This raises more questions about the long-term viability of this industry, which has been anything but profitable in the last couple of years. Strayer competes with Education Management and Apollo Education , which runs University of Phoenix.
These companies and other for-profit educators have been under government investigation for alleged predatory enrollment practices. Some students end up with mounds of debt with little to show for their education.
Things are likely to get worse for these companies before they get better. There are more jobs now than there were seven years ago at the height of the financial crisis. For-profit education companies then marketed themselves by offering students a better way of life and better jobs upon graduation.
With the U.S. unemployment rate around 5%, the pool for students is running dry. These schools now have to compete fiercely with each other. And they may also have to compete with the U.S. government, assuming President Obama's free community college proposal passes.