For-Profit Schools Look Abroad for Growth

29 Oct

As their student enrollments in the United States continue to shrink, some for-profit schools are hoping to find growth opportunities in other countries.

Domestic operations of the for-profit education firms have been hit hard by stricter government regulations and the weak economy, with the speed of recovery remaining uncertain.“There is increasing interest in tapping into demand from abroad for post-secondary education,” says Citigroup [C  34.16    -0.01  (-0.03%)   ] analyst James Samford.

An index of ten for-profit education companies, the S&P 1500 Education Services Index  is down 19 percent in the last three months and 9 percent for the year, as of Friday morning.

 

“It makes sense to go overseas with everything going on in the U.S. market,” says Jeff Silber of BMO Capital Markets. “The overseas market is about 8 times larger, with the college participation rate well below the U.S. in many areas, so there are lots of opportunities.”

DeVry is one of the schools talking up the importance of international expansion.

“We see certain international markets, in particular Latin America and India, as important opportunities for growth,” DeVry’s spokesperson [DV  38.86    0.35 (+0.91%)   ] told CNBC.

According to the company, growth overseas helped it mitigate the declines in total enrollment last quarter.

The number of students at its DeVry Brasil operations increased 18 percent year-over-year and new enrollment was up 29 percent year-over-year. The company says it “continues to invest in new programs and new campus locations” in the country.

 

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