Addressing America’s Healthcare Human Resource Shortage: DeVry Inc. CEO Daniel Hamburger (Part 5)

SM: Let’s talk about the other portions of your education portfolio.

DH: We have talked about business and medical education. We also have a professional education group. It does about $100M in revenue. Becker CPA review is the number one preparer of students who are going to take the CPA exam. Our fourth and final segment is comprised of our K-12 and international groups.

Those are emerging markets for us. The K-12 group is Advanced Academics, Inc. It is based in Oklahoma City. They are a 100% online business. They provide courses primarily to high schools, but they also have some middle schools as well. Right now they have 300 school districts they provide courses to.

SM: Is this a curriculum you have developed?

DH: The curriculum and technology was completely developed in house. They have been around for 10 years and have wonderful academic outcomes. The Oklahoma High Schools conduct mandatory state wide tests. Our online students outperform their site based cohorts by 17% on the core curriculum.

SM: Where are the 300 school districts serviced by your core curriculum?

DH: They are in 30 states, including California, Oklahoma, Alaska, Nevada, and Minnesota.

SM: I have talked to a number of businesses in that segment. Are you targeting public or private high schools? Who pays for it?

DH: It is free to students and their families. We are paid by the district as an outsourced provider of services.

SM: Different districts have different budgets. How do you price it?

DH: It is typically a revenue sharing model. The revenue that comes to the district from that state is shared between the district and Advanced Academics.

SM: How big is the K-12 business?

DH: We do not break that out.

SM: What about your international offering?

DH: We operate colleges in Brazil. DeVry Brazil has three schools with 5 campuses and more than 11,000 students. It is all post secondary. We have a law school, a business school, an engineering school, a nursing school, and many other programs.

SM: Are these campus or online programs?

DH: They are campus and a little bit of online. Online is just getting going. We are in 30 countries around the world.. A lot of what we are doing in China, India and the Middle East is professional education.

SM: What is the international accreditation process?

DH: It varies by country. In Brazil accreditation and regulation are one and the same, done by the government. We generally acquire existing programs with a good reputation. One of our schools in Brazil is ranked #40 out of 2,500 in the country.

SM: What have you done in India?

DH: India is mainly our Becker Professional Education and Training. It is one of our fastest growing markets. A lot of people want to be a CPA.

SM: Did you enter that market through an acquisition?

DH: No, in professional education we general strike a partnership with a local educational institution. It is our curriculum, know how, and way of doing things. They do the local work on the ground. We also just announced a partnership in China as well. Keep in mind we are teaching the American CPA. Around the world the CPA is still seen as a wonderful credential.

SM: I can tell you exactly why Indians want to be CPAs. There is a big business processing outsourcing operation that does accounting for American companies.

DH: That is absolutely a driver. It is very interesting. We expect to see the CPA exam to eventually be offered internationally.

SM: How many international students do you have?

DH: There are 11,000 in Brazil. Including professional education it is probably approaching 20,000 students.

This segment is part 5 in the series : Addressing America’s Healthcare Human Resource Shortage: DeVry Inc. CEO Daniel Hamburger
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