The Business of Education

A visit to India shows what for-profit education can deliver- the variance in the quality of education is much, much higher than that of the not-for-profit group.

In the U.S. the for-profit education business is delivering the profits, but what about the education?

The New Poor - For-Profit Schools Cashing In on Recession and Federal Aid - NYTimes.com: "A Lucrative Business

The stakes are enormous: For-profit schools have long derived the bulk of their revenue from federal loans and grants, and the percentages have been climbing sharply.

The Career Education Corporation, a publicly traded global giant, last year reported revenue of $1.84 billion. Roughly 80 percent came from federal loans and grants, according to BMO Capital Markets, a research and trading firm. That was up from 63 percent in 2007.

The Apollo Group — which owns the for-profit University of Phoenix — derived 86 percent of its revenue from federal student aid last fiscal year, according to BMO. Two years earlier, it was 69 percent.

For-profit schools have proved adept at capturing Pell grants, which are a centerpiece of the Obama administration’s efforts to make higher education more affordable. The administration increased financing for Pell grants by $17 billion for 2009 and 2010 as part of its $787 billion stimulus package."