DeVry Inc. (DV), American Public Education, Inc. (APEI): The State of For-Profit Education

Historically, American Public has focused exclusively on catering to active or retired military personnel. Not only did this usually mean higher rates of repayment, but funds from the GI bill did not count toward the school’s 90/10 rule. In recent years, however, American Public has focused on beefing up its enrollment figures from the civilian population.

This means that new student enrollments, which are measured every year, have ballooned. But student default rates and gainful employment statistics — which measure how students are doing three years after leaving school — won’t reflect this change for a long time. It’s my guess that when they do, the numbers won’t be so pretty for the school.

Ironically, the opposite is true for most of the other industry players. Because recruitment practices have been so drastically changed, schools have a smaller, more focused cohort of students in house. When these students leave school, they are more likely to find jobs and repay their loans.

Even though many of the industry’s biggest players are trading for single-digit P/Es, DeVry Inc. (NYSE:DV) and Bridgepoint are the only ones I consider to be worthy of investigation. On the whole, its good to see the composition of for-profit schools becoming healthier and more sustainable, but the industry has a long way to go before it can convince the public that it’s performing a worthy service for all of its stakeholders.

The article The State of For-Profit Education originally appeared on Fool.com.

Fool contributor Brian Stoffel has no position in any stocks mentioned. The Motley Fool recommends American Public Education and Bridgepoint Education (NYSE:BPI). The Motley Fool owns shares of American Public Education and Bridgepoint Education. 

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