Fact Sheet

Enrollment at for-profit colleges has increased an explosive 225% in ten years, enrolling 1.8 million students in 2008.[1]

  • Although enrollment decreased 7.2% at for-profit colleges from 2011 to 2012, there were nearly 1.5 million students enrolled at for-profit colleges in the fall of 2012.[2]

On average, 86% of all funding at for-profit colleges are from federal tax-payer dollars.[3]  For-profit colleges enroll between 10 to 13% of college students, yet receive 25% of all federal financial aid dollars.[4]  Specifically, for-profit colleges receive:

  • 25% of all Department of Education student aid funds, totaling $32 billion Education department grants and loans in 2009-10;
  • 37% of Post-9/11 GI Bill benefits, or $1.6 billion in benefits in the first two years of the program[5]); and
  • 50% of Department of Defense Tuition Assistance Funds.[6]

An Associate degree or certificate may cost four times more at a for-profit college than at a comparable public college.  A Bachelor’s degree at a for-profit college may cost 20% more than a similar degree at a public college.[7]

  • In the 2010-11 academic year, the average annual cost of a 2-year degree before aid was 115% higher at a for-profit college than at a public university.  The average annual cost before aid of a four-year degree at a for-profit college was 59% higher than at a public university.[8]
  • For example, a Medical Assistant diploma program at Corinthian’s Heald College in Fresno, California costs $22,275 but only $1,650 at Fresno City College.[9]

A staggering 96% of for-profit students take out student loans.[10]

  • In comparison, 57% of students at private non-profit schools take out student debt; 48% of students at four-year public universities and 13% of students at community colleges.[11]
  • Students at for-profit colleges carry a median debt of $32,700, while at public schools students have a median debt of $20,000 and $24,600 at private non-profit schools.[12]

 1 in 5 students from for-profit colleges, or 22.7%, default on their loans within three years of entering repayment.[13]

  • 47% of students that have defaulted on their loans attended for-profit colleges.[14]
  • In comparison, 7.5% of students at non-profit private colleges default within three years of entering repayment and 11% of students from public schools default.[15]

Within two years, 54% of enrollees withdraw from for-profit colleges. A U.S. Senate committee[16] investigated for-profit colleges and found that among the thirty for-profit higher education companies they examined:

  • 54% of the one million students that enrolled in these companies between 2008 and 2009 had left the school without a degree by 2010.
  • Even worse, 63% of Associate degree students left without a degree by 2010.[17]

For-profit companies are spending more on profits and advertising than on instruction.  In FY 2009, thirty for-profit higher education companies reportedly spent:

  • 22.7% on marketing, advertising, admissions and recruitment;
  • 19.4% on pre-tax profit; and
  • Only 17.2% on instruction.[18]

The five highest paid CEOs of for-profit higher education companies received an average of $7.3 million in compensation in 2009.

  • In comparison, the five highest paid public and private non-profit university leaders received an average of $1 million and $3 million, respectively, in compensation.[19]

For-profit colleges use a variety of strategies to defy the spirit of the law and benefit shareholders over students.  Strategies include:

  • Increasing the cost of tuition so students must pay out-of-pocket and decrease for-profit companies’ reliance on federal funds.
  • Pressuring students close to defaulting on their loans into loan deferment or forbearance.  This allows the school to protect their funding at the expense of the student, who is only delaying payment on a debt that continues to grow and collect interest while in deferment.
  • According to a U.S. Senate committee analysis, 75% of students that for-profit colleges “cured” from risk of default were actually placed in deferment or forbearance status.[20]

 

 

 

 

 

 



[2] Fall 2011 to Fall 2012 at four year title IV degree granting institutions. http://research.studentclearinghouse.org/files/TermEnrollmentEstimate-Fall2012.pdf

[3] Average derived from HELP committee study of 15 large publicly-traded schools and funding through student aid programs. http://www.harkin.senate.gov/help/forprofitcolleges1.cfm

[8] Average academic year price before aid in 2010-2011 academic year for full time first-time undergraduate students. In the 2010-11 academic year the average annual price before aid for students receiving aid at a 2 year public college was $11,396 but $24,479 at a for-profit college.  The average annual cost before aid at a four year public school for students receiving aid was $17,563 and $27,854 at a private for-profit school. http://nces.ed.gov/pubs2012/2012156rev.pdf

[11] http://www.help.senate.gov/imo/media/for_profit_report/ExecutiveSummary.pdf

[12] HELP committee analysis of median debt held by independent college students http://www.help.senate.gov/imo/media/for_profit_report/PartI-PartIII-SelectedAppendixes.pdf

[16] Two year investigation by the U.S. Senate Committee on Health, Education, Labor and Pensions (HELP).

[17] HELP committee analysis of student data provided by 30 for-profit higher education companies. http://www.help.senate.gov/imo/media/for_profit_report/ExecutiveSummary.pdf

[19]HELP committee analysis of 30 for profit higher education companies. http://www.help.senate.gov/imo/media/for_profit_report/PartI-PartIII-SelectedAppendixes.pdf

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