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
31
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
96
percent of those enrolled in for-profit schools who take out student loans
57
percent of those enrolled in four-year private, non-profit colleges who take out student loans
48
percent of those enrolled in public colleges who take out student loans
13
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)
20
percent of students who completed bachelor’s degree within four years at for-profit schools, matriculating in 2004 (Source: National Center for Education Statistics)
31
percent of students who completed bachelor’s degree within four years at public institutions, matriculating in 2004 (Source: National Center for Education Statistics)
52
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)

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WE CAME UP SHORT.

We just wrapped up a shorter-than-normal, urgent-as-ever fundraising drive and we came up about $45,000 short of our $300,000 goal.

That means we're going to have upwards of $350,000, maybe more, to raise in online donations between now and June 30, when our fiscal year ends and we have to get to break-even. And even though there's zero cushion to miss the mark, we won't be all that in your face about our fundraising again until June.

So we urgently need this specific ask, what you're reading right now, to start bringing in more donations than it ever has. The reality, for these next few months and next few years, is that we have to start finding ways to grow our online supporter base in a big way—and we're optimistic we can keep making real headway by being real with you about this.

Because the bottom line: Corporations and powerful people with deep pockets will never sustain the type of journalism Mother Jones exists to do. The only investors who won’t let independent, investigative journalism down are the people who actually care about its future—you.

And we hope you might consider pitching in before moving on to whatever it is you're about to do next. We really need to see if we'll be able to raise more with this real estate on a daily basis than we have been, so we're hoping to see a promising start.

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