For-Profit College Enrollment Grew 50-Fold from 1980 to 2009

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The National Center for Education Statistics massive annual report, The Condition of Education, released today focuses on the rise of for-profit postsecondary education over the past three decades – noting that undergraduate enrollment at four-year for-profit institutions rose from 23,000 in 1980 to 1.2 million students in 2009.

Much of that growth occurred in the past decade as hedge funds and private equity firms invested heavily in the for-profit education sector. The report’s statistics run only through 2009, long before media reports and Congressional inquiries focused public attention on the unsavory recruitment practices of some of the schools and the percentage and amount of federal student aid money flowing into them.

At a briefing for reporters in advance of the report’s release, Jack Buckley, commissioner of NCES, said the report emphasizes a different aspect of education each year and that in examining recent trends, the rise of for-profits was among the most prominent. He said the decision to concentrate the report on postsecondary schools was made about a year ago.

The report also notes that for-profit colleges are the leaders in distance, or online, education, with 30 percent of students in for-profit four-year colleges taking at least one course by distance education and 19 percent taking their entire course of study online. In contrast, at private nonprofit colleges, just 12 percent of students participated in distance learning and at public institutions 22 percent took courses online.

The report suggests that the way postsecondary education is delivered – in person or online – also plays a role in the education expenditures of various types of colleges. Private nonprofit colleges spent $15,289 per full-time student, public colleges spent $9,418 and for-profit schools spent $2,659 per student in 2008-09 on instructional expenses. Although the nonprofit schools spent nearly six times as much as for-profit schools on instruction, their average cost was only slightly higher than for-profits, $37,400 for nonprofits compared with $33,600.

A major difference was that at the for-profits, two-thirds of the annual charges went to student support and institutional support, which Buckley said included executive compensation and profits for owners and shareholders.

Between 2000 and 2009, undergraduate enrollment in degree-granting postsecondary institutions increased by 34 percent, from 13.2 million to 17.6 million students. Projections indicate that it will continue to increase, reaching 19.6 million students in 2020 .

But the 388-page report includes much more than facts and figures about postsecondary education. It tracks test scores for students, gaps between whites and blacks, Hispanic and Asian-American students. It reports that the dropout rate has dropped slightly, though there is still a band of Southern states that graduates less than 70 percent of students and a cluster of Plains and Midwest States where the rate is greater than 80 percent.

A larger percentage of older teens and young adults were enrolled in school in 2009 (mostly in college or graduate school); public school enrollment is expected to increase from 49.3 million in 2008-09 to 52.7 million in academic year 2020; about 10 percent of elementary and secondary students attend private schools; and about 1.4 million students attend public charter schools.

Between 1989 and 2009, the percentage of white students in public elementary and secondary schools decreased from 68 percent to 55 percent and the percentage of Hispanic students in those schools doubled, from 11 percent to 22 percent.

To access the report, click here.