Happy news greets private sector colleges and universities (PSCUs) this week. A recent Bloomberg Businessweek article reports that "[f]or-profit universities may soon see an end to their yearlong slide in new enrollments."
This rebound comes after months of intense governmental scrutiny and constant bad press, which combined to send new-enrollment figures plumetting. Among the casualties of the downturn were such industry leaders as DeVry University and University of Phoenix.
Lower enrollment meant depressed profits. Yet PSCUs' belt-tightening will pay off, it seems, as consumers continue to seek their educational product. The Bloomberg Businessweek article consults Deutsche Bank financial analyst Paul Ginocchio, who claims to have gotten "a sense from a recent Internet marketing conference that demand from potential students is healthy." He believes that "enrollment will likely pick up" once PSCUs have completely adjusted their business practices to conform to recently passed federal "gainful employment" regulations.
Also in line to experience an upswing is are such auxiliary for-profit higher education industries as educational advertising and affiliate marketing interests.
Ginochio sees the worst as already past. "He expects that Apollo, the largest school company, will begin adding more new students in its September-November quarter," the Bloomberg Businessweek article goes on to report.
The only potential storm cloud on the horizon comes in the form of cuts to the Pell Grant program. This federal student aid goes to the neediest students and need not be repaid. Ginocchio thus worries that many low-income students -- a considerable demographic for PSCUs -- will elect not to pursue postsecondary education if they expect that no free assistance is forthcoming. This will have the effect of making the PSCU enrollment rebound less spectacular than it would be had Pell Grants remained untouched.
Ginocchio nonetheless has faith that if sufficiently willing these students will find a way to attend college, whether it means borrowing greater amounts of money or continuing to work a job while completing coursework.
It's indeed encouraging to learn that the financial outlook for PSCUs is generally bullish. These schools offer many advantages largely missing from public and nonprofit private institutions, and it would surely be a shame if those students who best benefit from them were to be denied them.