Addressing America’s Healthcare Human Resource Shortage: DeVry Inc. CEO Daniel Hamburger (Part 7)

SM: Do you offer scholarships or financial assistance for your students?

DH: We certainly give back. We like to say that we are doing well by doing good. We are doing well as an organization by doing good things for society and our students. That includes $16 million in scholarships last year alone; 10% of our after-tax income was put into scholarship programs. We provide free courses to high school students to help them get a jump start on college. That early experience is a key part of the Obama/Duncan program.

When Arne Duncan ran Chicago Public Schools, he worked with us to create the DeVry University Advantage Academy. In that program, high school students take college classes simultaneously and earn an associates degree with their high school diploma at no cost to their family. They are 18, have a college degree, and no debt.

The Chicago high school graduation rate is 50%. Our Advantage Academy has a 90% graduation rate. We feel that we are having an impact on some of our most important challenges. For the long term, the dropout crisis is our most significant concern because right now 30% of our high school students drop out of college. That means they have no real long-term employment prospects.

We visit a million high schools every year. We have 300 people who go around and deliver lectures on career opportunities for students and encourage them to go on and get that second piece of paper. It could be a four-year degree, a two-year degree, or a certificate. Every American has to get at least one year of education beyond high school.

SM: Post-secondary education or qualification of some sort is necessary to be employed.

DH: Exactly. That is our biggest crisis. Right now only 25% of Americans graduate from college. We need that to be 40%-50%. When we get those numbers, the question then becomes “where are they going to go?” We believe that the capacity to train them will come from a partnership of public sector and private sector schools. That is why we are so passionate about the role the private sector is playing in education.

SM: Capacity is only scalable with online programs.

DH: Some programs require campuses, so we will expand to meet the demand. We are getting more nurses qualified to teach. We are growing our online enrollment as well. You are definitely right that it is faster to scale online. We are doing both because we have to.

SM: There are clear areas where online is not sufficient, like nursing and medical school. Online education is definitely not sufficient for medical school.

DH: We have many students who prefer the learning methodology of on-site classes. We need to make sure we are serving those students as well. Quality also leads to growth. That is our operating philosophy. The prerequisite for growth is quite simply quality. Our focus is first and foremost on quality, and in the process we get wonderful student outcomes as we described.

Students then go on and have successful careers and make referrals to our programs. That helps us build enrollment and encourages more students to attend school. As we grow, we have increased financial resources which we then plow back into quality. Last year, our net income after taxes was $165 million. We are taking $100 million of that and investing in capital expenditures in patient simulators, new campuses, new computers, and scholarships. That is like our endowment. We don’t have the endowments that independent schools have or the state subsidies of public universities. That margin is how we fund growth and quality.

SM: Thank you for your time. This has been a great story.

This segment is part 7 in the series : Addressing America’s Healthcare Human Resource Shortage: DeVry Inc. CEO Daniel Hamburger
1 2 3 4 5 6 7