Are students turning away from for-profit universities?

Stefanie Botelho's picture
Tuesday, May 6, 2014

About one-quarter of Strayer University students enroll because their employers have partnered with the university. Many students pursue graduate-level degrees. Both facts may help explain why Strayer graduates tend to fare better in the labor market than graduates of some other publicly traded, for-profit education institutions.

As the Education Department gears up to regulate career programs, it has its eye on for-profits. Community colleges and for-profits tend to serve similar populations, but for-profits charge much higher tuition. They also account for 13 percent of college students but nearly half of all student loan defaults, according to the Education Department.

Strayer serves about 43,000 students nationwide, both through online and on-campus programs. About 35 percent of students are eligible for federal Pell grants, and about two-thirds are nonwhite; a year's undergraduate tuition currently costs $15,495. With regulation pending and enrollments dropping—Strayer announced last fall that it will close 20 campuses in response to declining revenues and enrollment—what's the path forward for the institution? National Journal asked Strayer Education Chief Executive Officer Karl McDonnell about Strayer's future. Edited excerpts follow.

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