INSIDE HIGHER ED: For-Profit Group and Big Chains Part Ways

Career College Central Summary:

  • The for-profit college sector’s primary trade group is being buffeted by some of the same challenges its industry faces.
  • Most large, publicly held for-profit chains have left the Association of Private Sector College and Universities (APSCU) in the last year or so. And officials with the association said they have begun restructuring and refocusing on their career-school roots.
  • “This sector and its association need to be defined by the mission of its schools, not the corporate structure,” said Steve Gunderson, a former Republican congressman from Wisconsin who has led APSCU since 2012. “We are focused on postsecondary career schools and skills.”
  • The association also plans to court nonprofit career institutions, Gunderson said. Five nonprofits are already members, but all of those colleges are former for-profits that converted to nonprofit status, in some cases motivated by a desire to avoid the regulatory scrutiny for-profits have faced under the Obama administration.
  • APSCU’s shift is a reversal from five years ago, when the group changed its name from the Career College Association. That move was an attempt to be more amenable to big for-profit chains, which had moved deeper into the issuing of degrees and were less keen on being called career colleges, said Trace Urdan, a for-profit industry analyst, most recently with Wells Fargo.
  • “That was the whole point of that name change,” Urdan said.
  • The University of Phoenix and its holding company, the Apollo Education Group, never signed up. Neither did Capella University or American Public Education, both of which are generally considered to be high-quality publicly traded for-profits.
  • In recent weeks the DeVry Education Group and Kaplan have dropped their membership with APSCU, the association said. Spokespeople for the two companies declined to comment on the move.
  • Those departures follow previous exits by Corinthian Colleges, Education Management Corporation (EDMC) and ITT Tech.
  • Corinthian went belly-up last year amid serious financial woes and a long list of legal and regulatory problems, most of which revolve around bogus job-placement claims and deceptive marketing. ITT and two of its executives are facing fraud charges the U.S. Securities and Exchange Commission filed in court earlier this year. The company also has fiscal challenges, as does EDMC.
  • Most of the large for-profits have closed campuses and laid off staff or eliminated positions. Some have fewer public relations and government relations officials working for them.
  • Career Education Corp. and Bridgepoint Education appear to be the last major for-profit chains that remain on the membership rolls at APSCU. The group represents more than 800 schools, many of them small career colleges.

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