There are some interesting things shaping up in the booming for-profit edu space. If you are a regular reader of this blog you will know this is not the first time I have said the EDU space is facing troubled times. Even though this may be the case it doesn’t necessarily mean it doesn’t make sense for lead gen companies to continue their pursuits of market share. It does mean you should be diversified in the space and probably should be looking at partnering with traditional schools as well as for-profit establishments. Okay, aside from my opinions, I came across a great article by Anne Ryman at AZCentral.com that did a great job of encapsulating a number of the issues that the EDU space faces. If you want a quick read on what is going on with the space regarding student loan default rates, possible new marketing regulations and the high costs, the article is a must read.

The traditional schools should be looking at the online space and quickly figuring out how they can take away market share from these schools. It is quite possible for state schools to offer online classes and service more students at lower cost. It won’t be long until enter the market and begin building downward pressure on the enrollment costs of the higher priced for-profit schools.

Here is the article

Defaults on student loans rising

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The fellas at Sparkroom sponsored a benchmarking survey put together by forprofitedu.com, which I believe is run by the founder of CUNet, which just acquired Sparkroom. The report surveyed 102 marketing professionals in the for-profit EDU sector and asked a number general questions that reaffirmed the evident speculations most industry insiders have been making.

The survey found that almost 70% of the respondents plan on increasing their budgets. Not all too surprising being that EDU industry could easily be considered counter cyclical to the economy. People are looking to go about to school to increase their chances of earning more income in today job market. Once the economy begins to improve, not instantaneously, but soon after those same people will remove themselves from the continuing education market. It is also my speculation that many will begin to drop out or end their schooling prior to completing their degrees because of their secure job situations. They simply will not have the need and will find something better to do with their $1k+ per month. Regardless of this speculation, schools are doubling down on the current boom. No brainer there, but they should be cautious and have a close eye on key market indicators. On the same token, and I think I mentioned this before, but if Obama’s efforts continue on to completion and provide funding for citizens looking to go back to school through the state school system, which is making the same strides of bringing classes online, could bring a market turn quicker then expected. So it makes sense that schools are looking to spend more money on leads. They are currently raking in money hand over fist.

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