Interesting article from University Ventures Fund:

If you’ve seen Moneyball, the new baseball film about the unlikely success of the Oakland A’s and their out-of-the-box-thinking General Manager Billy Beane, you may have already drawn parallels to the current state of higher education. If not, we’re pleased to do it for you!

Like baseball ten years ago, higher education is focused on what’s easy to measure. For baseball it may have been body parts, batting average and the number on the radar gun. For higher education, it’s the 3Rs: research, rankings and real estate. Each of these areas is easily quantified or judged: research citations or number of publications in Nature and Science; U.S. News ranking (or colleges choose from a plethora of new entrants to the ranking game, including the international ranking by Shanghai Jiao Tong University); and in terms of real estate, how much has been spent on a new building and how stately, innovative and generally impressive it appears.

Unfortunately, the 3Rs correlate about as closely to student learning and student outcomes as batting average or fastball velocity, which is to say, not at all. Buildings are the “ugly girlfriend” of higher education.

Universities that continue to focus on the 3Rs in the wake of the seismic shifts currently roiling higher education (state budget cuts, increased sticker shock, technology-based learning) are either not serious about improving student learning and student outcomes, or they’re like the baseball fan who has lost her car keys in the stadium parking lot at night: Where does she look for them? Not where she lost them, but under the light because that’s where she can see.

To read the entire article: http://universityventuresfund.com/publications.php?title=moneycollege-where-is-the-billy-beane-of-higher-education

The winners were announced today for a new fellowship that has sparked heated debate in academic circles for questioning the value of higher education and suggesting that some entrepreneurial students may be better off leaving college.

Peter Thiel, a co-founder of PayPal, will pay each of the 24 winners of his Thiel Fellowship $100,000 not to attend college for two years and to develop business ideas instead

Doesn’t this continue to demonstrate that traditional education is not the right choice for everyone?  Career based education & accelerated paced degree programs commonly offered by for profit education firms are more aligned with the needs of many.  Watch and you will see many of the traditional colleges take another page from the for profit schools by offering accelerated programs 3 years for a bachelors, 18 months for an associates…

Good article from the chronicle: http://chronicle.com/article/Thiel-Fellowship-Pays-24/127622/?sid=at&utm_source=at&utm_medium=en

Two years ago, the founders of the University of Phoenix announced plans that they were going to create an independent, nonpartisan research institute to examine significant educational issues affecting nontraditional students and for-profit higher education. Industry analysts, excited to get a peek into the loads of data that Phoenix and other proprietary institutions track about their students and teaching methods,were excited about the news.

The report, “For-Profit Colleges and Universities: America’s Least Cost and Most Efficient System of Higher Education,” lofts praises of the University of Phoenix and other for-profit colleges. It postures that many of the problems of the industry highlighted in Congressional hearings and flow of negative news accounts are not systemic, and also dishes an attack on traditional colleges as “studies in inefficiency.”

the full report is available here: http://nexusresearch.org/1/NexusStudy8-31-10.pdf

An article with that title was published on the website Inside Higher

Education.  In their opinion the gainful employment rule is expected to be excluded from next

week’s education proposal.   The article outlines that the Office of Management and Budget

included a note in the Federal Register concluding that the DOE’s proposed program integrity

rules could have a major economic impact, a designation that would require the DOE to

strengthen the evidence necessary to justify the need for the regulation.  Furthermore, the article mentions

that the designation is believed to be a major reason why the DOE has (according to reports

from several sources Thursday, though unconfirmed by department officials directly) decided

to omit the gainful employment proposal from the proposed regulations expected to be

released next week.  This if the outcome follows the assumption will bring smiles to many of the faces I saw at last

weeks CCA.  Lets hope!

Apollo pre-announced results fiscal 2Q10 results, with EPS from continuing operations lower than our and the consensus estimate. 2Q10 EPS from continuing operations is expected to be $0.77-0.82 versus the consensus estimate of $0.94.

The pre-market announcement apparently is due to

 1) higher than expected bad debt expense,

 2) greater than expected investments in BP Holdings, the European education company that Apollo recently acquired.

Expected bad debt expense surged well above estimates as a % of revenue of 6.8-7.1%(a ~280 bps increase YoY) is higher than our estimate of 4.7% (a ~60 bps increase YoY). The lower than expected Q2 EPS also reflects a loss per share from BPP Holdings. Apollo has authorized a $500M incrase in the share repurchase program. The size of the share repurchase authorization program is now close to $800M.

The company will hold its 2Q10 conference call on March 29.

Security Analyst Faults Barron’s Cover Story on For Profits:

 A cover story (http://online.barrons.com/article/SB125755384448934953.html#articleTabs_panel_article%3D1%26articleTabs%3Darticle) this week in Barron’s takes aim at for-profit colleges and universities, saying student graduation rates and default rates are worse than those at traditional colleges, and that student dropout rates are as high as those at public universities.

 ”For-profit schools like to blame dropouts and defaults on the population of poor and minorities the industry ‘serves,’” concludes Bill Alpert, the article’s author. “But the evidence doesn’t show whether the industry’s serving that population or preying on it.”

In a two-page critique released Monday, Ariel Sokol, a New York City-based analyst with Wedbush Securities, picks apart the article, describing it as sensationalized and saying the author’s analysis is flawed.

 In particular, Sokol says Alpert uses U.S. Department of Education data on drop-out rates and graduation rates for full-time, first-time students pursuing bachelor’s degrees. Yet for profit institutions serve primarily working adults who are rarely first-time students, observes Sokol.  Therefore the department data that Alpert relies on “represents a fraction of the total enrolled students,” at for-profit institutions says Sokol.

 He also says that because for-profit institutions typically have open admissions policies they are likely to have lower student retention rates. Additionally, he writes, pursing a degree as an adult is harder than as an 18-24-year old, leading to higher drop-out rates.

—-Andrea L. Foster

Academe may look askance at Straighterline.com, (www.straighterline.com) the commercial service that offers basic college courses online for $99 a month. But the enterprise has lately been getting a lot of press attention, with some education experts seeing it as an harbinger of higher education’s future.

 The service, which started last year, allows students to take as many self-guided courses as they want for —as Straighterline’s Web site says — “less than the cost of your monthly cell phone bill.” 

 The $99 fee gives students access to course content from McGraw-Hill, 10 hours of one-to-one instructional support, and a course advisor. The business grew out of SmartThinking, a popular online tutoring service.

 What’s in it for students? A fast track, relatively inexpensive way to a college degree. Straighterline has partnered with at least four accredited higher education institutions that have agreed to accept credits from Straighterline students.

 The company Web site lists four partners: Charter Oak State College, Fort Hays State University, Lake City Community College, and Potomac College. Potomac is the sole proprietary institution.

 An article (http://www.washingtonmonthly.com/college_guide/feature/college_for_99_a_month.php?page=all) in the most recent issue of Washington Monthly traces the development and struggles of Straighterline and warns big and non-elite colleges that the Washington DC-based business could herald their unraveling.

 ”The day is coming—sooner than many people think—when a great deal of money is going to abruptly melt out of the higher education system, just as it has in scores of other industries that traffic in information that is now far cheaper and more easily accessible than it has ever been before, ” writes Kevin Carey, the author of the article. “Much of that money will end up in the pockets of students in the form of lower prices, a boon and a necessity in a time when higher education is the key to prosperity.” 

In another article (http://features.csmonitor.com/innovation/2009/10/15/the-future-of-college-may-be-virtual/), this one in the Oct. 15 edition of the Christian Science Monitor, Carey is quoted discussing Straighterline in the context of the growth in online education.

And in an opinion piece (http://www.insidehighered.com/views/2009/10/06/hess) in Inside Higher Education, Frederick Hess, of the American Enterprise Institute, cites Straighterline as one example of why President Obama’s initiative to get the government involved in developing free, online courses is unnecessary.

 —- Andrea L. Foster

ForProfitEDU.com

We had received many requests to create a new faculty subgroup within the forprofit edu group on linkedin.  So here it is: http://www.linkedin.com/e/vgh/2111792/  The group is for any & all current, former or those who want to get a job as faculty.

For the last 7 years the lead flow and search volume have followed a distinct trend of seasonality.  This year however April has appeared to buck the trend on search volume.  April EDU traffic has surged in many of the top edu related terms, when it normally would have begun to fall off.  If you look at the year over year volume you usually see a strong Jan-mid-March then a continued decrease from the end of March though the end of July.  This has not been the case this year.  Will may fall off the cliff or continue to set a new trend.  Is this driven by the economy..has the lack of jobs for new grads pushed them to reconsider continued education?

There have been a number of entrants into the online degree space whose tuition are at significantly lower price points than the majors.  Some of these have seen tremendous enrollment growth over the last year to two. In addition, they have remained (in many cases) extremely profitable.  What are your thoughts on these low price providers?  How do you think they will fare long term?  Will they be able to continue to grow with the high marketing/lead costs?