American Public Education Stock

American Public Education, Inc. provides online and campus-based postsecondary education and career learning to students through four subsidiary institutions. The company’s institutions offer purpose-built education programs and career learning designed to prepare individuals for productive contributions to their professions and society and to offer opportunities to advance students in their current professions or to help them prepare for their next career. The company serves approximately 107,100 students.

Segments

The company operates through three segments: the APUS; the RU; and the HCN.

American Public University System, or APUS segment: This segment reflects the operational activities of APUS.

Rasmussen University segment, or RU segment: This segment reflects the operational activities of RU.

Hondros College of Nursing segment, or HCN segment: This segment reflects the operational activities of HCN.

Institutions

The company has four subsidiary institutions: American Public University System, or APUS, Rasmussen University, or RU, Hondros College of Nursing, or HCN, and Graduate School USA, or GSUSA.

American Public University System

APUS provides online postsecondary education to approximately 88,900 adult learners. APUS traces its roots to American Military University, or AMU, which was founded as a distance-learning, graduate-level institution for military officers seeking an advanced degree in military studies. APUS has broadened its focus to include other military communities, veterans, and public service and public service-minded communities, with a focus on educating those who serve, and has two components: AMU, which focuses on educating students from the military, national security, military-affiliated and service communities, like police, firefighters, emergency personnel, and government employees, and American Public University, or APU, which focuses on educating career-focused working adults with an emphasis on educating professionals working in service-related communities, including nursing, public health, public administration, and business administration. A majority of APUS students are undergraduate-level students in addition to its graduate and certificate students.

APUS is exclusively an online institution of higher learning, designed to meet the needs of the military, military-affiliated, public service, and working adult students. Many of these students serve in positions requiring extended and irregular work schedules, are on call for rapid response missions, participate in extended deployments and exercises, travel or relocate frequently, and often must balance family and work demands. Although APUS’s focus has broadened since its founding, it continues to have an emphasis on its relationship with the military community. As of December 31, 2022, approximately 65% of APUS’s students self-reported that they served in the military on active-duty at the time of initial enrollment, and approximately 11% of APUS’s students self-reported that they are a military veteran. The remainder of APUS’s students are other military or military-affiliated professionals (such as reservists or National Guard members), public service professionals (such as law enforcement personnel or other first responders), and other non-military students (such as working adult students and military spouses).

APUS is institutionally accredited by The Higher Learning Commission, or HLC, a regional accrediting agency recognized by the U.S. Department of Education, or ED, with an Open Pathway designation, which affords institutions greater opportunity to pursue institutional improvement projects than the alternative Standard Pathway designation. Most other higher education institutions accept APUS’s courses for transfer credit as a result of this accreditation.

Rasmussen University

RU provides nursing- and health sciences-focused postsecondary education to over 15,600 students at its 22 campuses in six states and online. At the beginning of its 123-year history, RU focused on educating business students to prepare them for practical careers in bookkeeping, secretarial services, and accounting. RU’s foundation of education that transforms lives created an inclusive institution built to serve those not typically served by traditional higher education. While RU continues to offer programs across a broad range of study, including business, technology, and education, it launched its focus on healthcare education in 2006, and today offers a comprehensive ladder of nursing degrees, including pre-licensure PN and ADN degrees, post-licensure Bachelor of Science in Nursing, or BSN and RN to BSN degrees, Master of Science degrees in Nursing, Specialties and Nurse Practitioner, and a Doctorate of Nurse Practice.

RU is committed to innovation in program delivery. For example, RU offers competency-based education, or CBE, helping to advance this learning approach where students learn by doing, manage their pace, and stay connected with faculty and peers. Additionally, virtually every nursing program at RU incorporates online content alongside lab and clinical or classroom components. As of December 31, 2022, approximately 7,600 students are pursuing nursing degrees at RU, over 90% of whom are enrolled in RU’s pre-licensure nursing degree programs, and approximately 8,000 students are enrolled in non-nursing programs.

RU is institutionally accredited by HLC with an Open Pathway designation and all of RU’s Nursing programs are programmatically accredited by specialty nursing accrediting bodies. As with APUS, most other higher education institutions accept RU’s courses for transfer credit as a result of RU’s HLC accreditation.

APEI acquired RU on September 1, 2021, which the company refers to as the Rasmussen Acquisition, adding what is an attractive portfolio of programs to APEI, with a strong alignment around mission and culture.

Hondros College of Nursing

HCN provides nursing education to approximately 2,600 students across eight campuses in three contiguous Midwestern states with six campuses in Ohio, one campus in Indianapolis, Indiana, and one campus in suburban Detroit, Michigan, that opened in October 2022. HCN offers pre-licensure nursing programs that are designed to prepare individuals for productive careers through both a PN Degree and an ADN Degree, and two Direct Entry ADN Degree options that offer an accelerated graduation pathway for students who meet certain transfer, academic, and entrance exam requirements.

HCN’s students principally receive on-campus instruction at one of HCN’s campuses and offer certain courses in a virtual setting for those that prefer remote course learning. For the fiscal year ended December 31, 2022, approximately 60% of HCN students were enrolled in the PN program, while 40% were enrolled in the ADN program.

HCN is institutionally accredited by the Accrediting Bureau for Health Education Schools, or ABHES, a national accrediting agency recognized by ED. HCN’s PN program is accredited by the National League for Nursing Commission for Nursing Education Accreditation, or NLN CNEA.

Graduate School USA

GSUSA, based in Washington, DC, is one of the largest providers of career learning to the federal government and public employee workforce. The company acquired substantially all of the assets of GSUSA on January 1, 2022, advancing its focus on delivering training that provides students with pathways to employment and career advancement. GSUSA provides contract training to more than 100 federal government agency customers and through direct enrollment by federal, state, and municipal government employees, contractors, and non-government employees.

GSUSA provides career learning both in-person at its headquarters facility in Washington, D.C. and at customer sites, as well as online. GSUSA offers a catalog of more than 300 courses specializing in foundational and continuing professional development, as well as leadership training and practice management through its Center for Leadership and Management and Government Audit Training Institute. GSUSA trained over 25,000 individuals in 2022.

GSUSA is accredited by the Accrediting Council for Continuing Education and Training, or ACCET.

Acquisition Activity

The company acquired GSUSA on January 1, 2022, advancing its focus on career learning that provides pathways to employment and career advancement, and began repositioning GSUSA and focusing it on a return to growth. During 2022, the company also continued work to integrate RU, which it acquired on September 1, 2021, including through certain restructuring activities.

Business Strategy and Goals

At its core is a recognition of the importance of individuals who serve the country and society at large. The company seeks to offer curriculum in bundles that resonate with service-minded students. The company focuses on expanding nursing opportunities through geographic campus expansion and the expansion of its programs and course offerings. This focus includes expansion of the company’s post-licensure enrollments, particularly at RU where key post-licensure programs have already been established and are primarily delivered online, which represents an opportunity for its alumni and other already-licensed nurses to advance their nursing careers. The company also seeks to enhance provider partnerships to act as a catalyst for enrollment growth and defray student costs. The company intend to continue to seek opportunities for both organic and inorganic growth, including by exploring acquisitions of other nursing schools. The company’s strategy is organized around areas where it has the right to win. The company will continue to focus on being the top educator for active-duty military and veterans and pre-licensure nurses.

Institutions and Operations

The company provides postsecondary education through three educational institutions of higher learning: APUS, RU, and HCN. The company also provides career learning to the federal government workforce through GSUSA. Each institution is primarily responsible for its own academic mission, while APEI performs certain business functions on a shared basis for the benefit of APUS, RU, HCN, and GSUSA, with the capability to further expand these shared services to these entities.

Institutions

Programs and Areas of Study

The company offers a total of 184 degree programs, 138 certificate programs, and four diploma programs, through its institutions. The company offers programs across a broad range of fields of study, including public service-focused fields such as nursing, national security, military studies, intelligence, and homeland security, as well as traditional academic fields, such as business, health science, information technology, justice studies, education, and liberal arts. In addition, through GSUSA, the company’s offerings also include career learning opportunities in leadership, finance, human resources, and other fields of study critical to the federal government workforce.

General Academics

APUS offers 136 degree programs and 115 certificate programs. More than 1,800 distinct courses are available in either eight- or sixteen-week formats. Most APUS academic terms begin on the first Monday of each month. APUS’ certificate programs generally require a minimum of 18 credit hours and focus on a particular component of a broader degree program. Among those programs are 16 undergraduate and 16 graduate NanoCerts programs, focused programs comprised of three academic courses in a related area of interest that provide skills necessary for career or professional development and result in a micro credential. RU offers over 60 programs across six schools of study in addition to nursing. RU offers more than 800 distinct courses in 5.5 or 11-week formats with terms beginning in January, April, July, and October of each year.

Nursing

RU offers a comprehensive ladder of nursing degrees including a pre-licensure Diploma in PN, an ADN, and a BSN, as well as the post-licensure RN to BSN, Master of Science in Nursing and Doctorate of Nurse Practice. In addition, RU also offers a post-graduate nursing certificate. HCN offers on-campus instruction leading to a Diploma in PN and an ADN, as well as a Direct Entry ADN option that offers an accelerated graduation pathway for students who meet certain transfer, academic and entrance exam requirements. Portions of the programs are taught online. Academic terms for HCN’s PN and ADN programs begin four times each year, with courses starting in January, April, July, and October. Graduates of RU and HCN’s PN and ADN programs are eligible to seek licensure after passing the applicable National Council Licensure Examination, or NCLEX, exams.

Government Training

GSUSA offers professional development and training courses for federal government agencies and the federal government workforce, serving organizations and individuals with programs designed to support organizational missions, career and occupational development, and the personal ambitions of adult learners. GSUSA’s offerings include more than 300 courses across 14 program areas.

Student Body

Overall, the company’s institutions have approximately 107,100 students enrolled online and at 30 campuses across nine states, with enrollment calculated differently depending on the institution. In addition, GSUSA trained over 25,000 individuals in 2022.

The student body of APUS consists of approximately 88,900 enrolled students, most of whom are employed full-time. Student enrollment is defined as the number of unique active students, including those who take an approved leave of absence, who are attending a course or have completed at least one course within the last 12 months. As of December 31, 2022, approximately 65% of APUS’s students self-reported that they served in the military on active-duty at the time of initial enrollment, and approximately 11% of APUS’s students self-reported that they are a military veteran. The remainder of APUS’s students are other military or military-affiliated professionals (such as reservists or National Guard members), public service professionals (such as law enforcement personnel or other first responders), and other non-military students (such as working adult students and military spouses). Many APUS students have significant prior education and career experiences; 90% are working adults and the average age of APUS students is 31. APUS is designed to serve those adult learners with tailored offerings to support them in successfully reaching their individual goals.

RU provides education to approximately 15,600 enrolled students. Student enrollment is defined as the number of unique active students, including those who take an approved leave of absence. RU offers programs across a broad range of fields of study, but recent years have seen an increased focus on healthcare, specifically nursing education. At RU, 75% of students are over the age of 25 and 86% are female. As of December 31, 2022, approximately 7,600 students are pursuing nursing degrees at RU, over 90% of whom are enrolled in RU’s pre-licensure degree programs.

HCN provides nursing education to approximately 2,600 students at six campuses in Ohio, one campus in Indianapolis, and one in suburban Detroit. The average HCN student is approximately 32 years old and 93% of HCN students are female.

Accreditation

The company’s institutions have institutional accreditation and their programs often have programmatic or specialized accreditation. Institutional accreditation is an important attribute of the company’s institutions. Colleges and universities depend, in part, on accreditation in evaluating transfers of credit and applications to graduate schools. Students and sponsors of tuition reimbursement programs look to accreditation for quality assurance, and employers rely on institutions’ accredited status when evaluating a candidate’s credentials. APUS and RU have institutional accreditation from HLC with an Open Pathway designation, which affords institutions greater opportunity to pursue institutional improvement projects than the alternative Standard Pathway designation. HCN is institutionally accredited by ABHES. GSUSA is accredited by ACCET.

In addition to institutional accreditation, certain of its programs offered have received specialized accreditation. For example, the Accreditation Council for Business Schools and Programs, or ACBSP, accredits approximately 15 different business-focused academic programs offered by APUS, and accredits APUS’s accounting program under a specialized accounting accreditation. The Commission on Collegiate Nursing Education, or CCNE, accredits the Bachelor and Master of Science in Nursing programs. Certain programs offered by RU have received specialized accreditation as well. For example, RU’s ADN and Licensed Practical Nursing programs are accredited by the Accrediting Commission for Education in Nursing. The BSN and Master of Science in Nursing degree programs at RU are accredited by CCNE. HCN’s PN program is accredited by the National League for Nursing Commission for Nursing Education Accreditation, or NLN CNEA.

RU and HCN’s locations and programs are approved by state agencies as well. For example, the nursing education programs offered by RU and HCN are approved by the relevant state boards of nursing.

Admissions and Admissions Standards

The company works to attract students who are more likely to persist and succeed in its programs and continue to work to identify and implement changes and initiatives in an effort to attract and enroll more college-ready students more effectively. The company welcomes students to apply for admission at any time through online application processes at APUS, HCN, and RU. The qualification for most undergraduate programs is a high school diploma or General Education Development certificate. Applicants for graduate programs must hold a bachelor’s degree from an accredited U.S. institution or an equivalent foreign institution. Certain programs may have additional admissions standards and restrictions.

Affordability and Cost of Attendance

The company has long been focused on offering its students affordable programs. Affordable tuition has been a priority of APUS since its founding. APUS tuition remains among the lowest in the four-year for-profit sector. The combined tuition and fees at APUS are generally less than the average in-state cost at a public university. APUS costs are about 25% less than the average in-state full-time undergraduate tuition, fees, and books at four-year public universities, based on the final 2021-2022 institutional data reported to the U.S. Department of Education through The Integrated Postsecondary Education Data System. This low tuition and fees, in combination with APUS-funded tuition grants and book grants provided to all undergraduate students, and to active-duty military students and their spouses and dependents at the master’s level, result in significant savings.

Tuition and Fees

APUS is an exclusively online institution, there are no required resident fees, such as for parking, food service, student union, and recreation. APUS charges students a technology fee but provides a grant to cover the technology fee for students using TA. When applicable, APUS students are charged certain additional fees, such as graduation, late registration, transcript request, and comprehensive examination fees. APUS plans to adopt modest tuition and fee increases effective in the second quarter of 2023, with a corresponding increase in grants to military students.

Sources of Student Financing and Financial Aid

The company’s students finance their education through a combination of individual resources, ED’s Title IV programs, private loans, state and federal grants, institutional grants, TA, Department of Veterans Affairs, or VA, educational benefits, and corporate reimbursement programs. Most students rely on some form of financial aid in addition to their individual resources. At APUS, students utilizing DoD’s TA programs accounted for 47%, those using VA education benefits 21%, and those utilizing ED’s Title IV programs 18% of net course registrations in 2022.

Student Retention and Academic Outcomes

The company’s institutions are focused on executing initiatives that will more effectively support their students and help improve those students’ educational outcomes. Improved engagement is an important element in its goal of retaining qualified students. For example, APUS and RU improve engagement through, among other things, faculty engagement initiatives and co-curricular initiatives to increase the level of engagement and collaboration in the classroom and strengthen the bond between those institutions and their students. The company also carries out initiatives intended to improve the educational outcomes of its students. For example, RU recently established a Center of Nursing Excellence that is dedicated to helping students pass the NCLEX exam the first time by identifying student-specific challenge areas and providing customized tutoring resources and faculty training to help shore up gaps in student knowledge. RU plans to integrate NCLEX testing simulation and preparation tools throughout the curriculum and to conduct a curriculum assessment to identify areas where RU can better enable student mastery and success.

Career Development

The company’s institutions offer an array of career services, including complementary personalized career advice for students and alumni through direct interaction with career services staff, career events, such as in-person and virtual job fairs and on-campus recruiting, and institution-sponsored online job boards. APUS also offers career planning tools, such as an interest assessment to identify career options that fit student interests and guides to careers associated with student majors, and career preparation services, such as mock interview services, resume review services, and social media review services to improve students’ employer-facing online profiles. RU provides a variety of self-service resources, including access to a networking, job posting, a career research website, online resume building and interview preparation tools, webinars, and video tutorials, as well as online programmatic advising by dedicated career services advisors. The company strives to link students directly with employers where it can. For example, beginning in the fourth quarter of 2022, HCN entered into a partnership with a large national healthcare provider to assist certain HCN students in funding their tuition costs. The healthcare provider is fully funding the tuition costs of students it selects from HCN’s ADN program at its HCN’s Toledo, Ohio campus in exchange for the students agreeing to work for the provider for an agreed time period following graduation. The company plans to launch additional healthcare partnerships for RU and HCN in 2023.

Marketing and Branding

The company strives to align its marketing efforts with its business and strategy and to tailor its marketing approach to its educational offerings and the students it serves. This approach encompasses all the company’s learning modalities, from online to on-campus to hybrid, and all its educational outcomes, from certification to degree, and leading to the career outcomes students seek after they leave it. As part of these efforts, the company continues to highlight certain key marketing and branding messages that align with its strategy, including educating those who serve, affordability and value.

The company executes its marketing efforts through both direct-to-student and business-to-business channels. The company’s marketing relationship with students extends across the entire student journey from recruitment to post-graduation and includes efforts to drive student awareness, improve student onboarding, increase persistence, improve student performance, and focus on career outcomes. The company’s approach includes in-person and relationship-based marketing, as well as digital (including search, company-owned and external content, and social media), and more traditional television, radio, and print marketing efforts.

The company also works with partners it can provide with better access to the students. Almost 30% of the company’s RU enrollments are associated with a partner relationship. The company provides more than 130 APUS partner organizations with services to maximize strategic workforce development goals. This includes partnerships with community colleges, which prepare students for transfer opportunities to APUS for bachelor’s degree programs.

Marketing efforts tailored for the company’s institutions consider prospective and current students, including their respective educational goals. The company also has programs at APUS that aim to assist members of the military as they transition into private sector jobs. RU and HCN nursing program marketing includes leveraging relationships with and marketing to the healthcare community, and in late 2022 the company increased its non-nursing marketing for RU in response to demand.

In 2022, the company began efforts to centralize its marketing organization. The company’s centralized team is providing all marketing and branding services for APUS and GSUSA and providing many of these services for HCN. RU historically relied on Collegis for a variety of outsourced marketing services. In October 2022, RU and Collegis mutually agreed to the termination of the marketing services contract effective January 31, 2023, and the company has completed the transition of RU marketing in-house to its centralized marketing team. The company is also developing marketing expertise that spans a variety of functional areas and to extend its use of marketing technology and analytics. The company uses technology and analytics to improve marketing mix, audience targeting, new initiatives, messaging, and creative decisions, as well as advertising development, delivery, and testing.

Intellectual Property

The company or its institutions have secured or claim rights to trademarks for various names and terms used in its and their respective businesses, including rights in American Public Education, Inc., American Public University System, American Military University, American Public University, Rasmussen University and others. In connection with its acquisition of HCN, the company received a royalty-free, irrevocable, exclusive, transferable, sublicensable license to use the name Hondros College of Nursing and instead of Nursing, any other qualifier directly related to nursing, medicine, or healthcare in connection with the business and operations of HCN. The trademarks and service marks the company uses are central to its institutions’ brand identities overall and marketing efforts, including how prospective students identify them. The company’s institutions also own rights to internet domain names pertaining to their brand names and other unique descriptors.

Seasonality

The company experiences fluctuations in quarterly (year ended December 31, 2022) results. Operating results fluctuate as a result of seasonal or other variations in enrollments. For example, historically, across the company’s institutions, its enrollments are higher in the fall term when students traditionally start their education. The company’s student population also varies as a result of new enrollments, graduations, student attrition, the success of its marketing programs, and other reasons. The company expects quarterly fluctuations to continue.

Regulatory Environment

APUS, RU and HCN are approved to participate in tuition assistance programs administered by the U.S. Department of Defense (DOD) and veterans’ education benefits programs administered by the U.S. Department of Veterans Affairs (VA) and therefore also subject to oversight by those agencies. The company is regulated in some cases other federal agencies including the Consumer Financial Protection Bureau, or CFPB, and Federal Trade Commission, or FTC.

History

American Public Education, Inc. was founded as in 1991. The company was incorporated in Delaware in 1991.