Salient to Investors:
Competition from state universities’ expanding online programs is pummeling for-profit colleges, once among the fastest-growing U.S. industries.
The for-profit companies are closing campuses as enrollment and stock prices plunge. Deutsche Bank said it’s a potent threat because publicly traded for-profit colleges drew 59 percent of their enrollment last year from online-only students, 75% at the University of Phoenix.
Paul Ginocchio at Deutsche Bank said more than 80 percent of the US population will have access to less expensive online programs from their own state universities by the end of 2013 versus 62 percent in 2012 – as many as a third of those students would have gone to a for-profit college if the alternative didn’t exist.
Private universities are also invading the online arena, including Duke, Vanderbilt, Brandeis Harvard, and MIT.
For-profit college stocks fell after Romney lost to Obama.