Apollo Group, Inc. is the parent company of several for-profit educational institutions, including The University of Phoenix.
Economic Influences Although Apollo Group is impacted by the general state of the economy, as measured by the GDP and unemployment rates, the nature of the company's core business dampens the adverse impact of recessionary downturns somewhat as many prospective students consider furthering their education when they are unemployed or under-employed. Interest rates are still a key economic influence on the company, despite the lack of long-term debt on its balance sheet. Many of Apollo Group's students opt to finance their education with student loans, so a rise in interest rates could be a deterrent to enrollment. Currency exchanges rates also influence the company to some extent since it has operations in several countries, including Canada, Mexico, and the Netherlands. Interestingly, Apollo Group noted in its 2005 annual report that their operations are not impacted by inflation.
Government Influences Governmental influences on Apollo Group stem primarily from education related regulations. As the nation's largest recipient of federal government sponsored student loan funding, mainly through Title IV programs, the company is subject to a litany of regulations and audit procedures. Apollo Group must also comply with the education laws of the 40 states where it operates either a ground campus or a learning center. In addition to federal and state regulations, the company must also ensure it is in compliance with standards set by numerous government sanctioned educational accreditation boards. Aside from regulatory concerns, the political climate in Washington influences the company as well, given the reliance of many Apollo Group students on federal student loans. Efforts to rein in government spending by cutting back on such loan programs could adversely affect the company.
Legal InfluencesApollo Group has faced legal troubles of late...