NEW YORK (AP) -- For-profit school chains with relatively cheaper tuition and a focus on vocational programs may benefit as the industry adjusts to tighter regulation and lower enrollments, said William Blair analyst Brandon Dobell.
The industry is undergoing big changes amid tougher government rules and a declining student population. Enrollments soared during the recession, but have shrunk in recent years as the Obama administration put in place new, stricter regulations on recruitment and marketing practices.
Many companies increased admission standards, which hurt enrollments. Analysts say the lasting weak economy and negative publicity about the for-profit education industry have also discouraged students.
As the industry adjusts, American Public Education Inc., Grand Canyon Education Inc. and Bridgepoint Education Inc. may fare better because of comparatively lower tuition, Dobell said in a client note Tuesday.
Critics say tuition at for-profit schools is far higher than for comparable programs at community colleges, however.
Dobell said that schools with strong associate degree and vocational programs — training for specific trades — could also benefit, especially if courses are substantially different from offerings from community colleges and traditional 4-year colleges. He cited DeVry, ITT, Education Management and Career Education Corp.
Around the industry, shares mostly rose in afternoon trading Tuesday.
— Apollo Group Inc., owner of the University of Phoenix, rose 53 cents, or 2.6 percent, to $20.79.
— DeVry Inc.'s stock shed 71 cents, or 2.7 percent, to $25.92.
— Washington Post Co., which owns the Kaplan chain, gained $2.26 to $375.20.
— Shares of ITT Educational Services Inc. increased 25 cents to $19.26.
— Education Management Corp.'s shares climbed 27 cents, or 5.9 percent, to $4.83.
— Shares of Career Education gained 25 cents, or 8.3 percent, to $3.27.
— American Public rose 30 cents to $36.71
— Grand Canyon's stock gained 42 cents to $24.36
— Bridgepoint Education's shares climbed 22 cents to $10.48