will most likely cause significantly lower enrollment levels at Apollo and its peers. Top for-profit colleges such as Apollo’s received $26.5 billion in government-funded student aid in 2009. Consequently, with the government taking a closer look at Apollo, shareholders have been fleeing. Thirteen for-profit education companies have lost 32 percent of its value this year. Mr.MaCarthur, a researcher, has studied for-profit education sectors since 1997 and is fond of revealing illegal tendencies that occur in firms. He states, “Given the chairman and his son sold roughly two million shares in July of 2009 during a program review that was raising questions around the proper refund calculations, it should come as no surprise the S.E.C. is asking questions.” It will be interesting to see what happens as a result of governmental pressure on these companies.
-Matthew DiPietrantonio
http://www.nytimes.com/2010/10/31/business/31gret.html?pagewanted=2&_r=1&hpw
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