May 18, 2012

Many lead providers note lack of Demand for leads by large schools

 

demand for education leads

After many discussions with some of the top aggregators & lead providers it became clear that most noted a lack in demand by the major schools.  This softness in demand seems to be continuing from the first 8 months of the year by the major EDU players. Not all lead providers indicating lack of demand, a select few of the highest quality providers tell us that the demand for their leads (even at the higher prices) continues to be strong.

Vendors have noted schools being slow to test new campaigns, delays in providing campaign approvals, and restrictions pertaining to taking on new partners/affiliates.

For most schools the demand for leads softened last year and has continued thus far this year.  Many site internal changes, program changes, more emphasis on direct acquisition, branding compliance fears as well as internal admissions process changes.

It looks like supply has outpaced demand of EDU leads in the current market environment.  Now lets hope the schools continue to cut out the poor converting providers and test new higher quality ones.  If you are a school looking for top quality lead providers visit www.forprofitedu.com  and contact us for a free list.

Debt to Degree a new report correlating debt & degree completion

Education Sector has created such a measure, the “borrowing to credential ratio.”For each college, we have taken newly available U.S. Department of Education data showing the total amount of money borrowed by undergraduates and divided that sum by the total number of degrees awarded.

The results are revealing:

• Nationwide, the overall borrowing to credential ratio has risen sharply in recent years.

• Certain segments of the higher education industry—in particular, for-profitcolleges—are racking up far more student debt per degree than others.

• State policies matter a great deal, with seemingly similar public university systems achieving widely varying results for students.

• Among elite colleges and universities, some are making good on their pledgeto help low- and middle-income students graduate without major financialburdens while others are riding a wave of student debt to fame and fortune.

Keep in mind that this formula does not take into account the enrollment growth and thus lack of time for those new students to graduate, thus in many of the for profits case their number are artificially high as if they added 5000-35000 new students their numbers are significantly elevated due to their newness and do not reflect actuals.  This is a decent indicator for those schools with consistent flat enrollments

managing-student loan-debt

but not for those with rapidly changing enrollments.  Thus, those schools with declining enrollments may show better that actual results while those with enrollment growth will show higher inaccurate debt amounts.

 click here to viewreport: http://www.educationsector.org/sites/default/files/publications/Debt%20to%20Degree%20CYCT_RELEASE.pdf

Case study “all out WAR” in Media Coverage of For-Profit Higher Education

for profit education media war

You should check out the new study by Sage that goes into detail about the all out war in media coverage against the for profit education industry.  Utilizing various methods of analysis the study shows that clearly there was a tipping point in the negative media coverage relating to the for-profit education sector starting in May 2010.  Some again wonder who was behind this media push (short sellers or democrats seeking headline media attention), others simply shake their heads at the jadedness of many of the media outlets, and how news once known as unbiased coverage is now political rhetoric.  Which ever way you fall on this it’s clear that the media is hush hush about all of the positives while they stand on their soap box to scream about anything negative regardless of the accuracy.  It’s also clear how politics of the democratic party and self interest driven media sound bites clearly have played a role.   Just another reason the average American is being further disenfranchised with the political system and it’s win at all costs mentality, rather than working to improve the lives of Americans, they all too much focus on what ever helps them gain headlines, soundbites and re-election.

Linke to the study: http://sgo.sagepub.com/content/early/2011/07/08/2158244011414732.full.pdf+html

APSCU file a lawsuit against the United States Department of Education regarding its gainful employment regulations

 

 

We like & support the actions & efforts of APSCU

 

Dear APSCU Members:

Today your Board of Directors has authorized the Association to file a lawsuit against the United States Department of Education regarding its gainful employment regulations. Although this lawsuit is fairly complex, the basic contention is that the Department of Education has over-reached its authority on the gainful employment rules, which was not authorized by the Congress of the United States. This lawsuit represents a significant investment of time and money by the Association in order to protect our students and institutions of our membership, but we think that there are critical issues involved which, if left unaddressed, will prove extremely harmful in both the near and long term. We will keep you informed of the progress of this action.

In addition, last Friday the Association appealed the ruling of the district court judge on our prior lawsuit that sought remedies to the recently promulgated state authorization, misrepresentation and incentive compensation regulations. We won a significant victory with the judge’s overturning of the requirements of online institutions to obtain recognition and licensure in all 50 states. However, the Board, after careful consideration, believes that an appeal of the judge’s ruling against us in these other areas is important to the members of our Association.

These two legal actions, coupled with our highly active legislative agenda, demonstrate the commitment of the Board to protect our students and institutions from the unfair attacks of self-proclaimed consumer advocate groups, short sellers, trial lawyers, the Department of Education and certain senators. It is important to recognize that this is a long-term battle, a situation in which we need “all hands on deck,” and we need your continued participation and involvement to be successful.

Last week the staff sent out an assessment notice that had been approved by the entire membership at our Annual Business Meeting held in Dallas in June. We are aware of the burden that these additional legal expenditures will place on our institutions. However, we feel absolutely committed in the rightness of our struggle against our critics and detractors and the important difference staying the course will mean to our students.

We are making progress, we are getting the word out, we are effectively challenging each and every negative press story, and we will continue to protect our students’ rights to access the higher education institution of their choice.

Respectfully yours,

Arthur Keiser, Ph.D.
Chairman, APSCU Board of Directors

 

Private Equity Investing in Education Companies Conference

ForProfitEDU would like to extend an exclusive invitation to you to attend The Capital Roundtable’s conference on Private Equity Investing in Education Companies, being held on Thursday, July 21 in New York City.

As a partner, we have the privilege to put your name on our VIP list, allowing you to register for a special rate of $995 — $400 off the standard registration price.

 

This day-long conference is being chaired by Daniel Black, Managing Partner at Wicks Group of Companies, and features 20 experts.

For registration or inquiries, just call Shaina Mardinly at 212-832-7333 ext. 0, or email her at smardinly@capitalroundtable.comPlease be sure to mention our name.

For more details, click here:

 

http://www.capitalroundtablemail.com/masterclass/Capital-Roundtable-Private-Equity-Education-Conference-2011.html?&tag=forprofitedu
I hope to see you on July 21 for what promises to be a great day.

P.S. Since we expect this conference to attract a strong attendance, please register as soon as possible to reserve your seat.

 

 

Gainful Employment rules out!

Yesterday the Obama Administration released final regulations requiring career college programs to better prepare students for “gainful employment” or risk losing access to Federal student aid.  Or at least thats how they put it…  Bottom line is that they eased a few caveats of the previous reg’s providing colleges with extended time for implementation, some flexibility on income data sources, interest only or income based payments, and minor changes to debt to income metric.

While this is at least a bit more manageable than the previous reg’s most believe it’s still harmful to many constituents in the lower income and minority segments.  Hopefully this will be a sign and more thought will go into future revisions.

 

link to the rules on ed.gov: http://www.ed.gov/news/press-releases/gainful-employment-regulations

Despite inaccuracies & heavy criticism, Department of Education Moves Ahead With ‘Gainful Employment’ Rule

Well so many of us tried & cried but it looks as though it’s moving ahead…

In its campaign to block the adoption of a new federal rule measuring how colleges prepare students for “gainful employment,” the for-profit-college industry and its allies have attacked the credibility of the Department of Education, questioning the processes it has followed in developing the new regulation and its competency in managing the kind of data that could eventually be used to cut off vital federal aid.

But despite the well-heeled opposition and recent evidence that the message is taking root — fueled in part by notable missteps by the Education Department in calculating data on default rates and by the yet-to-be explained errors of the Government Accountability Office in its widely publicized undercover investigation of several for-profit colleges — a retreat on the rule isn’t looking likely.

That became clearer last week when the department confirmed that it had made final revisions to the proposed gainful-employment rule and sent it on to the White House Office of Management and Budget, the final stop before it is made public in the Federal Register.

Click link below for full article text.

THE CHRONICLE OF HIGHER EDUCATION

Source:
The Chronicle of Higher Education

 

Many colleges bolstering quality of intake with assessments

A good sign has risen over the last year as many of the nations top for profit colleges make strides in improving their intake mechanisms.  Instead of the previous standard open door policy colleges are now working to ensure a better fit for both the colleges and students best interest.  Assessments are starting to surface as a way for both the students and colleges to learn more about what is best for them.

By taking simple assessments many colleges are learning which programs the students are most motivated to succeed in and thus more likely to graduate, which is the shared goal of the student and institution.  Others are using assessments as a means to uncover weakness areas which need additional support from student services and professors.

Bottom line is that the smarter long term players have understood that now is the time to re-build for the future, while the market is expecting a slowdown anyway.  The result will be long term sustainable growth with better outcomes for all!admissions assessments

Only 30% of schools see lead scoring as valuable or a must

value of lead scoringOver the last few years there have been tremendous amount of conversations over the need for and value of lead scoring.  While companies such as targus have secured  nice subscription based revenue models by charging for lead scoring service many don’t find them as necessary.  In the beginning vendors dismissed the value and accuracy of lead scoring as clearly they dented the “valid lead” pile.  Arguments ensued as to how you can say the lead is not valid when the data is accurate and the person initiated the action of requesting info from the schools.  Others claimed it was the equivalent of profiling and thus prevented equal access.

With the gainful employment regulations pending many more schools looked into it as they felt compelled to target a higher level (financially) demographic for fear the other could not afford an education.  Once again leave it to the Govt. to create rules that negatively effect those who need it the most… but I digress…

 

The results of the 2011 EDU survey showed that only 8.3%  considered lead scoring extremely valuable and 22.6% found it valuable.  Which means 70% don’t see much value or importance in it, especially for 2011.  While I am sure that targus folk will differ and many may be in arms regarding this post, we are simply reporting what the schools and industry responded in the 2011 EDU advertising and marketing survey!

 

Default management creates a big shift in default rates between 2 and 3 years.

Education Department data released last month shows that rates at nearly all institutions rose when measured for three rather than two years, as federal law will soon require.  Duh… Yet at 243 colleges, or about 8 percent of the 3,168 degree-granting institutions The Chronicle examined, the three-year rate was at least 15 percentage points higher than the two-year rate, a substantial increase, how is that a surprise???  Of those, 83 percent were for-profit colleges We would wager that most loan portfolios would show an increase in defaults when compared to a longer period of time.

YET, the college showing the biggest gap was Professional Business College, a private nonprofit institution in New York City, where the difference between the two-year rate and the three-year rate was more than 30 percentage points.

Link to article: http://chronicle.com/article/Many-For-Profits-Are/126689/?sid=wb&utm_source=wb&utm_medium=en

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