Apollo Group Inc. (Nasdaq: APOL) shares rose 10.2% to $46.50, after the U.S. Education Department softened a rule that had threatened some aid to for-profit colleges.
The Department of Education on Thursday rolled out a rule that denies federal aid if programs don’t lead to “gainful employment” in a recognized occupation.
But the final rule would deny assistance as early as 2015, rather than immediately, if three tests over student loan repayment weren’t met.
“If you get three strikes in four years, you’re out,” Education Secretary Arne Duncan said in a statement. The department estimates that 18% of for-profit programs are expected to fail the thresholds at some point, with 5% of them failing to improve and ultimately losing eligibility.
Phoenix-based Apollo Group was one of a number of companies in the sector that jumped on the news.
Apollo Group, Inc. is one of the world’s largest private education providers and has been in the education business for more than 35 years. The Company offers innovative and distinctive educational programs and services both online and on-campus at the undergraduate, master’s and doctoral levels through its subsidiaries: University of Phoenix, Apollo Global, Institute for Professional Development and College for Financial Planning.
The Company’s programs and services are provided in 40 states and the District of Columbia; Puerto Rico; Latin America; and Europe, as well as online throughout the world.