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!

Sparkroom provides business intelligence and lead delivery software that helps organizations immediately improve marketing efficiency and increase profitability by managing, measuring, and optimizing lead performance across all direct response marketing channels. Sparkroom's Lead Performance Management product suite, which includes LeadDeliver, LeadIQ, and Lead Market Analytics, enables direct marketers in higher education to:

   -- Understand the performance of every lead, regardless of the channel 

   -- Proactively manage lead vendors 

   -- Align marketing with sales or enrollment targets 

   -- Immediately improve the performance of marketing spend

“We are excited by the opportunities created by bringing CUnet and Sparkroom together,” said Matt McLaughlin, President of CUnet. “Sparkroom's technology products will complement CUnet's interactive media and marketing services to provide a powerful solution for colleges to drive the most value from their marketing spend. It's a great fit that will benefit marketers in the higher education sector.”

CUnet provides clients with a wide range of performance marketing services including vendor lead management, call center management, search marketing, display advertising, social media management, mobile marketing, and school operations consulting. Sparkroom's Lead Performance Management product suite provides comprehensive technology tools to education marketers, allowing them to make faster, data-driven decisions that drive marketing efficiency and business profitability. The companies will offer an industry-leading mix of marketing services and technology solutions for educational institutions from a single provider.

“Sparkroom's mission is to enable our customers to optimize their investments in interactive direct response marketing,” said Jamie McDonald, CEO of Sparkroom. “By teaming up with CUnet, we will accelerate our ability to deliver on that mission and bring new ground-breaking products to the market, which will continue to improve marketing efficiency for higher education marketers.”

Sparkroom co-founders McDonald and Jamie Shulman, Vice President of Operations, will continue to lead Sparkroom and its associates from Toronto.

While the purchase price is not material to Nelnet, the acquisition adds strategic value to the company by broadening its lead generation products and services business and further strengthens its lead generation technology.

About CUnet

CUnet is the premier provider of online performance media and interactive marketing services driving qualified student inquiries and enrollments for the higher education industry. Founded in 2003, the company has grown rapidly to oversee the promotional campaigns of over 1 000 colleges, universities, and career schools throughout the United States and Canada. CUnet is dedicated to creating cost-effective marketing programs using a mix of online media strategies and formats to find prospective students, generate qualified responses, and maximize enrollments and starts. CUnet is a subsidiary of Nelnet, a leader in education planning and financing for more than 30 years. CUnet is based in Paramus, NJ. For more information, visit www.cunet.com.

About Sparkroom

Sparkroom delivers innovative solutions to direct marketers, including its comprehensive Lead Performance Management software and services. Sparkroom Lead Deliver, Lead IQ, and Lead Market Analytics deliver a hosted business intelligence platform to give direct response marketers the tools and expertise needed to measure, manage, and optimize their lead acquisition spending across every direct response channel. Sparkroom's software, which it hosts and delivers to its customers on demand, enables customers to capture, store, and analyze information generated by their lead buying activities and to gain critical business insights into the performance and efficiency of marketing and sales initiatives and other business processes. Founded in 2007, Sparkroom is privately held. For more information, visit www.sparkroom.com.

Information contained in this press release, other than historical information, may be considered forward-looking in nature and is subject to various risks, uncertainties, and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated, or expected. Among the key factors that may have a direct bearing on Nelnet's operating results, performance, or financial condition expressed or implied by the forward-looking statements are the uncertain nature of the expected benefits from the acquisition and the ability to successfully integrate operations, changes in terms of student loans and the educational credit marketplace changes in the demand for educational financing or in financing preferences of educational institutions, students and their families, or changes in the general interest rate environment and in the securitization markets for education loans.

(code #: nnig)

SOURCE Nelnet Inc.

/CONTACT: Media, Ben Kiser, +1-402-458-3024; Investors, Phil Morgan, +1-402-458-3038; both of Nelnet Inc.

/Web site: http://www.nelnet.com

I think it is finding those firms who understand the current postsecondary climate and have a plan for addressing the various concerns the sector faces as a whole.

More specifically, there are some serious issues with retention and completion initiatives across all postsecondary institutions.

Regarding the for-profit sector, the DOE is going to attempt to legislate stricter regulations if student loan default rates maintain current levels. There is a move afoot by the DOE to include a ‘gainful employment’ rule, which would force for-profits to adhere to a standard tying degrees earned to a result in employment that would ensure student loan payback. There is enough of a conundrum with retention issues and the DOE’s heavy handedness of the for-profits could be disastrous.

With regard to the public sector, the problems are just as serious. With tax revenues dropping, there are faculty layoffs and furloughs, courses being dropped, and students being turned away from schools. But alas, the Obama bucks will save the day! We’ve all heard about the American Graduate Initiative, where Obama and his administration are seeking to fund $12 billion to Community Colleges to graduate 5 million students over the next 10 years.

By the way, for-profits are noticeably absent from the mix, although they do a better job at graduating students. Is it possible the government is now trying to do away with for-profits by socializing education further?

So, I think there are opportunities that private equity firms should look for in the above relative to retention and degree completion. Too many students are heading back to school that are ill equipped and under-prepared in many ways. There are some firms out there addressing these issues. The key issue is to find those who have a pulse on the problem and who are in development of real solutions.

Happy holidays!

Paul

Bruce, over the last year I have had consultations with over 35 PE firms, some with indepth knowledge of the EDU industry most with no more than a big fund & surface industry information. I would say many PE firms should spend more time and bring in more experienced people to help them really learn about the EDU market, it’s been around for over 100 years and it changes rapidly. I also believe that many firms who are flushed with funds swing too fast with the wind and the flavors of the month, and do not take the time to plan a detailed strategy for the sector rather than just buying something to be in the game. I think that clearly some get it and are building profitable long term enterprises within segments of the sector but most move a little too fast. In addition I agree with what “the Doc” had said at the BMO conference about what scares him about the EDU industry being inexperienced & inadequate management being thrusted in power as the result of the frenzy in EDU and making headline type mistakes which may sour the milk for the rest of us.

 Hello Bruce: In my role as a broker for career colleges, I deal with PE firms every day. Many want to enter the Ed space. I think it is critical that they employ, pre-purchase or shortly after, an experienced operator of career colleges. I actually find that most PE firms are trying to be well informed and want their investment to be sound and successful. They have a healthy respect for default and 90-10 challenges facing the for-profit sector.

On the other hand, most want to exit the space in 5 years of so, thus they don’t have a tremendous amount of time to develop the company over a long period of time. An experienced operator will help them avoid making a critical mistake in the name of quick profits. It is that raised profit that will be important when they take their investment to market in the future, thus allowing them to “hit a home run.”

Also, more “home runs” experienced in the sector will shine the spotlight on the industry, and the numerous detractors will use the extraordinary profits and gains as a weapon against current operators. Sad, but true. The detractors (ex. Maxine Waters, et al) won’t let the facts get in the way of their pursuit.

The facts support continued support of the for-profit sector.

Hello Bruce,

Great question, thanks for posting.

I have consulted with several private equity groups that made an investment in the for-profit higher education industry. First, private equity groups with experience in for-profit education investment tend to do a better job with the following: 1. Selecting the right investment; 2. Conducting due diligence; 3. Hiring the right management team and 4.Understanding what questions to ask before, during and after the deal has closed. A private equity group that comes up short in its appreciation for the complexity and nuance of for-profit education may end up in a “money pit” (especially if it gets any combination of 1-4 wrong). That said I agree with Bruce and think we should expect stricter regulations from the US-DOE. Specifically, the 12-safe harbors are in potential trouble from the DOE’s Negotiated Rulemaking committees.

The profit motive in higher education can work quite effectively if managed with tight internal controls. For instance, the manner in which benchmarks and goals are established, communicated and managed makes a world of difference. Get this part right and you succeed or fail on your merits. Get it wrong and you create (as I mentioned above) your own money pit, or worse. I have concluded that private equity groups investing in for-profit higher education should be prepared for a more hands-on approach to understanding the business and monitoring its management team.
One critical issue facing new investment in for-profit education is the market itself. Shifting demographics over the next decade indicate a reduction in qualified students with the ability to pay and an enormous growth in academically and financially challenged students. The ability to deliver on alternative scheduling, delivery models and even alternative pedagogical models may distinguish those with the greatest market share. Increasing societal diversity, academic remediation, job placement and alignment between educational cost and salaried result (by program) are issues that will continue to rise and present challenges for new and existing institutions and investors.
Best of luck!

Join the group: http://www.linkedin.com/groups?home=&gid=1786509&trk=anet_ug_hm&goback=%2Eanh_1786509

ForProfitEDU.com Launches First Annual Lead Generation Benchmarking Survey Online Members of the higher education community are invited to participate in benchmarking study to identify current trends and best practices in lead marketing

Wednesday, December 2, 2009 – New York, NY – ForProfitEDU.com announced today the launch of the First Annual Lead Generation Benchmarking survey for the Higher Education sector, sponsored by Sparkroom. The survey, which is open to individuals that are directly involved with marketing in higher education, will examine where schools are focusing their online marketing efforts, what tools and tactics are most effective, and what challenges exist in this area. All survey participants may register to receive a free report with the results of the survey upon completion. According to BMO Capital Markets Equity Research, sales and marketing expenses run above 25% of revenues for the majority of companies in the for-profit education space, with a growing proportion of that spend happening in online marketing. Despite this, there are very few objective resources that marketers in the education market can reference to get a better handle on the use of online marketing in the sector.

This survey will offer a clear set of benchmarks, while identifying current trends and best practices for marketing professionals. The survey takes approximately 5 minutes to complete, and can be accessed online at https://surveys.itracks.com/survey/AHELMBS 

 It will be open to respondents until December 16, 2009 and a report on the results will be made available to participants in January.

About ForProfitEDU.com

ForProfitEDU.com is a leading website resource for all those who work within, around or are interested in the For-Profit EDU industry. The site offers networking, research, consulting, news updates and commentary from members of the For-Profit EDU community. Contributors include those from the school side, as well as those that work at related services firms including the investment community (investors, analysts, venture firms & PE firms), marketing & advertising professionals, educators & curriculum development, career services & other related service providers. ForProfitEDU also provides research and consulting services to schools & other service firms within the industry. Areas of expertise include Advertising, Lead generation, Marketing Strategy & Execution, Admissions, M&A, Raising capital, Market research and Partnering to create & grow online schools.

About Sparkroom

Sparkroom delivers innovative solutions to direct marketers, including its comprehensive Lead Performance Management software and services. Sparkroom Lead Deliver and Lead IQ deliver a hosted business intelligence platform to give direct response marketers the tools and expertise needed to measure, manage and optimize their lead acquisition spending across every direct response channel. Sparkroom’s software, which it hosts and delivers to its customers on-demand, enables customers to capture, store and analyze information generated by their lead buying activities and to gain critical business insights into the performance and efficiency of marketing and sales initiatives and other business processes. Founded in early 2007, Sparkroom is privately-held, with funding from private investors and Matrix Partners. For more information, visit www.sparkroom.com .

Media Contacts pr@sparkroom.com

1) Tying Title IV eligibility to a “gainful employment” metrics including cost of program , loan debt, and income after graduation. (apparantly to be applied to vocational programs only)

2) Getting rid of all 12 incentive compensation safe harbors . 

ED’s proposals for gainful employment standard will determine the appropriate levels of debt allowable for each vocational program/degree offering and thus may effectively result in tuition caps 

Eliminating all 12 safe harbors could restrict a school’s ability to utilize 3rd party call centers for qualification & hot transfer and potentially diminish internet generated starts, thus stalling enrollment growth. 

Still much speculation and uncertainty…

In a knowledge economy, nothing is more important than people being able to maximize their potential.  And yet, collectively we have not figured out how to reach every person – regardless of where they are intellectually, emotionally, financially, and geographically – to help them realize their potential.  Effective learning is important for individual learners, their families, their employers, their communities and their countries.  There is an urgent need to find ways to reach and educate every person.

Education – from toddlers through baby boomers – is also big business in the United States. Depending on how one counts it, education mirrors healthcare in terms of spending or falls just below it. The United States is the largest exporter of education in the world, and education is our country’s fifth largest export.  By some accounts we have the most robust system of higher education in this country, a rich diversity of K-12 education, innovative pre-K and educational entertainment industries, and over 50% of adult Americans learning on the job on any given day.

Despite the size and import of learning, we have immense challenges; many hold out the hope of entrepreneurship to help solve some of these challenges. That said, until now there hasn’t been a single education business plan competition in the world and while entrepreneurship in bio tech, software, engineering and medicine is quite robust with clusters of start ups surrounding some of the world’s great universities, nothing similar exists in education.

To address this issue, the Milken Family Foundation and Penn have come together to be a joint catalyst for innovation in education, to help “create a space” for education entrepreneurs.  To begin this process, we have put together a business plan competition and we hope –if you have an idea to change the world, that you will enter the competition.

Why Penn? Since its founding by Ben Franklin, Penn has prided itself on its ability to combine theory and practice. We have the country’s first school of medicine and school of business.  At PennGSE, this spirit has manifested itself in a rich array of entrepreneurial activities all designed to foster change in education. Our faculty, staff, and students are all committed to the teleology of change and this competition is just one manifestation of a broad and aggressive agenda – framed by real world needs and sound theory and research.

Why Milken? The Milken family – who are Penn graduates – embody the Franklin spirit and through Knowledge Universe have demonstrated successful educational entrepreneurship – from pre-K services through college education for working adults. And in their philanthropic activities, the Milken family have made education – particularly innovation in education – a cornerstone of their work.

We hope that you will enter the competition, and look forward to hearing your ideas.

Visit: http://www.gse.upenn.edu/entrepreneurcomp/

Good luck!

Best,

Gregory Milken

Doug Lynch

Toronto – November 11, 2009 – Sparkroom, Inc. (www.sparkroom.com), a leading provider of Lead Performance Management solutions, announced today that Remington College has chosen Sparkroom’s Lead Deliver and Lead IQ platforms to automate their lead delivery and gain real-time visibility into the performance of their direct response marketing channels. Sparkroom’s on-demand platform will enable Remington to take control over their lead management, reducing costs and allowing them to make more informed decisions, while holding lead providers accountable for performance.

“It was clear that bringing lead management in-house with Sparkroom would drive significant cost savings and give us greater control over our lead vendors. However the prospect of switching over all of our providers, implementing our complex business rules, and integrating with our various systems and partners was daunting – it really requires a solid solution from a vendor that can be supportive of our service level needs,” said Bob Lutz, Senior Vice President of Marketing for Remington College. “After speaking with some of Sparkroom’s other customers, I believe they have developed a methodology for rapid migration to their platform and that they will help my team come up to speed with minimal pain.”

With Sparkroom’s secure, scalable, on-demand platform in place, Remington College will:

• Gain access to a self-service platform that will enable them to proactively manage their lead vendors, allowing them to develop tighter relationships with key media partners;
• Increase conversion rates and lower acquisition costs through access to lead performance data that will enable them to optimize their spend against their strongest performing segments and eliminating waste in areas that are not yielding results;
• Eliminate time-consuming and error-prone manual process steps through the application of custom business rules and integrated delivery of leads to their CRM system and third-party call centers.

“We are thrilled to be working with Remington College, Bob Lutz and his team,” said Jamie McDonald, CEO of Sparkroom. “We look forward to providing Remington with a software platform that will help them better manage and optimize their lead generation and admissions activities, ultimately giving them a competitive edge and helping them to scale their business more quickly.”

The Sparkroom Lead Deliver platform includes:

• Real-time lead capture. Bring together leads from all of your direct response channels in one central database.
• Complex lead validation and scrubbing.Validate that the leads being delivered are within your campaign dimensions and eliminate fraudulent, duplicate and invalid leads before they reach your call centers.
• Robust lead delivery engine. Deliver valid leads to multiple destinations based on flexible and customizable distribution rules.
• Integration with leading CRM and Student Information Systems. Pre-built connectors to leading vendor systems to insert new leads and extract conversion and admissions data.

About Sparkroom
Sparkroom is a leading provider of Lead Performance Management software and services. Sparkroom Lead Deliver and Lead IQ provide a business intelligence and lead delivery platform to give direct response marketers the tools and expertise needed to measure, manage and optimize their lead acquisition spending across every direct response channel. Sparkroom’s software, which it hosts and delivers to its customers on-demand, enables customers to capture, store and analyze information generated by their lead buying activities and to gain critical business insights into the performance and efficiency of marketing and sales initiatives and other business processes. Founded in early 2007, Sparkroom is privately-held, with funding from private investors and Matrix Partners. For more information, visit www.sparkroom.com.

About Remington College
Remington College is a common name used by all 20 campuses of a group of affiliated companies of privately-owned post-secondary educational institutions. Remington College offers diplomas, bachelor’s and associate’s degrees in the fields of health science, criminal justice, business, electronics and information technology in 10 states and also offers online programs. Remington College and its predecessor companies have been part of the higher-education community since 1985.

Media Contacts
pr@sparkroom.com

Submit your EDU press releases Free: http://www.forprofitedu.com/press-release-submit/ 

to a whose who in EDU audience of over 3000+

 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

Recently a 93-page report on online education, conducted by SRI International for the Department of Education, has delivered an interesting conclusion: “On average, students in online learning conditions performed better than those receiving face-to-face instruction.”  The New York times reported the article here: New York Times