With growing regulation, continued scrutiny and shrinking revenue, US based for-profit schools look to international markets for growth. In 2015, we saw the closing of Corinthian College. This resulted in the closing 28 campuses and affecting over 16,000 students. Fortunately, most students will receive loan forgiveness. Now, 2016 has proven to be even worse for the beaten down sector. With new regulations and questions about the leading accreditation agency hampering their domestic efforts, for-profit schools will continue to grow their international presence in an effort to keep stock holders happy and avoid US regulations.
Here are a few of the headlines so far in 2016, leading us to believe our prediction in January will continue to be on track.
- The Education Department recommends eliminating ACICS, the leading accreditor of for-profit schools.
- The Education Department also has proposed new regulations, “We won’t sit idly by while dodgy schools leave students with piles of debt and taxpayers holding the bag,” Secretary of Education John King said in a statement.
- DeVry released their Q2 earnings. Devry Brasil’s revenue grew 28.2% to $48.1 million even with a negative currency effect. New student enrollment is up 26.4% over last year.
Schools like DeVry and University of Phoenix, with their late 2014 acquisition of FAEL, a Brazilian Education company, will continue to look to international markets for growth. Both schools are seeing increased revenue and enrollment this year in Brazil, with US revenue declining. We anticipate this trend to continue and for US based for-profit schools continue to look to international markets for growth.