For-Profit Colleges Are Enjoying Explosive Growth

For-Profit Colleges Are Enjoying Explosive Growth


But, are students paying the price?

Several smaller, private colleges including Dana College in Nebraska have closed its doors in recent years, victims of runaway expenditures and declining student populations. Perhaps some of that decline should be attributed to for-profit colleges and universities, schools which began to explode in growth in the 21st century.

Explosive Growth

Indeed, enrollment at for-profit schools has increased four-fold since 2000 according to the National Center for Education Statistics. These schools, which include the University of Phoenix, Argosy University and Potomac College, enrolled 27 percent of all college students, up from 7 percent a decade earlier.

The growth of for-profit schools is not without criticism. For example, the University of Phoenix has been faulted for its heavy advertising schemes and recruitment of low income students. The school, which accepts students who take out federal student loans, has nearly 500,000 undergrad and graduate students enrolled and operates more than 200 campuses worldwide. Offering more than 100 courses of study, many students are able to take classes online, which has been a significant contributor to the school’s growth.

Federal Assistance

Notably, for-profit students account for nearly 25 percent of all federal education grants, which compares to the number of students, 12 percent, currently enrolled in these programs. However, when it comes to loan defaults, for-profit school students account for 43 percent of all defaults reports Yahoo News.[1]

For-profit schools have been criticized for charging high tuition and for dedicating a smaller percentage of its funding to instruction. A U.S. Department of Education study revealed that for-profit schools direct 24 percent of total expenditures to instruction while nonprofit public and nonprofit private schools invest 28 and 33 percent, respectively. Critics note that for-profit schools typically pour millions of dollars into advertising and pay what they claim are excessive salaries for its administrators. For example, William J. Pepicello, who is President of University of Phoenix, Inc, Apollo Group Inc.; receives an annual $350,000 salary. However, with stock options, annual cash compensation, and short- and long-term compensation included, his total compensation is $2,035,470 according to Bloomberg Businessweek.[2]

Graduation Rates

Perhaps the most disturbing statistic when comparing for-profit students with non-profit college students is that after six years of education, only 22 percent obtain degrees compared with 65 percent for other students. Moreover, 80 percent of all students at for-profit schools take out student loans which means that most students never complete their education and have a pile of student debt to show for it.


[1] Yahoo News; For-profit College Enrollment Soared 418 percent; Liz Goodwin; May 26, 2011

[2] Bloomberg Businessweek; Executive Profile; William J. Pepicello


end of post idea


Helpful article? Leave us a quick comment below.
And please share this article within your social networks.

facebook linkedin pinterest

Amazon Affiliate Disclosure: is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to The commission earnings are used to defray our cost of operation.

View our FTC Disclosure for other affiliate information.

Categories: Campus News
Tags: slider