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New Report Documents Growth in Proprietary Institution Enrollment

May 13, 2011

Over the past decade, the private for-profit schools experienced enormous growth in enrollment. A new policy brief from the College Board Advocacy and Policy Center [http://advocacy.collegeboard.org/], examines recent trends in private for-profit institution enrollments, tuition and fee prices, student characteristics, student financial aid, and graduation rates. The report, “Trends in For-Profit Postsecondary Education,” aims to inform public policy discussions of the rapid growth this sector has experienced. Highlights of each section of the study are below.

Enrollment

From fall 2000 to fall 2009, the number of students attending degree-granting for-profit institutions surged from 336,000 (3 percent of all students in American higher education) to 1.5 million (9 percent of all students). In fall 2009, undergraduates accounted for 86 percent of the total students attending proprietary institutions. About 76 percent of all students in the for-profit sector were enrolled full-time, compared with 62 percent of postsecondary students overall.

Tuition and Fee Charges

Proprietary institutions generally charged higher average tuition and fee “sticker” prices than community colleges and four-year public colleges and universities. In academic year 2010-11, the average enrollment-weighted tuition and fee charge at public two-year colleges was 19 percent of the average price of at for-profit institutions, and public four-year tuition and fees averaged 55 percent of the average for-profit price. On the other hand, the average for-profit institution tuition price was nearly half as high as the average at four-year private non-profit institutions.

Student Characteristics

The students attending for-profit institutions were generally from lower-income families. In academic year 2007-08, roughly one-quarter of the students who attended proprietary schools were financially dependent (that is, dependent upon their parents to pay at least a portion of their educational costs), compared with 36 percent of students attending community colleges. Approximately 54 percent of the dependent students at for-profit institutions came from families with incomes below $40,000. This compares to 35 percent of students at public two-year institutions, about 25 percent of students at public four-year institutions, and about 20 percent of students at private nonprofit institutions.

Financial Aid

Due in part to their higher share of financially independent and lower-income students, proprietary school students received a relatively high share of Federal Pell Grant and student loan funds. In 2008-09, about one-quarter of all Federal Pell Grant dollars were provided to students at for-profit institutions. Proprietary school students also received more than one-quarter of the total Stafford Loans (subsidized and unsubsidized) and 12 percent of Federal PLUS loans.

However, despite their high share of Pell Grant dollars, dependent students in for-profit institutions receive less total grant aid on average than do students in private nonprofit and public four-year colleges and universities. In 2007-08, on average, full-time dependent students at four-year private non-profit colleges and universities received nearly $10,000 in grant assistance from all sources (federal, state, institutional, and other). Proprietary school students, in contrast, received just $2,100. This result occurred because students in the for-profit sector were much less likely to receive either state grants or institutional grants than students in other sectors.

Degrees Conferred and Graduation Rates

In academic year 2007-08, proprietary schools accounted for 17 percent of all associate’s degrees conferred by U.S. postsecondary institutions, 5 percent of baccalaureates, and 7 percent of all graduate degrees. While for-profit institutions produce a fairly high number of degrees, they tend to have lower degree completion rates. Of the first-time full-time students who began studying for a bachelor’s degree at private for-profit institution in 2002, only 22 percent received a bachelor’s degree from their school of origin six years later. Completion rates averaged 65 percent at private nonprofit, 55 percent at public four-year, and 22 percent at private for-profit institutions.

The full report is available for no charge from the College Board Web site.

Contact

Ken Redd
Director, Research and Policy Analysis
202.861.2527
E-mail