Apollo Education Group Inc., owner of the University of Phoenix for-profit college chain, fell as much as 9.4 percent after U.S. regulators began investigating possible unfair advertising and marketing.
The Federal Trade Commission demanded information on enrollment, recruiting, financial aid, tuition and other business practices from 2011 to the present, Phoenix-based Apollo said in a filing with the Securities and Exchange Commission. Apollo said it will cooperate fully.
The FTC and other government agencies are examining the practices of for-profit colleges amid concerns they are recruiting students with misleading pitches about the value of their education. Downers Grove, Illinois-based DeVry Education Group Inc., another for-profit college chain, received a similar notice from the FTC last year and said it is cooperating.
In the filing, Apollo said the FTC inquiry relates to possible “deceptive or unfair acts or practices in or affecting commerce in the advertising, marketing, or sale of secondary or postsecondary educational products or services or educational accreditation products or services.”
Late last month, Apollo, which has lost almost $16 billion in market value since its peak in 2004, said it expects its enrollment next year to decline by one-quarter, to 150,000 students.
Apollo fell less than 1 percent to $13.33 at 11:38 a.m. in New York. Alex Slater, a spokesman, declined to comment beyond the filing.
In a piece of good news for the industry, Strayer Education Inc., a Herndon, Virginia-based chain, bucked the trend of fewer students signing up for classes at for-profit colleges. The company reported that enrollment rose 2 percent, to 37,221, in the summer term.
It was the company’s first quarterly increase in enrollment since 2010, according to Jeffrey Silber, an analyst with BMO Capital Markets in New York. Strayer jumped 24 percent, to $51.90.