Anyone looking to make money from the for-profit education sector got blown away last week – unless they sold short the shares of such companies as Apollo Group, DeVry and ITT Educational Services. Anyone looking to make money by getting an MBA degree at one of these schools had better think twice, maybe three times.
Through some excellent investigative reporting by The New York Times and others, it has come to Congress’s attention that the Apollos of the world have basically been printing money off the backs of students who can’t really afford a degree, offline or online.
Over the past ten years, the Times found that enrollment had exploded by more than 200% at for profits, a factor of ten times the growth of private colleges and universities. The bad news is that the percentage of total federal student loans being held by students at for-profit colleges has also exploded. Worse, the loan default rate at for profits is double to triple that of privates.
Congress is going to fix this, and it is going to be painful for Apollo and its ilk. That’s why Wall Street took these stocks down 15% in 15 minutes last week.
Yet I am sure MBAs-to-be (roughly 150,000 per year according to the National Center for Education Statistics) will continue to put these schools in their consideration set. Which takes the age-old question of “Is an MBA degree worth it?” to a ho’ nubba lebel. “Is an online MBA degree, or an MBA degree from a for-profit mill, worth it?”
Other than for learning and personal growth, no. On average, it won’t put your resume on top, it won’t get you promoted, and it won’t make you enough to pay it back, never mind get rich. (“On average” because there are exceptions to every rule.)
But don’t expect to hear that from the mills. Here is what DeVry says on its website about its online MBA:
To get you enthused about its opportunities, ITT Educational Services quotes a Wall Street Journal article about MBA success…from 2003.
And Strayer University tells you the average age of its students is 34. What will a 34-year-old do with an MBA degree? From Strayer?
If you are contemplating an online MBA degree from a for-profit school, you should be doing your homework – lots of it – now, rather than later.