August 13, 2012

The Explosive Growth of For-Profit Higher Education, By the Numbers

High tuition, low retention rates, and aggressive recruiting are great for business—but terrible for education.

<a href="http://www.shutterstock.com/pic.mhtml?id=94530991">zimmytws</a>/Shutterstock

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This story first appeared on the ProPublica website.

The for-profit higher education industry was the target of a bruising report issued last week. Based on a two-year effort, the report detailed high rates of loan default, aggressive recruiting, higher than average tuition, low retention rates, and little job placement assistance. It was spearheaded by Sen. Tom Harkin, D-Iowa, a longtime critic of the industry. (ProPublica has written a number of pieces looking more closely at the explosive growth sector, including questionable recruiting and marketing.)

The report has provoked some pushback. The Association of Private Sector Colleges and Universities, a membership organization composed of accredited for-profit schools, issued a statement criticizing what it saw as “continued political attacks” on the for-profit sector. Saying the report “twists the facts to fit a narrative,” it went on to challenge several figures.

It didn’t contest the following numbers.

Growth

766,000

number of students enrolled in for-profit higher education schools in 2001

2.4 million

number of students enrolled in for-profit higher education schools in 2010

225

percent by which enrollment at for-profit colleges grew between 1998 and 2008

percent by which enrollment in all degree-granting higher-ed institutions grew in same time frame (schools awarding an associate or higher degree)

Cost of education

$35,000

average cost of a 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 state flagship university (Note: Such schools, of course, often benefit from significant taxpayer subsidies)

$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 college

Loan — and debt

$32,700

median debt with which average student at 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

percent of those enrolled in for-profit schools who take out student loans

percent of those enrolled in four-year private, non-profit colleges who take out student loans

percent of those enrolled in public colleges who take out student loans

percent of students at community colleges who take out student loans

$1.1 billion

amount of federal Pell grants given to for-profit colleges in 2000-01 school year

$1.5 billion

amount of federal Pell grants given to non-profit private institutions in 2000-01 school year (Source: 2000-2001 Title IV/Federal Pell Grant Program End of Year Report, U.S. Department of Education)

$5.4 billion

amount of federal Pell grants given to public institutions in same year (same source as above)

$7.5 billion

amount of federal Pell grants given to for-profit colleges in 2009-10 school year

$3.9 billion

amount of federal Pell grants given to non-profit private institutions in 2009-10 school year (Source: 2009-2010 Title IV/Federal Pell Grant Program End of Year Report, U.S. Department of Education)

$18.4 billion

amount of federal Pell grants given to public institutions in same year (same source as above)

Recruitment and lobbying

$4.2 billion

amount the for-profit education industry spent on marketing, recruiting and admissions staffing in fiscal year 2009

$78 million

amount Apollo Group Inc. agreed to pay in December 2009 to settle a whistleblower lawsuit for tying University of Phoenix recruiters’ pay to student enrollment

35,202

number of recruiters hired by 30 for-profit higher education companies in 2010 — roughly, one recruiter per 49 students enrolled at a for-profit college

3,512

number of career services staff employed by for-profit schools in 2010

Executive compensation

$7.3 million

average compensation of CEOs at for-profit higher education companies in 2009

$3 million

average compensation of five highest-paid presidents of non-profit colleges and universities in 2009

$1 million

average compensation of five highest-paid leaders of large public universities in 2009

Academic progress

$2,050

average amount publicly traded for-profit higher education companies spent on instruction per student in 2009

$7,239

expense spent on instruction per full-time student at public institution in 2009-10 (Source: The Condition of Education 2012, National Center for Education Statistics)

$15,321

expense spent on instruction per full-time student at private non-profit school in 2009-10 (Source: The Condition of Education 2012, National Center for Education Statistics)

percent of students who completed bachelor’s degree within four years at for-profit schools, matriculating in 2004 (Source: National Center for Education Statistics)

percent of students who completed bachelor’s degree within four years at public institutions, matriculating in 2004 (Source: National Center for Education Statistics)

percent of students who completed bachelor’s degree within four years at non-profit private schools, matriculating in 2004 (Source: National Center for Education Statistics)