We would like to point out our new Demand Trends area on MarketDrivenEDU.com In partnership with Gray Associates we now have an area specifically dedicated to Education Demand & performance data. This area will feature regular updates, graphs and commentary along with notifications of an ongoing series of webinars going over the data and how it effect your school.
International Education Corp. operates the UEI schools a heavy west coast operation has acquired a limited number of schools from Education Training Corporation. In addition, they have also taken over the corporate head quarters.
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In an attempt to ease crushing student debt, President Obama will sign an executive order Monday afternoon that will allow at least 5 million people to cap their student loan payments at 10 percent of their income.
Obama will direct Secretary of Education Arne Duncan to amend student loan regulations to allow for the payment ceiling, which the administration wants to make available to borrowers by December 2015.
It often appears as if the country’s six regional accrediting agencies are the federal overseers of all things higher education. It’s time to put an end to their expansive role; doing so would very likely set off a great chain of positive reform. This is especially important now, as Congress is getting ready to update and reauthorize the Higher Education Act, which governs accreditation, in 2014.
The six agencies are the Middle States Association of Colleges and Schools (MSACS), the New England Association of Schools and Colleges (NEASC), the Western Association of Schools and Colleges (WASC), the Southern Association of Colleges and Schools (SACS), the North Central States Association of Colleges and Schools (NCA), and the Northwest Commission on Colleges and Universities (NWCCU).
They provide a seal of approval—accreditation—that indicates schools are meeting minimal industry standards. Primarily, they ascertain that the colleges and universities are financially sound and function as educational institutions and not merely as “diploma mills.”
The agencies’ main source of power is their ability—granted by the original Higher Education Act in 1965—to determine whether schools are eligible for federal funding, particularly the student financial aid that is the life’s blood for private institutions. That role has permitted the agencies to make the transition from essentially trade organizations intent on cooperatively improving industry practices—as they were originally conceived—to quasi-governmental regulatory bodies with the authority to impose huge costs, policy shifts, and penalties.
Allowing the regional agencies to continue as they are will likely continue higher education’s slide into mediocrity and dogmatic conformity. They currently impose burdensome costs and regulations, stifle innovation, discourage competition and, most egregiously, allow substandard schools to continue operations while sucking up massive amounts of federal aid.
Full article: http://www.popecenter.org/commentaries/article.html?id=2934#.U44pUPldWa8
Interesting report from Baird on the Education Services sector.
Despite lingering macroeconomic pressures from the Great Recession, the global education industry continues to benefit from favorable, long-term secular trends. Population growth in most developed nations, combined with a continuing shift from industrial to service-based, knowledge economies will drive demand for greater educational attainment. As the public sector struggles with funding challenges, aging infrastructure and generally disappointing student outcomes, nimble, technology-enabled content and service providers, which can efficiently deliver high quality solutions, stand to benefit. The following section highlights selected recent/current trends and important news and events within each of the identified education sub-sectors.
• Stock thoughts: A solid first quarter was highlighted by starts growth on a positive starts comp for the first time in 14 quarters. This result was particularly impressive because it was accomplished at a lower year-over-year cost of student acquisition (marketing and admissions spending per new enrollment).
• Perhaps even more importantly, management guided to midsingle-digit starts growth in the second quarter on a 12.7% starts growth comp, implying two-year starts growth of nearly 20%, a demand growth rate that is at or above the high end of the sector.
• Instructional costs per enrollment rose slightly and operating margins were within the guided range but 40 basis points below consensus estimates. We believe operating leverage remains very strong, but the company is reinvesting a bit in new delivery methods like Sophia and Flexpath, products that should drive demand in 2015 and beyond. We also note that the company delivered very strong recurring operating margin guidance of 16.5% to 17.5% in the second quarter, 20 basis points above consensus and a 260-basis-point expansion year-over-year at the midpoint.
• All of this was accomplished with sector-leading retention and retention improvement. Capella appears to have built a better mousetrap and has virtually no policy concerns because of its strong student outcomes and high-quality working adult demographics, allowing it to operate with fewer constraints than other providers in the postsecondary group. We do not believe the current valuation reflects this perspective; we remain strong buyers and reiterate our Outperform rating.
Link to Full Report: https://www.rdocs.com/getrdocnologin.asp?p=148119&zId=46652
Timo Connor, CFA
William Blair www.williamblair.com
- Programs must pass the following metrics to maintain federal financial aid eligibility:
- The estimated annual loan payment of graduates cannot exceed 20 percent of their discretionary earnings or 8 percent of their annual total earnings; and
- The programmatic cohort default rate cannot exceed 30 percent for 3 consecutive years.
- The Department did modify 2 variables in the debt-to-earnings calculation:
- 30 students must complete the program; the previous version only required 10; and
- The amortization schedule is now 10 years for certificate and associate degree programs, 15 years for bachelor’s and master’s degree programs and 20 years for doctoral and first professional programs; the previous version provided a 10 year period for all programs.
- Institutions must certify that all gainful employment programs meet applicable accreditation requirements and state or federal licensure standards.
- Institutions must publicly disclose information about the program costs, debt, and performance of their gainful employment programs so that students can make informed decisions.
Link to Proposed Gainful Employment Rules: https://www2.ed.gov/policy/highered/reg/hearulemaking/2012/notice-proposed-rulemaking-march-14-2014.pdf
2014 Annual EDU Advertising & Marketing Survey for Schools, Lead Providers, Call Centers & Agency’s You MUST participate to receive results!
This survey has become a standard for the industry, bringing together Schools, Lead Providers & Agencies, helping to create an updated master list of industry service providers.
Link to survey: https://www.surveymonkey.com/s/2014edufficientforprofitedusurvey
Hundreds of screened participants help make this a valuable tool for all those who participate.
- All participants are reviewed for accuracy & relevance to the industry.
- You must complete 75% of the survey questions to qualify and receive results!
- All requests for survey results from non-participants will be denied!
Service providers contact information must be accurate to qualify. Remember, schools will receive your contact information so they can contact you, so please double check for accuracy.
All School contact information (school name, your name, phone & email) is private and will not be distributed. Only vendor info will be made available.
Link to survey: https://www.surveymonkey.com/s/2014edufficientforprofitedusurvey
Between 2002 and 2010, the number of students enrolled in online courses throughout the U.S. grew 283 percent — from 1.6 million to 6.1 million
The number of students in the United States enrolled in at least one online course has increased faster than overall enrollment growth in higher education, a new report from the state Comptroller’s office shows.
The report, released today by the Comptroller’s Offices of Research and Education Accountability (OREA), found that between 2002 and 2010, the number of students enrolled in online courses throughout the U.S. grew 283 percent — from 1.6 million to 6.1 million. Nearly one-third of all higher education students took at least one course online in 2011.