American Public Education, Inc. (NASDAQ:APEI) Q3 2019 Earnings Conference Call - Final Transcript
Nov 12, 2019 • 05:00 pm ET
these two forces are colliding to create unmatched opportunity for those positioned to provide today's workers with access to high quality, flexible and career-relevant degree programs and workforce training that is either affordable or debt-free.
It is important for our key stakeholders to understand that my priority is to grow APEI's core business with an emphasis on addressing this national need for affordability to upscale America's workforce. While the third quarter results met or slightly exceeded the company's outlook, the performance does not reflect the strong foundation and the market potential for APEI. As we move forward, our primary focus will be to grow the core business through increased learner and course enrollments across all brands, and to accelerate our reach to provide affordable, accessible, relevant and high quality post-secondary education and training to new learner markets.
In the third quarter of 2019, net course registrations by new and total learners at APUS declined 5% year-over-year. The decline was primarily driven by an 11% decline in net course registrations by new learners utilizing military tuition assistance, or TA. The decline in net course registrations by new learners utilizing TA was largely impacted by the temporary exhaustion of Navy TA program funds.
As previously noted, the US Navy announced that TA benefits available to sailors were expected to be exhausted by the end of May. and effective May 28, 2019, the Navy ceased approving TA program funds until the start of the new government fiscal year on October 1, 2019. APUS anticipated that this development would result in a loss of 4,300 net course registrations during the third quarter. However, actual results were better than that anticipated loss by approximately 630 net course registrations. Net course registrations by new learners utilizing Federal Student Aid, or FSA, were also slightly better than expected. That said, APUS did experience a 7.7% decline in net course registrations by new learners utilizing FSA, compared to the prior-year period. The declines were partially offset by a 9.6% increase in net course registrations by new learners utilizing Veterans Benefits, or VA, and a 5.4% increase in net course registrations by new learners utilizing cash or other sources.
I believe APUS remains one of the best-kept secrets in higher education. One of the key reasons I joined APEI is to accelerate the positive impact that APUS can have on delivering higher education with low debt or no debt to working adult learners. As of May 2019, approximately 72% of the 90,000 APUS alumni graduated with no APUS-incurred student loan debt, demonstrating leadership in our national mission to provide affordable, accessible and relevant higher education to adult learners of all kinds. In pursuit of that mission, APUS recently announced an increase in tuition grants for active-duty soldiers who pursue undergraduate and master's level courses. The APUS book grant was also extended to now include active-duty military learners at the master's level. Previously active-duty learners pursuing master's level courses at APUS paid for their textbooks and either financed or paid