For-Profit Colleges By the Numbers
August 14, 2012 10:23 am
Earlier this month, ProPublica published a report entitled “For Profit Higher Education: The Failure to Safeguard the Federal Investment and Ensure Student Success” that had many in the for-profit higher education industry up in arms. The two year effort, commissioned by the Health, Education, Labor and Pensions Committee of the US Senate, demonstrated what many of those currently or formerly enrolled in for-profit colleges like University of Phoenix, Capella University, DeVry University, ITT Technical Institute and many others are already familiar with: high rates of loan default, aggressive recruiting of and marketing to students, high tuition, low retention, and little job placement assistance.
While the Association of Private Sector Colleges and Universities charged that the report “twists the facts to fit a narrative,” it could not challenge the following figures:
- 766,000 students enrolled in for-profit higher education schools in 2001
- 2.4 million students enrolled in for-profit higher education schools in 2010
- 225% growth in student enrollment at for-profit colleges between 1998 and 2008
- 31% growth in student enrollment at all degree-granting higher education institutions between 1998 and 2008
Cost of Education
- $35,000 average cost of two-year associate’s degree at a for-profit college
- $8,300 average cost of an associate’s degree at comparable community college
- $63,000 average cost of a four-year bachelor’s degree at a for-profit college
- $52,500 average cost of a four-year bachelor’s degree at a state flagship university
- $19,806 average cost of a certificate program at a for-profit college
- $4,250 average cost of a certificate program at a comparable public collegeLoan and Debt
- $32,700 median debt with which average student at a for-profit college graduates
- $24,600 median debt with which average student at a private non-profit college graduates
- $20,000 median debt with which average student at a public college or university graduates
- 96% of those enrolled in for-profit schools take out student loans
- 57% of those enrolled in four-year private, non-profit colleges take out student loans
- 48% of those enrolled in public colleges take out student loans
- 13% of students at community colleges take out student loans, and more . . .
The investigative report was initiated by Senate HELP Committee Chairman Tom Harkin (D – Iowa) to
[B]etter understand the enormous growth in both the number of students attending for-profit colleges and the Federal student aid investment that taxpayers are making in the colleges. This growth has occurred as for-profit colleges have increasingly been acquired or created by publicly traded companies and private equity firms that are closely tracked by analysts and by investors seeking quick returns. Unlike traditional non-profit and public colleges, virtually all of the revenues of for-profit colleges come directly from taxpayers.
Although “achieving a college degree has been, and remains, the best way to ensure that an American student will have secure earning power that increases over time,” the costs — fiscal and otherwise — of attending for-profit colleges are higher than most bargain for. According to the report, “more than half of the students who enrolled in these colleges in 2008-9 left without a degree or diploma within a median of 4 months” and still more students left after a year without a degree or certificate.
The numbers in the report continue, including figures for aggressive and misleading recruitment of students, lobbying, compensation for CEOs and presidents of for-profit colleges, and academic progress (or lack thereof).
Regardless of mounting student debt and a decrease in morale, the businesses that own and operate these colleges turned a tremendous profit during this time, in part because “federal law and regulations currently do not align the incentives of for-profit colleges so that the colleges succeed financially when students succeed.”
The oversight effort included prescriptive measures, including increased transparency about student outcomes, strengthening the oversight of Federal financial aid, and creating meaningful protections for students. The report can be found here.
Image from here