Education Firms Learn New Lessons Regulators, Not Economy, Send Top Companies To Detention.(A)(IBD CORPORATE LEADERS)

Byline: Jonah Keri

By conventional wisdom, the economy's slowdown should be a boon to the for-profit education industry.

For years, education firms were seen as countercyclical. When the economy flourished, working adults would reap the benefits. They'd garner higher pay and job security as worker demand went up and unemployment went down. Going back to school was largely an afterthought.

That was a major drawback for education firms. Only when the economy slowed and workers started getting axed would demand for beefed-up skills through education go up.

That's changed in recent years. The technology boom has heightened demand for skilled tech talent. Even during most of the 1990s, in one of the longest booms in history, workers went back to school to upgrade their skills. Only this time, it wasn't about finding a job. It was about finding a great job.

"You see your peers, working in tech jobs and earning more," said Rene Champagne, president and chief executive of ITT Educational Services. "You wantto get those skills and qualify for those positions yourself."

The economy, slumping or sizzling, may not be a deterrent. Where, then, is the industry's bogeyman? What fear factor separates the best from the rest?