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On Jan. 6 the National Education Policy Center (NEPC) released its annual report on for-profit and non-profit education management organizations (EMOs). The report confirms that the trend of declining growth within the for-profit EMO sector is continuing. It also suggests that many of these companies, such as Pearson Education and Cambridge Education, LLC are expanding their supplemental services in the form of more books and education software. The explosion of growth among EMOs is, for the most part, the product of a 1992 Supreme Court decision that included them among “institutions of higher learning” and therefore made the organizations eligible for federal funding.
According to the NEPC report, the growth of schools has been massive in the last 15 years. In 1995, there were only five for-profit EMOs operating. There are now 99 operating within the United States. The growth among new organizations seems to have leveled off however, as the year between 2009-2010 and 2010-2011 saw a net increase of only one EMO.
The number of students attending these institutions however, has not leveled off in the slightest. As of 2009-2010, there were 353,070 students attending the 98 for-profit EMOs. According to this year’s report, there were 394,096 attending 99 for-profit schools.
This is an average net gain of 378 students per school.
It should seem pretty obvious that this growth is not sustainable. The report also gauges Adequate Yearly Progress; a rating tool used to gauge how well a school is improving its educational offerings and how well the students perform each year. As expected, performance is on the decline as more students are attending the same relative number of schools. In 2009-2010, 53 percent of for-profit EMOs achieved AYP. One year later, that number was only 48 percent.
But since the EMOs have a financial interest in assuring their students perform well, you can expect to see some sort of adjustment either in admissions rates or in performance benchmarks.
