When COVID-19 hit the U.S., many experts warned that America’s colleges and universities could be devastated. Some of them predicted enrollment declines of up to 20%.
So far, those initial forecasts were worse than what has actually taken place. One month into the fall semester of the 2020-2021 academic year, overall enrollment was only 3% lower than at the same time a year earlier. Enrollment declined at community colleges by 9.4%.
One kind of school, however, is faring better: for-profit colleges. Their average enrollment is up by 3%.
This growth is even more surprising given that enrollment at for-profit schools had fallen by an average of 10.5% annually between 2015 and 2019.
Several factors are at play.
For-profit colleges and universities tend to be experienced with remote learning, they have more flexibility to deploy financial resources and they have enjoyed favorable policies under the Trump administration.
The increase in for-profit enrollment may be short-lived. Graduates of for-profit colleges are defaulting on their tuition loans at higher rates, and President-elect Joe Biden has vowed to stop schools from “profiteering off of students.”
More than 1,000 U.S. colleges and universities started the fall 2020 semester with some form of in-person instruction. But the face-to-face learning environment has been transformed by COVID-19.
What you may think of as the “traditional” college experience is largely not happening this year.
Rather than paying full price for restricted conditions, some students chose not to attend traditional colleges.
Some opted for a “gap year.” Others sought fully online programs that were more established than the options hastily implemented in the spring. For-profit universities are recognized brands in distance education. That likely attracted some students seeking safe, reliable learning options.
Many traditional universities incurred considerable costs to resume teaching and research safely on campus in the fall.
For-profits have considerably more online programs than their nonprofit counterparts. They did not need to spend nearly as much to operate safely.
For-profits are also generally more financially nimble. They often maintain considerable cash reserves with minimal limitations on spending. They subsequently expended more on marketing efforts.
And for-profit institutions expanded financial aid. This gave students even more of an incentive to enroll.
Over the past decade, shifting federal policy has had a major impact on for-profits’ ability to attract students. During the 2008 recession, the sector experienced huge enrollment increases.
But some for-profits used deceptive tactics and persuaded students to assume large tuition loans that would allegedly pay off with lucrative jobs. Their promises misled thousands of graduates who defaulted.
In response, the Obama administration implemented the “gainful employment” rule. Schools were required to demonstrate that their graduates were employed and include employment figures in ads. The regulation reduced for-profit enrollments.
The Trump administration officially repealed the rule in 2019. In 2021, however, the federal approach will surely shift back under President-elect Joe Biden.
Biden’s higher education platform would restore the gainful employment rule. And he supports authorizing two years of free community college for all Americans. He also calls for free tuition at public universities for families who earn less than $125,000 per year.
If the Biden administration ensures that the cost of attending nonprofit colleges and universities – including those with established online degree programs – is substantively reduced, persuading students to enroll in for-profit alternatives will be very difficult.
Molly Ott is an associate professor of higher and postsecondary education at Arizona State University. Distributed by The Associated Press.
