For-profit education companies focus on reputation

For-profit education companies are focusing on reputation management as policymakers in Washington call for increased industry regulations.

For-profit education companies are focusing on reputation management as policymakers in Washington call for increased industry regulations.

In the past month, critics have intensified their focus on the for-profit higher education industry, which includes companies like the University of Phoenix, Education Management Corporation, Kaplan, and DeVry University.

The Health, Education, Labor and Pensions Committee held a hearing June 24 to assess the increasing amount of federal investment in the industry and whether industry issues, which reportedly include high loan default rates and lower graduation rates, are a risk to students and taxpayers.

And, just this week, the Obama Administration proposed new rules that would link the availability of federal aid to former students' salaries and debt repayment rates.

“At a time of increased competition for federal resources, there are problems within the education community about whether for-profit schools deserve them or should get them at their expense,” says Stan Collender, partner at Qorvis Communications.

PR sources say the focus on the industry is creating new business opportunities for agencies, as for-profit education companies begin to address the industry's reputation issues, both in and out of Washington.

“The problem is the industry is growing extremely quickly and has had to pay attention to the growth rather than managing their reputation,” says Collender. “And, now it's time to start managing that reputation.”

The American Public University System (APUS) hired Mike Smith Public Affairs to handle communications, including reputation and issues management and IR, in May.

Brian Muys, director of PR at APUS, says the company began to address reputation management at the end of 2009 and that the recent hearings have been a wake-up call for the industry to act on reputation issues.

“We really feel our reputation and our integrity is king,” he says. “Everything we do in marketing goes to support that.”

APUS, which announced a partnership with Wal-Mart in July to provide special access for Wal-Mart employees to the school's courses, is focusing its messaging on three key factors – quality, affordability, and accessibility – when communicating with consumers and to policymakers.

“We did, in tandem with Wal-Mart, communicate with the Education Secretary Arne Duncan to lay out some of these top-line industry issues confronting higher education, in general,” says Muys.

The University of Phoenix, one of the most well-known players in the for-profit education sector, hired APCO Worldwide earlier this year. The agency confirmed the relationship and said it is providing support for thought leadership, community engagement and philanthropy, and student outreach, but declined further comment.

Calls to the University of Phoenix were not returned.

Margaret Dunning, principal and head of Widmeyer Communications' Washington office, said the current focus on the for-profit education industry reflects how industries ranging from oil to healthcare have been navigating Washington since President Barack Obama came into office.

“That's a natural thing for any industry when the industry is feeling pressure from its regulatory body,” she says. “As soon as a major election occurs, you're going to be gauging the impact on your industry.”

She notes that the upcoming mid-term elections could create a different environment for the for-profit industry, as committee members change and legislative priorities shift, but adds that reputation remains a key factor for any fast-growing industry.

“Reputation management is critical for any entity, from the federal government to a for-profit institution to a not-for-profit,” she says.

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