Domestic, Institutions, International, Landscape, Markets, Not-for-Profit, Policy, Recruitment, Regulatory, Required, Retention Rates, Student Loans, University & College - Written by on Tuesday, December 13, 2011 12:18 - 0 Comments

Heard: Expansion Abroad Could Keep For-Profits Out of Trouble in the U.S.

via Flickr by ...RISE.. 72 CREW under CreativeCommons

To dodge trouble with the U.S. Department of Education (USDOE) some for-profit colleges are expanding operations to serve students abroad among other things.  This move may allow these schools to continue to receive federal student aid (Title IV programs), a major revenue source. Under current regulations, aid money cannot comprise more than 90 percent of cash revenue, therefore 10 percent must come from other sources (known as the 90/10 rule enacted in 1998).  In addition, loan default rates cannot be higher than 25 percent for three consecutive years.  And in 2014, they will not be allowed to exceed 30% three years after graduation.  Otherwise, the USDOE will issue sanctions that may prevent schools from receiving aid money.

How will going abroad solve domestic issues? Revenue from abroad would dilute the percentage of cash revenue from federal aid, keeping schools within the 90% rule if all goes well.  According to Dan Newman at The Motley Fool, 26 percent of Kaplan’s total revenue came from abroad, and DeVry’s comprised 12 percent.

As for default rates, schools are employing other strategies. Dan Newman writes:

So what are schools doing about it? A variety of things:

  • Corinthian Colleges partnered with a private loan group offering students $450 million in loans to help source funding outside of Title IV programs.
  • Apollo is trying to shift more students to bachelor and master degrees from associates. It hopes this will give students increased job prospects and a higher likelihood of paying off any loans.
  • Many schools focus on recruiting military students, since military-provided assistance does not count as a Title IV program.

See how major for-profit schools rank:

Company

Most Recently Reported 2-Year Cohort Default Rates

90/10 Rule

Apollo Group‘s (Nasdaq: APOL  ) University of Phoenix 18.8% 86%
Corinthian Colleges (Nasdaq: COCO  ) 21.9% 80%
Education Management (Nasdaq: EDMC  ) 13.1% 74%
Strayer (Nasdaq: STRA  ) 10% 78%
DeVry (NYSE: DV  ) 14.2% 70%-86%*
Bridgepoint Education (NYSE: BPI  ) 15.3%, 3.3%** 85%-86%**

Sources: NSLDS.ed.gov and companies’ most recent 10-Ks. 2-Year Cohort Default Rates ending Sept. 30, 2009. *Percentages across various institutions under DeVry. **Percentages across various institutions under Bridgepoint.

Via For-Profit Educations Needs a Semester Abroad by Dan Newman for The Motley Fool



Leave a Reply

Comment

Campus Buzz


We welcome Tips & Pitches



What you need to know weekly:
The WiredAcademic newsletter.


* = required field

Latest WA Original Features






  • Twitter feed loading




Paul Glader, Managing Editor
@paulglader

Eleni Glader, Policy Editor

Elbert Chu, Innovation Editor
@elbertchu

Ravi Kumar, Reporter & Social Media Editor
@ravinepal

Derek Reed, Reporter
@derekreed

Brock Buesing, Contributor










APEI18.80  chart+0.15  chart +0.80%
APOL9.995  chart+0.000  chart +0.00%
AAPL158.73  chart+0.06  chart +0.04%
BPI8.81  chart-0.04  chart -0.45%
CAST0.0025  chart+0.0000  chart +0.00%
CECO9.87  chart-0.21  chart -2.08%
COCO0.0139  chart+0.0000  chart +0.00%
CPLA67.40  chart-0.90  chart -1.32%
DV36.90  chart-0.05  chart -0.14%
EDMC0.007  chart+0.000  chart +0.00%
ESI0.358  chart+0.000  chart +0.00%
GOOG921.81  chart+6.81  chart +0.74%
LINC2.65  chart+0.01  chart +0.38%
LOPE82.84  chart-0.39  chart -0.47%
PEDH0.18  chart+0.00  chart +0.00%
PSO7.67  chart+0.00  chart +0.00%
SABA8.81  chart+0.00  chart +0.00%
SCHL38.54  chart-0.16  chart -0.41%
STRA82.58  chart-0.43  chart -0.52%
WPON/A  chart+0  chartN/A
2017-09-19 16:00


Cost of Education, Domestic, Education Quality, Ethics, For-Profit, Regulatory, Required, Students, University & College - Mar 11, 2012 21:17 - 0 Comments

Heard: Senators On Warpath Against For-Profit College Military Push

More In For-Profit


Blended Learning, Domestic, Elementary / Primary / Junior, Flipped Classrooms, High school / Secondary 2, International, Open Source Education, Required, School teachers, Startups, Students, Technology - Mar 12, 2012 19:04 - 0 Comments

Big Weekend For Sal Khan; Appears On 60 Minutes & Launches Free iPad App

More In Technology


Domestic, Education Quality, For-Profit, Friend, Fraud, or Fishy, Required, University & College - Feb 10, 2012 16:36 - 0 Comments

Heard: NYC Warns Against For-Profit Adult Education Scams

More In Friend, Fraud, or Fishy