After markets closed last night, Apollo Group Inc. (NASDAQ: APOL), which owns and operates the University of Phoenix, reported a better-than-expected earnings per share (EPS) of $0.52, but revenues fell 11% compared with the same period a year ago. The worse news, though, was still to come.

Apollo and other for-profit schools like DeVry Inc. (NYSE: DV), Strayer Education Inc. (NASDAQ: STRA), and Corinthian Colleges Inc. (NASDAQ: COCO) have all struggled with recent federal restrictions on recruitment and student loan requirements. Grand Canyon Education Inc. (NASDAQ: LOPE) has managed to prosper in the new environment by keeping its tuition costs low and attracting more students to online programs.

Apollo announced that it will close 115 of its locations, including 25 campuses and 110 learning centers, a move that will affect about 13,000 students. That will leave the school with 112 locations. The University of Phoenix claims 328,000 students enrolled in degree programs, and new student enrollments in the quarter of 52,800. Both represent double-digit declines from a year ago.

For these schools, the still-high unemployment rates stunt enrollments because there are so few prospects after the course of study is completed. Job prospects have not been much better for college graduates of traditional non-profit schools, but the outlook is improving somewhat for 2013 graduates according to the National Association of Colleges and Employers (NACE).

Grand Canyon Colleges has managed to avoid the carnage by limiting its physical presence to one location and enrolling more students in online classes. The school, a Christian liberal arts university, has also kept its tuition lower than tuition at local state schools in Arizona. These advantages may begin to evaporate as state and private non-profit colleges expand online offerings.

Today, though, the for-profit schools are getting hammered. Apollo’s shares are down 17.7% at $22.62 after posting a new 52-week low of $22.50. The prior 52-week range was $25.77 to $58.29.

DeVry shares are down 3% at $22.51 in a 52-week range of $18.15 to $46.92.

Strayer’s shares are down 5.8% at $65.66 in a 52-week range of $62.53 to $100.00.

Corinthian Colleges’ shares are off 4.9% at $2.53 in a 52-week range of $1.69 to $5.21.

Shares of Grand Canyon are also down, about 1.5% at $23.00 in a 52-week range of $14.12 to $24.41.

Paul Ausick

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