Why has for-profit colleges’ share of higher education expanded so rapidly? Estimating the responsiveness to labor market changes

Gilpin, Gregory; Saunders, Joseph Michael.; Stoddard, Christiana

doi:10.1016/j.econedurev.2014.11.004

Cited by 37 publications

(41 citation statements)

References 20 publications

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“…A caveat to these findings is that a policy‐induced shift of students from the for‐profit to public sector could be suboptimal. For example, Gilpin, Saunders, and Stoddard () find that enrollment and degree completion outcomes by field at FPCs are more responsive to employment growth (but not wage growth) than at public colleges. This suggests that programs of study at FPCs are better targeted to contemporaneous labor market demand.…”

Section: Implications For Students Of Restricted Access To Federal Stmentioning

confidence: 99%

The Case for Limiting Federal Student Aid to For‐profit Colleges

Cellini¹,

Koedel²

2017

J Policy Anal Manage

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INTRODUCTIONPrivate for-profit colleges (FPCs) receive a disproportionate share of funding through federal student aid programs. At its peak in 2010, the sector accounted for 23 percent ($33 billion) of federal student aid under Title IV of the Higher Education Act while enrolling just 11 percent (2.4 million) of students. 1 Enrollment and aid have fallen slightly since (to 17 percent of aid for 9 percent of students as of 2014), but FPCs continue to generate much of their revenue through federal student aid. On average, Title IV-eligible FPCs in the United States receive 70 percent of their total revenue through federal student aid and are allowed to receive up to 90 percent. 2 Not counted in these figures is funding that flows from the GI Bill and other programs administered through the Department of Veteran's Affairs and the Department of Defense.Under the Obama administration, FPCs received renewed attention with several high-profile federal investigations and regulations. The "Gainful Employment" (GE) rule for the first time holds FPCs accountable for student outcomes, requiring that graduates meet specific debt-to-earnings ratios. The Department of Education also restricted federal aid to several large FPCs charged with using fraudulent practices to increase student enrollment. As a result, for-profit giants Corinthian and ITT Tech both closed and their accreditor's authority was revoked. Today, the future of the GE regulations is in doubt and many analysts predict a renewed surge in the for-profit sector under the current administration.In this article, we argue in favor of the policies put in place during the previous administration and suggest that even further restrictions on federal student aid flowing to FPCs would be beneficial for both students and taxpayers. Our argument is predicated on the lack of evidence that federal subsidies to FPCs via student aid programs are a worthwhile investment. Research drawing on various data sources and methodologies consistently finds that FPC students have similar or worse labor market outcomes relative to comparable public college students. Coupled with disappointing student outcomes is the high cost of a FPC education: Tuition and fees at FPCs are more than four times those charged by public community colleges. 3 As a result, students who attend FPCs are much more likely to borrow, and borrow more, than their public college counterparts. With labor market outcomes that are similar at best (and likely worse), and more borrowing, it is unsurprising that FPC students are more likely to default on their student loans than students in other sectors. 4

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Section: Implications For Students Of Restricted Access To Federal Stmentioning

confidence: 99%

The Case for Limiting Federal Student Aid to For‐profit Colleges

Cellini¹,

Koedel²

2017

J Policy Anal Manage

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“…Studies suggest that FPCs respond more flexibly to labor market changes in their degree offerings than their public counterparts. Gilpin, Saunders, and Stoddard () find that enrollment and degree completion in specific majors at FPCs increase in response to employment growth and wages in related occupations in the area. Majors at public institutions, in contrast, remain unresponsive.…”

Section: If Fpcs Lost Federal Student Aid What Would the Consequencementioning

confidence: 99%

Does Regulating For‐profit Colleges Improve Educational Outcomes? What We Know, What We Don't Know, and What We Need to Find Out

Gilpin¹,

Stoddard²

2017

J Policy Anal Manage

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“…In 2014, online enrollment exceeded 5.8 million students, with 2.85 million of those students studying exclusively online and 2.97 million supplementing traditional classes with online offerings (Allen & Seaman, 2016). The popularity of online learning and increased enrollments (Allen & Seaman, 2016), and the financial benefits to the university that are associated with hiring adjunct faculty (Dailey-Hebert, Mandernach, Donnelli-Sallee, & Norris, 2014), helped facilitate a demand for non-tenured/parttime, or adjunct, faculty (Gilpin, Saunders, & Stoddard, 2015) that are required to teach online classes. Regardless of the increased use of adjunct faculty, few studies have examined factors that affect their job satisfaction (Rich, 2015).…”

Section: Introductionmentioning

confidence: 99%

“…This lack of research is an important observation given the rapid growth of for-profit post-secondary schools in the United States (Gilpin, et al, 2015), which is due largely to the desire of more individuals to obtain a college education, the increased accessibility of federal loans, and the affordability and popularity of online education (Cellini & Chaudhary, 2012). For example, enrollment in the for-profit sector has tripled since 2000 in the United States, with over 1.5 million students enrolled, as of 2014, in a for-profit school.…”

Section: Introductionmentioning

confidence: 99%