Education

American Public Education plans to purchase government workforce training provider

Dive Brief:

  • American Public Education Inc., the for-profit operator of the American Public University System and its American Military University, plans to buy Graduate School USA, the company announced Wednesday.

  • Graduate School USA trains federal government employees. APEI will acquire substantially all of its assets for $1 million and make the acquired company a standalone subsidiary.

  • Graduate School USA averaged 15,000 open-enrollment students in each of the last three years. American Public University System, an online provider, counted about 89,000 students enrolled over 12 months ending June 30, and APEI’s Hondros College of Nursing counted almost 2,400 students enrolled during that period.

Dive Insight:

It’s the second acquisition APEI announced in less than a year. In October, the company revealed plans to purchase Rasmussen University for $329 million. That deal is expected to close within the next few months.

The Rasmussen acquisition was an APEI effort to grow its healthcare education — a direction institutions across higher education are pursuing. APEI said at the time the purchase would make the company the largest provider of pre-licensure nursing programs in the nation.

Buying Graduate School USA is a move to augment American Public University’s core student bases: veterans and students enlisted in the military. It comes as APEI has been stung by disruptions to its pipeline of U.S. military students. 

Active-duty members of the Army are APEI’s largest student segment, accounting for 23% of its registrations in 2020, according to an analysis from BMO Capital Markets Senior Analyst Jeffrey Silber. Those students typically ask for tuition assistance through the Army education portal. But the portal experienced outages and limited capacity after transitioning to a new provider. As a result, Army active-duty registrations fell 26% in its most recent fiscal quarter.

American Public University System’s net course registrations fell by about 8% year-over-year in the second quarter of 2021, which ended June 30.

Graduate School USA has a strong portfolio of government agency contracts and helps APEI with career training, employment pathways and career advancement, according to the company. The acquisition provides a foundation in the workforce training market while also diversifying APEI, its president and chief executive, Angela Selden, said in a statement.

Selden pointed to opportunities to create new stackable credentials and for Graduate School USA students “to earn an initial or additional degree at our institutions.”

Graduate School USA does not participate in Federal Student Aid programs. American Public University System does.

Before the pandemic, Graduate School USA was training employees largely in person. Training took place at government agencies and a Washington, D.C., facility. But APEI leaders believe they can expand outside of the Washington market and in other areas of worker training.

The purchase is subject to closing conditions and regulatory approvals. It’s expected to close in the fourth quarter of this year.

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