Apollo Group, Inc. Announces Outsourcing Agreement for Financial Aid Program Processing

Phoenix, Arizona, December 15, 1998 -- Apollo Group, Inc. (Nasdaq:APOL) today announced a strategic outsourcing agreement with Arthur Andersen Process Solutions (AAPS) designed to simplify and strengthen the administration and processing of its student financial aid programs for two of its wholly-owned subsidiaries, the University of Phoenix, Inc. (University of Phoenix) and Western International University, Inc. (WIU).

Todd S. Nelson, President, Apollo Group, Inc., said, "This outsourcing agreement with AAPS is a cost-effective and more efficient way of processing our financial aid service to our students. We are excited about the increased level of support, the focus on best practices in the industry, and the enhanced processing quality we will receive. We believe this is essential in serving our students with the highest level of financial aid service."

Through this relationship, AAPS will manage major portions of University of Phoenix’s and WIU’s student financial aid programs in full accordance with Federal regulations including the processing of student awards, the disbursement of awards, and the calculation of refunds.

Christine Kirk, AAPS Partner, said "University of Phoenix and WIU are already leaders in educating business professionals and this is an opportunity for them to participate in the leading-edge business practice of outsourcing. The decision to entrust AAPS with University of Phoenix’s and WIU’s financial aid programs lets Apollo Group, Inc. strengthen its core business and delegate a critical, but non-core, function to an appropriate partner. This agreement illustrates AAPS’ central goal, which is to deliver experienced and efficient strategic process solutions. This is particularly important when companies, like Apollo Group, Inc., are at key junctures in their development and growth."

AAPS is a practice of Arthur Andersen LLP. It creates and operates world class business process solutions which improve profitability and business performance of its clients.

Apollo Group, Inc., through its subsidiaries the University of Phoenix, Inc., the Institute for Professional Development, the College for Financial Planning Institutes Corporation and Western International University, Inc., is one of the largest providers of higher education programs for working adults in the United States, with total degree-seeking enrollment of approximately 71,400 students. Educational programs and services are currently offered at 114 campuses and learning centers in 34 states, Puerto Rico and London, England.

For more information about Apollo Group, Inc. and its subsidiaries, call 1-800-990-APOL.

This press release includes statements, which may constitute forward-looking statements made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. This information may involve risk and uncertainties that could cause actual results to differ materially from the forward-looking statements.