Adtalem Global Education, a leader in healthcare education with institutions like Chamberlain University and Walden University, has consistently impressed investors with its "Growth with Purpose" strategy. Quarter after quarter, the company touts robust enrollment growth, operational efficiency, and a commitment to addressing healthcare workforce shortages. However, a deeper dive into their recent earnings transcripts reveals a potentially overlooked issue lurking within their Medical and Veterinary segment – specifically, the Ross University School of Veterinary Medicine (RUSVM).

While Adtalem celebrates RUSVM operating "near capacity" and boasts about it graduating nearly 9% of all US veterinarians [1], they also reveal active lobbying efforts to secure a regulatory exception for their DVM programs. This exception pertains to the Department of Education's "gainful employment" rule, a regulation designed to ensure that educational programs lead to viable career paths with sufficient earning potential.

The current iteration of the gainful employment rule offers a longer measurement period for MD and other mental health programs, effectively providing them more leeway in demonstrating career viability for their graduates. However, DVM programs, despite their crucial role in addressing the nationwide shortage of companion animal veterinarians, weren't specifically included in this extended measurement period.

This omission raises a critical question: If RUSVM is truly operating "near capacity" and graduating a significant percentage of US veterinarians, why are they actively lobbying for an exception? Shouldn't the sheer volume of graduates and the pressing need for veterinarians speak for themselves in demonstrating the "gainful employment" of their DVM program?

Enrollment Trends and the Gainful Employment Question

Here's where a potential hypothesis emerges. Adtalem's insistence on securing an extended measurement period for RUSVM could suggest that their current data, under the existing gainful employment metrics, falls short of the required thresholds. While they boast about operating near capacity, this could imply a high volume of enrolled students, but what about the earning potential of those graduates?

Could it be that RUSVM graduates are struggling to secure well-paying jobs, thereby jeopardizing the program's standing under the gainful employment rule? Is this the hidden reason behind their persistent lobbying efforts?

Consider this: The average starting salary for a veterinarian in the US is around $70,000, with variations based on location and specialization. However, with student debt averaging over $180,000 for graduating veterinarians, meeting the debt-to-earnings ratios crucial for gainful employment compliance might be challenging for some graduates, particularly those facing geographic limitations or lacking specialized skills.

Furthermore, the veterinary market, while experiencing a shortage, is also highly competitive. The rise of corporate-owned veterinary practices has driven down salaries in certain regions, potentially impacting the earning potential of RUSVM graduates seeking employment in those areas.

Adtalem's lack of transparency regarding specific metrics related to RUSVM graduate earnings raises further suspicion. They avoid providing granular data on post-graduation employment rates, salary ranges, and debt repayment statistics, opting instead for broad pronouncements about the program's success.

Analyzing Enrollment Trends

Looking at the recent earnings transcripts, we can see a clear trend of increasing enrollment across Adtalem's institutions, including Chamberlain and Walden. However, the data for the Medical and Veterinary segment, which includes RUSVM, is less detailed.

While their "Growth with Purpose" strategy has undeniably propelled overall growth, the lack of transparency surrounding RUSVM's gainful employment compliance warrants closer scrutiny. Are investors overlooking a potential "woof" of a problem, masked by impressive headline numbers and strategic buzzwords? Until Adtalem provides concrete data on RUSVM graduate earnings and addresses their seemingly unnecessary lobbying efforts, this question will linger, potentially jeopardizing the very "purpose" they claim to champion.

"Fun Fact: The American Veterinary Medical Association (AVMA) estimates that the US will need an additional 41,000 veterinarians by 2030 to meet the growing demand for veterinary care. This underscores the crucial role of institutions like RUSVM in addressing this critical workforce shortage."