Career Education Corporation (NASDAQ: 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.[1] The university generates most of its revenue from tuition and earned $1.6 billion in revenue and $81 million in net income in 2009.[2]

Maintaining accreditation is critical to CECO's financial health. 2/3 of the company's tuition fees come from Title IV funds(government financial aid) that are only available to accredited schools.

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. Career Education has seen a greater influx of students during the global economic downturn, which has raised revenues. As a result, the company's net revenue grew by 10.6% in 2009.[2]

Company Overview

Career Education offers educational services to more than 116,000 enrolled students at 90 campuses in the United States, Canada, France, Italy, and United Kingdom. Programs are offered in five career-oriented disciplines: Culinary Arts, Visual Communication and Design Technologies, Health Education, Business Studies, and Information Technology.

Strategic Business Units[1]

Career Education's subsidiaries are organized in six groups:

  • Art & Design - The Brooks Institute, Brown College, Collins College, Harrington College of Design and International Academy of Design & Technology offer disciplines of fashion design, game design, graphic design, interior design, film and video production, photography, and visual communications.
  • Culinary Arts - Le Cordon Bleu and Kitchen Academy offer culinary arts programs and hotel and restaurant management instruction.
  • Health Education - Sanford-Brown schools offers programs in business studies, health education, visual communications and design technologies, and information technology.
  • International - Campuses located in France, Italy, and United Kingdom offer classes in business studies, fashion and design, and visual communications and technologies
  • Transitional Schools - Includes schools that are being taught out.
  • University - American InterContinental University, Colorado Technical University, and Briarcliffe College offer programs in business studies, visual communications and design technologies, health education, information technology, criminal justice, and education.

Business Growth

FY 2009 (ended December 31, 2009)[2]

  • Net revenue increased 10.6% to $1.8 billion. New student starts grew 17% and student population increased 21%. There was 29% growth in the number of students in the Health Education segment.
  • Net income increased 35% to $81 million.

Trends and Forces

Capitalizing on Increased Demand for Education During Global Economic Slowdown

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 -- 41% of the university's students are over the age of 30, a 4% increase from the previous year.[3] Career Education 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 10.6% in 2009.[2]

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.

Government Regulation and Financial Aid Policies Determine CECO's Fiscal Success

The post-secondary education market is highly regulated for any educational institutions that receive funding from the government; in Career Education's case, government funding takes the form of financial aid programs that subsidize qualified students' education costs. In order for an institution to receive Tital IV funds, they must be accredited and recognized by the U.S. Department of Education. American InterContinental University successfully implemented SACS's recommendations and was removed from probation. Title IV government funds account for 63.1% of all tuition at Career Education.


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:[4]

  • 2,730 private, for-profit schools
  • 2,000 public, non-profit schools
  • 1,820 private, non-profit schools

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.

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.

ITT Educational Services (ESI) operates 124 campuses in 38 states serving approximately 80,000 students.


  1. 1.0 1.1 CECO 2009 10-K "Business Overview" pg. 1-2
  2. 2.0 2.1 2.2 2.3 CECO 2009 10-K "Selected Financial Data" pg. 44
  3. CECO 2009 10-K "Student Population by Age Group" pg. 8
  4. CECO 2009 10-K "Industry Background and Competition" pg. 2-3
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