For-Profit College Enrollment Drops Sharply
Follow @GretchenMargAugust 24, 2011, 2:20 pm ET
Are the industry’s glory days over?
It’s likely too early to tell, but The Wall Street Journal’s Melissa Korn has some numbers that don’t look good for the previously booming $400 billion a year for-profit college industry. Her striking stats on new-student enrollment declines include:
+ 25.6 percent at DeVry
+ 21.5 percent at Corinthian Colleges
+ 47 percent at Kaplan Higher Education
+ 35.8 percent at Capella Education Inc.
Korn suggests two key factors behind these numbers:
Corinthian and the Apollo Group (the parent of the University of Phoenix), for example, have “cut back on recruiter bonuses based on factors such as how many students make it past their first term.” The Apollo Group and Kaplan now require a trial period for some students before they enroll; Capella revamped its pay structure for recruiters in January. And then there’s the heavy cloud hanging over the for-profit industry in the form of a Justice Department lawsuit against the Education Management Corporation (EDMC), alleging fraud over its recruitment practices.
As always, for background, watch our investigations on the for-profit industry, which report on both the general student population and military veterans. It’s also worth taking a look at an interview we did in 2010 with Dr. Gail Mellow, president of LaGuardia Community College in Queens. She goes into detail about cost differentials at a community college versus at a for-profit, a factor Korn says is changed the mind of at least one student who is now attending Mellow’s school:
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