Subprime College Crash Continues Under the Radar

The subprime college crash continues for the seventh consecutive year with little attention from the government or media.

Subprime is a more appropriate name than for-profit, because several non-profit schools offer limited value at a high price. Campus closings, steep decreases in enrollment, low student loan repayment rates, low graduation rates, and low returns on investment are strong  indicators of "subprime."

University of Phoenix, now part of Apollo Global Management, continues to close campuses. In total, they have closed more than 450 campuses and learning sites. I expect UoPX to close half of their remaining campuses in the next 12-18 months.

Art Institutes are closing most of their campuses in 2018 after being taken over by Dream Center Education Holdings.  David Halperin has been covering the story in the Huffington Post, but it has received little attention.  Argosy University, another system of DCEH schools, is teaching out at least 14 campuses.




DeVry University will be closing more campuses after their parent company, Adtalem, dumped their brand and practically gave it away to Cogswell Education/Palm Ventures. They have already closed eight sites in 2018. Over the past few years, DeVry has closed 44 of their 90 learning sites.

National American University (NAUH) is in major trouble. Their stock price has been struggling at $1 a share, making it vulnerable to delisting. T. Rowe Price is keeping it propped up. NAUH recently mortgaged their real estate for $8M.



Zenith (ECMC) is completely out of subprime college ownership. The former Corinthian Colleges was propped up by the non-profit student loan company with help from the government.

Kaplan University is now operating as Purdue University Global. But the school remains a subprime effort despite fraudulent claims that it offers a "world-class education."

Ashford University (Bridgepoint) continues to profit amidst state and federal investigations, but enrollment is down as it pursues non-profit status.

Strayer is buying out Capella. The new company is still STRA, but it's known as Strategic Education.

Private College Revenues and the US College Meltdown

#CollegeMeltdown

According to National Center for Education Statistics charts, public higher education institutions overall experienced increased revenues in recent years, but private colleges saw a $46 Billion loss in revenues from 2013 to 2015.

Bear in mind that the numbers are not up-to-date, so this pattern may have improved, stabilized, or worsened since 2016. But with student enrollment continuing to decrease, declining private college revenue numbers may be a harbinger of a larger meltdown.

In 2016, EY suggested that as many as 805 colleges faced significant challenges due to low enrollment numbers and unsustainable finances.

Some of private college revenue losses may due to a tuition discounting. In any case, drops in institutional revenues for a significant period require cost cutting, which frequently means cuts in teachers and staff. Conditions at individual private colleges may be vastly different, from thriving and growing to downsizing and closing.

NCES Projecting Stagnant College Enrollment Numbers

The National Center for Education Statistics is moderating its perspective on US higher education enrollment.

Earlier NCES reports projected college enrollment to grow to more than 22 million students by 2023.

In the Department of Education's The Condition of Education 2018 report, NCES projects enrollment to recover to 17.4 million undergraduate students by 2027, after six consecutive years of losses.

But even these more moderate numbers may be too rosy if NCES projections are already off from 2017 and the first half of 2018, as National Student Clearinghouse numbers would suggest.

Unless there are major policy changes at the federal, state, and local levels, it's not impossible to project a more dismal picture. These positive changes would need to address social inequality in the US, including the savage inequalities in K-12 education and college affordability for working-class families.

College Meltdown: State By State Changes

The National Student Clearinghouse has provided College Meltdown with state by state changes in college enrollment from Fall 2011 to Fall 2017.  The chart is listed in order of percentage loss or gain.  New Mexico, Hawaii, Illinois, Michigan, and Alaska were hardest hit.  Twenty two states experienced losses of 10 percent or more.   Six states increased their enrollment from 2011 to 2017.  New Hampshire and Utah, the two largest gainers, increased their enrollment by having a large online presence (Southern New Hampshire University and BYU online).
State	Change %	Change N	Fall 2017	Fall 2011
Multi-State Institutions	-53%	-724,715	645,035	1,369,750
New Mexico	-20%	-28,468	115,734	144,202
Hawaii	-19%	-12,700	52,938	65,638
Illinois	-19%	-141,554	616,520	758,074
Michigan	-19%	-117,285	516,291	633,576
Alaska	-17%	-5,922	29,551	35,473
Oregon	-17%	-42,139	211,264	253,403
Missouri	-16%	-64,193	347,315	411,508
Louisiana	-15%	-38,854	222,640	261,494
West Virginia	-15%	-24,793	144,717	169,510
Montana	-15%	-8,134	47,811	55,945
Indiana	-14%	-57,710	345,140	402,850
Kentucky	-14%	-38,766	238,922	277,688
Minnesota	-14%	-58,239	362,416	420,655
Arkansas	-13%	-23,649	154,979	178,628
Ohio	-13%	-87,250	602,612	689,862
Wisconsin	-12%	-43,238	307,565	350,803
Oklahoma	-11%	-23,511	187,640	211,151
Maryland	-11%	-40,986	346,501	387,487
Wyoming	-10%	-3,396	29,333	32,729
Nebraska	-10%	-14,418	127,526	141,944
Pennsylvania	-10%	-72,163	682,995	755,158
North Dakota	-9%	-5,275	51,084	56,359
Iowa	-9%	-20,247	201,485	221,732
New Jersey	-9%	-37,731	383,465	421,196
Colorado	-9%	-28,640	291,986	320,626
Virginia	-8%	-44,484	484,523	529,007
New York	-8%	-98,904	1,092,559	1,191,463
Mississippi	-8%	-14,305	166,005	180,310
Washington	-8%	-27,148	316,152	343,300
Vermont	-7%	-3,177	40,024	43,201
Florida	-7%	-74,318	1,003,014	1,077,332
Massachusetts	-7%	-32,753	444,670	477,423
Maine	-7%	-4,690	65,361	70,051
Georgia	-6%	-33,836	491,898	525,734
Tennessee	-6%	-20,642	300,337	320,979
North Carolina	-6%	-32,642	522,750	555,392
Kansas	-5%	-10,015	193,733	203,748
District of Columbia	-5%	-3,727	73,925	77,652
Rhode Island	-4%	-3,179	69,543	72,722
South Carolina	-4%	-9,339	236,782	246,121
Connecticut	-3%	-6,257	187,124	193,381
Nevada	-2%	-2,651	110,085	112,736
California	-2%	-43,872	2,515,551	2,559,423
Alabama	-1%	-4,149	290,704	294,853
Delaware	0%	-177	55,926	56,103
South Dakota	3%	1,200	46,598	45,398
Texas	4%	58,803	1,489,865	1,431,062
Idaho	4%	4,202	100,851	96,649
Arizona	6%	23,750	451,539	427,789
Utah*	25%	63,108	317,839	254,731
New Hampshire*	89%	69,661	147,773	78,112
*Growth driven by institutions with large online programs. Students may not be physically located within the state.