2014 june grayreports - student demand trends

GRAYREPORTS Demand for Educational Programs

www.GrayAssociates.com

Results through June 2014

617.401.7662 www.GrayAssociates.com 2

GRAY For more information please contact Bob Atkins. Email: [email protected]

Agenda

1.  Introduction

2.  Demand: National Overview

3.  Demand for On-Line Programs

4.  Demand for On-Ground Programs

5.  Demand by Program and City

6.  Acquisition Analysis: Corinthian Example

7.  Summary



Key Demand Trends and Observations

1.  Data on market demand is now available that can help guide your decisions

2.  Overall demand was down slightly in June.

3.  Market share is shifting between:

§  On-line and on-ground programs

§  Large programs and smaller programs

§  Largest cities and other cities

4.  The data can be used as part of your acquisition analysis



Who Is Gray?

GrayData

Completions IPEDS

Employment BLS/O*NET

Placement Rates Gray Research

Industry Inquiries GrayReports

Demographics US Census

Job Postings WANTED Analytics

Students Programs Strategy Locations §  Demographic

priorities §  Geo-priorities §  Market share

§  City selection §  Location selection §  Relocation analysis §  Consolidation

§  Program ideation and selection

§  Feasibility studies §  R&D §  Market reports

§  Business strategy and implementation

§  Acquisition analysis §  Pricing §  Outcome improvement

Advanced Analytics Predictive Models

Geo-Analytics

Clients: Education Institutions and Investors Mission

Help clients do well by doing good



What is GrayReports?

Over 31 million qualified inquiries January 2012 to the present

Over 830,000 new inquiries in June 149 programs with over 10,000 inquiries

257 cities with over 10,000 inquiries



Agenda

1.  Introduction






7.  Summary



Education Industry Inquiry Growth

Inquiry volume appears to be stabilizing.

§  Inquiries for the first six months of 2014 have declined approximately 5.5% year-over-year (YoY).

§  May showed improvement over April with a 3.1% YoY decline.

§  In June, the decline slowed to just 2.0% YoY.

2012

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Inquiries (Millions)

Education Industry Inquiries All Programs and Award Levels

2013

2014

-2% YOY



2.9%

2.6%

3.0%

2.8%

2.9%

3.5%

3.3%

3.1%

2.8%

2.9%

2.9%

2.9%

3.2%

2.9%

3.4%

3.2%

2.8%

2.2%

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

3.50%

4.00%


App

licat

ion

Rat

e

Education Industry Application Rates 2013 2014

Inquiry to Application: Conversion Rates

Immature Months1

Inquiry-to-application conversion rates have strengthened in recent months. §  The first three months of 2014 are mature and have outperformed 2013. §  April 2014 is nearly mature and has already outperformed 2013 by 11.3%. §  June is off to a strong start and should approach 2013 rates.

1.  Applications are counted in the month in which the inquiry was received (i.e., an inquiry that is received in January and converts in March will be counted as a January inquiry). Typically, the application rate will rise for at least three months after the month in which the inquiries were received.



§  June prices increased by 7.32% over May §  The June prices were the highest since January 2012.

Average Price Per Inquiry

In 2014, price per inquiry has risen to an average of 43.44

$30.0

$32.0

$34.0

$36.0

$38.0

$40.0

$42.0

$44.0

$46.0

$48.0

Jan. Feb. Mar. April May June July Aug. Sept. Oct. Nov. Dec.

Avg.

PP

I

Inquiry Prices Average and YoY Change

All Programs and Award Levels

2014 2013

$42.38 $42.36 $42.93 $43.95

$42.97

$46.08



Average Cost-Per-Application

Cost per application has improved dramatically. §  March has matured and it is 8.9% below 2013’s prices. §  June appears high, but will almost certainly drop below $2,000 per application as it matures.

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC 2013 $1,445.92 $1,587.97 $1,385.66 $1,456.62 $1,452.26 $1,151.53 $1,269.14 $1,347.74 $1,477.55 $1,419.51 $1,405.05 $1,408.11 2014 $1,308.48 $1,451.59 $1,261.73 $1,395.86 $1,522.79 $2,066.03

$0

$500

$1,000

$1,500

$2,000

$2,500

Cost-Per-Application All Programs and Award Levels

Not Fully Mature



Agenda

1.  Introduction






7.  Summary



-

100,000

200,000

300,000

400,000

500,000

600,000


Inquiries

Inquiries for On-Line Programs All Programs and Award Levels

2013

2014

On-Line Inquiries Education Industry Inquiries: YOY Percent Change Inquiries for on-line programs continue to lose share. §  So far in 2014, inquiries for on-line programs have dropped 23% YoY. §  In June, they were down 20% YoY.

-20% YOY



1.9%

1.9%

2.2%

2.2%

2.2%

3.7%

2.0%

2.2%

2.0%

2.2%

1.9%

2.0%

1.9%

1.8%

2.5%

2.6%

2.5%

1.9%

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

3.50%

4.00%


App

licat

ion

Rat

e

On-Line Education Industry Application Rates 2013 2014

On-Line Inquiry to Application: Conversion Rates

Immature Months1

Application rates were poor in first two months of Q1, but are improving. §  Application rates improved in March to 2.5% over a February low of 1.8%. §  April and May are not yet mature months but they have already surpassed their 2013 rates.




On-line Average Price Per Inquiry

Inquiries for on-line programs are getting more expensive. §  Until May, price per inquiry rose every month and that trend continued in June. §  June prices rose were up $7.92 vs. May and $15.61 higher than last year.

$0.0

$10.0

$20.0

$30.0

$40.0

$50.0

$60.0


Avg.

PP

I

On-line Inquiry Prices Average and YoY Change

All Programs and Award Levels

2014 2013

$41.94 $42.45 $43.53 $45.91 $44.41

$52.33



On-line Average Cost-Per-Application

Price-per-Inquiry for on-line programs has improved in recent months. §  March of 2014 is the first mature month of 2014 to record a year-over-year decrease (7.8%). §  April and May of 2014 have finally dropped below their 2013 cost levels and will likely decline further. §  June’s year-over-year increase will improve as the month matures and more applications are received.

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC 2013 $2,210 $2,107 $1,869 $1,819 $1,878 $996 $2,030 $1,958 $2,019 $1,819 $2,023 $2,020 2014 $2,252 $2,327 $1,724 $1,736 $1,800 $2,770

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

On-line Cost-Per-Application All Programs and Award Levels

Not Fully Mature



Agenda

1.  Introduction






7.  Summary



Inquiries for On-Ground Programs

Inquiries for on-ground programs continue to show strength. §  The first six months of 2014 have produced a 9.0% year-over-year increase in inquiries. §  In each month, the year-over-year increase has improved. §  June 2014 inquiries are up 22.8% year-over-year.

2012

0 50,000

100,000 150,000 200,000 250,000 300,000 350,000 400,000


Inqu

iries

Inquiries for On-Ground Programs All Programs and Award Levels

2013

2014

+22.8%



4.1%

3.6%

4.6%

4.1%

4.4%

4.1%

5.6%

4.0%

4.1%

4.1%

4.3%

4.8%

4.6%

4.2%

4.6%

4.0%

3.4%

2.7%

0%

1%

2%

3%

4%

5%

6%


Inquiry-to- Application

Conversion Rate

Education Industry Application Rates 2013 2014

On-Ground Inquiry to Application: Conversion Rates

Immature Months1

Application rates appear slightly stronger in Q1 2014 than they were in 2013. §  On-ground inquiry-to-application conversion rates continue to outperform on-line programs. §  March 2014 is mature, and conversion rates slightly outperformed 2013 levels.




On-Ground Average Price Per Inquiry

In June, price per inquiry was higher than May, but 1% lower than last year.

$39.25 $38.76 $39.67 $39.75 $38.60 $38.76

$0.0

$10.0

$20.0

$30.0

$40.0

$50.0

Jan. Feb. March April May June July Aug. Sept. Oct. Nov. Dec.

Avg.

PP

I

On-Ground Inquiry Prices Average and YoY Change

All Programs and Award Levels 2014 2013



On-Ground Average Cost-Per-Application

On-ground, average cost per application is leveling out. §  In 2013, declining inquiry prices and application rates above 3.5% kept down the average cost per application. §  In Q1 2014, cost per application was consistently lower than 2013. §  It looks as though April, May and June, when they are mature, will also be lower cost than 2013.

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC 2013 $1,007 $1,140 $910 $982 $950 $949 $703 $975 $969 $952 $875 $810 2014 $857 $927 $856 $992 $1,148 $1,459

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

On-Ground Inquiry Cost-Per-Application All Programs and Award Levels

Not Fully Mature



Agenda

1.  Introduction






7.  Summary



Largest Programs: June Growth

In June, three of the five largest programs were down by more than 15% YoY. §  Computer and Information Systems and Health Professions grew in June.

-25%

-38%

-16% -19%

-40%

-18%

8%

-32%

1%

-21%

-50%

-40%

-30%

-20%

-10%

0%

10%

Business Management, Services and Marketing

Computer, Inf. Sys. & Support Services

Education Health Professions Homeland Sec., Law Enforcement & Protective

Svcs.

Five Largest Programs February Inquiries: Year-over-Year Change

2013 YoY % Change 2014 YoY % Change

1. Includes programs with the most inquiries in June 2014.



Top 5 Fastest-Growing Programs in June

The five fastest-growing programs1 all grew over 80% year-over-year in June. §  Two are traditional hands-on trade programs: Welding and Electrical Technician. §  Health Information/Medical Records came in fourth, with 86% growth. §  Liberal Arts returned to the list after making regular appearances during the first half of the year.

6.3% 4.2%

48.5%

-32.6%

40.8%

290.3% 306.2%

93.8% 86.2% 80.1%

-50.0% 0.0%

50.0% 100.0% 150.0% 200.0% 250.0% 300.0% 350.0% 400.0%

Welding Tech./Welder. Electrical, Electronic & Comms. Engineering

Tech.

Liberal Arts Health Information/Med. Records

Web Page, Digital/Multimedia Design

Industry Inquiries Fastest Growing Programs – June 2014


1. Includes only programs within the top 75 for total inquiries since January 2012.



Fastest-Growing Cities of the Top 75

The fastest-growing cities1 are all up over 100%. §  Four of the top five cities are in California-- §  Even though San Diego, CA, was knocked off the list for the first time in five months

-53.1% -60.8% -62.4% -60.8% -57.5%

130.8% 103.3% 122.3% 103.5% 135.2%

-30.0%

-10.0%

10.0%

30.0%

50.0%

70.0%

90.0%

110.0%

130.0%

150.0%

Honolulu, HI Los Angeles, CA Riverside-San Bernardino, CA

San Jose, CA Stockton-Lodi, CA

Industry Inquiries 5 Highest Growth Markets – June 2014


1. Includes only the top 75 cities by inquiry volume since January 2012. Data includes a 15-mile radius from the center of the CBSA.



Largest Cities: June Growth

Inquiry volume declined in four of the five largest markets in June 2014. §  Los Angeles recorded excellent year-over-year growth of 103%. §  New York and Philadelphia declined moderately at 2.5% and 4.0% respectively §  Atlanta and Chicago both registered double-digit declines.

-19.5% -24.4%

-60.8%

-16.9% -19.2% -10.5% -13.7%

103.3%

-2.6% -4.0%

-70.0% -50.0% -30.0% -10.0% 10.0% 30.0% 50.0% 70.0% 90.0%

110.0% 130.0%

Atlanta, GA Chicago, IL Los Angeles, CA New York, NY Philadelphia, PA

Industry Inquiries 5 Largest Markets – June 2014


1. Includes only cities in the top 75 for inquiry volume since January 2012 within a 15 mile radius for all award levels nationally.



Agenda

1.  Introduction






7.  Summary

Confidential www.GrayAssociates.com 27

Everest’s Skokie campus is north and west of the peak demand areas in Chicago.

The First Question in Campus Assessment: Where Is Student Demand?

Relevant Market

Inquiries by Census

Tract Everest’s Skokie campus

High-Demand

Areas


The campus demand index is between 40% and 50% of the peak in Chicago.

Distance-Adjusted Demand Index (“DADI”)

Everest’s Skokie campus

“DADI” Percentile by Census Tract

Potential campus locations with the highest distance-adjusted student

demand


Skokie scores between the 60-70th percentile on competitive intensity.

Competitive Intensity: Distance-Adjusted Competitive Index (“DACI”)


Area with most intense competition

“DACI” Percentile by Census Tract


Peak demand areas near the Skokie campus may be more accessible to competitors.

Largest Lead Sources for Everest’s Skokie Campus Based on Market Inquiries, Distance, and Competitive Intensity




Agenda

1.  Introduction






7.  Summary



Key Findings

There is a fundamental shift in the mix between On-Line and On-Ground Programs

§  Inquiries are down 20% for on-line programs.

§  Inquiries for on-ground programs increased nearly 23%.

§  On-ground programs gained nearly 8 share points

§  On-line program lost nearly share 7 points.



How do I get Information for My Locations and Programs?

Gray Reports is offered as an annual subscription. §  Customized for your locations §  Customized for your programs §  Monthly PDF overview of inquiry, application, and pricing tends in your markets §  On-line access to your market data by program, campus, veteran’s status, years since

high school and other factors



Questions and Contacts

Please feel free to contact me: Bob Atkins

CEO Gray Associates, Inc.

[email protected]

617-401-7662

For the presentation or a recording of the session, please visit: GrayAssociates.com

2014 june grayreports - student demand trends

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