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When COVID-19 hit the U.S., many experts warned that America\u2019s colleges and universities could be devastated. Some of them predicted\u00a0enrollment declines of up to 20%<\/a>.<\/p>\n 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\u00a0only 3% lower<\/a>\u00a0than at the same time a year earlier.<\/p>\n One kind of school, however, is faring better: for-profit colleges. Their average enrollment is\u00a0up by 3%<\/a>.<\/p>\n In contrast, at public and private nonprofit four-year universities, enrollment fell by\u00a0about 1.4% and 2%<\/a>, respectively.<\/p>\n Enrollment has declined much more at community colleges, which had\u00a09.4% fewer<\/a>\u00a0students this year. This change occurred even though\u00a0some experts anticipated<\/a>\u00a0community colleges would be more\u00a0attractive in the COVID-19 era<\/a>\u00a0because of their lower costs and flexible transfer policies.<\/p>\n Why are more students attending for-profit colleges in the middle of a pandemic?<\/p>\n This growth is even more surprising given that enrollment at for-profit schools \u2013 often criticized as being\u00a0high priced<\/a>\u00a0and\u00a0low quality<\/a>\u00a0\u2013 had fallen\u00a0by an average of 10.5% annually<\/a>\u00a0between 2015 and 2019.<\/p>\n As a\u00a0higher education researcher<\/a>, I see several factors at play.<\/p>\n For-profit colleges and universities tend to be highly experienced with remote learning, they have more flexibility to deploy financial resources as needed and they have enjoyed favorable policies under the Trump administration, which notably\u00a0rescinded an Obama-era rule<\/a>\u00a0meant to hold them accountable for ensuring that graduates are gainfully employed.<\/p>\n Given the recent presidential election results, I also suspect the increase in for-profit enrollment may be\u00a0short-lived<\/a>. Graduates of for-profit colleges are\u00a0defaulting on their tuition loans at higher rates<\/a>, and President-elect Joe Biden has vowed to\u00a0stop these schools from \u201cprofiteering off of students<\/a>.\u201d<\/p>\n More than\u00a01,000 U.S. colleges and universities<\/a>\u00a0\u2013 over one-fourth of the nation\u2019s postsecondary institutions \u2013 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 prevention measures: social distancing, mask wearing, virus testing requirements, hybrid attendance options and serious restrictions on extracurricular activities, such as sports and clubs.<\/p>\n What you may think of as the \u201ctraditional\u201d college experience \u2013 where students live, learn and socialize in close physical proximity \u2013 is\u00a0largely not happening this year<\/a>.<\/p>\n Rather than paying full tuition, housing expenses and \u2013 in some cases \u2013\u00a0extra coronavirus fees<\/a>\u00a0for restricted in-person conditions, some students chose not to attend traditional colleges.<\/p>\n Others\u00a0did not want to risk contracting the coronavirus<\/a>\u00a0while attending classes on campus.<\/p>\n Although exact numbers are unknown, some opted for a \u201cgap year<\/a>.\u201d<\/p>\n Facing a\u00a0dismal labor market<\/a>, others sought fully online programs that were more established than the \u201cZoom U<\/a>\u201d options hastily implemented in the spring of 2020.<\/p>\n For better or for worse, for-profit universities are\u00a0recognized brands in distance education<\/a>. That likely attracted some students seeking safe, reliable learning options during the pandemic.<\/p>\n Support for this idea can be found in the fact that \u2013 at universities with established online programs \u2013 fall 2020 undergraduate enrollments were\u00a0up by 6.8%<\/a>\u00a0compared with last year.<\/p>\n For-profits are part of this figure. However, a few nonprofit schools that have invested considerably in online education over the past decade also saw enrollment increases. These include public institutions, such as where I work,\u00a0Arizona State University<\/a>, as well as private nonprofits, such as\u00a0Liberty University<\/a>\u00a0and\u00a0Western Governors University<\/a>.<\/p>\n Many traditional universities incurred considerable costs to resume teaching and research safely on campus in the fall of 2020.<\/p>\n For example, North Carolina State University\u00a0spent an estimated US$5.2 million<\/a>\u00a0on measures to protect students, staff and faculty from COVID-19. Despite that investment, an outbreak forced administrators to\u00a0close the residence halls<\/a>\u00a0only a few weeks after reopening.<\/p>\n For-profits have\u00a0considerably more online programs than their nonprofit counterparts<\/a>. For that reason, they did not need to spend nearly as much to operate safely this fall.<\/p>\n For-profits are also generally more\u00a0financially nimble<\/a>\u00a0than public and private nonprofit colleges and universities. They often maintain\u00a0considerable cash reserves<\/a>\u00a0with minimal limitations on spending.<\/p>\n Nonprofit universities, especially publics, typically have less cash on hand because they tend to run on annual operating budgets that\u00a0redirect surpluses back into programs and services<\/a>. And even those with significant endowments\u00a0face restrictions on how they may spend that money<\/a>.<\/p>\n During the pandemic, for-profits have had more resources available than their counterparts. They subsequently expended more on marketing efforts. For example, of the 10 U.S. universities that spent at least $1.2 million on Google advertisements in March 2020,\u00a0six \u2013 or 60% \u2013 were for-profits<\/a>, even though for-profits represent only\u00a017%<\/a>\u00a0of all four-year institutions.<\/p>\n In addition to stepped-up advertising, for-profit institutions also\u00a0expanded financial aid<\/a>\u00a0when the pandemic hit. This gave students even more of an incentive to enroll.<\/p>\n Over the past decade, shifting federal policy has had a major impact on for-profits\u2019 ability to attract students. During the 2008 recession, the sector experienced\u00a0huge enrollment increases<\/a>.<\/p>\n Unfortunately,\u00a0some for-profits used deceptive tactics<\/a>\u00a0and persuaded students to assume\u00a0large tuition loans that would allegedly pay off with lucrative jobs<\/a>. Their promises misled thousands of graduates, who\u00a0defaulted on their debt<\/a>.<\/p>\n In response, the Obama administration implemented the \u201cgainful employment<\/a>\u201d rule. Schools were required to demonstrate that their graduates were employed and include employment figures in advertisements. Research shows the regulation\u00a0reduced for-profit enrollments<\/a>\u00a0relative to other sectors.<\/p>\n Some for-profit executives<\/a>\u00a0argued that for-profits were unfairly penalized by \u201cgainful employment.\u201d The Trump administration agreed and officially\u00a0repealed the rule in 2019<\/a>. This policy change likely helped boost for-profits\u2019 enrollment in 2020.<\/p>\n In 2021, however, the federal approach will surely shift again. I expect that the Education Department \u2013 under the leadership of President-elect Joe Biden and Vice President-elect Kamala Harris \u2013 will more aggressively regulate for-profit institutions in ways that will likely reduce the share of students who attend them.<\/p>\n As California\u2019s attorney general, Harris\u00a0successfully sued the predatory chain Corinthian Colleges for fraud<\/a>. As a U.S. senator, she\u00a0opposed allocating federal funds to predatory for-profit schools<\/a>.<\/p>\n Biden\u2019s\u00a0higher education platform<\/a>\u00a0would restore the gainful employment rule. The incoming administration also proposes eliminating a legal loophole that allows for-profits to disproportionately\u00a0recruit military service members and veterans<\/a>.<\/p>\n Most significantly, Biden supports authorizing\u00a0two years of free community college<\/a>\u00a0for all Americans. He also calls for\u00a0free tuition at public universities for families who earn less than $125,000<\/a>\u00a0per year.<\/p>\n I believe Biden\u2019s proposed policies would deter many future students from choosing for-profit universities. Research suggests that employers don\u2019t value for-profit degrees any more than those from\u00a0community colleges<\/a>\u00a0or\u00a0other four-year equivalents<\/a>. If the Biden administration ensures that the cost of attending nonprofit colleges and universities \u2013 including those with established online degree programs \u2013 is substantively reduced, persuading students to enroll in for-profit alternatives will be very difficult.<\/p>\nFactors behind the trend<\/strong><\/h4>\n
Recognized in remote learning<\/strong><\/h4>\n
More unrestricted money<\/strong><\/h4>\n
Evolving federal policies<\/strong><\/h4>\n