New-student enrollments are way down at for-profit colleges, reports the Wall Street Journal.
Companies have pulled back on aggressive recruiting practices amid criticism over their high student-loan default rates. And many would-be students are questioning the potential pay-off for degrees that can cost considerably more than what’s available at local community colleges.
“People are just frozen or deferring, delaying decisions to go to school,” said DeVry Inc. Chief Executive Daniel Hamburger in a conference call earlier this month. “The average person in the U.S. has become much more risk-averse and cautious when it comes to spending or committing to anything.”
Kaplan Higher Education lets new students take trial classes before enrolling and paying tuition: New-student enrollment declined by 47 percent in the last quarter.
Capella Education cut recruiters’ commissions and saw a 35.8 percent drop in new enrollments.
The specter of a hefty debt load dissuaded Jason Tomlinson from enrolling to study business at Berkeley College, a for-profit school with locations in New York and New Jersey. Mr. Tomlinson, now 25, said he would have had to pay more than $20,000 per year, for four years, for that school’s bachelor’s degree program.
On Mr. Tomlinson’s $8-per-hour salary as a part-time sales associate at the Gap, “it just didn’t seem realistic” he said. “I really did not want to go into that much debt.”
Mr. Tomlinson enrolled in LaGuardia Community College, where he pays $3,600 per year for his full-time associate-degree program in business management and works at the school’s fitness center to help cover expenses. A barber in his spare time, Mr. Tomlinson plans to open a high-end men’s day spa after graduating with his associate’s degree in business management this spring.
New enrollments are down by nearly half at Apollo Group’s University of Phoenix, the for-profit higher education leader, reports AP.
The three-week orientation program is now required of all prospective students with fewer than 24 college credits. The program is free, but those who don’t pass can’t continue. The company scrapped its financial incentive program for enrollment counselors and there’s less reliance on outside sales companies to generate leads, and more emphasis on finding corporate partners willing to help pay for their employees’ education.
In addition, a new social network, PhoenixConnect, links students to alumni who can provide job leads.
Officials expect the changes will lead to higher graduation rates and lower federal loan default rates.