New Report: For-Profits Gobble Up More of Online Market Amid Recession

Regulatory heat. Loan default worries. Bad publicity.

That’s the storyline about for-profit colleges lately, but here’s some other news: They just keep gobbling up the online-education market.

According to new research from the consulting firm Eduventures, for-profits’ share of the 2.1-million-student online sector rose from 39 percent in 2008 to 42 percent in 2009, as the recession drove students back to college and severe budget cuts strained public universities.

That may not seem like a big increase, but you can see how skewed that online penetration is when you compare it with for-profits’ chunk of the total higher-education market: about 9 percent. And consider that for-profits’ share had been projected to stabilize or even shrink.

Meanwhile, says Richard Garrett, managing director at Eduventures, some nonprofit online pioneers “have stalled.”

“It’s just more competition,” he says, “and compared to the biggest for-profit players, no comparable means to spend their way out of it.”

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