For about fifteen years, from 1995 to 2010, enrollments grew rapidly in the for-profit higher education sector, but since then have fallen substantially. The reason for the decline is mainly the overt hostility to for-profits during the Obama administration. The Department of Education killed off two of the largest for-profit competitors (Corinthian and ITT), and rhetoric from top officials created the impression that the for-profits were in general an educational scam.
That impression is challenged a newly published book Unprofitable Schooling, edited by Todd Zywicki and Neal McCluskey. It consists of eleven interesting and varied chapters; the one I will focus on is entitled “Assessing For-Profit Colleges” by professor William Shughart of Utah State and Jayme Lemke, senior fellow at the Mercatus Institute. In it, the authors argue that the for-profit sector has unappreciated virtues, particularly for many students who are the most at-risk, and that singling it out for regulatory attack is counter-productive.
For most of our history, for-profit higher education was almost non-existent. As Shughart and Lemke explain, “The significant tax advantages enjoyed by private and public nonprofit colleges make that market one into which competitors find it difficult to enter.” Nevertheless, starting in the 1990s, for-profit schools began to attract large numbers of students, suggesting that they must have provided many students with value in excess of the cost.