Managing Default Rates At Schools

EDU PE conference packed & mood optimistic !

January 13, 2012 By EDU Guy Leave a Comment

Yesterdays Capital Round Table conference for PE investing in EDU was a full house. It was good to see some many of the industry’s players together in one room discussing current issues & trends facing Education. In addition, Anthony Miller Deputy Secretary and Chief Operating officer at the U.S. Department of Education was there to answer questions regarding current and pending legislation. Tony was refreshingly honest when he said the the Department understands and acknowledges that for profit education providers are critical to reach America’s goal of education attainment. He praised the continued innovation provided by the industry and welcomes more of the same.

2012 Issues to remember:

The Change

A change in the President will result in a new DOE
A change in the Senate will result in a new head of the Senate Sub-Committee

The Result

A favorable shift in regulations will lift the entire industry

The Caution

The momentum to outcomes is already underway and will not change. Broadly, this is good for the industry

MOST Important The three rules – #1 Student Success, #2 Student Success, #3 Student Success

Long-term strong demographics and demand create a solid base for growth

Regulatory changes are largely complete in post-secondary while valuations remain at historic lows

Dramatic changes in traditional schools are underway

Real opportunities exist to build world-class companies

Great outcomes=Great businesses

The next conference for PE in EDU I believe is in June or July, it’s worthwhile to attend!

Filed Under: Education Industry Events, Education Investing, Uncategorized Tagged With: Anthony miller, career colleges, career education, Department of Education, DOE, education industry, for profit education in 2012, managing default rates at schools, non-profit vs. for profit, PE investing in education

Moneycollege: Where is the Billy Beane of Higher Education?

September 30, 2011 By EDU Guy Leave a Comment

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

Filed Under: Education Investing, Uncategorized Tagged With: consumer demand for education, cost of tuition, Department of Education, education industry, for profit education, forprofit colleges, high cost of education, managing default rates at schools, non-profit vs. for profit, quality of online education, traditional college focus on whats not important

Is For Profit Education Dead?

September 19, 2011 By EDU Guy Leave a Comment

New article by Michael Clifford on significant Ventures

Some would say that the for-profit postsecondary sector is on its last legs… DOA. Capitalism.” He calls this framework for success his Four Gospels of Higher Education:

Fifteen publicly traded education companies have seen their stocks decline by 33% on average since December 2009 versus a 5% increase for the S&P 500. Media accounts abound of allegations regarding improper practices at publicly traded companies, including marketing misrepresentation and fraudulent reporting of placement rates. Twenty state attorneys general are investigating for-profit institutions. No other sector has been as demonized as the for-profit sector has among state and federal politicians over the past several years.

to read the article in its entirety: http://significantfederation.com/eblast/2011.09.14/landing/

Filed Under: Uncategorized Tagged With: career colleges, career education, Department of Education, DOE, education industry, for profit education, for-profit, managing default rates at schools, non-profit vs. for profit, quality of online education

A call with an industry short fund

August 16, 2011 By EDU Guy 2 Comments

Last week we spent some time on the phone with a well-known industry short fund. We discussed the industry as a whole, as well as specific issues facing the industry which were behind their premise that shorting the industry was a good play for the next few years. Topics such as gainful employment, new compensation rules, default rates and the power of non-profit brands extending into the online education were the main points. Gainful employment in conjunction with 90/10 is in our opinion a biased illogical political move to hinder the growth of one industry segment for profit schools to the benefit of another nonprofit schools. If the rule is sound & logical, why wouldn’t it

be industry wide, the answer is clear, it’s not a well thought out rule. If the traditional colleges had to live within gainful employment you would see far fewer lawyers, doctors, economists, political scientists (maybe that’s a good thing) philosophers, literary scholars, teachers, artists, theorists etc. Who’s going to fill the entry level positions? Aren’t they stepping stones? We guess they will be filled by graduates of traditional colleges with English, Liberal Arts & Art history degrees whose $200,000+ education clearly provided them with such a solid and relevant foundation. Default rates, well they need to be managed, schools need to ensure that the engagement & value their student receive from the education provided them is compelling. We need to utilize assessment to make sure students enter program they have real interest and a likelihood of success in. And we need to screen for and provide the remedial assistance necessary for students to be able to be successful in their education. Will the industry be able to manage them successfully, YES. As for the value of brands, this is a topic which has been discussed for many years.

We all know a brand is valuable. We all know having a brand is a huge advantage and can significantly reduce the marketing costs of student recruitment. But the big caveat is “can”. Most traditional colleges significantly lack the admissions infrastructure and wiliness to adapt as necessary to be competitive to succeed in the fast paced world of online education. The partnerships between traditional colleges and for profit enterprises have proven that they can work and achieve fast growth, but those are still few in number. The real questions is when will we see an influx of these partnerships, and how much of an effect will they have on the for-profit EDU industry>

Filed Under: Education Investing, For Profit Education Industry, Uncategorized Tagged With: admissions, Department of Education, DOE, for profit education, forprofit colleges, ForProfitEDU.com, Gainful employment, managing default rates at schools, student marketing, tranditional colleges vs for profit colleges

Debt to Degree a new report correlating debt & degree completion

August 4, 2011 By EDU Guy 2 Comments

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

Filed Under: Education Investing, For Profit Education Industry, Uncategorized Tagged With: career colleges, career education, college worth, consumer demand for education, Department of Education, education debt limits, education industry, for profit education, forprofit colleges, Gainful employment, managing default rates at schools, non-profit vs. for profit, student loan burdens

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

July 20, 2011 By EDU Guy 1 Comment

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

Filed Under: For Profit Education Industry, Uncategorized Tagged With: apscu sues doe, APSCU suite against department of education, Department of Education, DOE, education industry, for profit education, gainful employment lawsuit, managing default rates at schools, non-profit vs. for profit

Many colleges bolstering quality of intake with assessments

May 9, 2011 By EDU Guy 1 Comment

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!

Filed Under: For Profit Education Industry, Uncategorized Tagged With: admissions, admissions assessments, education industry, for profit education, forprofit college assessments, forprofit colleges, forprofit edu, managing default rates at schools, non-profit vs. for profit, quality of online education, student marketing

Online schools continue to be concerned over State approval requirements

April 1, 2011 By EDU Guy 2 Comments

Many of the school systems we have spoken to continue to stress about the state approval requirements due to be in place by July.. It’s hard to imagine the burden the Govt. has placed on the many high quality education providers within our industry. Clearly many of them will not be able to achieve overall approval by the deadline. Does that only hurt the school or company? What about the students that have begun working towards their degrees? They continue to raise the bar as they go, yet they fail to even pretend to hold traditional post secondary institutions as accountable…

The common response from the govt. is that we need to continue to install checks and balances, yet they clearly have no checks and balance to the plethora of new rules & laws that they create. Wouldn’t common sense dictate that an easy check and balance would be what’s good for the goose is good for the gander? Why don’t they hold all colleges and universities to the same standards?

Filed Under: Educational Marketing, Uncategorized Tagged With: do online colleges require individual state approval, for profit education, forprofit schools under fire, government intelligence is an oxymoron, government rule changes in for profit education, managing default rates at schools, negotiated rule making sessions, non-profit vs. for profit, online colleges require state approval

Huffington Post Article about Kaplans “Bad Practices”

December 22, 2010 By EDU Guy Leave a Comment

The Huffington post recently posted a strikingly negative article about Kaplan. Link to article is below. The industry is clearly headline material for tv, print and online articles all unfortunately negative, why cant the industry get some positive press? Any of us who have actually been to a graduation at a forprofit school can attest to the lives that have been changed as well as the appreciation from the families and friends.

At Kaplan University, ‘Guerilla Registration’ Leaves Students Deep In Debt

http://www.huffingtonpost.com/2010/12/22/kaplan-university-guerilla-registration_n_799741.html?page=1

Filed Under: Uncategorized Tagged With: admissions, articles about kaplan, consumer demand for education, education industry, for profit education, for-profit, Gainful employment, huffington post article on kaplan, kaplan admissions tactics, managing default rates at schools, quality of online education

Keiser University files civil suit against Florida State College at Jacksonville

October 7, 2010 By EDU Guy Leave a Comment

In a clear sign of the heightened tensions over proposed new federal regulations on for-profit colleges, Keiser University, a for-profit education system based in Florida, has sued a public-college president there, accusing him and a top administrator of smearing Keiser by communicating derogatory comments about the for-profit education industry to investors and others via e-mail. Keiser itself is not publicly traded, but its founder and chancellor, Art Keiser, has been an outspoken criitic of the proposed regulations. The civil suit was filed in state court against two officials at Florida State College at Jacksonville—its president, Steven R. Wallace, and its vice president for government relations, Susan M. Lehr.

Filed Under: Uncategorized Tagged With: art keiser, Keiser sues Florida State College, Keiser university, managing default rates at schools, non-profit vs. for profit, quality of online education