Dive Brief:
- The University of Phoenix is temporarily banned from recruiting on military bases and Defense Department events, and it can’t accept Tuition Assistance Program funding from active-duty service members who qualify for it.
- The Chronicle of Higher Education reports that small loss of overall revenue could have an outsized impact on the institution if it becomes permanent and brings it closer to violating the 90/10 rule, removing a portion of technically non-federal revenue.
- The Wall Street Journal reports that Apollo Education Group Inc. shares dropped 9% Friday after the Defense Department’s announcement.
Dive Insight:
University of Phoenix enrollment has been cut in half since 2010, when the for-profit giant enrolled more than half a million students. The company has tried to shrink conscientiously, shifting admission requirements and closing campuses — all the while reminding investors that the company was very profitable the last time it enrolled about 200,000 students.
The danger of violating the 90/10 rule could be a serious concern. If ongoing investigations leave the university unable to enroll any active-duty or veteran students with Defense Department funding, it will have to find a new pool of students to contribute toward its 10%.