As the economy (sorta) bounces back and would-be students are able to find jobs, colleges trying to make money to teach business or technical skillsare having a harder time convincing new students to enroll and pay them the big bucks.
The Wall Street Journal reports that new-student enrollments at for-profit colleges have dipped, by as much as 45% in certain cases. This could be due to a retreat from aggressive recruiting, as well as students actually just thinking through the rewards vs. the cost for enrolling in an expensive school. Why pony up all that cash and tie yourself into a loan if you can get what you want from a community college?
“People are just frozen or deferring, delaying decisions to go to school,” said DeVry Inc. Chief Executive Daniel Hamburger in a conference call earlier this month. “The average person in the U.S. has become much more risk-averse and cautious when it comes to spending or committing to anything. It’s unrealistic for us to think that education would be immune from this.”
At DeVry, new student enrollment fell by 25.65 recently, while per-share earnings at Corinthian Colleges Inc. have fallen around 72%. This is a big difference from for-profit colleges’ heyday during the recession. Back then, jobless people decided it would be a good idea to go to school and learn a new skills.
The decrease in enrollments comes after state and federal investigators began hammering for-profit colleges for their high student loan rates. The company Education Management Corp. was also sued by the Justice Department and four states, which alleged that “its admissions personnel violates the federal Higher Education Act because admissions employees had been paid based on how many students they recruit.”
Boom Times End at For-Profit Colleges [The Wall Street Journal]