Education company Apollo Group will pay $67.5 million to settle lawsuit

Apollo Group will pay $67.5M to resolve lawsuit

PHOENIX — For-profit education company Apollo Group Inc. said Monday it will pay $67.5 million to the U.S. government to resolve a lawsuit, in addition to $11 million in attorney fees.

The lawsuit filed in 2003 by two private plaintiffs alleges Apollo’s University of Phoenix violated a rule stating that recruiters may be compensated partly for the number of students they enroll, but that cannot be the only factor determining compensation.

The company said that settling eliminates risks in taking the case to trial and is in the best interests of students, employees and shareholders.

The lawsuit was filed in U.S. District Court for the Eastern District of California, the Sacramento division.

“This agreement not only brings closure to a long-running dispute and enables the company to avoid the uncertainty and further expense associated with protracted litigation, it opens the door for a more constructive partnership with our lead regulator, the U.S. Department of Education,” said Charles B. Edelstein, co-chief executive of Apollo Group.

Shares of the company rose $5.23, or 9.2 percent, to $61.80.