ITT EDUCATIONAL SERVICES Indianapolis, Ind. Education Firm Learns The Value Of Job Cuts.(THE NEW AMERICA)

Byline: KIRK SHINKLE

U.S. unemployment is creeping up -- it hit 6% in April -- and the job market has yet to recover.

Absent many job prospects, younger workers are looking to beef up their skills by heading back to school. That's helped for-profit educator ITT Educational Services Inc. fill more seats in its classrooms.

"Where we are right now in the economy should be the best operating environment for a company like ITT," said analyst Alexander Paris Jr. of Barrington Research. "When the number of jobs being created falls, you see an increase in student enrollment (and) retention."

ITT's first-quarter enrollment rose 9.8% from a year ago, driven by better retention.

The firm's trade schools serve mostly men under age 30. One-third of its students are fresh out of high school. Students are staying longer because of the tight job market, analysts say.

But new enrollment is another story. At ITT, it rose only 1.7% in the first quarter. One problem is that the tech sector's current weakness has driven students away from electronics and information technology classes.