Apollo Group ( APOL) Year-to-Date Share Price Percentage Loss: -38.97% Market Capitalization: $5.74 Billion Apollo warned in October that student enrollment would be down more than 40% in fiscal 2011's first and second quarters , after falling 10% in the fourth quarter, ended Aug. 31. Apollo withdrew its earnings outlook and warned it would fall out of compliance with the 90:10 rule in fiscal 2012. Apollo, the parent company of University of Phoenix, Institute for Professional Development, College for Financial Planning Institutes and Meritus University, would have to increase its tuition rates if access to federal aid is cut off, further inhibiting student enrollment. "What a disaster," said Sterne Agee & Leach analyst Arvind Bhatia at the time. "The industry is starting to see some signs of more meaningful slowdown than anyone had expected two months ago." One reason for the significant decline in student enrollment is Apollo's implementation of a mandatory three-week orientation, beginning Nov. 1, for all new students enrolling at University of Phoenix with fewer than 24 transfer credits. The program -- which Apollo said results in about 20% of new students leaving the school before classes even begin -- should help to counter criticisms that Apollo and its for-profit education peers leave students with hefty loans but without qualifications for meaningful employment. The Education Trust, a non-profit student advocacy organization, released a report in November showing that six-year graduation rates at University of Phoenix, the largest for-profit college in the U.S., were just 9%. Broken down by campus, University of Phoenix's online campus, its largest by enrollment with more than 175,000 students, had the lowest six-year grad rate at just 5%. Students were most successful at its New Mexico campus, where 33% of students could expect to graduate. On Dec. 1 Apollo confirmed that it would lay off 700 employees at its University of Phoenix facilities, mainly in the school's admissions personnel department. The move may reflect a realization that expected restrictions on incentive-based recruiting practices -- part of the proposed for-profit education industry regulation -- would limit its need for such a large admissions staff. The company said in October it would discontinue compensating employees based on enrollment results as it works to smooth over criticism about its recruiting practices. Apollo posted better-than-expected fiscal fourth quarter earnings of $1.31 per share. Current fiscal-first quarter profits, due to be reported on Jan. 10, 2011, are expected to come in at $1.35 per share. If results are in line with expectations it would represent a 12.3% decline from year-earlier EPS of $1.54.