Apollo Group Essay

The Apollo free radical was founded by John Sterling, a professor at San Jose State University, in 1976. They are a for-profit didacticsal provider that specializes in educating workings adults. The Apollo Group has many subsidiaries both domestic and abroad.The University of capital of Arizona- the largest private university in the United States Institute for Professional Development- a consultant service that provides private colleges and universities in the US with adult education program development, administration and forethought support The College for Financial Planning Institutes- a national leader in providing financial services education the and certification to people and companies in the financial services industry Meritus University- an online university with arcdegree programs in Canada Apollo Global Inc- a partnership with The Carlyle Group that invest in international education services in various countries The University of Phoenix is their main subsidiary and has an enrollment of over 550,000 students.They provide undergraduate, masters and doctorial programs both online and at on-campus locations in 40 states. Since the University of Phoenix is a for-profit educator, they recognize their students as customers and have tailored their business to fit the educational needs of their customers. Their programs are geared toward working adults they are able to educate their customers at a fast pace with low overhead. They have simple online platforms that are easy to use and their on-campus locations consist of basic classrooms. Since their primary(a) customers are working adults and commuting students, they do non invest in building dorms, student unions or recreational facilities at these on-campus locations. Current IssuesWhile this business model has been profitable for Apollo Group, there are many concerns that leave behind force them to adjust their plan. Because of the perception that online classes are ineffective, and proprietary colleges and universities are degree factories that are non providing a quality education, prestigious universities are sticking with traditional programs. This perception is shared by potency students and their employers. Apollo needs to improve the re displaceation of their brand. The national government has put some regulations in place to witness that proprietary educators are educating students and not pushing them through their programs and granting degrees to create a revenue stream from federal official financial aid and student bestows.The Gainful Employment Rule- If programs fail the three test of gainful duty three times in a four year span they leave behind not be eligible to receive federal financial aid dollars. The 90/10 Rule- If the institution get more than than 90% of its cash revenue from student loans, the institution cannot participate in student federal loan programs. Student Loan Defaults- The federal government sets a three year default limit on coho rts of students. If the students loan default rate of the cohort drops below the limit, the institution cannot participate in student federal loan programs.In addition to the negitive reputation and government regulations, the Apollo Group is facing competition from both traditional and proprietary educators. As the technology increases, more schools are investing in their distance learning programs. Apollo pass on need to find a way to differentiate themselves from these institutions. RecommendationsI think the Apollo Group should leverage the relationships that their other subsidiaries have built with their clients, as well as the ones their professors have with their employers, to get input on redesigning their degree programs. If done properly these programs will set industry standards and change the reputation of the University of Phoenix. These redesigned programs should create more interlocking opportunities for their graduates and help them pass gainful employment test. W orking with major wads to create these programs and gaining their public endorsement will give them an advantage over their competitors.While their business model does not include the extra amenities of a traditional university, the University of Phoenix needs to invest in career counseling and job stance services to help their students find good jobs, this will increase the likelihood of being in meekness with federal regulations. They should also develop a business case showing how the 90/10 bump will cause them to deny enrollment to low income students and petition elected officials who serve low income areas to transform some of the federal regulations that they are governed by. Wall Street MetricsAs of this writing, The Apollo Group, with a ticker symbol of APOL is trading at $20.83 per share. Its 52-week high was $29.47 and its low was $15.98. It has a P.E. ratio of 8.54% compared to 24.38% of the S&P 500 and 36.39% for the sector. Its dividend consent to is 0 compared to 1.85 of the S&P 500 and 2.14 of the sector. It has a Beta measurement of 0.70. Based upon my analysis, I would not currently purchase this stock. Post ScriptThe University of Phoenix recently had some trouble retaining their accreditation. A partner group with The Higher Learning Commission, a member of the North Central Association of Colleges and Schools, recommended that they be put on probation. Specifically, the review team concluded that the University of Phoenix has insufficient autonomy relative to its parent corporation and sole shareholder, Apollo Group, Inc., to assure that its board of directors can manage the institution, assure the universitys integrity, exercise the boards fiduciary responsibilities and make decisions necessary to achieve the institutions mission and successful operation.1 The Apollo Group was able to work with the HLCs Institutional Actions Council First Committee to retain its regional accreditation, but that the university will be placed on not ice for two years. In efforts to retain students by reducing the represent of care, the university has created a scholarship reward program that gives eligible undergraduate degree students up to $10,000 in tuition reductions. They also instituted a tuition freeze so students will not have tuition increases as long as they are consistently enrolled in classes.