For-Profit Education Shares are Down

TheBizofKnowledge ^ | June 21, 2006 | Dr. Bill Belew

[G. Stolyarov II]

Apollo Group is the biggest of the ForPro education groups. It owns the University of Phoenix.

Yesterday its stock fell 2 percent after reporting lower third-quarter profits because of higher costs.

Corinthian Colleges is another of the big players. It, too, reported a loss of 3 cents/share.

DeVry lost 15 cents, and Educational Services lost 3 cents/share as well.

Everybody's trading down, albeit down very little.

Does this mean that the quality of education provided by these groups has also dipped? Are students losing out 2% on their classes? or 3 cents/dollar they spend on their tuition?

Hardly.

One of the big five -- Career Education Corporation -- reported gains of 2 percent. I reckon if they were all averaged out, it kind of breaks even.

Question: How did the traditional colleges do this last quarter?

Hmmm.... Nobody knows or will know until they come asking for money.

What do you think?

[G. Stolyarov II]

Although the stock of many for-profit educational corporations has slightly declined recently, the quality of education they provide has not. Besides, this is no grounds on asserting for-profit services' educational inferiority to traditional colleges, because traditional colleges refuse to operate on a for-profit basis on principle; the financial data of the two types of schools thus cannot be compared. See Dr. Belew's blog at TheBizofKnowledge