EDUCATION DIVE: How might these 6 for-profit institutions fare in 2015?

Career College Central Summary:

  • What will 2015 bring for the for-profit college industry?
  • A major factor in the prognosis will be federal regulation. While a Republican-controlled Congress should help block an aggressive regulatory push by the Obama administration, the U.S. Department of Education’s gainful employment rule is set to take effect in July. The rule establishes minimum outcome standards related to student debt levels for programs that provide job training, including most for-profit colleges — and programs that don’t meet the standards are at risk for losing eligibility for federal student aid.
  • Here’s what may be in store for six of the larger for-profit college providers, according to analysts and the companies themselves:

    • Strayer Education

      • With the gainful employment rule on the way in 2015, some analysts give the for-profit college industry a poor outlook. According to TheStreet.com, stricter regulations for the industry and an improving economy, with fewer people returning to school to improve their skill sets, mean that the sector may not be worth investing in.
      • Seeking Alpha argues that the stronger regulations anticipated for for-profit educators, such as Strayer Education, will push student enrollments and revenues lower.
      • The company’s Strayer University had a 2014 fall-term enrollment of 42,189 students, down 2% from one year earlier. New student enrollments were down 5%. Strayer’s enrollment and annual revenues have been declining since 2010, when they were 60,700 students and $636.7 million, respectively. For 2013, the totals were 43,200 and $503.6 million. Strayer’s undergraduate and graduate degree programs are aimed at adult students in business administration, accounting, information technology, education, health services administration, public administration, and criminal justice.
      • According to TheStreet.com, Strayer Education stock was among the biggest gainers in the for-profit college sector in 2014, rising 109.8% in 2014, while DeVry Education Group gained 34.8%. Apollo Education Group was up 22%, and Capella Education climbed 12%.
    • DeVry Education Group

      • DeVry Education Group Inc. owns Advanced Academics, American University of the Caribbean School of Medicine, Becker Professional Education, Carrington College and Carrington College California, Chamberlain College of Nursing, DeVry Brasil, DeVry University, Ross University School of Medicine, and Ross University School of Veterinary Medicine. DeVry’s reported combined enrollment as of Sept. 30 was 245,172 in 2014, compared to 244,878 in 2013.
      • DeVry expects that its acquisition of Damásio Educacional, one of Brazil’s largest test preparation providers for the bar examination there and a provider of law programs, will close in Feburary 2015. The company’s management is predicting its medical/healthcare and international segments will increase their revenues at more than 10% over the next three to five years, starting in 2015.

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EDUCATION DIVE

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