Enrollments Plunge at Many For-Profit Colleges

Discussion in 'General Distance Learning Discussions' started by imalcolm, Aug 17, 2011.

  1. Cyber

    Cyber New Member

    Nope! I am not a spokesman for Capella. However, my observation of the industry, as well as the antecedent of the major online-only for-profits, prompts me to draw the conclusion. After all, are they (Capella and Walden) not competing against each other? Looking at their modus operandi, its easy to draw conclusions based on what each of them are doing. Almost everything about Capella is a replication of what Walden does. Besides, what else is there for them to do other than to expand to maintain shareholder value? Look closely at Walden's operations and you'll easily deduce Capella's next set of steps.
  2. CalDog

    CalDog New Member

    Funny you should mention Walden. A Morningstar financial analyst published a review last month entitled:


    Acquisitions Ahead for the For-Profit Education Firms?

    ... As these firms struggle to fill their classrooms (physical and virtual) and drive profits for their shareholders, we'll see more intense marketing and industry consolidation as likely outcomes over the next few quarters. ... With an eye toward identifying schools that would be attractive targets, we scoured a list of more than 1,800 U.S.-based proprietary educational providers. ...

    Sifting through the pool of schools, 10 stand out as attractive, based on the selection criteria listed above. We came away with a list of 10 prime post-secondary institutions that we think have an increased likelihood of being acquired by a larger (potentially publicly traded) education provider. This list of targets includes schools such as the Academy of Art University, Illinois Institute of Art, Technical Career Institutes, and Walden University. Notably, our list also included Renaissance Learning (RLRN), which just last month received an all-cash takeout offer from private equity shop Permira. The transaction is currently pending, as another bidder has entered the mix.


    Of course, this is just one outside analyst's interpretation. But it's interesting to note that Walden is getting some attention as an attractive acquisition target.

    The study also concluded that Apollo and DeVry were the most likely schools to make major acquisitions, with Capella and Strayer less likely. However, this was before the news about Capella's new credit line hit.
    Last edited by a moderator: Oct 12, 2011
  3. Randell1234

    Randell1234 Moderator

    Maybe Capella will buy NCU.
  4. Ted Heiks

    Ted Heiks Moderator and Distinguished Senior Member

  5. Petedude

    Petedude New Member

    Or Trident.
  6. Randell1234

    Randell1234 Moderator

  7. Cyber

    Cyber New Member

    We know what will happen to doctoral enrollment at the expensive online schools, if APUS (AMU and APU) starts offering doctoral degrees that attract those looking for online doctorates. If APUS becomes a cheaper alternative to schools like NCU or Trident, they could easily loose market share to a point that threatens their existence. That said, I see APUS as a serious target for acquisition. Why? Their low tuition is a serious threat to their expensive counterparts. (Capella, Walden, NCU, JIU, Trident). To eliminate that threat, at least in the short-term (Grantham University is going RA - and it will compete APUS, tuition wise), acquiring it and then raising tuition is the only way to eliminate the treat. Simple!
  8. Randell1234

    Randell1234 Moderator

    While this looks good in theory and comes in a nice simple package, if this was true UoP would not exist. There are many schools cheaper then UoP yet they have a huge enrollment. I do agree that it will have an impact if AMU offers a PhD program but I doubt NCU, Trident, Capella, and Walden will go under.
  9. Cyber

    Cyber New Member

    UoP, just like DeVry/Keller, has physical campuses spread across the country. These physical campuses convey a sense of legitimacy among the unsuspecting public (folks who are ignorant about accreditation, for-profit/non-profit argument, etc); hence, the reason why many continue to enroll at these institutions despite their high tuition rates. If I knew what I know now from participating in this forum (Degree Info), I would not have pursued my BS and MS degrees from DeVry and TUI (now Trident), respectively (yes, I'm confessing my ignorance).

    My point is that as much as we (DI members) think that the general population is or should be aware of the types of issues discussed here, the reality is that many aren't, and that is why enrollment continue to be high (atleast, until recently) at these schools. Also, because of the physical campuses, where many see more value from an education from a school with many campuses compared to one from a school that exist on the internet only, it will be hard for schools like UoP, DeVry, Argosy, etc. to disappear, compared to schools like Trident or NCU.

    Regarding going under, NCU and Trident stand more chance of disappearing (they lack good reputation and they don't care to improve it) compared to Walden (Walden is highly reputable and they make every effort to maintain it).
    Last edited by a moderator: Oct 13, 2011
  10. Randell1234

    Randell1234 Moderator

    I can not speak for DeVry now but when I went in the mid 80's to the south Jersey campus, it was far from easy. I was in the electronics program (yes resistors and caps) and it was a killer program. I also graduated from Touro (pre-sale to TUI/Summit) and it was connected to a very real campus with a strong reputation. I do agree that accreditation is important but I do not buy the whole profit/non-profit agruement. I think that is more of personal preference and other personal beliefs.

    I do see the point about a campus seeming more "real" then an online only school. I certainly hope, and assume you do also, that NCU and Trident work to improve their reputation.
  11. RFValve

    RFValve Well-Known Member

    Walden is part of the Laureate group that is a network of hundreds of Universities. They are very solid with a strong reputation among teachers and general public. Their doctorates in education are quite popular among administrators.

    NCU is very new and seem to be targeting mainly doctoral students. They have built some reputation mainly among people working as adjuncts. I know few adjuncts that got their doctorate from NCU and many adjuncts wannabes are doing NCU doctorates. It is a niche market but still good enough to maintain an operation. I don't see the school disappearing anytime soon but perhaps merging with a bigger school.

    The DETC schools are more likely of disappearing although some are quite strong due to low cost like Pennfoster.

    I noticed a decrease in enrollment in for profits, I teaching some classes with 4 or 3 students now. One school is coming with a new contract that pays per student instead of a lump sum for the course because they want to run classes with little enrollment.
  12. ryoder

    ryoder New Member

    I would have to believe that NCU pays per student since they have weekly enrollments. Paying per student makes the most sense really and I wish that public schools could do this. Some teachers are able to teach only 10 students well, while another teacher can teach with a much higher rate of productivity and take care of a large 40 student class and save all of us a ton of money.
  13. CalDog

    CalDog New Member

    Update: Enrollments still falling at UoP

    Apollo Group has reported results for the fourth quarter of 2011 (which is June, July, and August 2011). Their enrollments dropped for the fifth straight quarter. Enrollment peaked in the third quarter of 2010 (which is March, April, and May 2010). Since then, UoP has lost 90,700 students, or more than 20 percent.

    476,500 3Q 2010
    470,800 4Q 2010
    438,100 1Q 2011
    405,300 2Q 2011
    398,400 3Q 2011
    380,800 4Q 2011

    New student enrollments are down, which suggests that this trend is likely to continue. Compare the new student enrollments for the 4th quarter over the past few years:

    102,000 4Q 2009
    92,000 4Q 2010
    61,200 4Q 2010

    At its peak, UoP was probably the largest university system in the country. But it now appears to be smaller than the SUNY and California State University systems.
  14. CalDog

    CalDog New Member

    The strange thing about this trend (at least to me) is that some degree levels are much more affected than others; UoP's enrollment is not falling equally across the board. Here are the number of enrolled students at UoP by degree level, from the third quarter of 2010 (enrollment peak) to the fourth quarter of 2011 (latest numbers):

    Associates - 212,100 to 136,300 - drop of 35.7 %
    Bachelors - 186,400 to 183,100 - drop of 1.8 %
    Masters - 70,400 to 54,000 - drop of 23.3 %
    Doctorate - 7,600 to 7,400 - drop of 2.6 %

    So in reality, the big hits to UoP's enrollment have come at the associates and masters levels. In contrast, UoP has suffered only minimal declines at the bachelors and doctoral levels.

    Don't know why this pattern should exist. It suggests that the incentives to go from an associate's to a bachelor's, or from a master's to a doctorate, are particularly strong. In contrast, it also suggests that the perceived rewards are smaller when you go from a high school diploma to an associate's, or from a bachelor's to a master's. Not sure if that makes sense.
    Last edited by a moderator: Oct 21, 2011
  15. Randell1234

    Randell1234 Moderator

    Maybe there are just better received and cheaper programs at those levels and people are going else where. The see the full picture you would need to know if all associate and masters degrees have dropped for all school. That can tell if your statement holds up (unless I read your statement of suggestion wrong).
  16. CalDog

    CalDog New Member

    Last line is for 2011. List should read:

    102,000 4Q 2009
    92,000 4Q 2010
    61,200 4Q 2011

    Well, that's possible. But I don't recall ever hearing that UoP associates or master's degrees are significantly better or worse than UoP bachelor's or doctoral degrees.

    True, but total nationwide numbers probably won't be available for a year or two. The UoP numbers are interesting even by themselves, because (1) they are available right now, and (2) UoP by itself is still a large sample.
    Last edited by a moderator: Oct 22, 2011
  17. Randell1234

    Randell1234 Moderator

    Maybe the people enter the programs [AA and masters] have just done more research...no idea. Maybe they blindly do a bachelors degree and hear the bad press and decide to go else where for a master...no idea. I have nothing against UoP by the way (except the outrageous tuition)

    Yes you are right but UoP is a very specific school with higher then average tuition, less then stellar reputation, etc. All of these things (and many others) make it a less then perfect indictator of an entire market. As my coworker says so often, "This one does not pass the smell test" If you wanted to say all super large for-profits with a strong online presence may be following the same trend I would be more open to it but not all schools.
  18. Anthony Pina

    Anthony Pina Active Member

    We have not seen our enrollments go down at all. In fact, this fall was our largest group of online students ever. Of course, we are not a publicly-traded corporation (our corporate office has 6 people in it) and our Chancellor likes to brag that we are, by design, the slowest-growing private sector university. I guess that's how you keep going for 50 years :)
  19. SurfDoctor

    SurfDoctor Moderator

    That's what it is all about. No greed at Sullivan, just purposeful, slow growth. I'll bet you don't have a staff of "counselors" who are paid by how many students they can enroll per semester.
  20. SteveFoerster

    SteveFoerster Resident Gadfly Staff Member

    If they're the slowest-growing private sector university, then if they do those people probably aren't very well paid. :wink:

Share This Page