Wednesday, December 06, 2017


DeVry is being handed over, for no money, to a for-profit college that has 600 students.  Its current parent company isn’t even getting a player to be named later.

I’m trying to figure this one out.

Several recent moves in the for-profit industry have left me agape, but this one is striking for the sheer incongruity of size.  An international chain being taken over, for no money, by a college the size of my high school graduating class?  

As longtime readers know, I used to work at a DeVry campus.  It was my first “real” job out of graduate school.  DeVry was in rapid-expansion mode at the time -- it was the late 90’s tech boom -- and the nonprofits had already made the move to adjuncts.  I could adjunct at Rutgers or be full-time at DeVry; I chose the latter, because rent doesn’t pay itself.  

This may sound like rose-colored glasses now, but I swear it’s true: for a while there, DeVry was actually trying to gain a sort of academic legitimacy.  I caught the tail end of that and the beginning of the decline.  When the decline started to accelerate and the “for-profit” part started to drown out the “education” part, I bolted for the community college world.  That was over fourteen years ago.

Still, it’s hard to imagine the place being swallowed by a college of 600 students.  When I worked at the North Brunswick campus, it had 4,000 students by itself.  And it was one of two dozen campuses around the country.

DeVry’s decline was largely self-inflicted, mostly because when it faced a choice between improving quality and improving quantity, it chose the latter.  You can only hollow out quality for so long before something terrible happens.

I’ve been trying to suss out the motivations on both sides for the “sale.”  (“Handoff” comes closer to the truth.)  As near as I can figure, the “buyer” stands to gain scale quickly without paying for it.  The last decade has shown pretty clearly that tuition-driven small colleges will struggle.  It’s easier to change the “small” part than the “tuition-driven” part.  And the “seller” stands to offload a whole bunch of potential legal judgments against it.  The “buyer” may be gambling that its very lack of assets will deter lawsuits, just because there’s nothing to win; the “seller” has probably determined that it’s better off just washing its hands of DeVry and walking away.  

I can’t really see the “buyer” doing well long-term, unless it knows something substantial that I don’t.  The organization had been so cost-conscious for so long that I don’t see a lot of efficiency gains to be had.  And its course offerings aren’t particularly unique.  You can get a business or CIS degree in a lot of places, and often less expensively.  Some of what was once innovative about it has long since become common practice elsewhere.  In a competitive industry, I’d be hard-pressed to name what would make it special.  

Of course, as I write this, Congress is looking at changing the Higher Education Act in ways that will make for-profit college’s lives easier and public colleges’ lives harder, so the “buyer” may be taking a calculated risk that it can wait until the good times for for-profits come back.  If the buyer is struggling to survive anyway, I could see the logic behind a “what the hell” move.  

Wise and worldly readers, is there a logic to this move that I’m missing?  At best, this looks like a “cut your losses” move by the “seller,” and a Hail Mary pass by the “buyer.”  Is there a better reading?