2015 March Gray Reports - Student Demand Trends

GRAYREPORTS
Demand for Educational Programs
www.GrayAssociates.com
Results through March 2015

617.401.7662 www.GrayAssociates.com 2
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For more information please contact Bob Atkins.
Email: bob.atkins@grayassociates.com
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§  Demographic
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§  Consolidation
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Advanced Analytics
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Geo-Analytics
Clients: Higher Education Institutions and Investors
Program Pricing:
Coming in 2015

GRAY
What is GrayReports?
GrayReports tracks demand trends in higher education.
§  Overall industry trend reports are a free monthly service, which includes these webinars.
§  Custom reports on trends by market and programs, which we provide to our paid subscribers:
─  Monthly reports for their specific programs and markets
─  On-line access to detailed data for their programs and markets
Over 37 million qualified inquiries
January 2012 to the present
Over 930,000 new inquiries in March 2015
Over 185 programs with over 10,000 inquiries
Over 300 cities with over 10,000 inquiries

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Agenda
1.  National Inquiry Trends
2.  Inquiries and Conversions: On-Line vs. On-Ground Programs
3.  Views by Program and Segment
4.  Geo-Targeting
5.  Summary

GRAY
Overall Student Inquiries
Overall, the “slowdown is slowing:” March inquiries dropped only 5% year-over-year.
§  January dropped 12%.
§  February fell 10%.
§  March was the least-bad month this year.
-5% YOY
-
200,000
400,000
600,000
800,000
1,000,000
1,200,000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
National Inquiries
All Programs and Award Levels 2014 2015

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1.  Applications are counted in the month in which the inquiry was received (i.e., an inquiry that is received in January and converts in March will be counted as a January inquiry).
Typically, the application rate will rise for at least three months after the month in which the inquiries were received.
3.3%
3.1%
3.6%
3.5%
3.5%
3.5%
3.7%
3.3%
3.4%
3.9%
2.9%
2.9%
2.7%
2.1%
1.6%
2.7%
2.3%
1.8%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
4.5%
Education Industry Inquiry Conversion Rates
2014 2015 Average Immature Conversion Rate
Inquiry to Application: Conversion Rates
The slowdown is slowing for conversion rates, too.
§  Last year the close rate averaged 3.4%.
§  December, the most recent mature month, closed at only 2.9%.
§  January, February and March are at or just below norms for immature months.
Immature Months1
2014
Mature Average: 3.4%

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Number of Conversions
The total number of converted inquiries steadily declined in 2014.
§  November and December, now mature months, were down significantly year-over-year.
─  November conversions fell 33%.
─  December conversions fell 20%.
§  January, still an immature month, has the best opportunity to match year-ago levels.
§  February and March are likely to fall short; but it is too soon to be sure.
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
Education Industry Inquiry Conversions
All Programs and Award Levels
2014 2015 2013
Immature Months1

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Average Price for Pay-per-Lead Inquiries
The average price for external inquiries flat-lined in the first quarter of 2015.
§  The average price settled at slightly above $44.
§  As in February, inquiry prices were up 5% year-over-year in March.
$44.01 $44.21 $44.33
$42.13 $42.24 $42.13
$42.87
$41.59
$44.97 $44.67 $44.86
$46.15 $46.45 $45.94
$43.11
$30
$32
$34
$36
$38
$40
$42
$44
$46
$48
Average Price per Pay-per-Lead Inquiry
2015 2014
Note: Inquiry price is the average price for pay-per-lead inquiries.

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Average Cost Per Converted Inquiry
The cost for a converted inquiry (inquiry-to-application) is likely to stay above $1,400.
§  The most recent mature month, December closed at $1,464 up 6%.
§  We estimate that January will mature just under $1,300.
§  February and March are likely to mature above $1,400.
2014 1261.488 1367.238 1184.523 1239.777 1181.089 1279.695 1194.133 1369.375 1364.959 1177.324 1565.561 1464.060
2015 1625.828 2111.399 2747.813
2013 1368.131 1522.057 1327.552 1388.356 1377.617 1136.420 1268.198 1323.551 1456.435 1407.252 1381.354 1379.051
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
Cost Per Converted Inquiry
Immature Months

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Agenda
4.  Geo-Targeting
5.  Summary

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Inquiries for On-Line Programs
Education Industry Inquiries: YOY Percent ChangeOn-line inquiry volumes took a step back in March, falling 8% year-over-year.
§  Inquiry volumes are down 11% in the first three months of 2015.
─  January was dropped 17%.
─  February fell 5%.
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
Inquiries
Inquiries for On-Line Programs
2014 2015
-8% YOY

GRAY
Student Inquiry Conversions for On-Line Programs
December conversions finished down 33% year-over-year.
§  With all of 2014 now mature, year-over-year conversions were down 20%.
§  January and February should mature at or above last year.
§  March is off to a slow start.
0
2000
4000
6000
8000
10000
12000
Inquiry Conversions for On-Line Programs
2014 2015 2013
Immature Months1

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Inquiries for On-Ground Programs
Inquiries for On-Ground programs almost matched 2014 in February. But, March fell 15%.
§  Thanks to a healthy start, in the first quarter of 2015, on-ground inquiry volumes were down just 8%.
─  February fell 1%.
─  January fell 7%.
2012
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
500,000
Inquiries
Inquiries for On-Ground Programs
2014 2015
-15% YOY

GRAY
After October of 2014, conversions for on-ground programs plummeted.
§  December finished 27% behind 2013.
─  November was 34% behind 2013.
§  This year is off to a slow start. When Q1 matures, it is likely to be down 10% or more.
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
Inquiry Conversions for On-Ground Programs
2014 2015 2013
Immature Months1
Student Inquiry Conversions for On-Ground Programs

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0
2000
4000
6000
8000
10000
12000
14000
16000
18000
20000
Conversions of External Inquiries
2014 2015 2013
Conversions of External Inquiries
The number of conversions from external inquiries has been on the decline.
§  Now mature, December closed 19% behind 2013.
§  Our estimates suggest that the first quarter will mature 15-20% below last year.
Immature Months

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Conversions of Internal Inquiries
Conversions of internal inquiries held their own in 2104, except in November and December.
§  November conversion volumes fell 37% while December followed with a 22% decline.
§  In Q1 2015, the January and February got off to a good start.
§  March is likely to mature well-below last year.
-
5,000
10,000
15,000
20,000
25,000
Conversions of Internal Inquiries
2014 2015 2013
Immature Months

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Agenda
4.  Geo-Targeting
5.  Summary

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Largest Programs: March Growth
Three of the five largest programs grew year-over-year.
§  Health Care Administration inquiry volumes jumped 28%.
§  Accounting and Business Administration were up slightly.
§  Medical Assisting dropped 17%.
§  Criminal Justice collapsed, losing 70% year-over-year.
-26%
-19%
-5%
2%
-23%
28%
2% 1%
-17%
-72%-80%
-60%
-40%
-20%
0%
20%
40%
Health Care Admin/
Management
Accounting Business Admin and
Management
Medical Assisting Criminal Justice/Police
Science
Year-over-Year Change in March Inquiries
Five Largest Programs
2014 YoY % Change 2015 YoY % Change

GRAY
-52% -47%
33% 38%
-1%
316%
115%
75% 66% 59%
-100%
-50%
0%
50%
100%
150%
200%
250%
300%
350%
Curriculum and
Instruction
Educational Leadership
and Administration
Welding Tech Registered Nursing Nursing Science
Five Fastest-Growing Programs
Top 5 Fastest-Growing Programs in March
The 5 fastest-growing programs grew at least 50% in March.
§  Curriculum and Instruction unseated Welding Tech as the fastest-growing program.
─  Welding Tech was the fastest growing program for six consecutive months.
§  Educational Leadership and Administration, Curriculum and Instruction, and Nursing Science are new to
the list of fastest-growing programs in March.
1.  Includes only the top 75 programs (based on inquiry volume since January 2012)

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Largest Cities for Inquiries
All five of the largest markets experienced a decline in March.
§  New York and Atlanta declined under 4%.
§  In March, Los Angeles replaced Chicago as the worst-performing market, declining 26%.
-14%
-17%
-13%
-1%
-6%
-3%
-4%
-11%
-14%
-26%
-30%
-25%
-20%
-15%
-10%
-5%
0%
5%
New York Atlanta Chicago Philadelphia Los Angeles
Top Five Cities for Inquiries
Note: The market for each city is defined as a 15-mile radius around the population center of its CBSA.

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Fastest-Growing Cities for All Inquiries
Three new cities joined the list of fastest-growers in March.
§  Oklahoma City followed 35% growth in February with 56% growth in March.
§  Wichita, KS and Bridgeport, CT are new to the list in March.
§  Jacksonville, FL and Hartford, CT fell off the list of fastest-growing cities.
-10%
-5%
-13%
-9% -7%
56%
18%
14%
12% 10%
-15%
-5%
5%
15%
25%
35%
45%
55%
Oklahoma City, OK Wichita, KS Kansas City, MO/KS Bridgeport, CT Indianapolis, IN
Five Fastest-Growing Cities for All Inquiries
1. Includes only the top 75 cities by inquiry volume since January 2012. Data includes a 15-mile radius from the center of the CBSA.

GRAY
Sustainers vs. Strugglers: Inquiry Volume
The Sustainers grew in March!
-12% -15% -15% -12%
0%
-3%
-13% -16%
-31%
-44% -46%
-27%
47% 44%
28%
10% 9% 7%
-6%
-13%
-7% -7% -11% -9%
-50%
-30%
-10%
10%
30%
50%
Sustainers vs. Strugglers
Year-over-Year Change in Inquiry Volumes 2014
-15%
-11%
-8%
-6% -8%
2%
-30%
-20%
-10%
0%
10%
Year-over-Year Change in Inquiry Volumes 2015
Strugglers
Sustainers

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Agenda
4.  Geo-Targeting
5.  Summary

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Quarterly Change in Inquiry Volumes by State
The GrayReports service allows you to see where the growth is.
§  In March, the mid-west, Florida and Massachusetts did well.

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% Change in Inquiry Volumes by County
The fastest growth in Massachusetts took place west and south of Boston

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% Change in Inquiry Volumes by Census Tract
Let’s take a closer look, by tract.

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In Boston, demand was strong just south of the city center

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While inquiries were strong in this tract, so far in Q1, conversions are not keeping pace.

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Agenda
4.  Geo-Targeting
5.  Quarterly Summary

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The first quarter of 2015 compared to the first quarter of 2014.
% Change in Inquiry Volumes by Inquiry Source and Campus Type
18.3%
-15.5%
-7.9%
-8.6%
-10.7%
-20.0% -10.0% 0.0% 10.0% 20.0%
Internal
External
Ground Programs
Unknown (CT)
Online Programs
Q1 2015 /
Q1 2014
All Programs
and Award
Levels

GRAY
The first quarter of 2015 compared to the first quarter of 2014.
% Change in Inquiry Volumes by Degree Level and Inquiry Source
-40.0%
-20.0%
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
120.0%
140.0%
- 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000
Q1 YoY
Change
Inquiries
Internal External Total
C
A
B
D
M
C
A
B
D M C
A
B
D
M
C: Certificate
A: Associate’s
B: Bachelor’s
M: Master’s
D: Doctorate

GRAY
Upcoming Gray Associates’ Webinars
Please join us next month!
May Webinar
(April Results)
Thursday, May 21st at 1:00 p.m. Eastern Time

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Questions and Contacts
Please feel free to contact:
Bob Atkins
CEO
Gray Associates, Inc.
Bob.Atkins@GrayAssociates.com
617-366-2836
***
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Business Development
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416-999-3397

2015 March Gray Reports - Student Demand Trends

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