McAlester News-Capital, McAlester, OK

Features

November 30, 2012

For-profits losing to better-rated state schools charging less

Keri Trimble, 33, an employee at a utility call center, was shopping for an online college so she could take classes at night and on weekends.

Trimble rejected Apollo Group's University of Phoenix, the dominant player in the market for selling Internet degrees to working adults. Instead, she chose Arizona State University's program, which typically charges almost 30 percent less.

"The cost was outrageous," said Trimble, of Sacramento, Calif. Too, "I didn't think that graduating from the University of Phoenix would give me the respect that comes with a degree from a traditional four-year college."

Competition from state universities' expanding online programs is pummeling for-profit colleges, once among the fastest-growing U.S. industries. The companies, including University of Phoenix and Washington Post Co.'s Kaplan chain, are closing campuses as enrollment and stock prices plunge. With outstanding student loans totaling $1 trillion, some potential customers are turning away from the schools out of concern about cost and quality.

It's a potent threat because publicly traded for-profit colleges drew 59 percent of their enrollment last year from online-only students, according to estimates from Deutsche Bank. At the University of Phoenix, the figure was three-quarters.

More than 80 percent of the U.S. population will have access to less expensive online programs from their own state universities by the end of next year, up from 62 percent this year, predicted Paul Ginocchio, an analyst at Deutsche Bank in San Francisco. Up to a third of those students would have gone to a for-profit college if the alternative didn't exist, he said.

Private universities are also invading the online arena. Last week, a group including Duke, Vanderbilt and Brandeis universities, said it would offer online classes for credit. Harvard and the Massachusetts Institute of Technology offer courses free online, though they don't count for credit or toward degrees.

Text Only | Photo Reprints
Features
Seasonal Content
AP Video
Raw: Israel Bombs Multiple Targets in Gaza Veteran Creates Job During High Unemployment Raw: Cargo Craft Undocks From Space Station Widow: Jury Sent Big Tobacco a $23B Message New Orleans Plans to Recycle Cigarette Butts UN Security Council Calls for MH 17 Crash Probe Obama Bestows Medal of Honor on NH Veteran Texas Sending National Guard Troops to Border Hopkins to Pay $190M After Pelvic Exams Taped Foxx Cites Washington 'Circus Mirror' NASA Ceremony Honors Moon Walker Neil Armstrong Obama Voices Concern About Casualties in Mideast Diplomacy Intensifies Amid Mounting Gaza Toll AP Exclusive: American Beaten in Israel Speaks Obama Protects Gay, Transgender Workers Raw: Gaza Rescuers Search Rubble for Survivors Raw: International Team Inspects MH17 Bodies Raw: 25 Family Members Killed in Gaza Airstrike US Teen Beaten in Mideast Talks About Ordeal 'Weird Al' Is Wowed by Album's Success
NDN Video
Obama: Putin must push separatists to aid MH17 probe Michigan inmates no longer allowed to wear orange due to 'OITNB' Adam Levine Ties the Knot Sebastian The Ibis Walks Beautiful Bride Down The Aisle | ACC Must See Moment NASA Ceremony Honors Moon Walker Neil Armstrong Faces of Souls Lost in Malaysian Plane Crash 105-year-old woman throws first pitch Man Creates Spreadsheet of Wife's Reasons for Turning Down Sex 'Weird Al' Is Wowed by Album's Success Rory McIlroy struggles, surges, wins British Open NOW TRENDING: Real life Pac-Man Explosions as hot air balloon crashes in Clinton DUI Driver Dragged to Safety by Officer After Walking Onto Busy Freeway Celebrities That We'd Like to Send to the Moon Spectacular lightning storm hits London Malaysian Flight Victim Was South Florida Grad Rory McIlroy on pace to break British Open records Officials Fear MH17 Site Now Tampered by Rebels Lowes employees repair Vietnam vet's wheelchair Widow of Staten Island man who died after NYPD takedown says he was unjustifiably targeted
Parade
Magazine

Click HERE to read all your Parade favorites including Hollywood Wire, Celebrity interviews and photo galleries, Food recipes and cooking tips, Games and lots more.