Struggling online education giant Apollo Education may have found a white knight. According to a January 11th article in the Wall Street Journal, NY-based private equity firm Apollo Global Management is in advanced negotiations to purchase unaffiliated Apollo Education, the parent of the University of Phoenix, the largest U.S. online college.

According to the knowledgeable sources that spoke to the WSJ, the deal for Apollo Education is likely to be finalized at a price of around $1 billion.

Apollo Education shares are up 16% to $7.43 as of 2 PM ET Tuesday on the the news of a possible deal.

Apollo Global

Details on Apollo Global buying Apollo Education

The source also noted that Apollo Education had been in discussions with several private-equity firms since late last year, but Apollo Global Management is the only firm still involved in negotiations.

The company announced on Monday that it is in talks that “could potentially lead to a change of control of the company.” The online education firm did not, however, specify a possible buyer or give other details about a potential deal to purchase the company.

The statement noted that a sale could expand the firm’s strategic initiatives, such as international expansion and a plan to dramatically improve outcomes for all of its students.

Apollo Education Group, which owns online college the University of Phoenix, disclosed the ongoing negotiations in its fourth quarter earnings report on Monday, while providing investors with bad news as the company saw its third loss in four quarters. Nearly all online colleges have been suffering enrollment declines and seeing scrutiny of their recruiting, student job placement and student-loan default rates. The stock prices of most firms in the sector are more than 50% off their highs just two or three years ago.

The U.S. Defense Department announced this fall it had banned the University of Phoenix from recruiting on military bases and troops could no longer use federal money to pay for Phoenix classes. This summer, the firm acknowledged ongoing investigations by the U.S. FTC and the California Attorney General’s office into its marketing and other business practices. The company claims to be cooperating fully with all investigations.

For the quarter ending November 30th, Apollo Education Group reported a loss of $60.8 million, or 56 cents a share. Taking out restructuring charges and other items, the firm actually saw a profit of 29 cents per share, which was a bit under the 31-cents-a-share consensus analyst estimate.

A number of analysts noted that revenues had slipped by a worrisome 18% to just $586 million as total degree enrollment decreased 22% year over year..

The share price of Apollo Education was up initially on Monday, but slipped to $6.38 in late trading. The stock is down a stunning 76% over the last year, for a current market value of close to $700 million.

After the report on the talks with Apollo Global hit the wires late Monday, the stock moved up again in after-hours trading.

As reported by ValueWalk, Apollo Education Group was hit with an investigation by the Federal Trade Commission last summer.  FTC probe is trying to find out if unnamed persons, partnerships, or others associated with Apollo Education engaged in deceptive or unfair practices in advertising, marketing or selling secondary or post-secondary, educational accreditation products and services .

The FTC investigation requires Apollo Education Group to submit documents and information about the business and practices of the University of Phoenix from January 1, 2011 to date.

Some of the required information includes its practices related to its academic programs, accreditation, billing and debt collection, enrollment, financial aid, marketing, recruiting, tuition and fees, student retention, training and other matters.