The DeVry Education Group, parent company of DeVry University, one of the nation’s biggest for-profit colleges, reports its second quarter earnings Thursday.
DeVry is getting hit by several industry trends, including a weaker revenue picture and legal troubles.
Enrollments at for-profit colleges have been falling lately, according to Stephen Burd with New America, a public policy institute.
“More students went to the schools during the recession and now that the recession is over, a lot of those students are going back into the workforce,” he said.
Burd said interest in for-profits has also declined because of state and federal investigations into the schools’ job placement rates.
“In part, that’s because the government doesn’t have a single standard that they use to say what a job placement rate is,” he said.
Last week, the Federal Trade Commission filed a lawsuit against DeVry University. It said the school falsely advertised that 90 percent of job-seeking graduates land work in their fields within six months of graduation, among other claims.
Trace Urdan, a Credit Suisse analyst, said the for-profit sector’s getting singled out.
“The administration has effectively declared war on this industry,” Urdan said.
Urdan said the FTC lawsuit could cost DeVry anywhere from $250 million to $1 billion. But he said DeVry has good financial resources and likely won’t go the way of Corinthian Colleges, which declared bankruptcy last year after a series of legal challenges.
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