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EDMC focuses on stabilizing enrollment
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Education Management Corp., the Downtown-based company that owns 52 Art Institutes, including the Art Institute of Pittsburgh, is focused on stopping the enrollment decline that has damaged its revenues over the last year.
Ed West, CEO of the company operating for-profit colleges and universities in 109 locations across the country and Canada under the brands Art Institutes, Brown Mackie College, Argosy University and South University, told analysts Thursday that Education Management is focusing its efforts on stabilizing enrollment, which declined by more than 10 percent from June 2011 to June 2012. There are currently 124,600 students enrolled in EDMC programs.
EDMC recorded losses of $1.5 billion for fiscal 2012, which ended June 30.
Mr. West's comments were made during a presentation at the BMO Capital Markets 12th Annual Back to School Education Conference in New York, in which representatives of 21 education-oriented for-profit companies spoke to analysts.
Part of the problem, Mr. West said, is with the federal student loan PLUS program, which has tightened lending requirements, making it harder for students to finance college. PLUS stands for Parent Loan for Undergraduate Students.
Just as important as stabilizing the enrollment decline, he said, is making sure EDMC has cash on hand to pay off debts that will come due in June 2014.
The company slowed its pace of adding new campuses in the last year. From 2009 to 2011, EDMC added 23 locations. In the most recent fiscal year, the company added just four.
"We've pulled back significantly in terms of rolling out new locations," Mr. West said.
While U.S. Department of Education rules regarding so-called "gainful employment regulations" were blocked in June by the U.S. District Court for the District of Columbia, the proposed rules did affect some EDMC programs. The regulations were an attempt to curtail high indebtedness for students who were leaving programs with low potential earnings.
In the company's annual securities filing issued Wednesday, EDMC said it had shortened some programs and lowered the cost of a number of degree programs in order to respond to the proposed regulations.
Mr. West told analysts said that the Art Institutes that are in California have not raised tuition in three years, while the state university system tuition has gone up by 30 percent.
EDMC shares dropped 14 cents, or 3.75 percent, to close at $3.59 Thursday.
First Published September 14, 2012 12:00 am
