The for-profit sector is collapsing, a possible omen of things to come for public and nonprofit schools.
The for-profit college industry is collapsing. The Chronicle of Higher Education reports that during the past five years, more than 1,200 college campuses have been closed — an average of about 20 every month. Of those that shut, 88 percent were for-profit, and their students amounted to 85 percent of those affected by the closures:
Enrollment at four-year for-profit colleges is in free fall, dropping 13.7 percent from fall 2014 to fall 2015, 14.5 percent the following year, and 7.1 percent the year after that.
Perhaps the only surprising thing was that it took this long. For-profit colleges have long been plagued by poor performance — a 2012 study by economists Kevin Lang and Russell Weinstein found no earnings premium from attending a for-profit university. Follow-up studies yielded similar results. But the price tag for these colleges was high, and students were encouraged to take out lots of loans to pay it. The inevitable result was a generation of for-profit college students with poor employment prospects and a mountain of debt. Meanwhile, a whiff of dubious marketing hung about the industry, with DeVry University being forced to pay a $100 million settlement for misleading prospective students about the economic benefits of attending.