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For-Profit Colleges are Especially Dangerous in a Downturn


Here’s two facts that everyone who cares about education and the economy should keep in mind:

First - enrollment at for-profit colleges surges during economic downturns.   

Second - historically many students who attend for-profit colleges after losing their job in a recession end up, on average, worse off than if they’d never attended college at all.

Those two facts together are a recipe for disaster. 

During the Great Recession, for-profit college enrollment increased dramatically, by over 75% between 2006 - 2010.  

So far in the current downturn, enrollment in community colleges has dropped by almost 10%, and dropped by almost 22% among first-time students;  but for-profit colleges have seen a 5% increase in enrollment, with increases reaching almost 15% among first-time students. 

A 2019 study found “significant wage penalties” for students who went to a for-profit college instead of a public or private nonprofit.  “For some student groups,” the report said, “earnings are higher if they drop out of community college instead of transferring to a for-profit college.”

At a time of significant economic distress, vulnerable people are increasingly likely to be trapped by “education” schemes that leave them worse off than when they started.  

People - especially people on the economic margins - are increasingly desperate in economic downturns, and look for ways forward.  For-profit colleges, meanwhile, spend massive sums on marketing:  “Pre-pandemic, for-profits spent about $400 per student on advertising compared to just $14 by public institutions,” according to The Brookings Institute.  

Furthermore, since most of the funding for for-profit colleges is backed by student loans from the federal government, taxpayers are to no small extent subsidizing these schemes that further take the vulnerable out of economic life just when they’re struggling to get in.

Our education system needs to protect the vulnerable, and offer them the opportunities they’re looking for to weather economic downturns.  We need a “public option” for education that will genuinely offer them the kind of support that for-profit colleges only claim to.   

Calbright is poised to be part of that solution, offering programs uniquely focused on those same working Californians whose lives make online, self-paced, low-cost education programs their only or most viable option.

Learn more at www.Calbright.org