Apollo Education Group to go private in $1.1bn sale

A group of investors has agreed to purchase Apollo Education Group, owner of the for-profit college chain University of Phoenix, in a $1.1bn cash deal. The New York Times reports that the buyers include Chicago-based investment firm Vistria Group, whose founder, Marty Nesbitt, has close ties to President Obama and Commerce Secretary Penny Pritzker, and whose COO, Tony Miller, served as deputy secretary of the Obama Department of Education from 2009 to 2013. While the investors hope to “help clean up the for-profit industry” with the purchase and plan to run the University of Phoenix with “the highest ethical standards,” critics of the sector and the purchase say the new team will struggle to do so, given their obligations to shareholders.

The troubled for-profit education company that owns the giant University of Phoenix agreed on Monday to be bought for $1.1 billion by a group of investors that includes a private equity firm with close ties to the Obama administration.

The university and its owner, the Apollo Education Group, have been subject to a series of state and federal investigations into allegations of shady recruiting, deceptive advertising and questionable financial aid practices.

In recent years, many for-profit educational institutions that have received billions of dollars in federal aid, including the University of Phoenix, have been pummeled by criticisms that they preyed upon veterans and low-income students, saddling them with outsize student loan debt and subpar instruction.

Moreover, at many of these schools, enrollment has been falling and profits shrinking, casting doubt on the future health of the industry.