For-Profit Colleges: Growth, Outcomes, Regulation. Research Brief. October 2013

For-profit, or proprietary, colleges are the fastest growing postsecondary schools in the nation, enrolling a disproportionately high share of disadvantaged and minority students and those ill-prepared for college. Because these schools--many of them big national chains--derive most of their revenue from taxpayer-funded student financial aid, they are of interest to policymakers both for the role they play in higher education and for the value they provide to students and to society. For-profit colleges primarily offer certificates and associate degrees in career-oriented programs, but they are also rapidly expanding their presence in the bachelor's degree market. While public colleges and universities have struggled to meet increasing enrollment demand in the face of state funding constraints, for-profit colleges have grown to meet student demand and have taken advantage of expanded federal student aid, which almost tripled to $121 billion between 2000-01 and 2010-11. In 2010-11, for-profit colleges enrolled 2.4 million students, or about 12 percent of all postsecondary students--more than three times as many as they enrolled in 2000-01. Large national chains of for-profit schools are responsible for nearly 90 percent of this growth. Based primarily on a report by Center for Analysis of Postsecondary Education and Employment (CAPSEE) researchers, this brief examines the growth of for-profit colleges, why students enroll in for-profit institutions, the outcomes of students who attend for-profits, and the current federal policies that govern these institutions. (Contains 4 figures, 1 table, and 20 endnotes.) [The information provided in this brief is based primarily on the chapter "For Profit Colleges" by David Deming, Claudia Goldin, and Lawrence Katz in "The Future of Children" (Spring, 2013), Vol. 23, No. 1.]