UPDATE: Grand Canyon Education To Be Subject Of Review
July 08 2010 - 7:49PM
Dow Jones News
Grand Canyon Education Inc. (LOPE) will be the subject of a U.S.
Department of Education program review investigating the for-profit
college's administration of federal student aid, the school
disclosed in a filing with the Securities and Exchange Commission
late Thursday.
The school derived about 83% of its revenue from federal funds
in 2009, according to an analysis by BMO Capital Markets.
According to the SEC filing, Grand Canyon was notified on July 6
of the Education Department's intent to conduct a review.
Bill Jenkins, executive director of the school's office of
institutional advancement, said the program review was "a normal
course of review" and "is related to our growth over the last five
years." He said the government agency last visited the school more
than five years ago.
The Department of Education said it doesn't discuss ongoing
reviews, but if there is a final determination letter, it will be
made available to the public.
Program reviews aren't uncommon and can be conducted at any
school that receives Title IV federal aid, but being the subject of
one can weigh heavily on a school no matter the outcome. Reviews
often drag out for months or even years with little or no
communication from the Department of Education, Grand Canyon warned
in its filing.
Shares of Grand Canyon were at $22.41 in after-hours trade after
closing at $22.39, up 1.5%. The company's stock is up nearly 18% so
far this year.
"If the [Department of Education] were to make significant
findings of non-compliance in the final program review
determination, it could have a material adverse effect on the
Company's business, results of operations, cash flows, and
financial position," Grand Canyon said in the SEC filing.
Other for-profit schools have been subjects of program reviews,
too, as the Department of Education comes under pressure to ensure
its loans are being used properly.
Corinthian Colleges Inc. (COCO) in May disclosed that it had
received a program review report on its Everest College Phoenix and
was conducting an investigation into the findings, some of which it
disputed. The report found the school breached its fiduciary duty
and made misrepresentations to students regarding its financial aid
administration, according to an SEC filing. It will respond to the
report, and then a final determination letter will be issued by the
Department of Education.
More recently, Apollo Group. (APOL) announced that its
University of Phoenix received the final determination linked to
its February 2009 program review. The school had to post a $125
million letter of credit after the report cited the untimely return
of some unearned funds. Apollo also made $660,000 in reimbursements
in its second fiscal quarter.
Grand Canyon said in its filing that its policies and procedures
are planned to comply with federal regulations and it would work to
resolve any compliance issues, were any to be found.
-By Melissa Korn, Dow Jones Newswires; 212-416-2271;
melissa.korn@dowjones.com
Apollo Education Group, Inc. (NASDAQ:APOL)
Historical Stock Chart
From May 2024 to Jun 2024
Apollo Education Group, Inc. (NASDAQ:APOL)
Historical Stock Chart
From Jun 2023 to Jun 2024