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Education Center of Excellence
- The Outlook for Education Investing
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6.14.2010
by Mark Jeynes
This study highlights the evolution of education spending in the UK over the past 20 years. We also evaluate the likely outlook for education spending in the UK, given the current fiscal deficit. Finally, we highlight three trends in the UK education sector that, despite the challenging funding environment, are likely to present opportunities for private education companies and private equity investors in the short to medium-term.
- Private Sector Post-Secondary Schools - Do They Deliver Value to Students and Society?
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3.31.2010
by Robert Lytle
Recently, U.S. private sector post-secondary education providers have come under intense legislative, regulatory, political, and press scrutiny across a myriad of issues. Likewise, discussions in Washington, D.C. have focused on assuring quality outcomes for students by enhancing existing regulations and proposing new ones. Underlying this scrutiny is an apparent belief that private sector educational providers are likely to suppress investments in educational quality and student outcomes in favor of profits. As a result, there has been much subjective discussion around the private sector’s role in post-secondary education with a limited level of objective facts.
In an effort to shed more objective light on the role of private sector education providers, The Parthenon Group examined the following question: Do private sector post-secondary schools deliver value to students and society? Over the past several months, through an analysis of U.S. Department of Education longitudinal studies, industry data, and primary research, Parthenon conducted a rigorous examination of the private sector’s ability to provide meaningful post-secondary outcomes.
- The Urgent Necessity to Adjust Federal Cohort Default Rate Standards
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2.24.2010
by Roger Brinner
Removing economic barriers to postsecondary education is a primary goal of student loan programs. Despite government-guaranteed student loan programs meeting this goal, current legislation for Cohort Default Rates (CDR) threatens to reverse this progress. Under CDR, institutions are held accountable for a defined standard of loan default behavior by prior students. This institutional statistic is critical for federal funding as it affects the ability of an institution’s future students to receive Title IV funds. A range of institutions are under great CDR pressure. The basis of the threat is that the “Great Recession” is almost certain to more than double default rates. Further threatening students’ ability to access Title IV money is the recent fixing of interest rates, the increase in the cohort default period from two to three years, and the phasing out of the FFEL program. The surge in unemployment and these policy changes
disproportionately affect proprietary schools since they educate traditionally underserved populations with a higher risk of default.
This paper seeks to highlight what causes default and suggest an adjusted CDR that reflects the students served and the economic environment. Academic loan literature suggests that the default rate of an educational institution is dominated by the characteristics of the student body, and not by the public/private or profit/nonprofit nature of the school. Thus, schools tending to meet the goal of serving the disadvantaged will be inadvertently penalized — and their potential students abandoned — if standards for institutional default rates are not adjusted for both student characteristics and the national unemployment crisis.
- Investing in Education
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7.1.2009
by Robert Lytle
Where are opportunities and how can you capture them?
- The Impact of the Education Stimulus on K-12
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March 2009
by Robert Lytle
- Corporate Reimbursement for Continuing Education in the Current Downturn
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3.1.2009
by Robert Lytle
Given the success enjoyed by market-funded colleges and universities over the past decade, both in growing enrollment and generating shareholder value, industry observers have become increasingly interested in the impact of the current economic crisis. One particular focus of attention has been the threat of reductions in corporate tuition reimbursement budgets as companies seek to manage costs by reducing funding for non-core employee benefits.
In response to this concern, The Parthenon Group, a strategic advisory firm, conducted interviews with Human Resources professionals at companies with revenue of more than $500 million. These companies represent a broad spectrum of industries and offered their perspective on how the economic downturn is impacting the funding levels for degree-based program tuition reimbursement.
