The nation’s largest urban school districts are warning that without federal aid, as many as 275,000 teachers could suffer layoffs. Universities like Harvard are freezing or cutting salaries. Digital education companies are stepping into the gap, capitalizing on the need for not just learning material, but teaching assistance for students amidst the coronavirus pandemic.
“We’re betting on the inevitable,” Dan Rosensweig, the CEO of online education company Chegg (CHGG), told Yahoo Finance. “What this means is schools are going to be able to offer less support. Students are going to be more on their own. And so what comes out of this on the other side is more people learning more things online and needing more online support.”
Chegg this week reported first-quarter revenue surged by 35%, as subscribers to its services rose to 2.9 million. Those services include online textbook and study Q&A for high school and college students.
“We offer homework help. We offer tutoring. We offer internships,” Rosensweig said.
He also said the surge in demand happened quickly, and he believes it will be sustained.
“We believe, independent of COVID, that our usage, our engagement will stay extraordinarily high. Our subscriber growth will likely continue to improve. I’m not sure it will continue to grow at the same rate that it went, which was just astronomical,” Rosensweig said.
Chegg shares have risen more than 50% this year, and it’s not the only publicly-traded education stock to get a boost. K12 Education (LRN) are up more than 8%, and CEO Nathaniel David told Yahoo Finance last month that even before this current crisis, studies showed that some students’ learning retention improves online.
“Online tools are a part of the way children are growing up today. They have technology available to them from two years old that you and I never had when we were that young. So they learn to retain in this environment,” he said.
Like Chegg, he said K12 had been experiencing a surge in demand.
Julie Hyman is the co-anchor of On the Move on Yahoo Finance.
Read the latest financial and business news from Yahoo Finance