Question-and-Answer Session
Operator
[Operator Instructions].
Your first question comes from the line of Mark Marostica with Piper Jaffray.
Mark Marostica - Piper Jaffray
Good afternoon, everyone.
John G. Sperling - Acting Executive Chairman
Good afternoon.
Mark Marostica - Piper Jaffray
My first question actually my only question I suppose relates to the big jump in G&A this quarter. Can you give us a sense if in fact any of the incremental items or more one-timish nature that impact only this quarter. And tied to that, give us some color as to what you think the current run rate of that item will be as a percentage of revenue or an absolute dollar? Thanks.
Joseph L. D'Amico - Executive Vice President and Chief Financial Officer
Yes, I wouldnít describe it as one-time. I would say that we were under invested in the areas of accounting and finance. And weíve made those adjustments we were under invested from a legal standpoint, weíve made that investment. The biggest change there was the 1% in terms of a stock-based compensation, and our investment in technology, part of our technical group is rightly appropriated in G&A. Thereís been a jump there. I wouldnít expect a decrease in that but as we move forward, I would expect that it will be somewhat similar to what we done from a space standpoint. We really have an eliminated space but we gained a percentage point here because as enrollments and revenue grew, we didnít have to grow that in relationship to those increases. I would expect the same thing what happened with G&A. I donít think it will be a 5.2 and I know that we wonít be as highest as we are today. We will have a budgetary meeting at the end of every quarter. Well watch those to the investments that we made very carefully. We will only add if itís absolutely necessary so that we hope as revenues grow the investments that we made to catch up wonít grow, our commitment with them and overtime weíll start moving that down. I donít know whether we would get the 5.2, but we wonít be as high as we are today.
Mark Marostica - Piper Jaffray
And jut a follow up on that point, you mentioned bad debt as a driver as well as the up tick in G&A, can you give us a sense of what your target levels of bad debt as a percentage of revenue are as you look to the coming quarters?
Joseph L. D'Amico - Executive Vice President and Chief Financial Officer
Yeah, thatísÖ I would say the same thing. We need to first stabilize it and some of the things that are going on, I think the increases into which in revenue per student Axia are pretty good indicator that we have the capability to increase retention levels today, which is the key driver to long-term decreasing bad debt that expense the percent of revenue. I think thatís an indicator that we are capable of doing it. We also know that there are certain campuses that we have out there, who have significant numbers of Axia college students and they are managing bad debt at the expense of revenue better than campuses especially in those new areas like in Northeast and the Midwest. So, I donít think bad debt as expense of revenue will get down to 2. I donít expect long-term for to be as high as it is today. I think it will moveÖ we will be focused on moving it down gradually and overtime get somewhere in the middle.
Operator
Your next question comes from the line of Sara Gubins with Merrill Lynch.
Sara Gubins - Merrill Lynch
Hi. Thank you. Good afternoon.
John G. Sperling - Acting Executive Chairman
Hi, Sara.
Sara Gubins - Merrill Lynch
The 800 million that you are putting into Apollo Global, can you talk about where thatís coming from and what the timing of putting it would be and also whether or not there are any incremental cost associated with setting up Apollo Global that we expect to see, saws in the income statement?
John G. Sperling - Acting Executive Chairman
Greg, why donít you take that and then Iíll add?
Gregory W. Cappelli - Director and Executive Vice President
Sure Sara. Those are commitments so those are not actually amount that have fund yet and that amount can come from a number of different areas as we talked about from the capital structure before how we are evaluating that, but also from our internal generated free cash flow, which you could see from our financial statement.
Sara Gubins - Merrill Lynch
Okay. So but the timing I am putting it in the argued decide to make an investment?
Gregory W. Cappelli - Director and Executive Vice President
Thatís right. Absolutely.
Sara Gubins - Merrill Lynch
Okay. And then any incremental cost, where we would see sure, before those investments were made?
Gregory W. Cappelli - Director and Executive Vice President
Well, just Brian add on please from my perspective, weíve already put team of people in place as we talked about before to cover areas like China, Brazil, Latin America, India and a M&A staff and part of those investments that what Brain was talking about in terms of adding to the G&A. So, I feel good that we have a good team in place, could there be additional investment as we go, going forward, absolutely but that will be commencement with the investments weíre making and the growth and returns we see within those investments.
Brian E. Mueller - President and Director
Yes, I guess, Iíd like to add that, I think the big difference between a Apollo Global and Apollo International is that we didnít do a very good job of leveraging, the Apollo Group and itís really substantial infrastructure from a technical standpoint and marketing sales standpoint etcetera. And we are going to do a better job of that with regards to Global or Apollo Global.
Sara Gubins - Merrill Lynch
Thank you. If I can seek an another follow-up, could you talk about as the trends over the course of the next year and whether or not youíre expecting any leverage in that line item?
Brian E. Mueller - President and Director
John?
John G. Sperling - Acting Executive Chairman
Yes. We are goingÖ we do expect that, we can, I mean, itísÖ when, in the industry wide you go from 18% and 19% to a highest 38%. And when you look at our company at lower 21%, a high of 29% obviously thereís a huge opportunity there. And when fast these things are changing on the internet, we do want to be on a leading edge and how we use that people to communicate to all of our constituencies and an eventually to be able to lower the cost. So like I said, our objective in the first six-month, is to make a smooth transition to make sure that we donít step backward which we have a lot of confidence that we will not and once we have made that happen, then we will start focusing on lowering that cost for acquisition, this is our goal to get back to where we were in a best absolutely. We wouldnít make any significant investment like this and we didnít think we can do that. But we will take it slow. We will make sure that in the course of the first six months, we are very happy with where things are going from our student acquisition standpoint both in terms of growth and cost, first of all do not step backward and then start making improvements.
Operator
Your next question comes from the line of Edward OíConnor with JP Morgan.
Edward OíConnor - JP Morgan
Hi, thank you very much. Just to be clear, does this new Apollo Global support Apollo International and does this $800 million kind of characterize your capital commitment in that growth market forÖ letís say the next three to five years?
Brian E. Mueller - President and Director
Go ahead, go ahead, Greg.
Gregory W. Cappelli - Director and Executive Vice President
It does supplant to Apollo International and the $800 million commitment is something that we felt appropriate to put on the table initially. So, we can sit here today and tell you how long itís going to take us to go to that capital. Weíve talked about on previous calls, we have a discipline for looking at investments and the return we expect to generate from those investments and will employ that same discipline internationally with Carlyle as our partner. So, weíd love to put capital to work if we think it isÖ itís going to be a great return for our shareholders. But again, as of right now, we canít tell you exactly how long it is going to take to go to that capital.
Edward OíConnor - JP Morgan
Great. Thank you very much.
Operator
[Operator Instructions]. Your next question comes from the line of Trace Urdan with Signal Hill.
Trace Urdan - Signal Hill
Hey, good afternoon. Brian, it has been a year since you gave us the magic numbers of 32, 43, and 93, and I am wondering if you guys might consider updating those numbers for the graduation rate for Axia and number of Axia students to continue on to pursue their BA and what retention is like for those student once they continue it UOP?
Brian E. Mueller - President and Director
Yes. The number we gave was 32, 43, and 93, 32% for finishing, 43% for transferring, 93% were persisting once they transferred. Those were conservative numbers, because it looks the first [inaudible]. Those numbers improved just because of time given and they are continuing to improve, but we are not giving those out.
Operator
Your next question comes from the line of Amy Junker with Robert W. Baird.
Amy Junker - Robert W. Baird
Hi. Good afternoon. Can you talk a lit bit about the number of new programs that you are planning to add? How that splits between the associates, bachelors, masters, and doctorates? And I think you said you are adding 42 new programs this coming year, if thatís correct?
Brian E. Mueller - President and Director
Yes, the 42 are in development. They are coming in all four of those areas. Right now, there is probably a few more at the associates level than in the other areas, although, we believe there is a potential to grow in all the other areas. We are excited about this prospect, both from the standpoint of conversion of lease and also retention of students. The obvious advantage that we have is that we have the most scalable online program and when we look now at programs that, for example, would have the potential ofÖ maybe 5000 students in the country. In the past, when you spread those 5,000 over 100 plus campuses, you couldnít get the class size or instructor necessary to make them profitable local market, but as we take those more niche programs and as we develop them for online delivery only, we donít have the problems ofÖ in both class size and faculty depth. And so, we are enthused about our ability to do this in a way that we couldnít in the past, because the market is demonstrating such a willingness and desire to want to go to school online.
Operator
Your next question comes from the line of Mark Hughes with SunTrust.
Mark Hughes - SunTrust Robinson Humphrey
Thank you very much. Any difference this quarter in the rate of students returning to the program after 12 months versus completely new students, and that any comment on starts in September and October?
Brian E. Mueller - President and Director
Iím the first one to know. There hasnít been change there really at all. On the second one, no, we're not giving guidance.
Operator
Your next question comes from the line of Jeff Silber with BMO Capital Markets.
Jeffrey Silber - BMO Capital Markets
Thanks. I just wanted to drill down a little bit further into the Axia roman numbers. This is actually a two-part question. If I look at the new student enrollment in Axia, it was only slightly higher in absolute terms than it was in 3Q í07 and when I compare that to last yearís 3Q to 4Q, we saw a sequential jump. I was wondering was there anything in terms of timing of starts or anything going on there. And then the second part, Iím not sure Iím calculating this correctly, but if I look at the retention rate from 3Q to 4Q and compare that to last year, it looks like it got a little bit weaker in this year, again, 3Q to 4Q than it did last year. I was wondering if you could comment on both of those.
Brian E. Mueller - President and Director
Yes. In terms of the first question, thereís been no change from a timings standpoint. And so, there has been no change from a timing standpoint. As to the second one, Iím looking at those numbers now. Can you repeat that question again please?
Operator
Iím sorry, sir.
Brian E. Mueller - President and Director
Yes. Can you repeat that question again please?
Operator
One moment. Mr. Silber, your line is now open.
Jeffrey Silber - BMO Capital Markets
Okay. Thank you very much. I just was wondering on the second question, if I look sequentially going from 3Q í07 to 4Q í07, it looks like the number Axia students that you've retained was lower as a percentage when I compare that last year from 3Q í06 to 4Qí06? [Inaudible]
Brian E. Mueller - President and Director
Yes. We've notedÖ let me see if IÖ I think the difference there is that in Q4 í06 we had a period there where we hadÖwe recruited lots of Axia college students. It was our first time our ground base enrollment counselors were recruiting students and putting them into Axia. And they recruited a lot of them. But many of them did not stay in the program. And so, you have kind of a number there from a new start standpoint that looks greater than what it really was. When you look at Q4 í07, we made significant progress there. And so the total number of Axia college students started in the fourth quarter of í07 may not look like that percent wasÖ of increase was as great as the previous years, but total enrollments are reflected in the increase in revenue that we adjusted 14.2%. And so, what looks like more students in the fourth quarter of í06 really wasnít. Weíre retaining, weíre not starting to make students drop quickly, and therefore, the overall contribution to the enrollment number is greater.
Jeffrey Silber - BMO Capital Markets
Okay. I get it, better quality than quantity.
Brian E. Mueller - President and Director
Yes, and thatís the reason for the comment on increased revenue per Axia college student in the firstÖ fourth quarter of this year versus the fourth quarter of last year. There was a huge increase there. We are happy about the increase, but the increase was dueÖ a little bit to the fact that we had a lot of students who started in Axia fourth quarter of last year, but didnít stay.
Jeffrey Silber - BMO Capital Markets
All right. Great. I appreciate the color. Thanks.
Brian E. Mueller - President and Director
Okay.
Operator
Your next question comes from the line of Gary Bisbee with Lehman Brothers.
Gary Bisbee - Lehman Brothers
Hi guys, good afternoon. The question is just taking a look at the starts growth here, it seems like, although, we donít have the data to really be able to know. But it seems like this year, you were up against pretty easy comps and that there was under spending early last year on marketing and it was a weak year for start. So, I know you are not giving guidance, but as we look forward into the next year, how should we think about the trend and start to growth rate. Is it going to converge fairly quickly with the trend you expect in total student growth? Or are we likely still to see a number where starts continueÖ can continue to exceed that number for a while?
Brian E. Mueller - President and Director
Well, again weíre not giving guidance, but I will tell you that the 15.4% number in the fourth quarter as compared to 20% plus in the third quarter and as compared to the number in the fourth quarter of the prior year was in part due to the fact that the quality got better. And so, that number in the fourth quarter as even compared to the second and third quarterÖ sort of second and third quarters of this year, I think you have to be fair. You have to look at that number and evaluate it from the standpoint of the improvement from a quality standpoint and I think you have to take a look at the relationship between that number and the revenue number of this year and compare those to prior quarters. And if we look at from that standpoint, I guess I will say that we are infused about the direction that we are going from both a new enrollment standpoint and a total enrollment standpoint, and its impact on retentionÖ I am sorryÖ impact on revenue.
Operator
Your next question comes from the line of Jerry Herman for Stifel Nicolaus.
Jerry Herman - Stifel Nicolaus
Thanks. Good afternoon everybody. Brian, question about the new program, the follow-up to one earlier. The 20 new programs that you talked about and as I understand sort of 5,000 potential in those programs is a rough target, could you may be giveÖ what sort of impact that had year-over-year on enrollment? And what the absolute number of programs there were at year-end?
Brian E. Mueller - President and Director
You can go to website and you can take a look at all the new programs we have started this year, they are out there. You can take a look at all the programs that we have in terms of those new programs and their contribution to enrollment. You can see slightly improved conversion rate on these. And there is number of factors, but we think one of the factors is giving students exactly what the program it is that they are looking for versus looking towards a program that might not fit their specific career goal. So, I think that is important, but I also think and can we know that there is a helping from retention standpoint. If you look atÖ when you look at more niche programs and you look at retention rate of students in those niche programs, because they are specifically related to the areas that people are working in or inspired to work in. Their retention rates are higher. Now how that could translate over the course of time and over the course of 40 new programs, as I figure that I can predict that, but there is enough of a trend there to know that we are moving in a right direction from that standpoint.
Operator
Your next question comes from the line of Suzanne Stein with Morgan Stanley.
Suzanne Stein - Morgan Stanley
Hi. Can you give us an update on insight and also an estimate for rate CapEx?
Brian E. Mueller - President and Director
Yes, from insight standpoint, we are in three states and just got approved for another difficult area in California, which is the equivalent of state or more. We have more toÖ we are probably working with eight additional states with a goal of opening four new states during this year. We would love to startÖ I would sayÖ we are working with eight, we hope to open six. And so we would like to start the fall of next year with around 10 states. There are currently 23 states that have approved charged school legislation. There is significant investment going into insight this year, but we expect if we can be successful with those six new states that the revenues are going to jump pretty quickly.
Joseph L. D'Amico - Executive Vice President and Chief Financial Officer
On CapEx, I think if you look at our financials, you will see we spent about $61 million on CapEx, and we expect that number to be about the same if not a bit more.
Operator
Your next question comes from the line of Corey Greendale from First Analysis.
Corey Greendale - First Analysis
Hi, good afternoon. Question on the new bachelors enrollment. Are youÖ can you give us some sense of how many of the new bachelors students who people whom articulated from Axia, and thought is not the exact number at least some qualitative commentary, and else if you give a sense of what the tax rate might be for ë08? Thanks.
Gregory W. Cappelli - Director and Executive Vice President
Yes, we are not giving out that information specifically. Although, I will tell you that there is some enthusiasm around this whole process because that pull Axia college students is rolling by the week and by the month and weÖ itís very much a priority to work with those students very closely. We know exactly how many students in the next three months will get to the 42 credit hour limitÖ our 42 credit hour amount, that is about when we begin working them very diligently to transition them to our back lawyer [ph] programs. We have a team of people in place who sold priority to do that. And so, I canít give you specific number, but I can tell you that part of bullishness about our strategy is that that number growing and we are working at number very hard.
Joseph L. D'Amico - Executive Vice President and Chief Financial Officer
On the effective tax rate, we donít have any information that would tell us it will be significantly different in the future at this point.
Operator
Your next question comes from the line of Brandon Dobell with William Blair.
Brandon Dobell - William Blair
Hi, thanks. I wondering if I can get some I guess better detail or clarity on the careerÖ current kind of pricing strategy. Also you mentioned whatís going on with Axia. Just want to get an idea as you look out the next two, three, four quarters, year-over-year comparisons, the national pricing strategy, we are only with that, are you seeing if bill converge around the lower number or higher number? Or how much disparity you see across the network of campuses those kind of things, just give an idea where we are as you are trying to get all that staff squared away?
Brian E. Mueller - President and Director
We at the doctoral level, we have significant room, and we are away entitled for loan limits and we know that that you can expect towards the increases that are traditional between 3% and 6% at the doctoral level and we can do that for a lot of years. At the master degrees level, the same is true. Weíve got significant room to increase prices, we are way under the title 4 loan limits. And so, watching that at the masters level from the competitive standpoint is more of a factor than watching Title 4 loan limit. I will say that as you see, although, a bit of a reduction in revenue per student at the masters level, the reason for that is that there is growth in the education and nursing areas that we havenít completed captivated, but there is significant growth there. Those programs tend to be at lower attrition rates in our business and IT programs and as well as those student become increasing percentage of our overall masters students back trend it might continue a little bit. However, Iíll say that we have room thereÖ significant room to increase to what master degree level and will do that in the coming years.
There is some room at the associates level. And we will continue to experience small increases at the associates level. At the bachelors level, itís mixed bag. Some of our students are below Title 4 limits, some are above Title 4 loan limits and we continue to monitor both the conversion rate I believe and the retention rate of students can be whether they are above or below Title 4 loan limits and right now we are just collecting data. We are continuing to evaluate it. We like the overall trend from a gross standpoint, and from our retention, and therefore, revenue standpoint, and so we donít feel any strong need to do anything in the short-term. But we will continue to watch, we will continue to monitor, we continue to evaluate and keep it updating.
Operator
Your next question comes from the line of Paul Beland with Citigroup Investment Research.
Paul Beland - Citigroup Investment Research
Hi, thanks. Just a question on retention. I am calculating it down this quarter about 200 basis points year-over-year, but there were a lot of comments to improving retention. I just want to kind of tie that together.
Brian E. Mueller - President and Director
Yes, I am not sure how you calculate that, I have to look at your calculation and obviously canít do that today. I think there is something thatís not completely accurate there. I think the strongest indication that retention is not deteriorating, but in fact is improving is the fact that gap between enrollment growth and revenue is growing, and it was the reverse of that number of yearsÖ number of quarters ago. And so, as we see that number, in fact, in third quarter was we have bought that even, which was an indication retention was improving. But when we got the gap to be where it is the fourth quarter, we knew that what we were watching from a numeric standpoint actually turning it out to be true from a revenue standpoint. So, I think thatís the strongest indicator that in fact retention is improving in that security.
Operator
Your next question is a follow-up question from Sara Gubins with Merrill Lynch.
Sara Gubins - Merrill Lynch
Thank you. Spending andÖ sorryÖ selling and promotion question. You mentioned that you hired new enrollment advisors and I am just wondering if you can give us some sense of the magnitude of that. And then also whether or not you are planning on ramping up marketing spend trend market Axia will directly over time?
Brian E. Mueller - President and Director
From the standpoint of the enrollment counselor, yes, we areÖ one of the things that is encouraging to us is that if you look at our mature markets, California, Arizona, Colorado, and the Mexico et cetera, we are looking at a growth rate there. But if you look at where we are getting a lot of our growth now, if you areas where we have been, where our market is still pretty immature, our products are pretty immature in the marketplace. And so, Northeast and Midwest, areas we havenít been strong in past from our management standpoint. We strengthened the management there. We are starting to see significant increases, especially in those two areas and thatís where we had the opportunityÖ we added the enrollment counsels.
As I said before for the most part, the increase advertising spend and enrollment counselor hiring will be commensurate or at least fairly commensurate and with our goals from a growth standpoint. But if we seeÖ we continue to see that there are areas in the country where we are under represented and where we are not growing as fast as we are capable, we will make those investments, but I wouldnít expect that it would be to the extend that we had two year ago. The second one from an Axia college standpoint, we are still watching that very carefully, an Axia college student today because we havenít really done a lot of publicizing of that brand. It looks still pretty similar to the University of Phoenix student that we have always got on average 29 or 30 years old. So, they are maybe two or three years younger, but there are people who are working and going to school at the same time. They are just starting with fewer college credit so we can put in into different learning model and different price point.
At some point, and we are experimenting with it now, we will get more aggressive about offering those programs to high school graduatesÖ to high school seniors. We are getting some movement there now, and we know that there is a belief that there is a significant population of high school graduates who donít want to leave their current environment. They donít want to leave and go away to school. They need to stay home. They want to work in a family business or they want to take their part time job and turn into a full time job in Axia college would be a really good way for them to start their academic careers. And so, we are experimenting with that now, and over time, we will be more aggressive there.
Operator
Your next question is a follow-up question from Brandon Dobell with William Blair.
Brandon Dobell - William Blair
I kind of follow-up on the Axia question. Any sense on what kind of timeframe we should expect when you have got enough data to be more definitive about the matriculation rates where you feel comfortable saying this is the trend we can expect and this is how the model, the Axia matriculation trends into UOP.
Brian E. Mueller - President and Director
Well, itís not a matter for us not having the data, itís a matter of right now for us believing that Axia college and our strategy is veryÖ it is a strategy that has big dividends that can pay the dividends in the future, and we are really not wanting to give a lot information out to our competition. And so, itís not right now we donít have the data. Itís not that we are not tracking, we are following very carefully because itís very, very important to us. Itís just that we are not especiallyÖ we are not ready to give that out, because we donít want to the end of our competition
Operator
Thank you. I would now like to turn the call back over to management for closing remarks.
John G. Sperling - Acting Executive Chairman
Thank you very much for your participation. We appreciate the questions very much, and we are looking forward to our next quarterís call.
Operator
This concludes todayís conference call. Thank you for your participation.
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