What is your over/under on how long this Zenith crap will stay in business? I give it 9 months to start the teach out process. What are your thoughts?
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Great thoughts 020. To have a chance Zenith has to stop the bleeding. Remember Hawn stating we had basically 200 million to lose in the first 2 years. Well, we're burning through that quickly. Also, another little known fact about the purchase, CCi was required by the DOE to deposit millions from the sale into an account that could be used by Zenith to help cover the cost of closing schools if needed. I can't recall the exact amount but you can find it on the internet. It was detailed in the SEC filing after the sale went through. Of course there's no guarantee that any of the schools will survive long term, but this was the plan. I don't believe they will invest more than the 200m if they can't see light at the end of the tunnel.
Insider - good logic, well stated. My concern: If enrollment continued to drop at the current rates, it wont be long before revenue fails to cover the campus by campus operating costs. At non-residential Everest campuses, there is only so much consolidating that can happen based on geography (i.e. Aurora and Thornton). What is the plan to increase enrollment in targeted campuses to endure viability for even a reduced number of schools? I have nothing yet from EDMC/ZEG to inspire confidence that they van reverse an industry-wide trend.
By reducing the number of campuses you reduce your overall expenses and losses. Take WyoTech for example, there are two automotive schools with approximately 300 students at each campus. It takes 600 to 900 students just to pay the bills (break even point). If we shutter one campus and transfer these students to the remaining campus it will save millions of dollars. Of course some students will take a refund of tuition instead of transferring, but it still results in a substantial savings. Now all efforts can be focused on one location to rebuild the reputation and population. Now do the same with Everest by closing the schools with the poorest results and you have a leaner, more efficient and more profitable system. In simple terms, if I have 50 campuses losing one million dollars each and I reduce the number of campuses to 30, haven't I saved 20 million dollars?
Insider - You continue to tell us that 30-35 schools is the plan. Even non - profits have to pay the bills. Continued low starts and high attrition don't pay the bills. What is the plan to have enough students at 30-35 campuses to make it work?
There will be a Zenith Education Group next summer, just a smaller version. I'm telling everyone there will be 30 to 35 schools remaining. That was the plan from the beginning. The evaluation of the schools is over and the consolidation and teach out strategy is in the planning stages right now. The process will begin in January once approved by the DOE and the accreditation agencies.
745: I agree. My estimate is 9 months from now. There will be no Zenith by next summer.
679 - I don't think 3 months is long enough for low enrollment and attrition to reduce student population to a level that allows for a teachout/closure of any campus without DOE being on the hook for too many loans to forgive. I am going with the Jan 1 date.
3 months period and there will not be a zenith. Just good old ECMC banging away on collections. They basically bought the receivables from Everest to help the DOE. DOE knew that ECMC had no interest in running any of the schools
445- I concur. With the new 6 week OL class schedules being rolled out as an unspoken part of this and more RIFs with the coming Degree start January will most likely mark the obvious.
Furthermore if you notice, any new campus CP leaders that have been put In place ARE NOT growth mode individuals- merely operations "yes" people who will tow the party line and ride it on out til the lights go dim. They are doing any and all methods to keep accrediting bodies complacent so the rug doesn't get pulled out until the teach out.
The really scam sad part is that ECMC is still playing to the public by the monies being funneled in for "local marketing" and scholorships, but it pays to operate a business at a loss on occasion. Hopefully once it all goes South, Hawn and crew will have a day in court just like Jack and his cronies.
January will be the start of consolidation and teaching out of the under performing schools. By next year at this time Zenith Education Group will be down to 35 schools. They have already dropped from 56 to 48 schools and the plan is to be at 35. This was the plan from the beginning to take the first 5 to 6 months to evaluate the schools then develop a colsolidation process to be implemented on January 1st.