One of the most notable for-profit college conglomerates, Education Affiliates, operates Fortis Colleges and Fortis Institutes and other lesser known trade schools. Fortis schools are managed by EA, but they are owned by JLL Partners, a New York City-based private equity firm.
At least eight Fortis campuses have closed, leaving 32 locations. But many of the remaining schools have been losing money and 14 are on US Department of Education Heightened Cash Monitoring.
In 2016-17 (the last year available for data), 21 Fortis locations were unprofitable: Centerville, Cincinnati, Columbia, Cutler Bay, Cuyahoga Falls, Grand Prairie, Houston, Indianapolis, Norfolk, Phoenix, Richmond, Baltimore, Birmingham, Cookeville, Erie, Forty Fort, Lawrenceville, and Nashville.
The problem from the beginning has not been with instructional quality, but with programs offering limited gainful employment. Schools like Fortis offer programs that often lead to low wage jobs, and low wages make student loan debt insurmountable. Student loan repayment rates for Fortis schools range from 20 to 24 percent.
So how long can JLL Partners continue to let the red ink continue with these assets? Can cuts be made without cutting instructional quality and student resources? And how can Fortis schools compete with free community college in states like New Jersey, Tennessee, and Indiana, where Fortis campuses exist?
JLL Partners has many notable investors, including the University of Missouri System, Montana Board of Investments, Colorado Public Employees' Retirement Association, Regents of the University of California, Travelers Companies, and the New Jersey Pension Fund. All of these funds need to pay off their obligations; with New Jersey, the pressure to create substantial returns is enormous.
JLL Partners also owns Ross Medical Education Centers, ACE Cash Express, CATO Research, Medical Card System, Pioneer Bank, Point Blank Enterprises, Viant, and Xact Data Discovery.
No comments:
Post a Comment