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How to Compete

March 18, 2005

The university is known for its branch campuses, which focus on older students. It's expanding quickly from its Western base either with its own campuses, or by managing those of other universities in fast growing states like Nevada and Florida. One of its most popular offerings is an online MBA. And it may be about to take over an adult education program that is losing ground for another college.

The University of Phoenix? Nope. Regis University, a Roman Catholic liberal arts institution based in Denver.

Saint Mary's College of California -- another Catholic liberal arts institution -- announced this week that it is negotiating to transfer its adult education programs to Regis. And that potential shift illustrates some key changes in the higher education market.

Like many liberal arts institutions, both Saint Mary's and Regis have long had a mix of a residential undergraduate programs and part-time offerings for working adults.

At Saint Mary's, about 1,200 of the 4,500 total students are continuing education students, more then half of them in a program to earn a bachelor's degree in management. But in recent years, Saint Mary's has faced competition from for-profit and online universities, and enrollments in that program have slipped.

"The market has changed quite a lot and our program hasn't," said Debra Holtz, a spokeswoman for Saint Mary's. "And as the market has grown more competitive with for-profit institutions getting into it, it's really difficult to maintain a program like this in a cost effective way."

Saint Mary's didn't want to abandon its programs, Holtz said. "We've wanted to offer education to a wide variety of people." But college officials have become increasingly concerned about the program's future, so they approached Regis, which has had much more success in adult education. Regis has an undergraduate liberal arts college of about 1,400 students, but also has some 13,000 adult students in various programs, half online and half at campuses spread through Colorado and Nevada.

William J. Husson, vice president and dean of the School for Professional Studies at Regis, said, "We don't want to leave the adult education component up to the Universities of Phonenix that are out there. They do a great job, but it would be a tragedy for higher education if we were to abandon that."

But to avoid doing that, he said places like Regis must do many of the same things Phoenix is known for. The branch campuses tend to hire working professionals as instructors. Special class times revolve around work schedules, and the curriculum has been designed for older students. Online programs -- especially the MBA -- are heavily marketed. And growth is taking place almost all the time.

In addition to its own programs, Regis has in the last two years started managing an Orlando campus for Mendez University, a private institution in Puerto Rico, and begun joint online programs with two Irish universities.

"There are opportunities for us to grow, and we take them with the kind of programs and the kind of direction that we have in our programs," said Husson.

Sean Gallagher, a senior analyst at Eduventures, which does research on the education industry for investors and colleges, said he is not surprised to see an institution like Saint Mary's turn to a place like Regis to take over adult education programs. "Higher education is scalable and larger providers have a huge advantage in marketing and online education," he said.

"It's just very difficult to develop a curriculum and manage and market it" in adult education, when you are a small college, Gallagher said.

Eduventures -- which counts both Regis and Phoenix among its clients -- has predicted that more nonprofit colleges may be purchased by for-profit institutions. That happened this month when Bridgepoint Education, a for-profit higher education company, bought the Franciscan University of the Prairies.

But he said the same factors that prompt that prediction may also apply to places like Regis that are big enough to compete with the larger for-profit institutions.

Officials at Saint Mary's said they were drawn to Regis because it is a nonprofit institution. And Husson, the Regis administrator, said that the university's traditional emphasis on values and ethics shapes all its programs.

But Gallagher said that in many ways, Regis illustrates that the divide in higher education isn't really between for-profit and nonprofit. Regis and Phoenix and some other nonprofit and for-profit institutions "have a model that works for adult students," and the model reflects educational philosophy and size of program, not corporate status.

"It comes down to mission and philosophy," Gallagher said. "This nonprofit, for-profit line has been blurring for some time. The strategies and tactics aren't terribly different."

 

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