As Enrollments Plummet, America's Biggest For-Profit College Is Up For Sale

The 176,000-student giant is "in discussions" that could lead to new owners, it said today.

The owner of the for-profit giant University of Phoenix is considering a sale of the company and is "in discussions" that could lead to new owners, it said today. The announcement came six months after Apollo Education Group, Phoenix's owner, launched an aggressive plan to "repair the reputation of the university."

Phoenix is the country's largest for-profit college, but enrollment numbers have plummeted as the economy improves and stigma around for-profit education grows. Student numbers fell from a high of 460,000 in 2009 to 176,000 in 2015.

The company is also feeling the weight of the Obama administration's new regulations on the for-profit college industry, which threaten to cut off federal money to low-performing programs.

Apollo announced plans in June to cut the programs that were threatened by new regulations and begin screening students with admissions criteria and diagnostic tests. But investors were skeptical about the plan, which executives acknowledged would likely lead to even more severe enrollment declines in the short term. The company now is valued at around $750 million — down from $3.5 billion a year ago.

Apollo also missed Wall Street estimates in its first quarter earnings announcement today, with new student enrollment falling by 38% and revenues by 18%. Investors place a high level of importance on new student enrollments, as they are markers of the university's revenue stream for the coming years.

Finding a buyer for Phoenix will likely be a difficult task. All but a small handful of its competitors have seen their valuations plummet in the past three years; Corinthian Colleges, once one of the country's largest for-profit college owners, declared bankruptcy, and another, EDMC Group, was forced to delist from the NASDAQ.

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