May 22, 2019

Students in poverty fuel for-profit universities

For-profit colleges and universities have a higher share of students in poverty than any other kind of post-secondary institution, according to a new study by Pew Research Center.

Data: Pew Research; Chart: Axios Visuals
Data: Pew Research; Chart: Axios Visuals

Why it matters: For-profit universities can provide higher education for students who would otherwise not be able to pursue a college degree. The downside is that for-profit degrees are, on average, much more expensive than degrees from not-for-profit institutions. And studies have found that for-profit students are less likely to graduate and more likely to struggle to pay off large amounts of student debt, as Axios has reported.

The big picture: The for-profit higher education industry has been struggling with financial troubles and accusations of false advertising and predatory lending. More than 1,000 for-profit college campuses closed in the past five years, displacing around 450,000 students, according to the Chronicle of Higher Education.

By the numbers:

  • For-profit colleges represent only about one-tenth of U.S. college enrollment, per the Chronicle of Higher Education
  • Half of independent students at for-profit universities are living in poverty — 7 percentage points higher than at public 4-year universities, according to Pew.
  • Two-thirds of students still financially dependent on their parents and studying at for-profit universities live in poverty, compared to less than 20% of dependent students at public universities.
  • Between 1996 and 2016, growth in poor, dependent college students was highest among for-profit institutions and public 2-year colleges.
  • While all colleges and universities saw their poor, independent student populations rise over the 20 year span, for-profit universities had the slowest growth.

The bottom line: For-profit universities can help impoverished and marginalized students by giving them a chance at earning a degree. But the cost and instability of for-profit colleges can also contribute to socio-economic inequality.

Go deeper