For-profit colleges are a growing sector - The...

© 2010 THE EDUCATION TRUST

Source:

For-profit colleges are a growing sector

IPEDS First Look Table 1 - Number and percentage distribution of Title IV institutions, by control of institution, level of institution, and region:

United States and other jurisdictions, academic years 2000-01 through 2009-10; U.S. institutions.

For-profit

Public

Private, Non-

profit

0%

20%

40%

60%

80%

100%

Pe

rce

nt

of

Inst

itu

tio

ns

38%

32%

30%

44%

30%

27%

Number of Institutions, by Sector, 2000-01 to 2009-2010

Note: Percentages may not add to 100% due to rounding.


Source:

For-profits enroll 12% of all college students, and 60%

of for-profit students are enrolled in 4-yr institutions

Ed Trust analysis of IPEDS, 12-Month Enrollment Survey, 12-month unduplicated headcount enrollment at Title IV U.S. institutions, 2008-09.

Public

75%

Private,

non-profit

13%

For-profit

12%

Enrollment at

all colleges and universities

4-yr

60%

2-yr

24%

Less than

2-yr

16%

Enrollment at for-profit

colleges and universities


Source:

The 15 largest for-profit institutions enroll 60%

of all students at proprietary institutions

• Apollo Group, Inc.

(University of Phoenix)

• Education Management

Corporation

• Career Education

Corporation

• Corinthian Colleges

• DeVry

• Kaplan Education

• ITT Educational Services

2008-09 IPEDS fall enrollment calculations, in Bennett, Lucchesi, and Vedder. For-

Profit Higher Education: Growth, Innovation and Regulation. Center for

College Affordability and Productivity, July 2010.

• Strayer Education

• Laureate

• Bridgepoint Education

• Capella Education

• Lincoln Educational Services

• Grand Canyon Education

• American Public Education

• Universal Technical Institute


Source:

Enrollment at for-profits is growing rapidly

Ed Trust analysis of IPEDS, 12-Month Enrollment Survey, 12-month unduplicated headcount enrollment at Title IV U.S. institutions,

1998-99 and 2008-09.

21 17

236

0

50

100

150

200

250

Public Private, Non-Profit For-Profit

Pe

rce

nt

Gro

wth

in E

nro

llme

nt

Rate of Enrollment Growth,

1998-99 through 2008-09


Source:

Last fall, the University of Phoenix

enrolled more students than

the entire sector did in 1991.

TICAS analysis of 1991 and 2009 IPEDS fall enrollment data, Fall Enrollment Survey, in “Testimony of Lauren

Asher, President, The Institute for College Access & Success Before the Senate Committee on Health,

Education, Labor, and Pensions Hearing on the Federal Investment in For-Profit Education: Are Students

Succeeding?” September 30, 2010.


Source:

For-profit colleges enroll large proportions

of underrepresented minority students

2330

45

1930

59

3242

50

0

20

40

60

80

4-Year 2-Year LT 2-Year

Percent Underrepresented Minority

Public

Private,

Non-Profit

For-Profit

Ed Trust analysis of IPEDS, 12-Month Enrollment Survey, 12-month unduplicated headcount enrollment at Title IV U.S. institutions, 2008-09.

Note: Underrepresented Minority includes black, Hispanic, and American Indian students.


Source:

Black, Hispanic, and Low-Income students are more likely

than others to start college at for-profit institutions

Ed Trust analysis of BPS:96 and BPS:04 using PowerStats, http://nces.ed.gov/datalab/

17 19

9

19

56

26 26

10

27

70

10

20

30

40

Asian Black Hispanic White Low Income Non-Low

Income

Increase in percent of students starting school at a for-profit institution,

1995-96 to 2003-04

NA

Note: Low-Income is defined as students below 200% of the federal poverty level.


Source:

A large proportion of students at for-profits

receive Pell Grants

Ed Trust analysis of IPEDS, Student Financial Aid Survey, % Pell among undergraduates, 2008-09.

26 2517

24

44 4743

58 60

0

20

40

60

80


Pe

rce

nt

of

Un

de

rgra

du

ate

s

Re

ceiv

ing

Pe

ll G

ran

ts

Percent Pell

Public

Private,

Non-Profit

For-Profit


Source:

About 12% of all students are enrolled at

for-profit colleges, but 20% of black

students and 24% of Pell recipients are

concentrated in these schools.

Ed Trust analysis of IPEDS, 12-Month Enrollment Survey, 12-month unduplicated headcount enrollment at Title IV

U.S. institutions, 2008-09 and Federal Pell Grant Program End-of-Year report, 2008-09, Table 5: Distribution

of Federal Pell Grant Recipients by Expected Family Contribution and Type and Control of Institution.


Source:

The federal government is investing billions of

taxpayer dollars in for-profit colleges each year.

Majority staff calculation of data provided by U.S. Department of Education in “Emerging Risk?:

An Overview of Growth, Spending, Student Debt and Unanswered Questions in For-Profit

Higher Education.” Senate HELP Committee. 24 June 2010.


Source:

The number and percent of Pell Grant dollars

spent at for-profits has increased dramatically

Ed Trust analysis of Federal Pell Grant Program End-of-Year reports, 1998-99 and 2008-09, Table 19: Federal Pell

Grant Expenditures, Recipients, and Average Grant by Type and Control of Institution. See also Majority

staff calculation of data provided by U.S. Department of Education in “Emerging Risk?: An Overview of

Growth, Spending, Student Debt and Unanswered Questions in For-Profit Higher Education.” Senate HELP

Committee. 24 June 2010

$0.91

$4.31

0

1

2

3

4

5

1998-99 2008-09Bil

lio

ns

of

Pe

ll G

ran

t d

oll

ars

sp

en

t

at

for-

pro

fit

coll

eg

es

Billions of Pell Dollars

13

24

0

5

10

15

20

25

1998-99 2008-09

Pe

rce

nt

of

Pe

ll G

ran

t d

oll

ars

sp

en

t

at

for-

pro

fit

coll

eg

es

Distribution of Pell Dollars


Source:

In 2009-10, one institution

—University of Phoenix—

became the first college ever to receive

over $1 billion in Pell Grant funding.

2009-2010 Award Year Grant Volume by School, Department of Education Data Center in “U of Phoenix Makes History.” The Quick and the Ed.

20 July 2010. http://www.quickanded.com/2010/07/phoenix-makes-history.html


Source:

An increasing share of for-profit institutions’ revenue

comes from federal student aid

“Large Schools and Schools that Specialize in Healthcare Are More Likely to Rely Heavily on Federal Student Aid.” (GAO-11-4). GAO Report to

Congressional Committees. August 2010.

66

34

0

20

40

60

80

100

Federal Student Aid Other Revenue

Pe

rce

nt

of

Re

ven

ue

fro

m F

ed

era

l St

ud

en

t A

id,

20

08

Note: In addition to non-governmental revenue, other revenue also includes Department of Defense aid, state loans and grant aid, and any Stafford

loan increases not included in each school’s financial reporting.

10

15

0

5

10

15

20

2007 2008

Pe

rce

nt

of

Inst

itu

tio

ns

De

rivi

ng

Mo

re t

ha

n

85

% o

f R

eve

nu

e f

rom

Fe

de

ral

Stu

de

nt

Aid


Source:

Is this federal investment paying off?


Source:

4-year for-profits have much lower graduation

rates than non-profits

5565

22

0

20

40

60

80

4-Year

IPEDS Graduation Rate, 2008

Public

Private,

Non-Profit

For-Profit

IPEDS First Look 2008-09, Table 5. Graduation rates at Title IV institutions, by race/ethnicity, level and

control of institution, gender, and degree at the institution where the students started as full-

time, first-time students: United States, cohort year 2002.


Source:

Graduation rates at 4-year for-profits

are low for students of all races

17

36

1628 26

0

20

40

60

80

100

American

Indian/Alaska

Native

Asian Black Hispanic White

IPEDS Graduation Rate at For-Profit 4-year

Institutions, 2008





Source:

2-year for-profits have higher graduation rates

than public community colleges

26 22

74

4251

74

4660 66

0

20

40

60

80

100

4-Year* 2-Year LT 2-Year

IPEDS Graduation Rate, 2008

Public

Private,

Non-Profit

For-Profit

IPEDS First Look 2008-09, Table 5. Graduation rates at Title IV institutions, by race/ethnicity, level and control of

institution, gender, and degree at the institution where the students started as full-time, first-time students:

United States, cohort year 2005; and Ed Trust analysis of IPEDS Graduation Rate Survey, Other

degree/certificate-seeking subcohort (4-year institutions), 2008.

* In 2002, 49,484 first-time, full-time students entered 4-yr for-profit institutions seeking an AA or certificate. 64,957 and 24,373 first-time, full-time AA or

certificate-seeking students entered public and private 4-yr institutions, respectively. In these graduation rate calculations, Ed Trust analysis includes

as graduates students in these cohorts who completed any credential.


Source:

Black and American Indian students graduate from 2-

year for-profits at lower rates than their peers

5667

4963 65

0

20

40

60

80

100

American

Indian/Alaska

Native

Asian Black Hispanic White

IPEDS Graduation Rates at For-Profit 2-year

Institutions, 2008





Source:

A large portion of students at for-profit colleges attend full-

time

22

61

42

17

30

11

27

11 14

0

20

40

60

80


Percent Part-Time

Public

Private,

Non-Profit

For-Profit

IPEDS First Look 2008-09, Table 1. Enrollment at Title IV institutions, by control and

level of institution, student level, attendance status, gender, and

race/ethnicity: United States, fall 2008.


Source:

The tuition & fees at for-profit colleges is

more than twice the cost at public colleges

IPEDS First-Look (2009-10), Table 3. Average, median, and number of institutions reporting academic year

tuition and required fees for full-time students at Title IV institutions, by control of institution,

student level, level of institution, United States, academic year 2009-10.

Institution TypeAverage Tuition and Required Fees,

2009-10

4-Y

ea

r For-profit $15,715

Private, non-profit $21,050

Public (in-state) $6,393

2-Y

ea




Less

th

an

2-Y

ea




5x

2.5x

2.5x


Source:

Unmet need among low-income students is exponentially

higher at for-profits than at public colleges

Ed Trust analysis of NPSAS:08 using PowerStats, http://nces.ed.gov/datalab/; Full-time, full-year, one-

institution dependent students in the bottom half of the income distribution are included in this

analysis.

Type of Institution

Cost of

Attendance,

2007

EFC,

2007

All Grant

Aid,

2007

Unmet Need,

2007

4-Y

ea

r

For-profit $31,976 $3,518 $3,501 $24,957

Private, non-profit $34,110 $3,911 $13,624 $16,574

Public $18,062 $3,798 $5,676 $8,588

2-Y

ea

r For-profit $26,690 $1,882 $3,736 $21,072

Public $11,660 $3,659 $2,523 $5,478

Less

tha

n

2-Y

ea

r For-profit $20,032 $2,005 $2,874 $15,154

Public $16,193 $3,791 $1,424 $10,978

Unmet Need of Low-Income Students

Note: Data are not available for private, non-profit 2-year and less than 2-year institutions because of small sample sizes.


Source:

Private, non-profit institutions cost

students less, but spend

3.5 times more on each student.

Enrollment in Postsecondary Institutions, Fall 2008; Graduation Rates, 2002 & 2005 Cohorts; and Financial

Statistics, Fiscal Year 2008 in Bennett, Lucchesi, and Vedder. For-Profit Higher Education: Growth, Innovation

and Regulation. Center for College Affordability and Productivity, July 2010.


Source:

Students at for-profit colleges are more likely

than others to take out student loans

47

14 18

5950

95 97

78

0

20

40

60

80

100


Percent of students taking out loans, 2007-08

Public

Private,

Non-Profit

For-Profit

NA

Ed Trust analysis of loan data in NPSAS:08 using PowerStats, http://nces.ed.gov/datalab/


Source:

Students at for-profit colleges are more likely than

others to take out risky private loans

Ed Trust analysis of loan data in NPSAS:08 using PowerStats, http://nces.ed.gov/datalab/

Institution Type

Percent of Students Receiving Loans

Stafford Private

4-Y

ea

r For-profit 94 46

Private, non-profit 54 25

Public 42 14

2-Y

ea

r For-profit 95 42

Private, non-profit 47 18

Public 11 5

Less

th

an

2-Y

ea

r For-profit 67 34

Private, non-profit 31 NA

Public 15 7


Source:

Students at for-profit colleges graduate

with large amounts of debt

$7,960

$17,040

$31,190

$0

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

Public Private, non-profit For-profit

Median Debt of Bachelor's Degree Recipients,

2007-08

Analysis of NPSAS:08 in Trends in Student Aid, The College Board, 2009.


Source:

Students at for-profits are more likely to

take on large amounts of debt

Analysis of NPSAS:08 in Trends in Student Aid, The College Board, 2010, Excel data for Figure 19A.

132 1

26

57

193

0

20

40

60

Bachelor's Associate Certificate

Percent of students with at least $30,000 in debt,

2007-08

Public

Private,

Non-Profit

For-Profit

NANA


Source:

Default Rates are higher at for-profits

Ed Trust analysis of Trial 3-Year Cohort Default Rates, National Student Loan Data System,

Department of Education, http://federalstudentaid.ed.gov/datacenter/cohort.html

Institution Type

Cohort Default Rate (CDR)

(Three-year average, 2005-07) Difference between 2-

year and 3-year CDR2-Year CDR 3-Year CDR

For-profit 9.5% 19.1% 9.6%

Private, non-profit 2.9% 5.0% 2.1%

Public 5.0% 8.1% 3.1%

If default rates were tracked for three years instead of two,

for-profit default rates would double to about one in five.

Almost 10% of students

at for-profits default on

their loans within 2 years

of entering repayment.

Almost 20% of students

at for-profits default on

their loans within 3 years

of entering repayment.


Source:

Even when controlling for student

demographics and completion rates,

default rates are still higher at for-

profit institutions than at other

colleges.

Guryan and Thompson. “Report on Gainful Employment.” Charles River Associates. 2 April 2010 in “Testimony of Lauren Asher, President, The

Institute for College Access & Success Before the Senate Committee on Health, Education, Labor, and Pensions Hearing on the Federal

Investment in For-Profit Education: Are Students Succeeding?” September 30, 2010.


Source:

For-profits represent:

• 12% of enrollments

• 24% of Pell Grants and federal

student loan dollars

• 43% of federal student loan

defaults.

Ed Trust analysis of IPEDS, 12-Month Enrollment Survey, 12-month headcount enrollment, 2008-09; Majority staff calculation of data provided by U.S.

Department of Education, 2008-09 in “Emerging Risk?: An Overview of Growth, Spending, Student Debt and Unanswered Questions in For-Profit

Higher Education.” Senate HELP Committee. 24 June 2010; and Ed Trust analysis of FY 2008 data in “Institutional Default Rate Comparison of FY

2006, 2007, and 2008 Cohort Default Rates.”

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