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.
Keiser University files civil suit against Florida State College at Jacksonville
October 7, 2010 By Leave a Comment
BMO Conference was Packed as expected!
September 17, 2010 By 1 Comment
Yesterday was the BMO annual Back to School conference in NYC. As expected in this active political climate relating to the sector, it was packed. First I want to congratulate BMO for the excellent job they did, they not only put out a great agenda with the top tier participants, they also provided a quality environment for networking, private discussions and of course plenty of food & beverage.
Almost every session was standing room only with people listening closely to what the power players were saying relating to current operations, government proposed changes and the potential effects on their businesses. Also it was great to hear such organized demonstrations of the faults inherent within the proposed rule making. I only wish many of the news outlets would broadcast those messages before the proposed changes become rules. While CNBC was there networking and doing some interviews we have yet to see many of the concrete negative attributes of the proposed changes made public with the national media. Hopefully that will change soon.
Clearly there are many conflicts with the governments intended goals regarding educating America and the actual negative outcomes the proposed rules will result. Who is going to push the value of college to those consistently neglected. Who is going to take the risk of trying to educate those who need it most, but represent the biggest default risk? Clearly there are many conflicts with the discussions relating to the cost/waste of tax payers money on the forprofits and the reality of actual cost to the tax payer without them. Clearly they are not comparing apples to apples with the facts and figures, rather shouting sound bites and political buzz words to seek attention in the active political climate.
Also, Steve Eisman the industry short attended some of the conference, what are the odds his mind was open to any of the data presented…
University of phoenix & nexus research first report on most efficient systems of higher education
September 2, 2010 By Leave a Comment
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
Apollo group’s position paper on Higher education
August 26, 2010 By 1 Comment
The Current State of Higher Education in America and the Vital Role of Proprietary Colleges and Universities
Gregory W. Cappelli Co-Chief Executive Officer of Apollo Group and Chairman of Apollo Global
■ America is at a crossroads with respect to how the nation’s higher education system will adapt to meet the needs of today’s learners.
At Apollo Group, we are concerned that the country will not meet the national education goals set forth by President Obama without an adaptable postsecondary system that operates differently than it has in the past–a system that embraces diversity and innovation.
■ More Americans than ever need a college degree and are seeking access to higher education.
Jobs today require higher education, yet out of 132 million people in the labor force, more than 80 million don’t have a bachelor’s degree, and 50 million adults have never even started college. These individuals are increasingly looking for ways to remain competitive and advance in their careers in today’s global economy.
■ Those seeking access to higher education are less prepared than in the past and require greater support.
High school dropout rates are now approximately 55% in many major cities like New York and Los Angeles. Even more concerning, many students who do graduate cannot perform at the twelfth grade level in reading or math.
■ Over 70% of today’s students are now categorized as “non-traditional” students.
Our colleges and universities must meet the needs of today’s learners who have families and professional obligations that make it incrementally challenging to pursue a college degree.
■ Traditional colleges and universities are the backbone of the U.S. higher education system, but they alone cannot meet the country’s needs.
This system, which is exclusive by design, was built to meet the needs of a different era when only a small portion of the nation’s workforce needed a college degree. Today’s globally competitive, knowledgebased economy requires a more broadly educated society.
■ President Obama has set forth three important goals for the U.S. higher education system which are critical to the country regaining its standing as a global leader in education.
On a sobering note, we estimate that without proprietary schools, meeting these goals would cost U.S. taxpayers more than $800 billion over the next ten years.
■ Accredited, degree-granting proprietary institutions, which have been a strong source of innovation, play a critical role in the future of education.
These institutions provide access to students who previously have been left behind by or excluded from the traditional higher education system. Well managed proprietary institutions can meet the demand for education at a significantly lower cost to society.
Link to the complete white paper: http://www.apollogrp.edu/Investor/Reports/Higher_Education_at_a_Crossroads_FINALv2[1].pdf
“Sector Under Siege?”,
June 14, 2010 By Leave a Comment
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!
Gainful employment, what it can mean to forprofit schools
March 4, 2010 By 3 Comments
During long winded negotiated rulemaking for Higher Education, the US DOE proposed defining gainful employment by establishing a 8% debt to income threshold (debt to income is also commonly used for mortgage limits) based on median student debt for recent college graduates with income based either on Bureau of Labor Statistics 25th percentile wage data or actual college graduate earnings. Loan payments would be based on the standard repayment plan (10 years) for the unsubsidized Stafford loan program. For programs that failed to satisfy this standard, the US Department of Education proposed an alternative that requires a loan repayment rate for recent college graduates of 90%. The loan repayment rate measures the percentage of borrowers actively repaying their loans/ and not defaulting. It is a dual to the default rate, but also includes borrowers who are delinquent, in an economic hardship deferment or in forbearance along with borrowers who are in default.
Mark Kantrowitz has written a piece that’s worthwhile reading. Click the link below to view Marks piece:
http://www.finaid.org/educators/20100301gainfulemployment.pdf
Apollo pre-announced results fiscal 2Q10 results, lowers estimates
February 19, 2010 By Leave a Comment
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.
ForProfitEDU.com welcomes veteran journalist Andrea Foster
October 15, 2009 By 1 Comment
ForProfitEDUis proud to welcome future contributions from veteran journalist Andrea Foster. Our relationship with Andrea Foster is a positive step in our continued efforts to provide you with quality industry content. We look forward to the work she will be sharing in the coming months.
Andrea Foster is a veteran journalist whose specialty is education, technology, and Congress. She wrote for eight years about the intersection of academe and technology for The Chronicle of Higher Education, and before that, for The National Law Journal and Congressional Quarterly, among other publications.
commercial career colleges have more success graduating high-risk students than do other types of institutions
July 24, 2009 By Leave a Comment
For those of us in the industry this is no surprise… We hope other take notice of these FACTS and begin to value the role of the for profits withing the education industry.
Click on the link to read the article at inside highered: http://www.insidehighered.com/news/2009/06/18/career
What ever happened to Apollo’s Billion Dollar International Investment Fund?
April 20, 2009 By 5 Comments
| Remember the press release from 2007 about Apollo’s billion dollar invetment with Carlyle? What ever happened with that?Apollo Group and the Carlyle Group Form $1 Billion Joint Venture to Make Investments in the International Education Services Sector |
| PHOENIX & WASHINGTON–(BUSINESS WIRE)–Oct. 22, 2007–Apollo Group, Inc. (Nasdaq:APOL) (“Apollo Group” or the “Company”), and private equity firm The Carlyle Group (“Carlyle”), today announced that they have formed a $1 billion joint venture, Apollo Global, Inc. (“Apollo Global”). Apollo Global intends to make a range of investments in the international education services sector. Apollo Global will target investments and partnerships primarily in countries outside the U.S. with attractive demographic and economic growth characteristics. Apollo Group has committed up to $801 million and will own 80.1% of the joint venture. Carlyle has committed up to $199 million and will own 19.9% of Apollo Global. Investments and funding will be subject to approval by the respective investment committees of both Apollo Group and Carlyle. Apollo Global will be a consolidated subsidiary of Apollo Group and Greg Cappelli, Apollo Group’s Executive Vice President and Director will be Chairman of the subsidiary.Commenting on the new venture, Greg Cappelli said, “We are very excited about this new joint venture and our partner, The Carlyle Group. Our core competencies in the education space, combined with Carlyle’s industry relationships and strategic assets across the global education sector, will allow us to successfully capitalize on the tremendous global opportunity that exists in the marketplace.”
Brian Mueller added, “We will continue to invest capital in our high return core domestic business, and through Apollo Global, we will also explore strategic and value creating global acquisition opportunities. Importantly, we reiterate that any investment must meet our disciplined investment criteria as we remain committed to creating long-term value for our shareholders.” Brooke B. Coburn, Managing Director and Co-head of Carlyle Venture Partners III, L.P., said, “Global demand for higher education is strong. Apollo Group’s operational expertise coupled with Carlyle’s global network make this a powerful partnership.” The remaining six directors who comprise Apollo Global’s board include Brian Mueller, President and Director of Apollo Group, Peter V. Sperling, Senior Vice President, Secretary and Director of Apollo Group, Roy A. Herberger, Jr., an Apollo Group Director, Jeff Langenbach, Vice President Corporate Development of Apollo Group and Apollo Global’s interim President, Brooke B. Coburn, Managing Director and Co-head of Carlyle Venture Partners III, L.P. and Charles C. Moore, Managing Director on Carlyle’s U.S. Venture and Growth team. About Apollo Group, Inc. Apollo Group, Inc. has been an education provider for more than 30 years, operating the University of Phoenix, the Institute for Professional Development, the College for Financial Planning, Western International University and Insight Schools. The Company offers innovative and distinctive educational programs and services at high school, college and graduate levels at 259 locations in 40 states and the District of Columbia; Puerto Rico; Alberta and British Columbia, Canada; Mexico and the Netherlands, as well as online, throughout the world. For more information about Apollo Group, Inc. and its subsidiaries, call (800) 990-APOL or visit Apollo on the company website at: www.apollogrp.edu. About The Carlyle Group The Carlyle Group is a global private equity firm with $75.6 billion under management committed to 55 funds. Carlyle invests in buyouts, venture & growth capital, real estate and leveraged finance in Africa, Asia, Australia, Europe, North America and South America focusing on aerospace & defense, automotive & transportation, consumer & retail, energy & power, financial services, healthcare, industrial, infrastructure, technology & business services and telecommunications & media. Since 1987, the firm has invested $32.3 billion of equity in 686 transactions for a total purchase price of $157.7 billion. The Carlyle Group employs more than 900 people in 21 countries. In the aggregate, Carlyle portfolio companies have more than $87 billion in revenue and employ more than 286,000 people around the world. www.carlyle.com.
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