Starting a college as a business

Has anyone worked high up in a college(to know the financials) and/or looked into starting a college as a way to make income. It seems like it would be a huge cash cow, and it's something that always has demand, since it's basically what people do after high school whether they want it or not. I know nothing about the the financials or colleges though so would be curious to hear from anyone who does. Is there some crazy hoops to jump through to be considered a college?

Watch the movie "Accepted" with Justin Long and Jonah Hill! It may be easier then you think! lol

Are we talking about a public or a private college? Either way, you have NUMEROUS things to account for. Not to discourage you at all...because it could be well worth it. On the private side, I am both a former student and employee of ITT Technical Institute. I have seen a copy of the rules and regulations of their accrediting agency and have been a part of a campus meeting with the CEO, Kevin Modany. Whether public or private, you will want to build a team to do this. I am starting a curriculum design company in the financial education industry, so colleges will be my clients. You will want to think about what curricula you want/need to offer, the needs of your market in the area, look at various accrediting agencies (find out who will be yours), you will need to build committees for governance of the operation, get in touch with local organizations and businesses and see what they can contribute or advise, and the list goes on.

This is very doable and can be VERY profitable. You need a solid checklist, though. I'd start taking industry professionals and teachers to lunch and picking their brains. You may also need to think about a holding company if you plan on having multiple campuses. As far as lone campuses go (with regard to public colleges), I'm not sure.

Just a few things to chew on.

I think a trade school might be alot easier.

Online schools would need a moderator/instructor.

Now a trade school can be an online text book and a series of test. Alot less hands on. All you would need is to get recognized by some of the larger associations in that trade.

Customer service will probably be the biggest headache. But that can be outsourced. I think it can be pulled off fairly easily.

what type of rules and regulations were there?


private

Ya, it seems like it would be. What types of numbers were you aware of that the school you worked for was doing?

talking with the Goddard school franchise may provide alot of info (despite it being preschool)

private college education is a big business today.... unemployment market is driving enrollment through the roof

While the numbers are so huge that I believe you are correct to say there will always be a strong demand for colleges, I was suprised to learn that only ~30% of high school graduates attend college.

Not really relevant to your idea, but interesting trivia nonetheless..

what's the source for that #? That seems very low.

If someone was to start a college they wouldn't be targeting the areas where people can't afford college, etc... so I don't think the overall % matters too much, although it seems like it would be higher than that. Just with a quick search in 2008 the state of NC was 76% for people who went onto higher education after high school.(which I assume might include trade schools along with colleges) At our high school I think our class was around 95% who went on to college. If any area was near 30% I'd assume that wouldn't be the best spot for a college.

what prank are you up to now Bill?

Just kidding!

I suppose if you factor in drop out rate. In my High School dropout rate was over 50%, but like you said you probably wouldn't focus on those areas.

I have had a few conversations about this with teachers in the past. They can gobble up tons of profit especially if quality is lax. If you will accept anyone and provide a quick-fix then the income can sky rocket.

Reminds me a lot of the martial arts business. If you provide a belt factory it's real simple to achieve a million-dollar income. If you want to provide quality (my route) it takes quite a bit more work for half of that.

Just with some quick searching looks like to get into their franchise the start up is around $650,000. Looks like franchise fee is $135k and the rest I assume is for the real estate, administration fees, etc... I'll probably call them to check it out.

This is just a curiosity one nothing I'm actively pursuing. Just seems like an insane cash cow since you have absurd amounts of people looking for colleges every year and a lot of the colleges aren't doing a lot to differentiate themselves from all the other colleges. If you had a small college with 1,000 students and they were paying you $25k/year it's $25,000,000/year in revenue.(I know that doesn't factor in scholarships, loans that don't pay, etc..) Then figure the cost of administration, upkeep of the campus, the initial real estate costs etc... and it seems like you'd be keeping a big chunk of that $25m each year, but I'm sure there's a ton I'm not thinking of since I've never looked into the financials of a college and what other costs there are. So it's just a curiosity thing but I'm pretty curious since you never hear people speak about this as a potential business, but it seems like it could be a good one.


This is the other thing that crossed my mind when thinking about it. What's to stop colleges run as a business from letting in however many people they need to reach their desired profits, even if they aren't good students. There's plenty of people who have trouble getting into college, and would love to get an acceptance letter from someone.

Loaded question...but they will require that your teachers have certain qualifications, for example. Your schools/facilities must meet student learning needs according to what programs you offer (i.e. computer networking programs would require a certain number of labs to be set up with basic equipment like servers, shell computers, routers, etc). Your financial aid department may need to partner with particular lending institutions to provide student grants & loan assistance for tuition costs. Go to ACICS Home. They are the accrediting agency for ITT Tech. You should be able to access a pdf file or something with their requirements.

ITT Educational Services is worth well over $5 billion. It was founded in 1994 by Rene Champagne and a few others. I'm not sure about individual campus figures, though. Looking at a few 10K's a couple of years back, I believe I remember them bringing in about $50 - 70 million a year and growing. When Champagne was CEO, I think he and the CFO paid themselves $1 million each (salary/bonus combination) one year. But, ITTESI is also publicly-traded--so take that into account as well.

I can speak to this as well, from experience. Many of their campuses do not have the capacity to support an uncontrolled influx of enrollments. Lack of capacity means there are not enough available classrooms to teach a certain number of classes on a given night. It means that since most of the instructors at private colleges are adjunct (part-time), their availability for teaching is limited to certain days and time slots. It means that except for the students paying cash for tuition, the college has to manage an overwhelming number of student accounts held by lenders (such as the federal government) who are slow to disburse funds for a particular quarter/semester for any given reason. The financial aid department alone, which manages not only student assistance, but in many cases accounting and bookkeeping for the college, can only handle so much workload at a time and still keep the college profitable. In addition, enrolling a new student is a very multi-faceted process that requires every step to be fulfilled in order to successfully seat the student. Some students who register never get to take a class because of either something lacking in their academic background or something lacking in their financial aid qualifications or a number of other things.

In a nutshell, the profit potential is breathtaking...but it takes tremendous diligence.

sick

Ya, I was wondering who makes the money at a lot of these schools if they aren't publicly traded. You never hear about people making a killing from colleges but it seems like someone has to. Obviously have never looked into it, but you only ever hear of the president of the school, never the "owner(s)."

post your dd

Is this in any way related to your army of homeless poker bums?

Besides the tuition, don't forget to include revenue from dorms, meal plans, selling Snowbank U sweatshirts etc.

Have you considered a Bluefire Poker University?

beat me to it- i thought this was the plan?

i think a niche product that teaches skills such as poker as a profession and not just another "diploma mill" is the way to go! For my j.o.b. I work with colleges and universities and one of my coworkers actually works with for-profit schools and I know that there are plenty of tech expenses for your Kaplans, AIUs, Devrys, etc... but it also means that these schools are raking in due to education being in demand in good and bad economies(moreso in bad).

Man, I think niche colleges, especially institutions that offer distance learning, are a huge opportunity. With the massive changes in our economy and technology, learning new skills is going to continue being in high demand. Sorry I cannot offer any advice on implementation, only encouragement that it sounds like a great area to focus. My two cents...

snowbank - did you ever get the details from Goddard?