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Apollo Group To Challenge Probation Recommendation - Update

Apollo Group Inc. (APOL: Quote) said Monday that it is reviewing the draft reports received by University of Phoenix and Western International University last week and is confident that all concerns expressed by the Higher Learning Commission or HLC can and will be successfully addressed in due course. The firm intends to challenge and appeal the review team's probation recommendation.

The educational services provider announced earlier in the day that the HLC determined that its wholly-owned subsidiary University of Phoenix is not in compliance with Criterion One of the Criteria for Accreditation, Core Component 1d, and some of the related Minimum Expectations, sending the stock down over 3 percent in the extended trade.

The company plans to challenge and appeal the review team's recommended sanctions, while also intending to work closely with HLC to achieve agreement and resolution.

Mark Brenner, Chief of Staff for Apollo Group, said, '' We intend to challenge and appeal the review team's probation recommendation, and we have the opportunity to challenge findings of fact in the draft review report and, following that, to appeal the final review report findings and recommendations to the HLC Institutional Actions Council First Committee.''

The HLC has indicated that this appeals process would be complete by the end of June, although it could be extended.

There will be no change in the accreditation status of University of Phoenix or WIU until the review and appeals are complete, Apollo Group said.

Brenner pointed out that the draft reports include several positive findings and observations. The HLC review team notes that University of Phoenix is well resourced and innovative, and has a number of strengths, including a high level of relevant student services, technology and systems.

''In fact, University of Phoenix was found to be in compliance with substantially all criteria associated with academic matters,'' he added.

APOL settled lower by 4 percent on Monday at $17.83. The stock fell 3.2 percent in the extended trade and was trading at $17.26.

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by RTT Staff Writer

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