The University of Phoenix's parent company, Apollo Education, is being investigated by the Federal Trade Commission over potentially "deceptive or unfair" marketing and advertising practices, the company disclosed this morning.
The news comes less than a month after Apollo announced a bold plan to "get the University of Phoenix's reputation back." As part of a bid to stem its sliding enrollments, and protect itself from the looming threat of stricter government regulation, Phoenix said it would cut back on poorly-performing programs and enact unprecedented admissions standards — drastically reducing the size of its student body. Investors reacted poorly, sending the company's stock tumbling 20%.
An exposé earlier this week by the Center for Investigative Reporting and PBS NewsHour found that Phoenix was "sidestepping" an Obama administration order meant to shield veterans from aggressive marketing efforts by for-profit colleges. Phoenix is the country's largest recipient of GI Bill funds.
The FTC's actions are only the latest in a series of government probes into Phoenix's practices. The school is also being investigated by the Education Department's Office of the Inspector General, and by several state attorneys general. It has previously settled whistleblower lawsuits into its practices of paying recruiters based on how many students they enroll.
A similar FTC investigation was conducted last year into the marketing practices of another for-profit college giant, DeVry Inc.
Molly Hensley-Clancy is a business reporter for BuzzFeed News and is based in New York. She covers the intersection of business and education.
Contact Molly Hensley-Clancy at firstname.lastname@example.org.
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