Few institutions have topped more than 100,000 students online, but Western Governors University and Southern New Hampshire University are on the brink.

Scott Pulsipher, WGU's president, said the nonprofit, fully online institution enrollment is roughly 97,000 students.

Online enrollment at the nonprofit Southern New Hampshire, which has a traditional campus and an online arm, is about 93,000 students, said Paul LeBlanc, the university's president. SNHU's total enrollment crossed the 100,000 mark earlier this year.

Observers said the two nonprofits could soon overtake the University of Phoenix as the largest online universities in the U.S. The only other university that remains within striking range of 100,000 students online is Liberty University. But the Christian institution's enrollment has slipped of late, according to recent reports.

Spokespeople for Phoenix declined to comment. But multiple sources told Inside Higher Ed that for-profit Phoenix’s enrollment may have dropped below 100,000 recently, which would be the first time it slid below that number in 15 years.

Meteoric Growth for Nonprofits

“The for-profit brand has been tarnished,” said Trace Urdan, managing director at Tyton Partners, a higher education consulting firm. He said government scrutiny, negative media coverage and self-inflicted scandals have created the impression that for-profits can’t be trusted.

“Not-for-profit is associated with quality now,” Urdan said. “Students think, ‘I can trust Southern New Hampshire University because they told me 17 times in their television commercial that they’re not-for-profit.’”

SNHU won’t stop telling people about being a nonprofit in commercials any time soon. “It still matters,” said LeBlanc.

“We can debate how fair or unfair the assault on for-profits was, but the market has been educated,” he said, adding that in the past, prospective students didn't ask admissions staff members about the university's tax status. Now it's a routine question.

“Sometimes they won’t have the right language, so they’ll ask, ‘Is this a real place?’” said LeBlanc. “We tell them that we’re nonprofit and we have a campus, and they’re reassured."

Both Pulsipher and LeBlanc said the decline of the for-profit sector has helped their institutions grow.

WGU's expansion is accelerating, according to Pulsipher. He attributes the increase to WGU’s growing alumni network. About half of WGU students find the institution through referrals from friends and family. And Pulsipher said increased respect for WGU graduates among employers and strong community college relationships have also helped.

The institution is growing at an annual rate of 20 percent, meaning that in the next year, WGU estimates it will gain another 20,000 students. Asked whether there is a point when it might reach capacity, Pulsipher said, “We don’t foresee a limitation in our ability to scale.”

“Our biggest challenge is that with growth and scale we still have to endeavor to deliver an individualized experience for every student,” he said. “We invest significantly to support the growth that we forecast.”

The university is investing in “great talent and great technology” said Pulsipher. For example, it adds 80 to 100 new employees per month, many of whom are faculty members.

WGU would know quickly if it was growing too fast, he said. Student measures such as course completion and time to degree are monitored closely by the university. If these started to decline (or increase, in the case of time to degree), Pulsipher said, the university would throttle back their student intake. “We would trade off growth for quality,” said Pulsipher. But he said size and quality are not mutually exclusive.

At SNHU, enrollment is still growing but no longer accelerating, said LeBlanc. The period of the most “meteoric” growth for the institution was from 2012 to 2015. Since the economy has picked up, LeBlanc said, growth has slowed a little.

These days SNHU is targeting nontraditional learners -- adult students with some college credit but no degree. That description fits 37 million potential students in the U.S., said LeBlanc. But the university also is working to identify new pools of learners, in part by building partnerships with community colleges and high schools and offering education opportunities to refugees and DACA recipients.

The Fall of Phoenix

Phoenix’s declining enrollment in recent years has benefited both WGU and SNHU. But many nonprofits are now competing and moving into the space with the help of online program management partners.

At its peak in 2010, Phoenix enrolled more than 470,000 students. That number had slid to 130,000 students by 2016. And last year the university closed 20 of its campus locations and laid off hundreds of employees.

Jane Oates, president of media company WorkingNation, worked for Apollo Education Group (Phoenix’s holding company) until last year. Asked why enrollment at the university has dropped, Oates said Phoenix made a conscious decision to focus more on the student experience. It also dropped all short courses to concentrate on degrees, she said.

Factors outside Phoenix’s control also may be having an effect. Oates said many institutions are struggling with enrollment and retention. “People tend to turn to education when they can’t get a job, and now pretty much there’s full employment,” she said. “It’s cyclical.”

The national conversation about federal gainful-employment regulations made the average American “very skeptical” of for-profit education generally, said Oates. And Phoenix dealt with its share of bad publicity. “No college is perfect, but I think the University of Phoenix came out of all that pretty much unscathed, both with military students and Title IV,” she said, referring to federal student aid programs.

Phil Hill, cofounder of Mindwires Consulting and co-author of the e-Literate blog, said Phoenix got comfortable being the “800-pound gorilla” of higher education and made several strategic mistakes. Specifically, he pointed to millions of dollars Phoenix spent on custom technology that wasn't fully used. In recent years, the university replaced its leadership and laid off administrators. Last year a group of investors bought Phoenix for $1.14 billion and took the university private. (It had been publicly traded.)

“There was an all-out assault on the for-profit sector during the Obama administration, and it was successful,” said Hill. “That had a huge impact on the University of Phoenix. But the whole sector has been going down.”

What About Liberty?

ProPublica and The New York Times Magazine last week published a scathing article about Liberty University -- a nonprofit Christian institution with a traditional campus and large online presence. Like Phoenix's, Liberty's online enrollment is reportedly down. A Liberty official was quoted in the article saying that the university deliberately brought down its enrollment to ensure quality. But Hill said he doesn’t buy that explanation.

“My belief is that they had a turnaround in enrollment and they’re trying to paint that in a positive light,” said Hill. “They’re in a niche market for Christian students, but that market has got much more competitive. The market is no longer one where you can do a massive land grab. The ground has shifted and students have multiple options.” Hill suggested that Liberty is losing ground to the for-profit Grand Canyon University -- another Christian university with a large, growing online presence.

Liberty's current online enrollment is roughly 85,000 students, the university said, with 15,500 attending its campus in Lynchburg, Va.

Going above 100,000 students online is “pretty difficult to do, and there are some questions about whether you should,” said Hill.

But LeBlanc and Pulsipher don’t see any limitations to their universities' growth, at least if they continue to scale up their operations as demand increases. With more students comes more student data, LeBlanc, and that information can be used to improve students’ experience. It’s also easier to market for multiple programs at once rather than individual programs.

Oates doesn’t think another institution will get as big as Phoenix was at its height. “If you get too big too fast, things fall through the cracks,” she said. “I don’t think you’re ever going to see anybody get that big again because of the quality of the competition. You have so many for-profit and nonprofit competitors going after the same students -- that’s going to keep everybody’s numbers down.”