The Career College Next Door

Rasmussen College is a relatively small fish that prefers small ponds. That may be why the for-profit chain is sitting pretty compared to many of its higher-profile peers.

Economies of scale and easy access to market capital fueled the explosive growth of large, publicly traded for-profit higher ed providers during most of the last decade. Companies like Education Management Corp. and Kaplan Higher Education followed Apollo Group’s lead in developing centrally controlled curriculums and advertising them to vast numbers of students.

But the bottom fell out with the recession and the withering scrutiny of regulation-minded lawmakers and the news media. Now most of the big for-profits are grappling with slumping enrollment and revenue, as well as worried investors.

Career Education Corporation, for example, saw its net income drop to $19 million in 2011 from $158 million the previous year, while new student enrollment dipped by 27 percent (when comparing fourth quarters). The company hasn’t been helped by a scandal over its job-placement reporting, a related review by its accreditor, the departure of CEO Gary McCullough and a steep share price slide — all last fall.

Meanwhile, Rasmussen has stayed out of the news and continued its growth aspirations, increasing enrollment to a total headcount of 15,600 from 9,500 three years ago. While Rasmussen is still a modest-sized institution, it has managed to grow and ramp up hiring despite the recession, company officials say, adding a few campuses as well.

The college was founded in 1900 in St. Paul, Minn. In addition to online offerings, it has deep roots in the Midwest, with 17 campuses in mostly small towns in Minnesota, Illinois, Wisconsin and North Dakota, as well as the growing presence in Florida, with five campuses.

“We’ve been in these communities for a long time,” says J. Michael Locke, Rasmussen’s vice chairman.

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