February 24, 2019

Lamar Alexander will not seek re election

lemar alexander wont seek reelection

Tennessee Republican Lamar Alexander, one of the few pragmatic dealmakers left on Capitol Hill, is the first senator to announce he won’t run for re-election in 2020.

“The people of Tennessee have been very generous, electing me to serve more combined years as Governor and Senator than anyone else from our state. I am deeply grateful, but now it is time for someone else to have that privilege,” the longtime politician said in a statement. “I have gotten up every day thinking that I could help make our state and country a little better, and gone to bed most nights thinking that I have. I will continue to serve with that same spirit during the remaining two years of my term.”

Virginia College and Brightwood College suddenly close all locations

for profit education closures 2018

Education Corporation of America, owner of a national chain of for-profit schools including Virginia College and Brightwood College in Maryland, is ending operations this week in the face of dwindling enrollment and regulatory pressures.

“This is not the outcome that we envisioned and is one that we recognize will have a dramatic effect on our students, employees and many partners,” Diane Worthington, a spokeswoman for Education Corp., said in a statement Wednesday.

The abrupt closure will leave some 20,000 students at more than 75 campuses scrambling to complete their education once the current term ends Friday. Worthington said the company, known by its acronym, ECA, will ensure students can access their transcripts to transfer to another school.

On its website, ECA promises students it will provide information within two weeks about transcript requests and recommendations on where to transfer. The haphazard planning has drawn the ire of the Education Department, which has been in talks with the company to create a transition plan for students, according to department spokeswoman Liz Hill.

Link to article: https://www.washingtonpost.com/education/2018/12/06/virginia-college-brightwood-college-closing-for-profit-operator-cites-dwindling-enrollment/?noredirect=on&utm_term=.bd3b51e1aebf

Betsy DeVos plans to eliminate gainful employment regulations!!

Betsy Devos for profit education

Education Secretary Betsy DeVos plans to eliminate regulations that forced for-profit colleges to prove that they provide gainful employment to the students they enroll, in what would be the most drastic in a series of moves that she has made to free the for-profit sector from safeguards put in effect during the Obama era.

The so-called gainful employment regulations put into force by the Obama administration cut off federally guaranteed student loans to colleges if their graduates did not earn enough money to pay them off. That sent many for-profit colleges and universities into an economic tailspin because so many of their alumni were failing to find decent jobs.

The Obama regulations — years in the making and the subject of a bitter fight that pulled in heavy hitters from both parties who backed the for-profit schools — also required such schools to advertise whether or not they met federal standards for job placement in promotional materials and to prospective students.

Its clear she understands the logic that a law should not apply to some colleges but not all of them…

Link to article: https://www.nytimes.com/2018/07/26/us/politics/betsy-devos-for-profit-colleges.html 

Education Companies for PE Investors–Special Invitation for July 19

edu conferenceI’m very pleased to be a partner of The Capital Roundtable for its full-day annual winter conference on “Private Equity Investing in Education-Focused Companies.

 

Coming up on Thursday, July 19, in New York City, the theme of this conference is
How PE Firms Are Engineering A New Generation of Education Companies.

 

I’m reaching out to you, as a friend of my firm, to offer you a special VIP rate — $500 off the standard rate.  Your price to register is only $995! To register at this special rate, please contact Julie Berger at 212-832-7300, ext.0, or jberger@capitalroundtable.com.

You’ll hear from more than 20 private equity investors and bankers, and education company managers discussing how they’re partnering with schools, corporations, and other kinds of investors to build “next-gen” companies that can drive the remodeling of the U.S. education system and thereby deliver better outcomes for students and better returns for investors.

Click here to learn more about the program.

Chairing the conference is Shoshana Vernick, a co-founder of Sterling Partners’ Education Opportunity Fund. She joined Sterling in 2003, and has devoted her tenure on the investment team, working on all aspects of the deal process including identification and due diligence, and management and oversight of the active portfolio.

At this conference, you’ll enjoy exceptional networking opportunities. The agenda includes ample time, with session breaks and a buffet lunch, to exchange ideas, swap business cards, and form new relationships.

 

To register, please call Julie Berger, at 212-832-7300 ext. 0, or email her at jberger@capitalroundtable.com

 

Please be sure to mention MarketDrivenEDU to receive this low VIP rate.  And note this rate is not available online. 

Breaking News! Secretary DeVos Resets the Clock on ACICS!

The U.S. Department of Education said Tuesday evening that a controversial accreditor, which had lost its federal recognition in 2016, would again be eligible to serve as a gatekeeper of financial aid.

The department restored the recognition of the Accrediting Council for Independent Colleges and Schools, which oversees primarily for-profit career colleges. That means that more than 100 colleges still accredited by the council will remain eligible to receive federal student aid, for now. It also means that the council, commonly known as Acics, will not have to face a federal advisory panel in May as part of the process to regain recognition.

The department’s announcement is a response to a federal-court ruling, issued in late March, that concluded the department had used a flawed process in removing the accreditor’s recognition. The accreditor sued the department after its recognition was removed, starting an 18-month countdown in which all of the colleges that it had accredited would have to find a new accreditor by June or lose access to federal student aid.

The judge’s decision did not overturn the department’s earlier action. But it did require the education secretary, Betsy DeVos, to reconsider whether Acics should remain recognized, after she reviews some 36,000 pages of material that the accreditor submitted to the department nearly two years ago. Although the material had been requested by the department, the court found that it had not been reviewed by department officials in revoking the council’s status. “As the court ordered, we will fairly consider all of the facts presented and make an appropriate determination” on the accreditor’s recognition, DeVos said in a news release.

The department’s announcement does not necessarily mean she will reverse the decision made under the Obama administration. But she will consider more options than just the binary choice of either renewing or denying the council’s recognition. And the council will have new opportunities to prove itself to the department, according to DeVos’s official order.

Link: https://www.chronicle.com/article/DeVos-Gives-Controversial/243028 

 

CECU conference Discount link for Market Driven EDU members

 

Join us at the 2018 CECU Convention on June 3-5 in Orlando, Florida this year! The CECU Convention is the largest gathering of sector leaders nationwide and you won’t want to miss out.

As many of you know, never before has our sector seen so much opportunity for progress than what we see ahead of us today. With recommendations submitted for reauthorization of the Higher Education Act (HEA), we look forward to a future with accountability measures that apply equally to all sectors of higher education and a common set of outcomes to support our students.

So join CECU in June to hear updates from sector thought leaders and the most up to content presented by industry experts.

There is something for everyone at the CECU Convention – Choose your itinerary from over 40 education sessions or come early for any of our pre-meeting workshops.

Last year, 65% of attendees came from schools. Many were C-suite executives and decision makers as well: 30% were CEOs/Owners, and 34% were part of the executive team.

 

So don’t miss out, register today. From now until April 30th register using the Code: MarketDriven and receive 5% off your registration.

 

CECU Discount code Code: MarketDriven

CECU registration link: https://www.eiseverywhere.com/ereg/index.php?eventid=282108&token=46904875dd95d7f291400795b919747da5

Hope to see you there!

 

Downturn in foreign student enrollment, causes pain at US Colleges and Universities

drop in foreign students effect us colleges

Just as many universities believed that the financial wreckage left by the 2008 recession was behind them, campuses across the country have been forced to make new rounds of cuts, this time brought on, in large part, by a loss of international students.

Schools in the Midwest have been particularly hard hit — many of them non-flagship public universities that had come to rely heavily on tuition from foreign students, who generally pay more than in-state students.

The downturn follows a decade of explosive growth in foreign student enrollment, which now tops 1 million at United States colleges and educational training programs, and supplies $39 billion in revenue. International enrollment began to flatten in 2016, partly because of changing conditions abroad and the increasing lure of schools in Canada, Australia and other English-speaking countries.

And since President Trump was elected, college administrators say, his rhetoric and more restrictive views on immigration have made the United States even less attractive to international students. The Trump administration is more closely scrutinizing visa applications, indefinitely banning travel from some countries and making it harder for foreign students to remain in the United States after graduation.

While government officials describe these as necessary national security measures, a number of American colleges have been casualties of the policies.

“As you lose those students, then the tuition revenue is negatively impacted as well,” said Michael Godard, the interim provost at the University of Central Missouri, where 944 international students were enrolled in the fall, a decline of more than 1,500 from the previous year. “We’ve had to make some decisions, budgetary decisions, to adjust.”

Link to NY Times Article: https://www.nytimes.com/2018/01/02/us/international-enrollment-drop.html 

Private Equity Investing in Education-Focused Companies Conference Discount

MarketDrivenEDU,  is very pleased to be a partner of The Capital Roundtable for its full-day annual winter conference on “Private Equity Investing in Education-Focused Companies.

Coming up on Thursday, January 25, in New York City, the theme of this conference is
Scouring the Education Industry for Niches Underserved by Investors.

 I’m reaching out to you, as a friend of my group, to offer you a special VIP rate — $500 off the standard rate.  Your price to register is only $995!

Chairing the conference is Atif Gilani, founding partner at Renovus Capital Partners, an education and training-focused private equity firm founded in 2010.

You’ll hear from 20 experienced education company pros who will share their perspectives and lessons learned. These experienced investors will discuss which segments they find most intriguing — like vocational technology, corporate training, pre-K, K-12, and post-secondary.
At this conference, you’ll enjoy exceptional networking opportunities. The agenda includes ample time, with session breaks and a buffet lunch, to exchange ideas, swap business cards, and form new relationships.

 

To register, please call Sarah Burd, at 212-832-7300 ext. 0, or email her at sburd@capitalroundtable.com

 Please be sure to mention MarketDrivenEDU to receive this low VIP rate.  And note this rate is not available online. 

Possible changes to gainful employment signaled by the DOE

Recent discussions from the department of education indicate changes may be in the works.

 

Session 1: December 4-7, 2017

 

Issue Paper #1

 

Issue:                          Scope and Purpose

Statutory cites:           20 U.S.C. § 1221e-3; 20 U.S.C. § 3474; 20 U.S.C. § 1231a; 20 U.S.C. §§ 1001(b)(1), 1002(b)(1)(A)(i), (c)(1)(A); 20 U.S.C. § 1088(b)

 Regulatory cites:       34 CFR § 668.401

Summary of issue:     On October 31, 2014, the Department published final regulations establishing standards and other requirements for title IV-eligible programs that prepare students for gainful employment (GE) in a recognized occupation.   Those regulations went into effect on July 1, 2015.

 

The regulations established an accountability and transparency framework for GE programs.  The accountability framework conditions the eligibility of a GE program based on (1) the program’s performance under a debt-to-earnings (D/E) rate measure and (2) the institution’s certification that the program meets certain accrediting agency and State requirements.  The transparency framework provides students, prospective students, and their families with accurate and comparable information about a GE program to better inform their educational and financial decisions about enrolling or continuing in the program.  Finally, the GE regulations included reporting requirements to provide the Department with information required under both the accountability and transparency frameworks.  In adopting the accountability framework, the Department acted under its authority under sections 101, 102, and 481(b) of the HEA, which pertain solely to GE programs, among other authorities.  The Department also relied on its broader authority under the General Education Provisions Act and the Department of Education Organization Act.

 

A common criticism of the GE regulations is that one of the problems the rules aim to address—students being saddled with unaffordable levels of loan debt in relation to their earnings—is an issue across all institutions, and not just those that offer GE programs.  In addition, some have argued that many of the factors contributing to poor student outcomes, as measured by the D/E rates, are outside of the control of an institution.  Accordingly, some have suggested that the regulations should apply to all programs, not just GE programs, and that the loss of eligibility resulting from poor D/E rates is unfairly punitive.  Critics have also argued that the reporting and compliance requirements are overly burdensome.

 

In the issue papers that follow, we discuss in detail the individual components of the GE regulations.  Here we address broad issues of scope and purpose of the regulations.


 

Questions for consideration by the committee:

  • Should the regulations apply, in whole or in part, to all programs or just GE programs?
  • Should the Department retain, amend, or eliminate the accountability framework?
    • Should the Department retain, amend, or eliminate the D/E rates? For all programs or just GE programs?
    • If retained or amended, should the D/E rates measure be used to determine eligibility, result in other sanctions (e.g., warnings or other enhanced disclosures), and/or be used as a disclosure? If retained or amended for purposes of disclosure, should this pertain to all programs or just GE programs?
    • Should the Department retain, amend, or eliminate the certification requirements? For all programs or just GE programs?
  • Should the Department retain, amend, or eliminate the transparency framework? For all programs or just GE programs?
    • If D/E rates are removed from the accountability framework, should D/E rates be used for disclosures under the transparency framework?
  • Are program disclosures alone effective in helping enrolled and prospective students identify lower-performing programs with respect to job earnings?

 

Articles on this topic:

https://www.insidehighered.com/quicktakes/2017/11/30/education-department-signals-possible-changes-gainful-employment-rule#.Wh_84Y-jBFo.linkedin

https://www.wsj.com/articles/house-gop-to-propose-sweeping-changes-to-higher-education-1511956800

Capella & Strayer tie the Knot!

capella and strayer merge

Strayer Education Inc. and Capella Education Co. announced Monday they are merging, in a $2 billion deal that will make the combined company one of the largest for-profit college operators in the country.

Shareholders in Herndon, Va.-based Strayer will own 52 percent of the combined company’s stock, while Capella investors will hold the rest. Both boards have voted unanimously for the deal, which the companies anticipate will close in the third quarter of 2018. They will need state and federal approvals, including a thumbs up from the Department of Education.

Neither Strayer nor Capella has endured the legal headaches of some of their competitors, yet tepid growth in the number of people seeking degrees remains a hurdle — but one that investment analysts say the combined companies may be able to overcome.

Link to article: https://www.washingtonpost.com/news/grade-point/wp/2017/10/30/for-profit-college-operators-capella-and-strayer-join-forces-in-a-2-billion-merger/?utm_term=.2e826d6c5d1a 

 

Analysis of the proposed merger by Trace Urdan:

In the all-stock transaction as described, CPLA investors will receive 0.875 STRA shares and own 48% of the combined company post-merger. On a combined basis the new company will offer 135 degrees and certificate programs to more than 80,000 students. Its revenue will approach $900 million annually, its EBITDA will approach $130 million and its distributable free cash flow will be approximately $80 million. Its implied equity value will be roughly $1.9 billion.

The new entity will combine back office operations and share best practices, but each academic institution will be separately and independently maintained and operated. Pending approval by the U.S. Department of Education, each of its accreditors (HLC and Middle States) and various state regulatory entities, it expects to close the transaction within the next eight months. The new parent company will change its name to Strategic Education and retain the STRA ticker.

Link to full analysis:

https://www.linkedin.com/pulse/chocolate-bars-vs-candy-corn-sorting-strayer-capellas-trace-urdan/?trackingId=dRoiTGJ4KKEI1VdwCq%2FWaQ%3D%3D

Local