ITT Educational Services (ESI) is the fourth largest for-profit university in the U.S., offering 35 degree programs to approximately 80,000 students, both online and at 124 campuses and 5 learning sites in 38 states. The company's revenue comes from tuition charges. The company earned $1.3 billion in revenue and $300 million in net income in 2009.
ITT Educational Services has traditionally focused on providing technology-related associate degree programs, but has expanded its offering to include an increased number of degree programs outside of technology in addition to a greater number of bachelor's degrees. Bachelors programs generate more revenue than Associate's degree programs because they are often 4-year programs versus 2-year Associate programs, and Bachelor's programs have greater tuition costs. To provide these new services, ITT has opened many new smaller branch campuses and learning sites.
Historically, enrollment at for profit educational institutions has increased during economic downturns as poorer job prospects cause prospective students to view continuing eduction more favorably. The global economic downturn has increased student enrollment and as a result, the company's net revenue increased by 30% in 2009.
The ITT Technical Institutes offers 35 degree programs in fields in the following schools of study:
Historically, enrollment at for profit educational institutions has increased during economic downturns as poorer job prospects cause prospective students to view continuing eduction more favorably. People of all ages are going back to school to get a better job and increase their job prospects -- 30% of the university's students are over the age of 31, a 6% increase from the previous year. ITT has been no exception from this trend. The global economic slowdown has increased their number of students and thus raised revenues. As a result, the company's net revenue grew by 30% in 2009.
The U.S. Department of Education estimates that the post-secondary education market is worth at least $370 billion. The Department of Education estimates that nearly 40% of all students enrolled in post-secondary education programs are older than 24; 80% of Career Education's enrolled students are 'non-traditional' and older than 21. Over the next six years, the percentage of 18-24 year old students will increase by 16%, and the number of non-traditional students should grow at a similar rate.
The post-secondary education market is highly regulated for any educational institutions that receive funding from the government; in ITT's case, government funding is in the form of financial aid programs that subsidize qualified students' education costs. Because 70% of ITT's annual revenue comes from Federal Education Financial Aid Programs, any significant change in policy for the various financial aid programs will affect ITT's revenue.
The post-secondary education market is extremely competitive and not dominated by any single player. The United States has approximately 6,550 post-secondary education institutions:
In addition to this extreme market fragmentation, the extensive accreditation process acts as a significant barrier to entry for new companies.
Of the other private, for-profit schools that target non-traditional students, Apollo Group (APOL) , DeVry University (DV), and ITT Educational Services (ESI) pose the greatest competition to Career Education.
Career Education (CECO) is a global for-profit university that offers associate, master's, bachelor's and doctoral degree programs in vocational areas such as business, communications and IT. The company had an enrollment of 116,000 students on 90 campuses in the the US, France, Italy, and UK.
Apollo Group (APOL) operates the University of Phoenix, the largest private, for-profit postsecondary education institute. They serve more than 355,800 enrolled students, at 102 campuses and 157 learning centers in forty states.
DeVry (DV) served approximately 130,000 students through its four subsidiary institutions - DeVry University, Ross University, Chamberlain College of Nursing, and Becker Professional Review. DeVry University is an undergraduate institution with more than 80 locations and the Keller Graduate School of Management. Ross University operates the Ross University School of Medicine and the Ross University School of Veterinary Medicine in Dominica.