3 Million and Counting

As policy debate rages about for-profit colleges' value, their enrollments continue to soar, nearing 12 percent of all students.
August 26, 2010

WASHINGTON -- Love 'em or hate 'em -- and many of this city's current power brokers seemingly fall into the latter category right now -- for-profit colleges are attracting students in ever-growing numbers, as made powerfully clear by an Education Department report released Wednesday.

The report, an annual study of college enrollments, prices and degrees awarded, includes data on the number of students who enrolled in various types of postsecondary institutions throughout the 2008-9 academic year. As seen in the table below, the statistics show that for-profit colleges enrolled a total of 3.2 million students, 11.8 percent of the nearly 27.4 million students who studied at all institutions that year.

The figure for for-profit enrollments reflected an increase of more than 20 percent over 2007-8, and a rise of more than 60 percent since 2004-5. The number of enrollees in for-profit four-year institutions nearly doubled over that period, from 1.1 million to 2.1 million.

A few caveats about the data. First, the figures represent what the National Center for Education Statistics calls the "12-month unduplicated headcount enrollment," which means the data include all students who enroll at any point during the year, regardless of whether they study full time or take one course. So while the fall enrollment data that the Education Department reports each year also show for-profit colleges gaining significantly in students (the fall 2008 data pegged the institutions at 9.2 percent of all students), the 12-month headcount enrollment ratchets up the sector's numbers, because for-profit colleges are more likely than other institutions to enroll students throughout the year, and in shorter-term programs.

Second, because they extend well into 2009, the data also reflect the upturn in recession-driven enrollments by job seekers -- which may exaggerate permanent shifts in enrollment patterns.

But those cautions aside, the enrollment data underscore the reasons why advocates for for-profit colleges say they are an increasingly vital part of the higher education infrastructure -- and why the institutions are drawing growing (and increasingly critical) scrutiny from politicians and policy makers.

"This solidifies everything we've been hearing about: this is where all of the growth is," said Donald E. Heller, professor and director of the Center for the Study of Higher Education at Pennsylvania State University. "We know that they've been aggressively recruiting students in the recession, and this is where the students are going."

12-Month Unduplicated Headcount Enrollments by Sector, 2004-5 to 2008-9

  2008-9 Headcount Enrollment % of Total, 2008-9 2007-8 Headcount Enrollment % Change, 2007-8 to 2008-9 2004-5 Headcount Enrollment % Change, 2004-5 to 2008-9
Total 27,369,242   25,880,412 5.8% 24,485,664 11.8%
Public 19,609,933 71.6% 18,772,432 4.5% 18,223,997 7.6%
--4-Year 9,050,563 33.1% 8,702,209 4.0% 8,263,081 9.5%
--2-Year 10,452,884 38.2% 9,973,316 4.8% 9,888,386 5.7%
--Less-Than-2-Year 106,486 0.4% 96,907 9.9% 72,530 46.8%
Private 4,543,148 16.6% 4,464,440 1.8% 4,267,346 6.5%
--4-Year 4,460,007 16.3% 4,385,950 1.7% 4,162,114 7.2%
--2-Year 59,253 0.2% 61,024 -2.9% 83,598 -29.1%
--Less-Than-2-Year 23,888 0.1% 17,466 36.8% 21,634 10.4%
For-Profit 3,216,179 11.8% 2,643,540 21.7% 1,994,321 61.3%
--4-Year 2,076,225 7.6% 1,648,494 25.9% 1,098,816 89.0%
--2-Year 673,785 2.5% 567,726 18.7% 502,488 34.1%
--Less-Than-2-Year 466,169 1.7% 427,320 9.1% 393,017 18.6%

Source: National Center for Education Statistics

The enrollment figures show clearly that, as leaders in for-profit higher education are quick to assert, their institutions are the ones adding students at a time when the Obama administration and others argue that the United States must significantly boost the number of Americans with postsecondary credentials of various types. The enrollment increases for the other sectors of higher education since 2004-5 are 7.6 percent for public institutions and 6.5 percent for private colleges.

"These numbers certainly reinforce the dependence that the country is going to have on the for-profit sector to play some role in its college completion agenda," said Guilbert Hentschke, Professor & Richard T. Cooper and Mary Catherine Cooper Chair in Public School Administration at the University of Southern California's Rossier School of Education, and co-editor of For-Profit Colleges and Universities: Their Markets, Regulation, Performance, and Place in Higher Education (Stylus).

"This cannot be written off as a marginal part of the higher education system," said Kevin Kinser, associate professor of educational administration and policy studies at the State University of New York at Albany.

There is much, though, that the enrollment figures alone don't show. First, they don't reveal the extent to which student growth at public colleges, particularly, has been limited in recent years by a combination of state budget cuts and outright enrollment caps. Restrictions on enrollments at community colleges, particularly, are among the factors that have driven students to for-profit institutions, where tuitions are significantly higher. (Data in the same report -- see Tables 4-6 -- compare the tuitions and average costs of attendance for full-time students at various types of institutions.)

More importantly, given the policy debate raging in Congress and at the Education Department, the enrollment numbers don't show how much federal financial aid money is flowing to students at the institutions, which reports in the last year have revealed to be about a quarter of all Pell Grant and federal loan funds.

The vast sums of federal financial aid flowing to students at the institutions -- coupled with the fact that those students emerge with significantly greater debt burdens than do students at other types of colleges, and are less likely to repay their loans -- have contributed to the ramped-up scrutiny that the Obama administration and Senate Democrats have imposed on the institutions over the past year-plus. That scrutiny has in turn generated damaging revelations about questionable, and sometimes illegal, recruiting practices at some institutions.

In that context, the burgeoning number of students enrolling in for-profit institutions may very much be a double-edged sword, argued Kinser of Albany.

"The data in this report, with a growth curve that you need calculus to understand, show that the for-profits are being very successful in bringing in new students, in generating demand," he said. "From a policy perspective, we have generally argued that more access to higher education is good. But we're now adding a caveat, which is that it's not just about getting in, it's about graduating, and coming out with something that lets you repay your loans."

And from that standpoint, Kinser argued, the enrollment data in the Education Department report offer worrisome signs, since they show huge and rapid increases in the numbers of students flowing into institutions that, according to the department's recently published loan repayment rates, were by far the least likely to produce loan-repaying graduates. The loan repayment statistics, published to support the Obama administration's proposed "gainful employment" regulations, showed 36 percent of students at for-profit institutions to be paying off the principal on their loans, compared to 54 percent of students at public institutions and 56 percent at independent nonprofit colleges.

"There are now a million more students [in for-profit colleges] than there were at the time those [loan repayment rates] were calculated -- that's a huge number of students who are moving through a system that we're just beginning to understand the implications of," Kinser said. "And it's an enormous number of students if we can't rely on people being able to get employment in the work force that's sufficient to repay their loans."


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