The company that owns the for-profit college chain University of Phoenix announced Monday it was in final negotiations to be sold to a group of private investors. Apollo Education Group Inc. wrote in a news release it planned to be acquired by the Vistria Group, Najafi Companies and funds with Apollo Global Management, which isn't affiliated with the current owners, by August. The $1.1 billion deal comes after months of layoffs and a White House push to better regulate the controversial for-profit college industry.
“This new structure will allow Apollo Education Group the flexibility and runway it needs to complete the transformational plan at University of Phoenix, which will enable us to serve our students more effectively during a period of unprecedented volatility within our industry," Chief Executive Officer Greg Cappelli said in the release.
Tony Miller, of the Vistria Group, was set to become the corporation's chairman. He served as the deputy secretary of the United States Education Department from 2009 to 2013.
In recent years, the Obama administration has stepped up its efforts to hold for-profit colleges, which received $32 billion in federal aid in the 2010-2011 school year, accountable for their students' success. Government agencies have launched investigations into chains like Corinthian Colleges Inc. and DeVry University over whether the institutions recruited too intensely and misled students about their job prospects.
The University of Phoenix, which serves more than 200,000 students, has been "shrinking in every way possible," according to a June CNN article. It shut down about 100 of its locations in 2012 and has laid off 900 people since 2014. Revenue for its most recent fiscal quarter was about $568 million — down from $714.5 million the year before, the Wall Street Journal reported.
In the news release, Miller expressed optimism that new management could reverse the trend. “For too long and too often, the private education industry has been characterized by inadequate student outcomes, overly aggressive marketing practices, and poor compliance," he said. "This doesn’t need to be the case."