23 - Enrollment Data For-profit Chronicle Report 052611

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Annual Portrait of Education Documents Swift Rise of For-Profit Colleges - Faculty - The... Page 1 of 9 Faculty Home News Faculty May 26, 2011 Annual Portrait of Education Documents Swift Rise of For-Profit Colleges By David Glenn Today marks the release of "The Condition of Education 2011," the latest in an annual series of data compendiums from the U.S. Department of Education. Like its predecessors, the report does not break new ground—it is mostly drawn from familiar federal data sources—but its hundreds of tables and graphs offer a rich portrait of American education. Just as David Foster Wallace forged a novel from the minutiae of the American tax code (his marked-up copies of federal tax statutes are now archived at the University of Texas), some future social novelist might want to spend a few weeks poring over today's report. One of the report's chief themes is the rise of for-profit higher education during the last decade. In 1999 for-profit institutions accounted for 3.1 percent of the students enrolled in American undergraduate institutions. By 2009 their share had risen to 9 percent. The sector also quintupled its share of bachelor's degrees: Only 1 percent of the bachelor's degrees awarded in 1999 came from for-profit institutions, but by 2009 the figure was 5 percent. (Public colleges and private nonprofit colleges each lost two percentage points of market share during the decade.) In 2008-9 for-profit institutions spent far less on instruction than did colleges in other sectors. Among four-year institutions, for-profits' instructional expenditures averaged $2,659 per full-time student, as opposed to $9,418 at public colleges and $15,289 at private nonprofit colleges. But tuition at for-profit institutions was not correspondingly lower. The average net price for full-time dependent undergraduates in 2007-8 was $30,900 at four-year forprofit institutions, versus $26,600 at private nonprofit colleges and $15,600 at public institutions. At two-year institutions, meanwhile, for-profit colleges appeared to have the strongest retention and completion rates. Among students who enrolled full time at for-profit two-year colleges in the fall of 2002, 58 percent had graduated from those institutions by 2005. At public two-year colleges, the equivalent figure was just 21 percent. http://chronicle.com/article/Annual-Portrait-of-Education/127639/ 5/26/2011 Annual Portrait of Education Documents Swift Rise of For-Profit Colleges - Faculty - The... Page 2 of 9 Many people in higher education consider that figure for public colleges to be misleadingly low; under the federal government's idiosyncratic system of calculating graduation rates, students who transfer from a two-year college to a four-year college before they complete an associate degree are never counted in either college's graduation tally. But even if the 21-percent figure is subject to dispute, the strong completion rates at for-profit two-year institutions appear to buttress the arguments of James E. Rosenbaum, a professor of sociology and education at Northwestern University. Mr. Rosenbaum has long argued that public community colleges should imitate certain practices of their for-profit peers. Grim News, and Sunny Not surprisingly, most of the report's economic news was grim. The average salary of young adults, age 25 to 34, who were employed full time in 2009 was $38,000—which was actually less than the equivalent figure for 1980, when it was $39,000. (Those figures are adjusted for inflation and expressed in constant 2009 dollars.) Is a bachelor's degree an effective hedge against that kind of wage stagnation? Yes and no. Wages for young adults with less than a bachelor's degree have plunged—so in that sense, a four-year degree seems like an excellent investment. In 1980 young adults with bachelor's degrees had salaries that were 29 percent higher than the salaries of young adults whose education stopped with a high-school diploma. In 2009 their salaries were 67 percent higher. And that salary gap, if anything, understates the matter. There is also a widening employment gap. In 1990 young adults with bachelor's degrees were 12.7 percentage points more likely to be employed full time than were their peers who had only high-school diplomas. Twenty years later, in 2010, they were 19.1 percentage points more likely to be employed full time. (The full-time employment rate for young adults with at least a bachelor's degree was 74.1 percent, but the rate for high-school graduates was just 55 percent. In between, the rate for people with associate degrees was 65.4 percent, and the rate for people with "some college" was 55.9 percent.) But the news is not all sunny for bachelor's degree holders. Among young adults employed full time with only a bachelor's degree, but no higher degree, average salaries fell from $48,600 in 2000 to $45,000 in 2009. (Again, the figures are in constant 2009 dollars.) The only group of young adults whose salaries grew during that decade were those with a master's degree or higher. Their average salary went from $56,100 to $60,000. http://chronicle.com/article/Annual-Portrait-of-Education/127639/ 5/26/2011 Annual Portrait of Education Documents Swift Rise of For-Profit Colleges - Faculty - The... Page 3 of 9 Among thousands of other data points, the report also concludes that: • In 1999, 44.1 percent of 18- and 19-year-olds were enrolled in college. By 2009 that figure had risen to 49.8 percent. • Total college enrollment is projected to rise from 17.6 million in 2009 to 19.4 million in 2019— a considerably smaller rate of growth than the last decade has seen. • In 2000, 29.1 percent of Americans age 25 to 29 held bachelor's degrees. By 2010 that figure had risen to 31.7 percent, which was a weaker rate of growth than during the 1990s. (In 1990 the figure was 23.2 percent.) • Completion rates have risen modestly in recent years. Among students who enrolled full time at four-year institutions in 1996, 55.4 percent graduated from those same institutions within six years. Among students who enrolled in 2002, the equivalent figure was 57.2 percent. Finally, a note about the college students of the future. In 2000, 15.4 percent of Americans age 5 to 17 were living in households below the poverty line. By 2009 that figure had risen to 18.6 percent. Comments Powered by DISQUS Add a comment Log in to post with your Chronicle account: Don't have an account? Create one now. Or log in using one of these alternatives: Showing 25 comments Sort by Oldest first Follow comments: by e-mail by RSS Real-time updating is enabled. (Pause) 1 new comment was just posted. Show nacrandell 7 hours ago "Among four-year institutions, for-profits' instructional expenditures averaged $2,659 per full-time student, as opposed to $9,418 at public colleges and $15,289 at private nonprofit colleges. But tuition at for-profit institutions was not correspondingly lower. The average net price for full-time dependent undergraduates in 2007-8 was $30,900 at four-year for-profit institutions, versus $26,600 at private nonprofit colleges and $15,600 at public institutions." If for-profit schools cost less to run, then why is the tuition about twice the amount of public schools? In addition, if the for-profit school costs approximately the same as a private institution, is the online degree equivalent to a private university degree for the paying student? Online programs are good for certification on a specific topic but not a general education. 1 person liked this. Like mitchp 5 hours ago in reply to nacrandell "If for-profit schools cost less to run, then why is the tuition about twice the amount of public schools?" The cost/student is less (this article doesn't give the cost to attract the students, just to educate them.) The administrative costs are high at "for-profits." The public schools have taxpayers paying a significant portion of the tuition for students. Take that away and tuition costs would be higher at the public schools. A small fraction of public school budget is based on tuition - most is from state budgets (i.e. taxpayers.) Anyone who goes to public school has received a "scholarship" simply by their acceptance there. Private schools use endowments for making up that amount. For Profits must provide value to shareholders (who have paid through their stock to invest in providing education to an ever growing segment of society.) But for the shareholders, the for-profits wouldn't exist. http://chronicle.com/article/Annual-Portrait-of-Education/127639/ 5/26/2011 Annual Portrait of Education Documents Swift Rise of For-Profit Colleges - Faculty - The... Page 4 of 9 5 people liked this. Like nacrandell 4 hours ago in reply to mitchp "The cost/student is less (this article doesn't give the cost to attract the students, just to educate them.) The administrative costs are high at 'for-profits' ... For Profits must provide value to shareholders (who have paid through their stock to invest in providing education to an ever growing segment of society.) But for the shareholders, the for-profits wouldn't exist." Exactly - the shareholders are the focus for the for-profit and education becomes certifiaction. Which leads to these questions: 1) Why are for-profit schools bloated with high administative costs? Are their business model skewed and shouldn't the shareholders be advised of the poor management? 2) Does an enforced high marketing budget create a 'bubble' for the quality of education and acceptance of the degree? What happens to the graduates when it pops? 3) Don't for-profit schools profit from Federal loans also? Aren't the students required to pay back the loans after they pay the school's tuition and the school is debt free? 1 person liked this. Like aep06 3 hours ago in reply to nacrandell "If for-profit schools cost less to run, then why is the tuition about twice the amount of public schools?" At the most basic level, the answer is this: because they exist to turn a profit -- if they spent as much on education costs as non-profit institutions, they'd most likely be non-profit themselves. 1 person liked this. Like Laura Gilbert 5 hours ago Every college is the right college for someone. The trick is knowing which one is right for you. The comparison of for-profit, public and private schools tends to focus on the product (degrees) and overlook the fundamental sector distinctions among these three models: corporate, government and private. The 15 largest for-profit schools have a duty to their shareholders that, in a purely corporate sense, outweighs their duty to their customers (aka students). Is it any wonder the expenditures-per-student and other numbers don't match up? http://backtoschoolforgrownups... 1 person liked this. Like ginabecker 3 hours ago in reply to Laura Gilbert You're right, for-profit schools have a duty to their shareholders. But in order to please their shareholders, they MUST please their customers, who are free people paying hard-earned money for an education. Obviously, their customers believe they are getting something very valuable, or they wouldn't pay such a premium for it. It's just like Centralized Planners to cast a skeptical eye at success, create artificial metrics that the planners, not the free-minded consumer, deem important, and set about regulating that success to death. 3 people liked this. Like aep06 3 hours ago in reply to ginabecker GinaBecker, I don't think consider high default rates and low graduation rates to be "success". And I don't think that companies make money by ultimately pleasing customers. They continue to operate by offering the best (relative) option for their customers. If their customers are desperate people with no where else to go, or no knowledge of better options, then those http://chronicle.com/article/Annual-Portrait-of-Education/127639/ 5/26/2011 Annual Portrait of Education Documents Swift Rise of For-Profit Colleges - Faculty - The... Page 5 of 9 companies will continue to make a profit by providing services to those same individuals. I equate this to my experience with my wireless provider -- I don't like them, but I hate them less than other service providers. So I keep paying them, no matter how bad the service is, because I want a cell phone and they provide cheaper service than other providers I've had in the past. For -profit institutions may not be cheaper but they tend to recruit aggressively, they're generally market-savvy, and they usually offer convenient options (such as open admission standards and part-time classes). I don't think that people elect governments to "regulate... success to death." Call me an oldfashioned realist, but I think that we elect governments in an effort to protect ourselves from other large organizations (armies, corporations, etc.). It seems as though average individuals usually can't convince companies to provide better service at lower cost any other way. 1 person liked this. Like ginabecker 2 hours ago in reply to aep06 So, you think people are paying TWICE the tuition because they're "desperate" or have "no knowledge of better options," like public schools? HA! So you think you have a right to cheaper and better wireless service, without the obligation to go out to start your own wireless company? You think the government ought to force somebody to provide it on your terms? Frankly, that attitude is what gets society in trouble every time. If large-screen TVs had been deemed a "human right" back when they came out at $8000 each, and if government took it upon themselves to ensure people had them, then there'd be ten-year government-industry contracts, building in an inflation adjustment, so they'd now cost $10,000 plus each. They'd be subsidized, "cheap" or "free" to the consumer, though, so no free-market enterpriser would be motivated to bring the price down to the $500 they are today. If many people have the same complaints you do about wireless service, and if government stays out of it, competition will intensify. Companies will continue to compete to please you, to try to discover your needs and meet them. I remember in the seventies when a phone call to a town 20 miles away was $0.35/ minute. That was in 1970 dollars! That was when government had taken a responsibilty to ensure phone service to all. Like davi2665 27 minutes ago in reply to aep06 Don't you just love the academics (and politicians) who always seem to know better what is right for you? Of course, you are too stupid to make a good decision by free choice, so we need the "central planners" and "government regulators" to tell us all what is in our best interest, so that we can make the correct decision that those with superior judgment and intellect deem appropriate. If the for-profits cease to provide a product that the consumers want, they will go out of business. If only the oh-so-brilliant social engineers will just keep their interfering hands off. Like Bill George 4 hours ago Metrics are simply numbers...you need to focus on how you get those numbers. Public institutions are typically taught by professors who has to earn their PhD.D all the way through and really value education. For Profits are thought by part-time professors who are told that if you dont have a certain % stay and pass then you wont have a job. Case in point, at a recent graduation for a For Profit 68% graduated with honors. REALLY? Doesn't that concern anybody. So you are telling me that the real smart kids are now going to For Profits and are being thought by GREAT professors? Give me a break..learn to read between the line. I have great examples of students that graduated from the For Profit sector who still cant read or write but they have an associates degree and $45k in debt. 4 people liked this. Like http://chronicle.com/article/Annual-Portrait-of-Education/127639/ 5/26/2011 Annual Portrait of Education Documents Swift Rise of For-Profit Colleges - Faculty - The... Page 6 of 9 ginabecker 3 hours ago in reply to Bill George You complain about false metrics, yet rely on them for your point. Think about this: Why would free people be willing to pay twice as much to for-profit institutions (vs a lower amount to public institutions) if they weren't getting their money's worth? Why would the enrollment in for-profit institutions have increased over the decade, even with 2X tuition rates, if people didn't believe they were getting their money's worth? What data do you have to say that professors at for-profit institutions don't care? Their customers must think they care, or they wouldn't pay twice the tuition. Like Antsy Kuhnwisse 2 hours ago in reply to ginabecker Why did free people sign their names to adjustable rate mortgages? or fork over their life savings to Bernie Madoff? If I were fresh out of high school, struggling, with no close advisors who knew any better, I too might fall for the late night TV ads promising the moon, yelling at me to "Call now! Call now!" 3 people liked this. Like ginabecker 1 hour ago in reply to Antsy Kuhnwisse "It must be obvious that liberty necessarily means freedom to choose foolishly as well as wisely; freedom to choose evil as well as good; freedom to enjoy the rewards of good judgment, and freedom to suffer the penalties of bad judgment. If this is not true, the word 'freedom' has no meaning." – Ben Moreell There will always fools, but there will be fewer fools if we let people be responsible, instead of insisting that government always rescue, protect and coddle. Also, corruption can't last long in the free market. In a highly regulated market, though, people get rich by being in bed with the regulators, and corruption is institutionalized. See the finance and health care industries, two of the most highly regulated in our nation--not free markets at all. If the for-profit schools are really inferior, if people are really not getting their money's worth in terms of personal satisfaction and good careers, then reputations will eventually doom them. As it is, though, more and more people are willing to pay twice the tuition for them. If government steps in, though--prompted by fearful public-sectors that see enrollment declining and want political forces to stifle it--then we may be killing off a viable and valuable education choice, institutionalizing the stodgy status quo. 1 person liked this. Like djgonzo 1 hour ago in reply to Antsy Kuhnwisse Further, if I was a single parent, full-time employee, recently unemployed, had anxiety about the traditional college setting, or simply unaware of a better alternative..."I too might fall for the late night TV ads promising the moon," or the telemarketer's pitch of easy access to financial aid (not always specifying this means loans not scholarships/grants) and online convenience and ease (despite my lack of computer skills and the fact that I have been out of school for 7-10 years or more). Like nacrandell 43 minutes ago in reply to Antsy Kuhnwisse In resonse to ginabecker's remark: "Also, corruption can't last long in the free market. In a highly regulated market, though, http://chronicle.com/article/Annual-Portrait-of-Education/127639/ 5/26/2011 Annual Portrait of Education Documents Swift Rise of For-Profit Colleges - Faculty - The... Page 7 of 9 people get rich by being in bed with the regulators, and corruption is institutionalized." I thought that our current economic 'down-turn' was a result of deregulation and an out of control free-market. But what do I know, I attended an old fashioned university and couldn't use Wikipedia as a primary source. I have to ask - are you an employee of an online school or a consultant/lobbyist for the forprofit schools trolling online? Like R117532 24 minutes ago in reply to nacrandell I don't know either of you and I work in a public university but it seems that your personal question is a distraction that does not address the issue. In my opinion, it is reasonable and right to make the assumption that individuals will offer reasoned judgments and that those judgments may or may not align with their personal employment. If you believe otherwise, it follows that readers should discount your judgment because you work wherever you work. On the point, are you familiar with the details of the regulatory capture construct? This person makes a legitimate point. Large universities, for example, captured the accreditation process decades ago. On the other hand, I don't agree with her belief that markets work perfectly. In a totally free market, corruption would be similar to the corruption of a fully command market; only the details would differ. In any event, how about a little less snide arrogance. I'm sure you have your areas, perhaps this one, in which you come up a tad short. 2 people liked this. Like ginabecker 6 minutes ago in reply to Antsy Kuhnwisse nacrendell, No, I am in no way associated with a for-profit school. I'm have a libertarian bent, and so am interested in the subject because of this. What "deregulation" are you talking about? That championed by Schumer and enacted under the Clinton administration, which went through on the very same day that significant regulation was increased to force banks to make loans to people who could not afford Type your comment here. them? I know of no deregulation since then. The finance and banking industry does not even remotely resemble a free market. The power we gave government to regulate this market was used in extortion, to force banks to do irrational things in the name of social justice, which would never happen in a free market. No sane bank executive would have ever made such subprime loans. The government forced them, then to thwart their protests, took away their risks (by letting them sell the loans to entitites that were completely backed by government, the taxpayer). All gain, no risk! Banks were on board with government now. They pushed loans like drugs, selling them off immediately to the government partner banks, backed by the taxpayer. Starter homes were snatched up, so normal buyers in that market went to higher markets, pushing prices up in every market. Again, government assumed risks, and loans were extended to high end housing markets, and other credit markets. Banks offered 0% interest, no money down. Things utterly unheard of in a free market. Things insane, and only possible when government takes charge. When the party started to die, the government-backed companies came up with new schemes to bundle subprime and good loans, and sell them. Again, government assumed the risk and encouraged the behavior. Those who warned congress of pending catastrophe were accused of being racist: "This is a lynching," it was said, when someone challenged the president of Fannie Mae, the government's Precious. The people trying to scare people about the "successful" system, it was said, hate poor people and minorities. That's NOT a free market. That's NOT a deregulated market. But that's what happens when government regulates in the name of social justice. Like nacrandell 2 hours ago in reply to ginabecker "Why would free people be willing to pay twice as much to for-profit institutions..." Simple - it's easy and convenient. But just like Happy Meals, are they good to serve your kids everyday? http://chronicle.com/article/Annual-Portrait-of-Education/127639/ 5/26/2011 Annual Portrait of Education Documents Swift Rise of For-Profit Colleges - Faculty - The... Page 8 of 9 2 people liked this. Like ginabecker 1 hour ago in reply to nacrandell Are Happy Meals good? So you're saying that you and your friends should decide for society whether or not happy meals are good for other people's kids? The arrogances and excesses fo those who think they know what's best for society! 1 person liked this. Like djgonzo 1 hour ago in reply to ginabecker So because "free people" are paying "hard earned money" means they are satisfied with the product? Are you satisfied with gas prices at $4 per gallon? Do you pay that price because you feel the money is worth it? Are public transportation, walking, riding a bike, or carpooling pragmatic solutions for you? The answers to these questions vary person to person, but I'd wager that most aren't satisfied with high energy costs, they simply don't have a more practical alternative. Share holders don't necessarily have to please customers if their is no viable alternative to their product. The vast majority of students at for-profit colleges are non-traditional students. Many have fulltime or multiple part-time jobs, families, and other obligations or limitations that do not permit them to take 3-4 classes at a time on campus in a traditional setting or at a traditional time. The choice (and you are right about the "choice") to attend a for-profit college at two to ten times the expense of a public community college or four year institution is due to decision making similar to what I outlined above. This does not mean that the decision to attend a for-profit college automatically validates the cost or that the student is "pleased" with the services offered, it may simply mean that the student feels there is no better alternative available. 1 person liked this. Like ginabecker 1 hour ago in reply to djgonzo djgonzo, Actually, I'd like for gas to be free. Then I'd be utterly satisfied... Well... except that it would take force to make others give me gas for free, and if I approve of force in that case, then that force may be used to dictate all my negotiations. So in the end, I'd have no freedom anymore. Experts like you would be deciding what I pay for what I eat and wear, and when I ride a bus, or ride a bike, or drive a car, and who teaches me what subjects and how. On second thought, I'd rather pay $4 per gallon. Like Antsy Kuhnwisse 2 hours ago " ... the strong completion rates at for-profit two-year institutions appear to buttress the arguments .... that public community colleges should imitate certain practices of their for-profit peers." No mention of the tactic we've heard about in previous articles: administrators pressuring instructors to give everyone passing grades. Maybe "completion" doesn't necessarily mean the same thing in different twoyear institutions. 2 people liked this. Like willynilly 2 hours ago http://chronicle.com/article/Annual-Portrait-of-Education/127639/ 5/26/2011 Annual Portrait of Education Documents Swift Rise of For-Profit Colleges - Faculty - The... Page 9 of 9 Scam operations, no matter what type or variety, always rise quickly and dramatically UNTIL the public and the authorities find out that there is an organized swindle underway. At that point these enterprises drop and splatter like a ton of bricks falling on a concrete pad. Actually, the descent is now underway. Take cover. 1 person liked this. Like R117532 1 hour ago A couple of other points for consideration. - "Cost spent" is an input metric consistent with pre-scientific notions of how to measure quality. How much money you spend on a function (e.g., building a car, instruction) defines only a weak and highly inconsistent relationship with quality. Often, more money spent means nothing more than inefficient or unmanaged process where self-interests have been allowed to rule. In my many years in public higher education, I consistently see inefficiency and waste that amounts to roughly 50% of costs; i.e., you could deliver the same quality for half the budget. - I find a bundle of contradictions in the view that students are too dumb to make a rational choice in schools when they choose a for-profit but if they come to a non-profit, they are apparently smart enough that we can take money from them in exchange for education. Put differently, if students have chosen well when they choose us, if follows that they have chosen well when they choose another school. Like gsudduth 0 minutes ago These comments are great and produce a multiplicity of opinions concerning education. I have been in the public non - profit and publicly owned for - profit sectors. Believe me they both have many problems, new and reoccurring; however, to assume that blanket statements concerning unscrupulous administration occurs only in one sector vs another is simply naive. Plato in his Republic stated, ' The greatest enemy of all is considered he who tells the truth.' I recently wrote that while looking for work in a job blog and the recruiter asked, ' What does that mean?' Like 1 new comment was just posted. Show Copyright 2011. All rights reserved. The Chronicle of Higher Education 1255 Twenty-Third St, N.W. Washington, D.C. 20037 http://chronicle.com/article/Annual-Portrait-of-Education/127639/ 5/26/2011