The struggling school is now facing a probe from the Federal Trade Commission. The agency is looking into whether the school engaged in deceptive marketing tactics, its parent company, Apollo Education Group, said Wednesday.
The company must hand over documents regarding matters that include ts marketing, tuition, billing, accreditation, and military recruitment practices going back as far as 2011.
Apollo declined to comment to CNNMoney and cited their response in the legal filing which stated, “Apollo is evaluating the demand and intends to cooperate fully with the FTC.”
The probe comes as the federal government is cracking down on for-profit colleges, which have long been criticized for leaving students with loads of debt and few real job prospects. Regulators claim that some schools prey on low-income students and veterans, encouraging them to take out expensive loans, and then use abusive tactics to collect repayment. New federal rules were implemented on July 1 to hold these schools responsible for students’ return on investment of their degree programs.
In April, Corinthian College was fined $30 million for for overstating job placement rates for graduates. The company has since shut down its campuses, affecting about 74,000 students. A for-profit college network called ITT Educational Services was charged with fraud by the Securities and Exchange Commission in May. It said the company’s chief executives misled investors and auditors with “outright misstatements” and “half-truths” about its student loan program.
Both Corinthian and ITT have been sued by the Consumer Financial Protection Bureau over alleged predatory student lending. So far, the University of Phoenix has escaped the wrath of the CFPB.
The University of Phoenix is struggling to keep enrollment up. It has lost about half of its students over the past five years and has fired 900 employees since September. The college currently has about 206,000 students and expects enrollment to decline to about 150,000 next year. It has closed more than 100 campuses in recent years.