For-profit Colleges Research Articles

Institutional and State-Level Factors Related to Paying Back Student Loan Debt Among Public, Private, and For-Profit Colleges

In this study, we examine whether institutional-level characteristics, student demographics, and state conditions are associated with student loan repayment rates and cohort-level loan default rates. We separately explore these characteristics for each of four higher education sectors: public 2-year colleges, for-profit colleges, public 4-year colleges, and private 4-year colleges. We conduct a series of multiple linear regressions on a sample of 2,375 colleges. Estimates suggest that across all sectors except at for-profits, colleges enrolling a higher percentage of historically underrepresented students, including first-generation and African American/Black students, report lower repayment rates. Additionally, a higher percentage of students enrolled who file as independents for tax purposes, as well as lower levels of family incomes among independent students, and lower graduation rates are all associated with lower repayment rates, across all four sectors. With the exception of for-profit colleges, the factors associated with higher cohort default rates include a smaller percentage of Asian students, a larger percentage of first-generation students, and lower median household incomes at the state level. Factors related to one-year and five-year loan repayment rates are similar, indicating that students who struggle to make progress on repaying their loans soon after leaving college continue to struggle in the future.

Quality and innovation in American higher education accreditation: the case of the University of Phoenix

ABSTRACT In 1978, the University of Phoenix was among the first for-profit universities to receive accreditation from a prestigious regional agency: the Higher Learning Commission of the North Central Association of Colleges and Schools. Its accreditation marked a turning point in broader acceptance for the for-profit model in higher education and gave the University of Phoenix access to its primary source of revenue: federal financial aid. This case offers an example of how innovation in US higher education can happen rapidly and with relatively little controversy. The decentralised nature of accreditation means that new schools can shop around to find an accreditor that best meets their needs. Because accreditors are so closely entwined with federal actors, they will greenlight innovative programmes when they serve the federal interest. Finally, because higher educational quality is difficult to assess, accreditors can use output-based metrics, which are better at supporting novelty than input-based standards.

SERVICE QUALITY AND STUDENTS’ SATISFACTION IN B.SC MARKETING DEGREE PROGRAMMES OF SELECTED PRIVATE UNIVERSITIES IN SOUTH WESTERN NIGERIA

Delivering satisfactory educational quality is paramount to achieving institutional objectives such as improve revenue, enrolment growth, contributes significantly to the goal of sustainable competitive advantage for most for-profit universities. In Nigeria, many private universities are recording low enrolment into their BSc Marketing degree programmes. However, students’ disposition to marketing as a course of study has not been well studied. Most marketing education studies have focused mainly on the teaching methodologies without giving due consideration quality of educational experience that shape enrolment into this vital field of study. This study examined the effect Service Quality (SQ) and Students’ Satisfaction (SS) into BSc. Marketing degree programmes in selected Nigerian private universities in South Western Nigeria. Cross-sectional survey research design was adopted in this study. The population consisted of 201 BSc undergraduate students from six selected private universities from South Western geo-political zone of Nigeria. Total enumeration was employed and all the undergraduate marketing students of the six selected private universities were respondents for this work. A structured questionnaire was adapted and validated. The Cronbach’s Alpha reliability coefficient for the constructs were indicated thus; SQ =0.833 and SS=0.88807. The response rate of 97.5 % was achieved for this study. Data were analysed using descriptive and inferential statistics. Findings revealed that that service quality had significant effect on student satisfaction for B.Sc. Marketing degreeprogrammes in selected private universities in South Western Nigeria (R2= 0.084, β = 0.252, t = 2.757, p<0.05). The study recommended that universities and marketing professional associations should commit significant resources to organizing career fairs, workshops, essay competitions and expert series to create public awareness on the importance of marketing as a career and the foundational role the profession plays in profit and non-profit organizations.

For-Profit Schools as Covered Persons under the CFPA

A cornerstone of for-profit schools’ business model is to encourage students to borrow as much as possible to finance their college attendance. After drawing people in with misleading advertisements, for-profit colleges quickly hand prospective students off to financial aid officers who rush students through the process of explaining the financial aid system—if they explain it at all. These employees drive students to take on massive federal and private debt loads, including loans that the school itself originates. They will sometimes fill out or even fraudulently sign forms on students’ behalf, all the while insisting that they are working in the students’ interest. Each of these tactics has one goal: boosting schools’ revenues by inflating students’ debt balances, regardless of how unmanageable those loans are likely to be for borrowers.This issue brief argues that each of these areas of conduct place for-profit colleges squarely within the authority of the Consumer Financial Protection Bureau (CFPB), and that the Bureau can therefore intervene to protect borrowers. The CFPB’s authorizing statute states that anyone providing a consumer financial product or service is a “covered person” and therefore falls under the Bureau’s purview, including with respect to the prohibition on unfair, deceptive, and abusive acts and practices. As this issue brief outlines, each one of the common features of the for-profit college business model described above is alone sufficient to make a for-profit college a “covered person,” including the practices of lending to students through institutional loan programs, brokering student loans through third parties, and providing students financial advisory services in the financial aid process (regardless of the quality of the advice).With for-profit college enrollment surging due to COVID, the need to rein in the industry has never been more pressing. The CFPB has the tools to combat the rampant illegal practices that the for-profit college industry relies on.

The Rise of For-Profit Higher Education: A General Equilibrium Analysis

The growth of for-profit colleges has been historically aided by online instruction, and budget crunches at public institutions, circumstances which have resurfaced during the COVID-19 pandemic. We set up and calibrate a general equilibrium model of competition between public and for-profit institutions in the U.S. four-year college market. Our predicted levels of tuition, instructional spending and average student body ability match data counterparts well. In policy experiments, we vary the generosity of public support for higher education and we consider the effects of “gainful employment” legislation that would link access to federal funding for universities to their graduates’ debt-to-earnings ratios. We find that Pell Grant cap increases would benefit for-profit colleges, which flexibly decrease tuition and instructional spending to attract a higher number of low-income beneficiaries. Our simulations indicate for-profit colleges prefer to comply with gainful employment standards, but do so by lowering tuition and instructional quality.

"How Does the Elimination of State Aid to For-Profit Colleges Affect Enrollment? Evidence from California’s Reforms

"How Does the Elimination of State Aid to For-Profit Colleges Affect Enrollment? Evidence from California’s Reforms

Mapping Exploitation: Examining For-Profit Colleges as Financial Predators in Communities of Color

Mapping Exploitation: Examining For-Profit Colleges as Financial Predators in Communities of Color

How Veterans Make Meaning of the College Choice Process in the Post-9/11 Era

The Post-9/11 GI Bill was implemented in 2009. Since then, more than 1.9 million people have used the benefits afforded by the bill to attend college, and more than $90 billion has been paid to institutions of higher learning and Post-9/11 GI Bill beneficiaries. During this time, the types of colleges that veterans attend as well as the educational models they select have shifted. Veterans are more likely to utilize online or distance education models. Additionally, veterans attend for-profit universities at an increasing and greater rate than do their nonveteran counterparts. These shifts differ from the trends observed among the general population. The purpose of this study was to learn from veterans how they make sense of decision-making related to college choice prior to matriculation into a 4-year institution. Qualitative methods were utilized to examine the lived experiences of 12 post-9/11-era U.S. Navy and U.S. Marine Corps student veterans during the college choice process. The experiences shared by the participants in this study were used to further examine and critique an established theory of college selection. This study provides practitioners and academics with insight into how to better engage with this diverse and unique community of prospective students on and off campus through greater understanding of how they make meaning of the college choice process.

Analysis of the Classification Management Policy of Private Universities in China: Focusing on Process of Legalization of For-Profit University

[연구목적] 본 연구의 목적은 최근 중국에서 영리대학을 합법화한 사립대학 분류관리 제도의 도입과정을 심층적으로 분석하고, 이를 바탕으로 한국의 영리대학도입 논의에 대한 시사점을 제공하는데 있다. [연구방법] 이를 위해 역사적 신제도주의 관점에 기초한 구조-제도-행위자 통합모형을 분석틀로 활용하여 중국의 관련 문헌을 체계적으로 분석하였다. [연구결과] 주요 연구결과는 다음과 같다. 첫째, 구조적 수준에서 투자설립 위주의 중국 사립교육 구조는 재산권 귀속에 대한 잠재적인 문제를 축적 시켰다. 이후 사립학교의 파산과 재산권 분쟁과 같은 위기 사건의 증가는 제도변화의 결정적인 분기점이 되었다. 둘째, 제도적 수준에서 상위법과 하위법 사이의 모순, 그리고 기존 제도에 대한 경로 의존성은 제도변화를 제약하였다. 셋째, 행위자 수준에서 이해관계자들은 입법 과정에 참여하여 자신의 이익을 추구하는 등의 능동적인 행위전략으로 제도변화를 촉진하였다. [결론] 중국에서 영리대학을 법적으로 인정한 새로운 분류관리 제도의 도입은 역사적으로 형성된 구조적 문제와 제도적 제약에 대응하기 위한 정부와 설립자 간의 역동적인 상호작용의 산물이라 할 수 있다. 이러한 중국의 사례는 한국의 영리대학 도입과 관련된 쟁점에 유용한 정보를 제공할 수 있으므로, 향후 중국의 분류관리 제도 시행 과정에서 나타나는 변화에 주목할 필요가 있다.[Purpose] The purpose of this study is to analyze and understand the implementation process of classification management policy of private universities in China which legalizes for-profit colleges. [Methods] This study adopts a historical neo-institutional perspective which is appropriate to explain an gradual institutional change over time. Specifically, this study relies on the integrated model of structuresystem-agent by Kim(2005). [Results] The main findings are as follows: At the structural level, the system of Chinese private education which has accumulated potential problems with the attribution of property rights, such as the bankruptcy of private colleges, has become a critical turning point in the institutional change. In addition, at the institutional level, inconsistencies between higher and lower laws and path dependence on existing policies impinging upon institutional changes. Furthermore, at the actor level, the government and the founders in their interest actively participated in enacting the laws and as a result promoted the institutional change. [Conclusion] The implementation of the classification management policy is a product of a dynamic interaction between the government and founders to cope with the structural problems and institutional constraints formed historically, and it is worth paying attention to what changes will bring to the future of Chinese private universities.

“Hopefully I Can Transfer:” Cooling Out Postsecondary Aspirations of Latina/o/x Students

ABSTRACT Guided by the frameworks of college-conocimiento and the cooling out function, this study examined the college choice process of Latina/o/x students who attended an under-resourced urban high school. Data for this study consisted of interviews with ten institutional agents, two oral history interviews with 34 Latina/o/x students, and observation field notes. Findings revealed that upon seeking college information, students were informed that the community college was more accessible than four-year college. The consistent message from advisors and teachers influenced the participants to enroll in community college, with aspirations to transfer to a four-year college. Upon applying to college, recruitment counselors from for-profit and community colleges offered vocational pathways as an alternative option to transferring. Implications for equity-minded research are discussed. Recommendations for socially just policies and asset-based practices are provided to bridge the high school-to-ollege transition for Latina/o/x students.

Online For-Profit Colleges and Universities and the Evolving Role of Academic Librarianship

This presentation reports on a survey of academic librarians and their attitudes on several interrelated professional issues in the online for-profit college and university environment. Librarians from this sector offer a unique perspective on librarianship best practices for online educational delivery. They also present a clearheaded understanding on the impact of profit-based decision making on academic librarian values, responsibilities, and sense of professional duty. In addition to the survey results, this presentation discusses how academic librarianship has responded to the growing prevalence of virtual education delivery, and what roles the for-profit model might proffer for academic librarians going forward.

Campus Governance in U.S. Universities and Colleges

The governance of universities and colleges in the United States basically follows the concept and spirit of democracy embraced by the nation from its birth. The systems and practices in place at most U.S. institutions of higher learning include collaborative, representative, or collective decision-making arrangements known as shared governance. However, these systems and practices are hardly uniform due to the diversity of governance patterns that reflect the unique and different history, needs, and mission of a particular institution. Sometimes they are differentiated from, and contrasted with, corporate, business, and more authoritarian or centralized forms of institutional governance.
 In contrast with university governance elsewhere in the world—that can range from strong central government control to private self-regulated operations—the U.S. forms of campus governance have emerged in a country that does not have centralized authority over education. U.S. institutions of higher learning respond to a variety of controls and interests that are on display variously at public, private non-profit, private for-profit, and religious universities. Governance, authority, and administration are spread across a wide spectrum of players, including governing boards; presidents, chancellors, and other administrators; the academy/faculty; administrative staff; campus committees; students; and, even some external factors.
 Shared governance is not a perfect formula or panacea for university administration and decision-making. It does, however, provide a methodology, system, and concept that can help guide the leadership of a university as it approaches the administration and conduct of its educational responsibilities. In today’s higher education environment, the term governance is rather expansive. In one sense, it means top-down governance that is the rightful role and authority of an institutional board charged with overseeing policy, programming, performance, and executive guidance and evaluation. But, it also variously means the use of institutional strategies, operations, and components to distribute, disseminate, and “share” authority and responsibilities for a university’s administrative, management, and decision-making functions, i.e., “on-campus governance.” In this respect, shared governance “borrows” many of the attributes and principles of democratic government. In any case, shared governance, in its many forms and applications, is widely practiced in U.S. universities, including Delta State University.

Bankruptcy as Consumer Protection: The Case of Student Loans

Over 300,000 student loan borrowers have applied to the Department of Education for administrative relief from federal student loans on the ground that they were deceived or otherwise victimized by their schools. The Department adopted relatively borrower-friendly rules for this process in 2016. But under the new administration, the Department changed course and adopted new rules that make it “nearly impossible” for student borrowers to prevail. After a presidential veto of a resolution that would have stopped the new rules, they went into effect on July 1, 2020. With victimized students effectively deprived of administrative relief, bankruptcy provides at least a partial solution. Many such borrowers will be candidates for bankruptcy: The median loan default rate at for-profit colleges sued or investigated for wrongdoing against students is estimated at 31 percent. To get bankruptcy relief, a debtor must show that repayment would cause “undue hardship.” Courts currently do not consider school wrongdoing in assessing undue hardship; this article argues that they should. When repayment will entail some hardship and the borrower’s decision to incur the student loan was induced by the school’s deceptive representations or unfair, abusive, or unconscionable practices, bankruptcy courts should provide relief. They should discharge at least the amount of the loan corresponding to the difference between the cost of the schooling and any value the loan holder can prove the education actually had. Considering school misconduct is consistent with the policies underlying non-discharge-ability of student loan debt because victimized students are not abusing the system when they seek relief and because collection from them is unlikely to be cost-effective. Moreover, discharge advances the goals of the student loan program. It might be objected that the federal government is not itself a wrongdoer in school-misconduct cases, so it should not bear losses arising from bankruptcy discharge of federal student loans. But the FTC’s Holder Rule has provided since 1976 that consumer lenders are responsible for sellers’ misconduct in analogous situations. The assumptions underlying the Holder Rule are met in student-loan cases. As between the two innocent parties, government and student, the government is both better able to absorb school-misconduct losses. The government is also better situated to prevent such losses due to its extensive supervisory powers over schools.

The Multiplier Effect of Education Expenditure

This paper examines the short-run effects of federal education expenditures on local income. We exploit city-level variation in exposure to national changes in the $30-billion Federal Pell Grant Program, which is the largest program to help low-income students attend college in the U.S., to calculate fiscal multipliers of education expenditures. An increase in Pell grants by 1 percent of a city's income raises local income by 2.4 percent over the next two years. This multiplier effect is larger than estimates for military spending (1.5 on average). Multipliers are higher when grants are awarded to students at non-profit colleges, as for-profit colleges absorb most of the grant increases with raises in tuition. Multipliers are also higher during recessions than in expansions: Pell grants can be an effective tool for countercyclical policy that adds to already established benefits, such as, increasing the affordability of college and fostering long-run economic growth.

The Proletarianization of the Professoriate and the Threat to Free Expression, Creativity, and Economic Dynamism

Over the past four decades, forces have been set in motion that are proletarianizing professors—reducing their control over their workplaces. This has been in part propelled by a resurgence of laissez-faire doctrine that has legitimated public policies which have fueled soaring inequality. This article addresses the threat to freedom and economic dynamism posed by the debasement of professors by examining six forces that are driving the proletarianization of the professoriate: the replacement of tenured with contingent faculty, an expansion of for-profit colleges and universities, the rise of online education, the introduction of annual evaluations and merit pay, the development of outcomes assessment, and the increased reliance on external research funding. The essay then surveys how laissez-faire doctrine and rising inequality have led to cuts in government funding for higher education, have placed an increased emphasis on providing student consumers with vocational training as opposed to a liberal education, and have reshaped higher education through the introduction of corporate values within universities’ systems of governance. The article concludes with reflections on the evolution of the status of professors in higher education as a symptom of the betrayed promises for personal and social life held forth by economic abundance following WWII.

Attendance Spillovers between Public and For-Profit Colleges: Evidence from Statewide Variation in Appropriations for Higher Education

Between 2000 and 2010, U.S. public colleges and universities experienced widespread and uneven changes in funding from state and local appropriations. We find that over this period annual decreases in statewide appropriations led to lower public enrollment and higher for-profit enrollment (with no effect on enrollment overall), as well as increased student borrowing. In an analysis of mechanisms, we detect effects on spending, tuition, and capacity in the public sector. Altogether, the results reveal that core institutional resources affect the types of schools that students attend and yield new evidence of substitution between the public and for-profit sectors.

Forecasting the impacts of the “future of work” on universities: a sociological perspective

PurposeThe purpose of this study is to analyse the prospective impact of the future of work on universities.Design/methodology/approachSeveral brief case studies of heralded disruptors of higher education (HE) – including digital badges, for-profit universities and massive open online courses – are reviewed to illustrate inertial forces in the system.FindingsThe results indicate that several social forces will protect most universities from significant disruption, with the impetus for change being felt mostly in the periphery of the system.Originality/valueThe argument presented in this study serves as a corrective to claims that looming changes in the nature of work will radically disrupt universities. It calls for more nuanced theorizing about the interaction between technical and institutional forces in HE.

Book Review: Lower Ed: The Troubling Rise of For-Profit Colleges in the New Economy, by T. McMillan Cottom

Book Review: <i>Lower Ed: The Troubling Rise of For-Profit Colleges in the New Economy</i>, by T. McMillan Cottom

Agile predators: private equity and the spread of shareholder value strategies to US for-profit colleges

AbstractI argue that growth in private equity and publicly traded ownership of US for-profit colleges has created new shareholder-value pressures for schools to maximize returns for investors. Privately held firms, which had long dominated the sector, were converted to private equity ownership through 88 buyouts since 1987. Private equity managers then used IPOs to establish 20 of 35 publicly traded firms that operated in the sector. I use longitudinal panel analyses of 14,212 federally qualified colleges to show that schools under these ownership forms featured unusually high debts and low graduation rates for students. The results (a) provide some of the most robust evidence to date that shareholder value strategies of cost-cutting and implicit contract violations can adversely affect non-labor stakeholders; and (b) help to theorize the growing but understudied role of private equity as a transitional ownership form that spreads shareholder value strategies to privately held firms.

Are federal student loan accountability regulations effective?

Within the education sector, accountability regulations have been used with the intended purpose of improving student outcomes. In higher education, one such regulation aims to improve the ability of borrowers to repay their student loans by placing sanctions on institutions with excessive student loan defaults. This paper examines whether student loan accountability regulations were able to (1) lower student loan defaults, and (2) address the broader objective of improving repayment ability, by exploiting a change to the period in which the regulation’s performance measure was monitored. I find that the change to the regulation resulted in less student loan defaults at for-profit colleges. I also find that this reduction in student loan defaults resulted in a short-term improvement in repayment ability at for-profit, but not nonprofit, institutions.