Dear Commons Community,

The Chronicle of Higher Education has an article (subscription required) today on the for-profit higher education sector.  Enrollment in for-profit colleges fell by about 7 percent from the fall of 2011 to the fall of 2012, according to December estimates from the National Student Clearinghouse. That is a much steeper decline than the drop of 1.8 percent for higher education over all during the same period.  The article attributes the decline to:

“Over the past two years, for-profit colleges have come under growing scrutiny from federal lawmakers, state regulators, skeptical investors, and consumer advocates, who have questioned their recruiting tactics and educational quality.

An increasing number of nonprofit colleges have also begun to offer programs online, making it tougher for the for-profit institutions to compete on factors like convenience.

New federal regulations now also make it explicitly illegal for the colleges to pay incentives to their admissions representatives on the basis of the number of students they enroll. Mr. Kinser says the declines in enrollment that coincide with that new regulation suggest that without those incentives, “they’re having a tougher time recruiting.”

There have already been major staff reductions at a number of the for-profits and more are to come:

“.. contraction has been a major theme over the past two years. Career Education Corporation announced the closing of a quarter of its 90 campuses and a reduction of 900 positions; Corinthian Colleges took steps to sell or close nine campuses; DeVry announced plans to cut its employee count by 570; and Capella Education planned a reduction of 185. Last month the University of Phoenix and its parent company, the Apollo Group, began the elimination of 115 of its 227 campuses and learning centers, and 800 jobs, in addition to the 700 positions it cut two years ago.”

It is unfortunate but a few rotten apples such as Phoenix and Kaplan have really hurt this sector.

Tony