University of Phoenix enrollment dropped 42 percent in the last three months of 2010 and is expected to plummet further.
Officials at the university's parent company, the Apollo Group, told the Arizona Republic that they expect enrollment to decrease an additional 40 percent in the first quarter of this year.
"This is a volatile time with many questions about the (education) sector and its growth prospect and our position within the sector," Apollo Group co-chief executive officer Gregory Cappelli told the Republic. "But we continue to believe that we are making the right decisions now to position the company for higher quality and more long-term growth."
The university and other for-profit colleges have recently faced increasing government and media scrutiny, due in large part to high student loan default rates, nefarious recruiting practices and low graduation rates.
The average for-profit college graduation rate is 22 percent.
Despite the enrollment dip, Apollo Group shares increased 10 percent Tuesday.