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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I believe that basic economic realities will very quickly drive the state supported schools (not for profit) headfirst into online education. Across the country states, counties, and municipalities are faced with budget deficits and as a result have cut funding to their respective publicly supported schools. The schools can respond by raising tuition to offset this loss of support, but very quickly they will find a point at which tuition hikes will become intolerable to the student population. They already have the content with the courses, so why not make it more widely available online? In addition, a student who is working towards a degree would prefere to have degree from a school that at least has some local name recognition than a lesser-known national one. I think it will take time but I see the rise of the state schools and the community colleges becoming bigger players in the online EDU space.
Great take Ed,
I agree and think that this is the reason why the EDU space overall will continue to thrive in the online space. The for-profit space, however, if these state schools begin to compete for their students and if regulations make things a little more difficult (which in all honesty, I don’t think they will. There are plenty of work-arounds.) the for-profit space will need to lower their costs and ultimately shrink their margins. And we know from the mortgage space what the trickle down effect will look like if that does happen.
Who knows…only time will tell.