It sure has been a hectic week for investors in career colleges.
Bloomberg Businessweek reports that "[f]ortunes for the for-profit education sector will get worse before they get better, but Apollo Group Inc. should get the worst of it before most of its rivals and could mount a turnaround after 2013." This intelligence comes courtesy of "a BMO Capital Markets analyst."
The Bloomberg Businessweek article also informs us that on March 29, 2011 Apollo Group Inc. "reported a $64 million loss for the fiscal second quarter and said new, degreed enrollments sank by 45 percent." Enrollment is not expected to swing back "until 2012 [and] BMO Capital Markets analyst Jeffrey Silber said he expects the company is closer to a turnaround than other for-profit school operators."
CNBC.com recently reported that investors need to keep their eye on for-profit schools, "especially Bridgepoint Education." The article goes on to report that the "Senate Health, Education, Labor and Pensions (HELP) Committee will hold the latest in a series of hearing on the for-profit schools, with this highly unusual twist: It will focus exclusively on one company -- Bridgepoint Education."
Earlier last month Reuters economics blogger Felix Salmon designated Bridgepoint the "sleazy for-profit educator of the day." Salmon reports that Bridgepoint focused on getting students to sign up for classes, but once they had completed four weeks of coursework -- the point at which the school could keep the students' federal aid money -- the university stopped providing counseling services.
The report comes on the "eve of a Senate committee hearing into Bridgepoint," Salmon writes, "which with any luck will help convince lawmakers that something drastic needs to be done to fix the broken for-profit education system."
This much is clear: Online education will become a necessary part of the American system of higher education. But it needs to rectify perceived weaknesses introduced into it by the largest providers of online education. The industry is still young, and it has a bright future -- if it plays its cards right.