Recession Silver Lining: First in a Series?

Katherine Mangu-Ward | December 10, 2008

At least there's one industry group feeling cheery these days. Apparently nothing brings more glee to the annual meeting of the Career College Association, a group of for-profit colleges, than shrinking endowments and rising tuition at traditional schools. And history suggests that they have good reason for optimism:

For-profit colleges have seen enrollment grow by an average of about 17 percent during the past nine economic downturns—when Gross Domestic Product declined and unemployment rose—compared with an average of 8 percent growth during positive economic conditions, according to an analysis provided by Stifel Nicolaus, a brokerage and investment banking firm....

As would be expected, publicly traded for-profit colleges saw revenues increase as well, generating $10 billion in the fall of 2008, an increase of 13 percent over last year, Stifel Nicolaus found.

Incidentally, according to the article quoted above, the former chairman and CEO of ITT Educational Services is named Rene Champagne, and the CEO of Devry is Daniel Hamburger. Make of that what you will.

For more on the joys of for-profit education, check out my article from the July print edition, "Education for Profit: Why Is Everyone Flaming the University of Phoenix?"

Comments

|12.10.08 @ 3:01PM|#

But they'll never make it to a BCS bowl.

|12.10.08 @ 3:29PM|#

The sole reason you posted this is because you got a good hit on google image search for "champagne hamburger"

robc|12.10.08 @ 3:48PM|#

Makes sense. Typical 4 year colleges are, in many ways, a luxury item. Things schools teach job skills, 4 year colleges teach job skills + other stuff.

Dont get me wrong, the other stuff has value. But, from a pure job training aspect, it isnt the most efficient.

thoreau|12.10.08 @ 4:04PM|#

Jack-

The image she uses is the first one that shows up on a Google Image search.

I don't always agree with Katherine on everything, but I love her use of images in blogging.

FWIW, I am thinking of trying some GRE prep tutoring on the side. Grad school admissions swell in recessions, might as well cash in on the one viable industry during this tough time.

Lefiti|12.10.08 @ 4:30PM|#

Right because everything else for profit turns out so well. Like healthcare. The Market can do no wrong!

economist|12.10.08 @ 4:31PM|#

robc,
About 40% skills I actually use, 20% skills I might theoretically use but have never had occasion to, and 40% stuff that isn't terribly useful at all.

|12.10.08 @ 4:57PM|#

But they don't get to read Chaucer!

sage|12.10.08 @ 5:41PM|#

You know what I don't get about that article about the U of Phoenix? The letter from the president of that same college that took your whole article as a dig at online schools, especially his. What was that about?

|12.10.08 @ 6:37PM|#

But they'll never make it to a BCS bowl.

They do host one every year.

Kolohe|12.10.08 @ 6:59PM|#

Grad school admissions swell in recessions, might as well cash in on the one viable industry during this tough time

Tyler Cowen had a link yesterday that this does not seem to be the case this time around. Although some commeters pointed out that it could just be 'so far' and the data from a rising wave just hasn't come in yet.

thoreau|12.10.08 @ 7:30PM|#

Kolohe-

Yeah, I did hear that professional schools (law, business, etc.) are doing better than traditional academic programs that require the GRE. However, I predict that eventually the number of GRE takers will rise. Besides, even if GRE numbers just stay flat while GMAT, LSAT, MCAT, etc. numbers rise, experienced test prep people will flock to those tests, leaving a vacuum in GRE prep.

|12.10.08 @ 8:48PM|#

thoreau refers to Lobster Girl, I believe.

I, Kahn O\'Clast|12.11.08 @ 10:27AM|#

I have another silver lining particular to this crisis: The reduction in the financial sector will release a lot of smart, educated people who went to Wall Street with math, chemistry, physics, computer science and other higher ed degrees solely bcse Wall Street was where the money was and now they might go forth and become actually productive citizens.