for-profit higher education in the United States

For-profit colleges in the U.S. have their origins in the Colonial Era.{{cite book|url=https://books.google.com/books?id=B0UGX-10hrcC&q=Higher+ed.+inc.|title=Higher Ed, Inc.|access-date=June 14, 2015|isbn=9780801874475|last1=Ruch|first1=Richard S.|date=August 11, 2003|publisher=Johns Hopkins University Press }}{{cite book|url=https://jhupbooks.press.jhu.edu/content/diploma-mills|publisher=Johns Hopkins University Press |title=Diploma Mills|date=2016 |doi=10.1353/book.44879 |access-date=February 18, 2017 |last1=Angulo |first1=A. J. |isbn=978-1-4214-2008-0 }} According to AJ Angulo, 19th century for-profit colleges offering practical skills expanded across the United States, meeting a demand for practical job training. A student could take any courses, and they generally did not offer degrees or dormitories or extra-curricular activities. Typically they hired local businessmen to give occasional courses. In the 1830s and 1840s, proprietary business schools in Boston, Brooklyn, and Philadelphia offered penmanship and accounting classes. The expansion continued in the 1850s and 1860s, to Chicago, New Orleans, Memphis, and San Jose. Angulo estimated that there were 2,000 for-profit colleges with more than 240,000 students during the period, if fly-by-night schools were included.{{Cite web|url=http://www.processhistory.org/angulo-for-profit-colleges/|title=For-Profit Colleges in American History|date=June 20, 2017 |work=Process |publisher=Organization of American Historians |last=Angulo |first=A.J. }} The Bryant & Stratton Chain School grew to about 50 schools by 1864.{{Cite web|url=https://ohiohistorycentral.org/w/Bryant_%26_Stratton_Chain_of_Business_Schools|title=Bryant & Stratton Chain of Business Schools |website= Ohio History Central |archive-url= https://web.archive.org/web/20150905105705/https://ohiohistorycentral.org/w/Bryant_%26_Stratton_Chain_of_Business_Schools |archive-date= 5 September 2015 |url-status= dead}} After graduating from high school in 1901 Harry S. Truman decided not to attend the state university like his friends. He was more interested in continuing his advanced piano lessons in Kansas City. He also took three occasional courses at Spalding's Commercial College, including typing, shorthand, and accounting. These proved useful in getting an office job with a major bank, and later when he kept the books on his family farm.Alonzo L. Hamby, Man of the People: A Life of Harry S. Truman (Oxford UP, 1995) pp. 17–19. The decline of proprietary colleges was a result of the Smith-Hughes Act of 1917. Also known as the National Vocational Education Act, this legislation funded free public vocational education.

In 1893, two years after International Correspondence Schools (ICS) started their profitable and increasingly popular business, others followed, including University of Chicago, Penn State College, and University of Wisconsin. Through several social movements and public funding, the US slowly became more inclusive and education became more universal. But some for-profit entities pushed the envelope with deceptive marketing and advertising promising more than they could deliver.{{cite journal |title="Education for Success": The International Correspondence Schools of Scranton, Pennsylvania |url=https://journals.psu.edu/pmhb/article/view/45108 |journal=Pennsylvania Magazine of History and Biography |date=October 1996 |volume=120 |issue=4 |pages=343–370 |publisher=Penn State University |access-date=9 April 2021 |last1=Watkinson |first1=James D. }}{{cite web |last1=Whitman |first1=David |title=The Cautionary Tale of Correspondence Schools |url=https://www.newamerica.org/education-policy/reports/cautionary-tale-correspondence-schools/ |website=New America |access-date=9 April 2021}}

Since the early twentieth century critics have complained about money rather than academics driving leadership at traditional universities. Thorstein Veblen's 1918 famous screed on the topic, The Higher Learning in America, was subtitled, "A Memorandum on the Conduct of Universities by Business Men."{{Cite book|last=Veblen|first= Thorstein |author-link=Thorstein Veblen |orig-date=1918 |title=The higher learning in America: a memorandum on the conduct of universities by business men |date=June 2015 |editor-last=Teichgraeber |editor-first= Richard F. |isbn=978-1-4214-1679-3 |edition=Annotated |location=Baltimore |oclc=908146232}} While nonprofit university leaders have faced increasing pressures to grow funding and endowments, the lines separating nonprofit and for-profit institutions have been more strictly enforced in the U.S. than in nearly any other country, contributing to American dominance in higher education.{{Cite web|date=2020-10-07|title=How For-Profits Masquerade as Nonprofit Colleges|url=https://tcf.org/content/report/how-for-profits-masquerade-as-nonprofit-colleges/|access-date=2020-12-13|website=The Century Foundation|language=en}} In 1923, muckraker Upton Sinclair published The Goose Step: A Study of American Education, a 488-page account of monied interests at elite colleges and universities, which concluded that all of the institutions he researched were plutocratic. Sinclair reportedly interviewed 1000 people across the US and used a variety of primary and secondary sources, particularly from the American Association of University Professors. The Goose Step mentions a number of industrialists and entrepreneurs, including Andrew Carnegie (Carnegie Tech), John D. Rockefeller (University of Chicago), Johns Hopkins, J.P. Morgan (Columbia University), and Leland Stanford (Stanford University).{{cite book |last1=Sinclair |first1=Upton |title=The goose-step: a study of American education |date=1923 |author-link=Upton Sinclair |location=Pasadena, CA |url=https://archive.org/details/goosestepstudyof00sinc/mode/2up?q=johns+hopkins}}{{cite journal |last1=Alvord |first1=Clarence W. |title=Book Reviews: The goose-step. A study of American education. By Upton Sinclair (Pasadena, California: The author, 1923. x, 488 p.) |journal=Journal of American History |date=December 1923 |volume=10 |issue=3 |pages=336–337 |doi=10.2307/1891616 |jstor=1891616 }}

In the 1940s, "fly-by-night commercial vocational 'schools' sprang up to collect veterans' tuition grants" due to the newly created GI Bill's lax requirements and limited oversight.{{cite web|url=http://prospect.org/article/delivering-young-families-resonance-gi-bill|publisher=prospect.org|title=Delivering for Young Families: The Resonance of the GI Bill|date=December 19, 2001|access-date=February 18, 2017}} For-profit colleges grew again from 1972 to 1976, after the Higher Education Act of 1965, part of President Lyndon Johnson's "Great Society" of progressive reforms, was amended so that for-profit colleges could receive Pell Grants and federal student loans.{{cite web|url=http://digilib.gmu.edu/jspui/bitstream/1920/6273/1/Perini_thesis_2011.pdf |title=A Phoenix Still in Ashes : For-Profit Open Admissions and the Public Good |publisher=Digilib.gmu.edu |access-date=July 4, 2015}}{{cite web|url=http://scholarship.law.duke.edu/cgi/viewcontent.cgi?article=3355&context=dlj |format=PDF |title=Subprime Education: For-profit Colleges and the Problem with Title IV Federal Student Aid |publisher=Scholarship.law.duke.edu |access-date=July 4, 2015}}

University of Phoenix was a pioneer as a for-profit mega-university, schools of over 80,000 students, with an emphasis on adult learners and a business attitude, and later with an emphasis on online learning. With profit-driven schools, academic labor was faced with unbundling, where "various components of the traditional faculty role (e.g., curriculum design) are divided among different entities, while others (e.g., research) are eliminated altogether."{{cite web |last1=Kinser |first1=Kevin |title=Faculty at Private For-Profit Universities: The University of Phoenix as a New Model? |url=https://www.prophe.org/cache/0633066_p13_14_Kinser.pdf |website=International Higher Education |access-date=2 February 2021}}

From 1974 to 1986, for-profit colleges share of Pell Grants rose from 7 percent to 21 percent, even though for-profit colleges only enrolled 5 percent of all higher education students. In the 1980s, public higher education was also increasingly privatized. In the late 1980s, Secretary of Education William Bennett investigated the problems with for-profit higher education; investigators found widespread abuses across the industry.

Since the 1980s, public universities, particularly state flagship universities have increasingly relied on for-profit revenue sources and privatization.{{cite web |last1=Breneman |first1=David W. |title=The "Privatization" of Public Universities: Mistake or Model? |date=March 7, 1997 |url=https://www.chronicle.com/article/theprivatization-of-public-universities-mistake-or-model/?cid2=gen_login_refresh&cid=gen_sign_in |access-date=8 July 2021 |publisher=Chronicle of Higher Education}}{{cite news |last1=Dillon |first1=Sam |date=October 16, 2005 |title=At Public Universities, Warnings of Privatization |website=The New York Times |url=https://www.nytimes.com/2005/10/16/education/at-public-universities-warnings-of-privatization.html |access-date=8 July 2021}}{{cite web |last1=Carey |first1=Kevin |title=Why Flagship Public Universities Should Stay Public |url=https://www.chronicle.com/article/why-flagship-public-universities-should-stay-public/ |access-date=8 July 2021 |publisher=Chronicle of Higher Education |date=August 7, 2011 }}{{cite web |last1=Lederman |first1=Doug |title='Privatization and the Public Good' |url=https://www.insidehighered.com/news/2014/12/08/does-privatizing-public-higher-education-necessarily-undermine-public-good |access-date=8 July 2021 |publisher=Inside Higher Education}}{{cite web |last1=Piereson |first1=James |last2=Schaefer Riley |first2=Naomi |title=Reimagining the Public University |url=https://www.nationalaffairs.com/publications/detail/reimagining-the-public-university |access-date=8 July 2021 |website=www.nationalaffairs.com |publisher=National Affairs}}

Regulations and policies to curb the abuses in for-profit higher education occurred during the presidency of Barack Obama. These actions were rolled back during the Donald Trump administration.{{cite news |last1=Hackman |first1=Michelle |title=Trump Administration Revokes Obama-Era Rule on For-Profit Universities |url=https://www.wsj.com/articles/trump-administration-revokes-obama-era-rule-on-for-profit-universities-11561763021 |newspaper=Wall Street Journal |date=June 28, 2019 |access-date=26 February 2023}}

As for-profit colleges face declining enrollment, there has been a blurring between for-profit and non-profit institutions.{{Cite web|url=https://www.insidehighered.com/news/2015/02/23/nonprofit-university-becomes-benefit-corporation-further-blurring-profit-divide|title=Nonprofit university becomes a 'benefit corporation,' further blurring for-profit divide|website=insidehighered.com}}{{Cite web|url=https://www.insidehighered.com/digital-learning/article/2019/01/09/purdue-prepares-online-expansion-support-newly-acquired-profit|title=Purdue prepares online expansion with support from newly acquired for-profit {{pipe}} Inside Higher Ed|website=insidehighered.com}} For-profit Online Program Managers (OPMs) serving public and private non-profit schools include 2U, Academic Partnerships, Bisk Education, Noodle Partners, Pearson Education, and Wiley.{{Cite web|url=https://www.theatlantic.com/education/archive/2016/06/for-profit-companies-nonprofit-colleges/485930/|title=How Five Companies Are Gaining Millions in Profit Off Education at Nonprofit Schools|first1=Derek|last1=Newton|date=June 7, 2016|website=The Atlantic}}{{Cite web|url=https://www.insidehighered.com/digital-learning/article/2018/06/04/shakeout-coming-online-program-management-companies|title=Is a shakeout coming for online program management companies? {{pipe}} Inside Higher Ed|website=insidehighered.com}} In 2018, there were more than two dozen OPMs. Human capital contracts, also known as Income Share Agreements (ISAs) may also be seen as for-profit vehicles.http://www.aei.org/wp-content/uploads/2016/03/Students-Future-as-Investments.pdf {{Bare URL PDF|date=March 2022}}

{{See also|For-profit colleges in the United States}}

For-profit colleges, also known as proprietary colleges, are post-secondary schools that survive by making a profit for their investors. For-profit colleges have frequently offered career-oriented curricula including culinary arts, business and technology (including coding bootcamps), and health care. These institutions have a long history in the US, and grew rapidly from 1972 to 2009, fueled by government funding and corporate investment.{{cite web |last1=Unglesbee |first1=Ben |title=Private equity's role in the rise – and fall – of for-profit colleges |url=https://www.highereddive.com/news/private-equitys-role-in-the-rise-and-fall-of-for-profit-colleges/554077/ |website=highereddive.com |access-date=28 February 2021}} Approximately 40 percent of all for-profit college campuses have closed since 2010.{{Cite web | url=https://theintercept.com/2019/04/12/betsy-devos-for-profit-colleges/ |title = Betsy DeVos Quietly Making It Easier for Dying For-Profit Schools to Rip off a Few More Students on the Way Out|date = April 12, 2019}} Concerns about for-profit school owners converting to nonprofit while retaining profit-making roles led lawmakers to request an examination of the situation by the U.S. Government Accountability Office.{{Cite web|date=2019-11-14|title=GAO Probing For-Profit College Conversions As DeVos Retreats on Approvals|url=https://www.republicreport.org/2019/gao-probing-for-profit-college-conversions-as-devos-retreats-on-approvals/|access-date=2020-12-13|website=Republic Report|language=en-US}} Two states, Maryland and California, enacted laws to review the legitimacy of nonprofit claims by colleges.

{{See also|online program manager}}

Online program managers (OPMs) play a significant role in online education, serving many colleges and universities, including elite schools.{{Cite web|url=http://www.montanakaimin.com/news/over-half-of-online-tuition-could-go-to-private-company/article_5c75ac14-5b0e-11e9-a1c9-9747a7a1d138.html|title=Over half of online tuition could go to private company|first1=Cameron Kia Weix / Montana|last1=Kaimin|website=Montana Kaimin|date=April 10, 2019 }} However, the industry has felt a great deal of economic pressure.{{cite web |last1=McKenzie |first1=Lindsay |title=A Reckoning for 2U, and OPMs? |url=http://www.insidehighered.com/digital-learning/article/2019/08/01/bad-day-2u-highlights-vulnerability-online-program-management |website=insidehighered.com |access-date=August 3, 2019}} The largest OPM's are: 2U, Academic Partnerships, Bisk Education, Pearson Learning and Wiley Education Solutions.{{cite web |last1=Schwartz |first1=Natalie |title=Democratic congressional inquiry targets OPMs |url=https://www.educationdive.com/news/congressional-inquiry-targets-online-program-managers/571275/ |website=educationdive.com |access-date=22 April 2020}}

In 2007, Academic Partnerships was founded, and a year later, 2U. In 2010, Noodle was created. By 2018 there were approximately 30 OPMs and experts were reporting that a shakeout would occur.{{cite web |last1=McKenzie |first1=Lindsay |title=A Reckoning for 2U, and OPMs? |url=http://www.insidehighered.com/digital-learning/article/2019/08/01/bad-day-2u-highlights-vulnerability-online-program-management |access-date=August 3, 2019 |website=insidehighered.com}}

In June 2018, Inside Higher Education published "A Tipping Point for OPM?" which stated that most experts thought a "shakeout" would be occurring among Online Program Managers. In July 2019, 2U shares dropped more than 50 percent when it lowered its growth expectations.{{cite web |last1=Millward |first1=Wade Tyler |title=2U Stock Tumbles 54% After Company Lowers Growth Expectations for 2019 |url=https://www.edsurge.com/news/2019-07-31-2u-stock-tumbles-after-online-degree-company-lowers-growth-expectations-for-2019 |website=edsurge.com |date=July 31, 2019 |access-date=August 5, 2019}} According to a Century Foundation analysis of 70 universities, OPMs create an increasing risk to students and public education. According to the report "this growing private control{{snd}}which is often hidden from public view{{snd}}is jeopardizing the quality of online programs, stripping control from colleges and universities, and putting students at risk of predatory behavior and abuse at the hands of for-profit companies."{{cite web |last1=The Century Foundation |title=TCF Analysis of 70+ University-OPM Contracts Reveals Increasing Risks to Students, Public Education |url=https://tcf.org/content/about-tcf/tcf-analysis-70-university-opm-contracts-reveals-increasing-risks-students-public-education/?session=1 |website=tcf.org |date=September 12, 2019 |publisher=The Century Foundation |access-date=27 October 2020}}

In January 2021, in anticipation of an edtech bubble, Class Acceleration Corporation (CLAS.U), a special-purpose acquisition company (SPAC) was formed, raising $225 million in its initial public offering.{{cite web |last1=Wan |first1=Tony |date=January 27, 2021 |title=Public Edtech Companies Have Been Rare. These SPACs Will Change That. |url=https://www.edsurge.com/news/2021-01-27-public-edtech-companies-have-been-rare-these-spacs-will-change-that |access-date=18 July 2021 |website=www.edsurge.com |publisher=Ed Surge}} In March 2021, Coursera, became a publicly traded corporation.{{cite web |last1=de León |first1=Riley |date=March 31, 2021 |title=Coursera closes up 36%, topping $5.9 billion market cap in Wall Street debut |url=https://www.cnbc.com/2021/03/31/coursera-ipo-cour-begins-trading-on-the-nyse.html |access-date=3 July 2021 |website=www.cnbc.com |publisher=CNBC}} In June 2021 2U announced they would be acquiring edX, "to create an entity that would reach 50 million learners and serve most of the best universities in the United States and the world."{{cite web |last1=Lederman |first1=Doug |title=2U, edX to Combine to Create Online Learning Giant |url=https://www.insidehighered.com/news/2021/06/29/2u-edx-combine-create-online-learning-behemoth |access-date=29 June 2021 |publisher=Inside Higher Education}}Guild Education, an intermediary in employee education benefits, also grew in value, from $1 billion in 2019 to $3.75 billion in 2021, adding Target Corporation to its list of large corporate clients.{{cite web |last1=Rosenbaum |first1=Eric |date=August 5, 2021 |title=EVOLVE Target, Walmart education deals are inflection point in war for workers, says Guild Education CEO |url=https://www.cnbc.com/2021/08/05/target-walmart-college-deals-are-inflection-point-in-war-for-workers.html |access-date=5 August 2021 |website=CNBC}} In September 2021, Anthology, a higher education administrative software firm, announced that would merge with Blackboard.{{cite web |last1=Lederman |first1=Doug |title=Blackboard to Merge With Anthology, Creating Massive Ed-Tech Company |url=https://www.insidehighered.com/news/2021/09/13/blackboard-merge-anthology-creating-massive-ed-tech-company |access-date=13 September 2021 |publisher=Inside Higher Education}}

In 2022, 2U acquired edX, a platform for massive open online courses.{{cite web |last1=Hill |first1=Phil |title=What a New Strategy at 2U Means for the Future of Online Higher Education |url=https://www.edsurge.com/news/2022-08-05-what-a-new-strategy-at-2u-means-for-the-future-of-online-higher-education |website=www.edsurge.com |date=August 5, 2022 |publisher=EdSurge |access-date=3 October 2023}}

In 2023, the US Department of Education announced that OPMs would be subject to greater oversight, to include audits. Higher education institutions would be required to report details about their agreements with OPMs by May 1, 2023.{{cite web |last1=Knott |first1=Katherine |title=Oversight Coming for Online Program Providers |url=https://www.insidehighered.com/news/2023/02/16/education-department-review-rules-online-program-providers |publisher=Inside Higher Education |access-date=21 February 2023}} The same year, Edtech expert Phil Hill said that the OPM model is now "on life support."{{cite web |last1=Coffey |first1=Lauren |title=OPMs on 'Life Support' in Changing Online Marketplace |url=https://www.insidehighered.com/news/tech-innovation/2023/10/11/are-opms-life-support-some-experts-think-so |publisher=Inside Higher Education |access-date=12 October 2023}}

Since the 1980s, public universities, particularly state flagship universities have increasingly relied on for-profit revenue sources and privatization.{{cite web |last1=Breneman |first1=David W. |title=The 'Privatization' of Public Universities: Mistake or Model? |date=March 7, 1997 |url=https://www.chronicle.com/article/theprivatization-of-public-universities-mistake-or-model/?cid2=gen_login_refresh&cid=gen_sign_in |publisher=Chronicle of Higher Education |access-date=8 July 2021}}{{cite news |last1=Dillon |first1=Sam |title=At Public Universities, Warnings of Privatization |url=https://www.nytimes.com/2005/10/16/education/at-public-universities-warnings-of-privatization.html |website=The New York Times |date=October 16, 2005 |access-date=8 July 2021}}{{cite web |last1=Lederman |first1=Doug |title=Privatization and the Public Good |url=https://www.insidehighered.com/news/2014/12/08/does-privatizing-public-higher-education-necessarily-undermine-public-good |publisher=Inside Higher Education |access-date=8 July 2021}}{{cite news |last1=Piereson |first1=James |last2=Schaefer Riley |first2=Naomi |title=Reimagining the Public University |url=https://www.nationalaffairs.com/publications/detail/reimagining-the-public-university |website=www.nationalaffairs.com |publisher=National Affairs |access-date=8 July 2021}}

Public colleges and universities have increasingly relied on for-profit businesses for a number of products and services, including food service. For example, Sodexo, Aramark, and Compass Group are three major for-profit food servicers.{{cite web |title=Redefining the Student Experience |url=https://www.aramark.com/industries/education/colleges-universities |access-date=9 July 2021 |website=www.aramark.com |publisher=Aramark}}{{cite web |last1=Anderson |first1=Greta |title=Colleges Break From Corporate Dining Services |url=https://www.insidehighered.com/news/2021/03/31/movement-against-corporatized-campus-dining-services-renewed |access-date=9 July 2021 |publisher=Inside Higher Education}}

Today, most state flagship universities are not affordable for low- and moderate-income families as these schools cater more toward affluent students.{{cite web |last1=St. Amour |first1=Madeline St. Amour |title=Flagships Fail on Financial Equity |url=https://www.insidehighered.com/news/2019/09/12/most-public-flagship-universities-are-unaffordable-low-income-students-report-finds |access-date=9 July 2021 |publisher=Inside Higher Education}} According to the U.S. Department of education the cost of 4-year bachelor's degrees, has doubled in the last 30 years even when accounting for inflation.{{Cite web |title=College Affordability and Completion: Ensuring a Pathway to Opportunity {{!}} U.S. Department of Education |url=https://www.ed.gov/college |access-date=2021-07-19 |website=www.ed.gov}} The increased cost of tuition for higher education leads to multiple detrimental effects both socially and economically within the U.S. including preventing access to college education, decreasing individual student health, and increasing the chances of a debt crisis.{{Cite web |title=Addressing higher ed economics |url=http://www.gpprspring.com/addressing-higher-ed-economics |archive-url=https://web.archive.org/web/20200915014406/http://www.gpprspring.com/addressing-higher-ed-economics |url-status=usurped |archive-date=September 15, 2020 |access-date=2021-07-19 |website=Georgetown Public Policy Review |language=en-US}} In 2013, the average cost of tuition was 3.5 times that of a median households annual income.

In 2023, the Chronicle of Higher Education found that 75 percent of the university officials they surveyed said private-public partnerships were increasing.{{cite web |title=The Chronicle of Higher Education & P3•EDU 2023 Public-Private Partnership Survey |url=https://www.p3edu.com/wp-content/uploads/2023/08/2023-Public-Private-Partnership-Survey.pdf |website=www.p3edu.com |publisher=P3.edu |access-date=14 October 2023}}

From the late 1980s to the mid-1990s, Senator Sam Nunn led for more scrutiny of for-profit colleges. The General Accounting Office (GAO) also found that 135 for-profit colleges contributed to 54% of all student loan defaults. The number of for-profit colleges rose from about 200 in 1986 to nearly 1,000 in 2007.{{cite book|url=https://books.google.com/books?id=nVM3tUhQeqUC&q=for-profot+colleges+and+universities&pg=PA68|title=For-Profit Colleges and Universities|access-date=June 14, 2015|isbn=9781579225285|last1=Hentschke|first1=Guilbert C.|last2=Lechuga|first2=Vicente M.|last3=Tierney|first3=William G.|date=March 12, 2012|publisher=Stylus }} From 1990 to 2009, for-profit colleges grew to 11.8 percent of all undergraduates.{{cite web|url=https://www.insidehighered.com/news/2010/08/26/enroll|title=3 Million and Counting|work=Inside Higher Ed|access-date=June 14, 2015}} For-profit college enrollment expanded even more after the 1998 reauthorization of the Higher Education Act resulted in more deregulation. The industry also grew in the wake of state budget cuts, stagnation, and austerity in funding that grew more visible in the 1980s and 90s.{{cite web|url=http://www.news.cornell.edu/stories/2014/04/suzanne-mettler-sees-higher-ed-caste-system|title=Suzanne Mettler sees higher ed 'caste system' |work=Cornell Chronicle|access-date=June 14, 2015}} Initial public offerings of Devry, ITT Educational Services, Apollo Education Group, Corinthian Colleges, and Career Education Corporation occurred between 1991 and 1998 and for-profit colleges became "the darlings of Wall Street." The advent of the Internet also helped enrollment as many for-profit colleges were pioneers in online education. The George W. Bush administration further deregulated the industry as posts at the Department of Education (ED) were filled with for-profit administrators.{{Cite web|last=Jackson|first=Abby|title=How one memo from 2002 may have helped launch the for-profit college boom|url=https://www.businessinsider.com/president-bush-incentivized-the-for-profit-college-business-2015-7|access-date=2020-06-21|website=Business Insider}} Increased capitalization of for-profit colleges occurred after Goldman Sachs, Wells Fargo, Blum Capital Partners and Warburg Pincus became large institutional investors in this industry.{{cite news|url=https://www.huffingtonpost.com/2011/10/14/goldman-sachs-for-profit-college_n_997409.html|title=With Goldman's Foray Into Higher Education, A Predatory Pursuit Of Students And Revenues|work=The Huffington Post|access-date=June 14, 2015|date=October 14, 2011}}{{cite news|url=https://www.huffingtonpost.com/davidhalperin/who-owns-the-awful-corint_b_4101323.html|title=Who Owns The Awful Corinthian Colleges? Wells Fargo, Marc Morial, Pension Funds|work=The Huffington Post|access-date=June 14, 2015|date=October 15, 2013}}{{cite web|url=http://www.sandiegoreader.com/weblogs/news-ticker/2012/jul/14/bridgepoint-huge-profits-but-possibly-no-future/#|title=Bridgepoint: Huge Profits, but Possibly No Future|publisher=Sandiegoreader.com|access-date=June 14, 2015}}{{Cite web | url=https://www.educationdive.com/news/private-equitys-role-in-the-rise-and-fall-of-for-profit-colleges/554077/ |title = Private equity's role in the rise – and fall – of for-profit colleges}} Private equity in for-profit education was associated with higher costs to students and declining outcomes: less spent on education, more student loan debt and lower student loan repayment rates, lower graduation rates, and lower earnings for graduates.

In the 2009–2010 academic year, for-profit higher education corporations received $32 billion in Title IV funding{{snd}}more than 20% of all federal aid. More than half of for-profits' revenues were spent on marketing or extracted as profits, with less than half spent on instruction.{{cite web|title=For-Profit College Investigation|url=http://www.harkin.senate.gov/help/forprofitcolleges.cfm|publisher=U.S. Senate|access-date=March 19, 2013|archive-url=https://web.archive.org/web/20130328220032/http://www.harkin.senate.gov/help/forprofitcolleges.cfm|archive-date=March 28, 2013|url-status=dead}}{{cite web|title=Where Are Federal G.I. Bill Dollars Going?|url=http://www.harkin.senate.gov/documents/pdf/4eb2c45d86297.pdf|publisher=U.S. Senate|access-date=March 19, 2013|archive-url=https://web.archive.org/web/20130317141912/http://www.harkin.senate.gov/documents/pdf/4eb2c45d86297.pdf|archive-date=March 17, 2013|url-status=dead}}{{cite web|title=Senator Harkin's Findings Regarding Veterans and For-Profit Colleges|url=http://www.harkin.senate.gov/documents/pdf/4f9ac62292704.pdf|publisher=U.S. Senate|access-date=March 19, 2013|archive-url=https://web.archive.org/web/20130218044753/http://www.harkin.senate.gov/documents/pdf/4f9ac62292704.pdf|archive-date=February 18, 2013|url-status=dead}}

A two-year congressional investigation chaired by Senator Tom Harkin, D-Iowa, examined for-profit higher education institutions. The committee found that $32 billion in federal funds were spent in 2009–2010 on for-profit colleges. The majority of students left without a degree and carried post-schooling debt.{{cite web|url=http://www.help.senate.gov/imo/media/for_profit_report/Contents.pdf|title=For Profit Higher Education: The Failure to Safeguard the Federal Investment and Ensure Student Success|website=Senate.gov|access-date=January 1, 2018}} Recruitment training manuals at some schools specifically targeted low-income students and attempted to elicit 'pain' and 'fear.'{{Cite web|last=Kirkham|first=Chris|date=2011-02-08|title=For-Profit College Recruiters Taught To Use 'Pain,' 'Fear,' Internal Documents Show|url=https://www.huffpost.com/entry/for-profit-college-recruiters-documents_n_820337|access-date=2020-06-21|website=HuffPost|language=en}} The manuals even included groups to target, including: "welfare mom w/kids", "pregnant ladies", and "experienced a recent death." In 2010, Trump University was closed by the State of New York for operating without a license.{{cite news|url=https://www.reuters.com/article/us-trump-nyag-lawsuit-idUSKCN0I52MW20141016|title=New York judge finds Donald Trump liable for unlicensed school|work=Reuters|access-date=June 14, 2015|date=October 16, 2014}}

As for-profit colleges began to falter, for-profit online program managers (OPMs) gained momentum. Under the Obama administration (2009–2017), for-profit colleges received greater scrutiny from the U.S. government. State Attorneys General, the media, and scholars also investigated these schools.{{cite news|last1=Armour|first1=Stephanie|last2=Zibel|first2=Alan|title=For-Profit College Probe Expands|url=https://www.wsj.com/articles/SB10001424052702303819704579318872286744010|access-date=January 15, 2015|work=The Wall Street Journal|date=January 13, 2014}}{{cite web|url=https://www.theatlantic.com/education/archive/2014/04/how-higher-ed-contributes-to-inequality/360407/|title=How Higher Ed Contributes to Inequality|work=The Atlantic|access-date=June 14, 2015|date=April 9, 2014}} For-profit school enrollment reached its peak in 2009.{{cite web|url=http://nces.ed.gov/programs/coe/indicator_cha.asp|publisher=nces.ed.gov|title=The Condition of Education – Participation in Education – Postsecondary – Undergraduate Enrollment – Indicator May (2016)|access-date=February 18, 2017}}{{cite web|last1=Fain|first1=Paul|title=More Selective For-Profits|url=https://www.insidehighered.com/news/2011/11/11/enrollments-tumble-profit-colleges|work=Inside Higher Ed|access-date=January 15, 2015|date=November 11, 2011}}{{cite web|url=https://www.insidehighered.com/news/2014/05/15/new-data-show-slowing-national-enrollment-decline|title=New data show slowing national enrollment decline |work=Inside Higher Ed|access-date=June 14, 2015}}{{cite web |url=http://www.educationdive.com/news/how-might-these-6-for-profit-institutions-fare-in-2015/346788/|title=How might these 6 for-profit institutions fare in 2015?|date=December 31, 2014|work=Education Dive|access-date=June 14, 2015}} Corinthian Colleges and Education Management Corporation (EDMC) faced enrollment declines and major financial trouble in 2014 and 2015.{{cite web|url=https://www.npr.org/blogs/ed/2014/12/24/370979991/an-update-on-for-profit-colleges|title=An Update On For-Profit Colleges|date=December 24, 2014|publisher=NPR|access-date=June 14, 2015}} In 2015, Corinthian Colleges filed for bankruptcy.{{cite web|url=https://www.latimes.com/business/la-fi-corinthian-shutdown-20150427-story.html|work=Los Angeles Times|title=Corinthian closing its last schools; 10,000 California students displaced |access-date=February 18, 2017|date=April 27, 2015}} Enrollment at the University of Phoenix chain fell 70% from its peak{{cite web|url=https://www.chicagotribune.com/business/ct-for-profit-colleges-enrollment-slide-20160922-story.html|title=Amid scrutiny, for-profit colleges see enrollment slide |work=Chicago Tribune|date=September 22, 2016 |access-date=February 18, 2017}} In 2016, ITT Technical Institute closed, and the US Department of Education stripped ACICS of its accreditation powers. In 2017, the advocacy group the Debt Collective created its own, unofficial "Defense to Repayment App" allowing former students of schools accused of fraud to pursue debt cancellation.{{cite web|url=https://debt-is.herokuapp.com/defense-to-repayment|publisher=debt-is.herokuapp.com|title=The Debt Collective|access-date=February 18, 2017|archive-url=https://web.archive.org/web/20160131074022/http://debt-is.herokuapp.com/defense-to-repayment|archive-date=January 31, 2016|url-status=dead}}

From 2017 to 2020, the Donald Trump administration accused the government of regulatory overreach and loosened regulations.{{cite web|url=https://consumerist.com/2017/08/17/education-secretary-betsy-devos-will-allow-for-profit-schools-to-continue-offering-programs-that-dont-meet-standards/|title=Education Secretary Betsy DeVos Will Allow For-Profit Schools To Continue Offering Programs That Don't Meet Standards|date=August 17, 2017|website=Consumerist.com|access-date=January 1, 2018}} In 2018 Strayer University and Capella University merged as Strategic Education.{{cite web|url=https://www.insidehighered.com/news/2017/10/30/strayer-and-capella-two-publicly-traded-profit-providers-merge|title=Strayer and Capella, two publicly traded for-profit providers, to merge|website=InsideHigherEd.com|access-date=January 1, 2018}}{{Cite web|url=http://www.startribune.com/capella-and-strayer-complete-1-2-billion-merger-take-new-name-as-strategic-education/489752481/|title=Capella and Strayer complete merger, shares soar nearly 12 percent on strong Q2 results|website=Star Tribune|date=August 2, 2018 }} EDMC sold its remaining schools to the non-profit Dream Foundation and Purdue University purchased Kaplan University.{{cite web|url=https://www.buzzfeed.com/mollyhensleyclancy/for-1-purdue-university-will-acquire-a-massive-for-profit|title=Here's Why Purdue University Is Buying A Massive For-Profit College For $1|website=Buzzfeed|date=April 27, 2017 |access-date=January 1, 2018}} Atalem sold DeVry University to Cogswell Education.{{cite web|url=https://www.buzzfeed.com/mollyhensleyclancy/devry-university-will-be-sold-to-a-tiny-college-company|title=Troubled DeVry University Gets Sold Off For A Pittance|first1=Molly|last1=Hensley-Clancy|website=BuzzFeed|date=December 5, 2017 |access-date=January 1, 2018}} In 2018, U.S. Education Secretary Betsy Devos scrapped a 2010 ED "gainful employment" rule.{{Cite news|url=https://www.washingtonpost.com/news/grade-point/wp/2018/08/10/trumps-education-department-moves-to-rescind-rule-aimed-at-for-profit-schools/|title=Trump's Education Department moves to rescind rule aimed at for-profit schools|newspaper=Washington Post}}{{Cite news|url=https://www.nytimes.com/2018/08/10/us/politics/betsy-devos-for-profit-colleges.html|title=DeVos Ends Obama-Era Safeguards Aimed at Abuses by For-Profit Colleges|first1=Erica L.|last1=Green|newspaper=The New York Times|date=August 10, 2018}}{{Cite web|url=https://www.cnn.com/2018/08/10/politics/devos-obama-for-profit-college-rule/index.html|title=Betsy DeVos' rollback of Obama's for-profit college rules is almost complete|first1=Katie|last1=Lobosco|website=CNN|date=August 10, 2018}} Later that year, Education Corporation of America began closing its campuses.{{Cite web|url=https://www.insidehighered.com/news/2018/09/12/profit-chain-will-close-dozens-campuses|title=For-profit chain will close dozens of campuses|website=insidehighered.com}}{{Cite web|url=https://www.usatoday.com/story/news/education/2019/03/26/how-to-choose-a-college-argosy-university-college-closing/3211480002/|title=A college closed, leaving thousands without a degree. How to keep it from happening to you|first1=Chris|last1=Quintana|website=USA Today }} ED also restored ACICS as an accreditor.{{Cite web|url=https://www.insidehighered.com/news/2018/11/26/devos-restores-authority-profit-accreditor|title=DeVos restores authority of for-profit accreditor|website=insidehighered.com}} In 2018 and 2019, Dream Center Education Holdings began closing and selling off schools of the Art Institutes, Argosy University, and South University.{{Cite news|url=https://www.nytimes.com/2019/03/07/business/argosy-college-art-insititutes-south-university.html|title=A College Chain Crumbles, and Millions in Student Loan Cash Disappears|first1=Stacy|last1=Cowley|first2=Erica L.|last2=Green|newspaper=The New York Times|date=March 7, 2019}} In 2019, Argosy University closed. USA Today portrayed the school's collapse as part of a trend, highlighting the losses of other for-profit colleges, including Brightwood College (2018), Vatterott College (2018), and Virginia College (2018).{{Cite web|url=https://www.usatoday.com/story/news/education/2019/03/26/for-profit-college-closing-argosy-university/3271813002/|title=Trouble at for-profit colleges in 5 graphs: Here's what's happening|first1=Lindsay|last1=Huth|website=USA Today}} In 2019, Betsy DeVos was criticized for allowing five failing for-profit colleges to avoid posting a letter of credit. Accreditor WASC approved Ashford University's conversion to a non-profit. Its parent company, Zovio, continued to be a publicly traded for-profit college company.{{cite web |last1=Busta |first1=Hallie |title=Accreditor approves Ashford U's nonprofit conversion |url=https://www.highereddive.com/news/accreditor-approves-ashford-us-nonprofit-conversion/558781/ |website=Higher Ed Dive |access-date=July 16, 2019}} In December 2020, Congress passed a bill that improved safeguards for veterans exploited by predatory colleges.{{cite web |last1=Wentling |first1=Nikki |title=Congress Passes Sweeping End-of-Year Bill Impacting 'Every Corner' of the Veteran Community |url=https://www.military.com/daily-news/2020/12/17/congress-passes-sweeping-end-of-year-bill-impacting-every-corner-of-veteran-community.html |website=militarytimes.com |date=December 17, 2020 |access-date=17 December 2020}}

Companies can recruit and retain employees by offering them education assistance and employee tuition discounts.{{cite journal |last1=Cappelli |first1=Peter |year=2002 |title=Why Do Employers Pay For College? |url=https://www.nber.org/papers/w9225 |publisher=National Bureau of Economic Research |doi=10.3386/w9225 |access-date=19 March 2021 |website=www.nber.org|series=Working Paper Series }}Guild Education is a for-profit company that works with employers such as Walmart and Disney to offer tuition assistance from several colleges, including University of Arizona Global (formerly Ashford University), Purdue University Global (formerly Kaplan University), and University of Florida.

While most student loans are owned by the federal government, for-profit student loan servicers collect a large amount of the student loan debt. Navient, Wells Fargo, and Discover Financial Services have been among the largest student loan lenders. FFEL loans and private loans are packaged, rated by rating agencies, and sold off as Student Loan Asset-Backed Securities (SLABS). For-profit student loan servicers have included Maximus Inc., Sallie Mae, Navient, Great Lakes Borrowers and Nelnet.{{cite web |last1=Du |first1=Jack |title=Student Loan Asset-Backed Securities: Safe or Subprime? |url=https://www.investopedia.com/articles/investing/081815/student-loan-assetbacked-securities-safe-or-subprime.asp#:~:text=Student%20loan%20asset%2Dbacked%20securities%20(SLABS)%20are%20exactly%20what,much%20like%20an%20ordinary%20bond. |access-date=6 August 2021 |website=www.investopedia.com |publisher=Investopedia}} In 2020, there was a resurgence in private student loans.{{cite web |last1=Gravely |first1=Alexis |title=Student Debt From Private Lenders Hits All-Time High |url=https://www.insidehighered.com/news/2021/11/17/report-outlines-class-2020s-student-debt-burden?mc_cid=e597dd21f6&mc_eid=92b3e8a476 |access-date=17 November 2021 |publisher=Inside Higher Education}}

The main sources of initial capital for large proprietary colleges and online program managers are institutional investors: international banks, hedge funds, institutional retirement funds, and state retirement funds.{{cite book|url=https://books.google.com/books?id=E9KJWnyDk1sC&q=warburg+pincus+acquires+bridgepoint+education&pg=PA53|title=Corporations Are Not People|access-date=June 14, 2015|isbn=9781609941079|last1=Clements|first1=Jeffrey D.|year=2012|publisher=Berrett-Koehler Publishers }} Some smaller schools are family owned businesses. At elite universities, donors may serve as significant sources. Stanford University and Johns Hopkins University were built with funds from their founders.

For-profit institutions also obtain funds through student private loans, corporate loans, and the selling of assets.{{cite web|url=http://www.gpo.gov/fdsys/pkg/CPRT-112SPRT74931/pdf/CPRT-112SPRT74931.pdf |title=For Profit Higher Education: The Failure to Safeguard the Federal Investment and Ensure Student Success |publisher=Gpo.gov |access-date=July 4, 2015}}{{cite web|url=https://www.pbs.org/newshour/rundown/new-report-shows-nearly-2-billion-of-gi-bill-funds-go-to-for-profit-colleges/|title=New report shows nearly $2 billion in GI Bill funds go to for-profit colleges|work=PBS NewsHour|date=July 30, 2014|access-date=June 14, 2015}}

The for-profit education industry also receives billions of dollars through VA benefits also known as the GI Bill.{{cite web |title=For Profit Higher Education: The Failure to Safeguard the Federal Investment and Ensure Student Success |url=http://www.help.senate.gov/imo/media/for_profit_report/PartI-PartIII-SelectedAppendixes.pdf |access-date=July 4, 2015 |publisher=Help.senate.gov}} According to a CBS News report in 2017, 40 percent of all GI Bill funds went to for-profit colleges.{{Cite web |title=Warrior Scholar Project helps veterans transition from battlefield to classroom |url=https://www.cbsnews.com/news/warrior-scholar-project-helps-veterans-transition-to-college-life/ |website=CBS News|date=August 15, 2017 }} For-profit colleges receive money for servicemembers and their spouses attending college while still in the military.{{Cite web |date=March 27, 2018 |title=DoD review: 0% of schools following TA rules |url=https://rebootcamp.militarytimes.com/news/education/2018/03/27/dod-review-0-of-schools-following-ta-rules/}} In fiscal year 2018, for-profit colleges received $181 million or 38 percent of all DOD TA funds. For-profit schools also receive money from DOD for education of military spouses. The program is known as MyCAA.{{Cite web |title=Home |url=https://www.dodmou.com/}}{{Cite web |date=April 11, 2019 |title=Few military spouses are using this $4,000 benefit |url=https://www.militarytimes.com/pay-benefits/2019/04/10/few-military-spouses-are-using-this-4000-benefit/}}

Coding bootcamps and other tech boot camps are a popular route for acquiring technical skills quickly. However, there may already be an oversupply of graduates and some coding bootcamps have already closed.{{Cite news |last1=Lohr |first1=Steve |date=August 24, 2017 |title=As Coding Boot Camps Close, the Field Faces a Reality Check |newspaper=The New York Times |url=https://www.nytimes.com/2017/08/24/technology/coding-boot-camps-close.html}}{{Cite web |date=April 9, 2019 |title=Suzy Welch: The only 2 reasons you should drop everything and learn to code |url=https://www.cnbc.com/2019/04/08/suzy-welch-the-only-2-reasons-you-should-learn-to-code.html |website=CNBC}}{{Cite web |title=As some pricey coding camps fade away, Codecademy barrels ahead with affordable paid offerings and a new mobile app |date=October 4, 2018 |url=https://techcrunch.com/2018/10/04/as-some-pricey-coding-camps-fade-away-codecademy-barrels-ahead-with-affordable-paid-offerings-and-a-new-mobile-app/}}{{Cite web |date=July 22, 2017 |title=Why Are Coding Bootcamps Going Out of Business? |url=http://hackeducation.com/2017/07/22/bootcamp-bust}} Some privately run bootcamps were acquired by for-profit educational companies. In 2014, Kaplan acquired Dev Bootcamp.{{Cite web |date=2014-06-25 |title=Dev Bootcamp No Longer Bootstrapped, Acquired by Kaplan – EdSurge News |url=https://www.edsurge.com/news/2014-06-25-dev-bootcamp-no-longer-bootstrapped-acquired-by-kaplan |access-date=2020-06-21 |website=EdSurge |language=en}} In 2016, Capella University acquired Hackbright Academy, a coding bootcamp for women, for $18 million.{{Cite web |date=2016-04-22 |title=Capella University Acquires Hackbright Coding Bootcamp for $18M |url=https://www.edsurge.com/news/2016-04-22-capella-university-acquires-hackbright-coding-bootcamp-for-18m |access-date=2020-06-21 |website=EdSurge News |language=en}} In October 2020, online program manager 2U announced that it had established more than 50 additional bootcamps.{{cite web |title=2U, Inc.'s (TWOU) CEO Chip Paucek on Q3 2020 Results – Earnings Call Transcript |url=https://seekingalpha.com/article/4381940-2u-inc-s-twou-ceo-chip-paucek-on-q3-2020-results-earnings-call-transcript |access-date=19 December 2020 |website=seekingalpha.com|date=October 27, 2020 |last1=Transcripts |first1=SA }}

For-profit corporations also obtain cash flow through student private loans, corporate loans, and the selling of assets.{{cite web |title=For Profit Higher Education: The Failure to Safeguard the Federal Investment and Ensure Student Success |url=http://www.gpo.gov/fdsys/pkg/CPRT-112SPRT74931/pdf/CPRT-112SPRT74931.pdf |access-date=July 4, 2015 |publisher=Gpo.gov}}{{cite web |date=July 30, 2014 |title=New report shows nearly $2 billion in GI Bill funds go to for-profit colleges |url=https://www.pbs.org/newshour/rundown/new-report-shows-nearly-2-billion-of-gi-bill-funds-go-to-for-profit-colleges/ |access-date=June 14, 2015 |work=PBS NewsHour}} Colleges and universities may generate capital for large projects like sports stadiums, dormitories, and other infrastructure by issuing bonds that are created, rated, and sold to investors.{{cite web |last1=Katsomitros |first1=Alex |title=The emerging university bonds market |url=https://www.worldfinance.com/markets/the-emerging-university-bonds-market |access-date=17 July 2021 |website=www.worldfinance.com |publisher=World Finance}}{{cite news |last1=Chung |first1=Juliet |last2=Korn |first2=Melissa |title=Bond Boom Comes to America's Colleges and Universities |url=https://www.wsj.com/articles/bond-boom-comes-to-americas-colleges-and-universities-11608978781 |access-date=17 July 2021 |newspaper=Wall Street Journal |date=December 26, 2020 }}

Research parks and medical facilities make up a great amount of revenue for brand name US Universities. There are more than 130 research parks in the US. These parks do research for private companies and federal agencies and they patent pharmaceuticals and other scientific products.{{cite book |last1=Twithchell |first1=James |title=Branded Nation |publisher=Simon & Schuster |pages=280–281}}

US universities, especially elite schools, hold large amounts of land, giving them an enormous amount of local political power.{{cite web |title=In the Showdown of the Ivory Tower How Universities Are Plundering Our Cities |url=https://www.kirkusreviews.com/book-reviews/davarian-l-baldwin/in-the-shadow-of-the-ivory-tower-universities/ |access-date=14 September 2021 |website=www.boldtypebooks.com |publisher=Kirkus Reviews}}

Community colleges receive funds from counties and states. States partially fund state colleges and universities. State flagship universities often rely on more diverse revenue streams.

For-profit credit rating agencies evaluate the credit worthiness of higher education institutions. Credit rating is an essential element for obtaining capital for large infrastructure projects. The rating agencies also evaluate Student Loan Asset-Backed Securities. The three major credit rating agencies are Moody's, Standard and Poor's, and Fitch Ratings.

The for-profit college industry has spent billions of dollars on student recruiting, advertising, and buying leads for recruitment.{{cite web|url=http://chronicle.com/blogs/bottomline/u-of-phoenix-reboots-advertising-and-rebrands-in-the-process/|title=U. of Phoenix Reboots Advertising and Rebrands in the Process – Bottom Line – Blogs – The Chronicle of Higher Education|date=February 6, 2013 |publisher=Chronicle.com|access-date=June 14, 2015}}{{cite web|url=https://news.yahoo.com/recruitment-profit-colleges-targeted-145346998.html|title=Recruitment by for-profit colleges targeted|date=April 18, 2012|work=Yahoo News|access-date=June 14, 2015}} The colleges' marketing departments rely heavily on Lead Generators, which are companies that find potential students ("leads") and provide their personal information and preferences to for-profit college.{{explain|reason=So what? Explain—in neutral and informative language.|date=October 2015}}{{cite web|url=http://www.nacacnet.org/media-center/Pages/Lead-Generators.aspx|title=Lead Generators: A Checklist for Reporters|publisher=Nacacnet.org|access-date=June 14, 2015|archive-url=https://web.archive.org/web/20150121014654/http://www.nacacnet.org/media-center/Pages/Lead-Generators.aspx|archive-date=January 21, 2015|url-status=dead}}{{cite web|url=http://fortune.com/2014/11/19/business-school-rankings-lead-generation-marketing/|title=What's a goat farmer doing ranking business schools? |work=Fortune|access-date=June 14, 2015}}{{cite web|url=http://www.sfweekly.com/sanfrancisco/for-profit-colleges-predators-in-the-ivory-tower/Content?oid=2185880|title=For-Profit Colleges: Predators in the Ivory Tower|work=SF Weekly|access-date=June 14, 2015}}

In 2016, Noodle CEO John Katzman estimated that about $10 billion per year is being spent on higher education marketing and advertising.{{cite web |last1=Katzman |first1=John |title=The Spending War on Student Recruitment |url=https://www.insidehighered.com/views/2016/04/18/too-much-being-spent-higher-education-marketing-assault-essay |publisher=Inside Higher Education |access-date=6 September 2021}} For-profit colleges use lead generation companies to target potential students and to take their personal information.https://www.ftc.gov/system/files/documents/public_comments/2015/10/00016-98214.pdf {{Webarchive|url=https://web.archive.org/web/20210429200654/https://www.ftc.gov/system/files/documents/public_comments/2015/10/00016-98214.pdf |date=April 29, 2021 }} {{Bare URL PDF|date=March 2022}}{{Cite web|url=https://www.huffpost.com/entry/military-branded-websites_b_9131742|title=Military-Branded Websites Push Veterans to Troubled For-Profit Colleges|date=February 1, 2016|website=HuffPost}} However, as competition has heated up in U.S. higher education, traditional schools have also employed them.{{Cite web|url=https://www.insidehighered.com/views/2016/04/18/too-much-being-spent-higher-education-marketing-assault-essay|title=Too much is being spent on a higher education marketing assault (essay) {{pipe}} Inside Higher Ed|website=insidehighered.com}} Lead generators use multiple strategies to find and enroll students. There are hundreds of sites on the internet that gather information for schools.{{Cite web|url=https://www.noodle.com/articles/list-of-lead-generation-sites|title=Noodle|website=noodle.com|date=January 13, 2015 }} The most notable lead generator is Education Dynamics. In September 2020, Education Dynamics purchased QuinStreet's higher education vertical.{{cite press release |title=EducationDynamics Acquires Assets of QuinStreet's Higher Education Vertical |url=https://www.prnewswire.com/news-releases/educationdynamics-acquires-assets-of-quinstreets-higher-education-vertical-301121185.html |website=PR Newswire |access-date=4 September 2020}}

Politics and lobbying play a significant part in the history of U.S. for-profit school growth.{{cite web|url=https://www.republicreport.org/2016/friends-in-high-places-who-endorses-americas-troubled-for-profit-colleges/|publisher=republicreport.org|title=Friends In High Places: Who Endorses America's Troubled For-Profit Colleges? – Republic Report|access-date=February 18, 2017|date=June 21, 2016}}{{cite book

|title=Diploma Mills: How For-Profit Colleges Stiffed Students, Taxpayers, and the American Dream|author=Angulo, A.J.|date=2016|publisher=Johns Hopkins University Press|isbn=9781421420073|url=https://books.google.com/books?id=Q8qnCwAAQBAJ&pg=PR4|access-date=February 18, 2017}} The for-profit education industry has spent more than $40 million on lobbying from 2007 to 2012.{{cite news

|url=https://www.huffingtonpost.com/2012/08/30/for-profit-colleges-lobbying_n_1842507.html|title=For-Profit Colleges Spending Millions On Lobbying, Nearly $40 Million Since 2007|work=The Huffington Post|access-date=June 14, 2015|date=August 30, 2012}} and $36 million since 2010.{{cite web|url=https://www.opensecrets.org/industries/lobbying.php?cycle=2014&ind=H5300 |title=For-profit Education: Lobbying, 2014 |publisher=OpenSecrets.org |access-date=July 2, 2015}} For-profit education lobbying grew from $83,000 in 1990 to approximately $4.5 million in its peak year of 2012.{{cite web|url=https://www.opensecrets.org/industries/totals.php?cycle=2016&ind=H5300|publisher=opensecrets.org|title=For-profit Education: Long-Term Contribution Trends {{pipe}} OpenSecrets|access-date=February 18, 2017}} In 2019, colleges and universities spent almost $75 million in federal lobbies.{{Cite web|title=Higher Ed Spending On Lobbying Declines|url=https://pac.org/impact/higher-ed-spending-on-lobbying-declines|access-date=2021-07-20|website=Public Affairs Council|language=en-US}} The most significant industry lobby is Career Education Colleges and Universities (CECU), previously known as The Association of Private Sector Colleges and Universities (ASPCU). Before 2010, the organization was known as the Career College Association.{{cite web|url=http://hechingerreport.org/seeking-fresh-start-battered-profit-colleges-give-new-name/|publisher=hechingerreport.org|title=Seeking a fresh start, battered for-profit colleges give themselves a new name – The Hechinger Report|access-date=February 18, 2017|date=June 6, 2016}} The Cato Institute's Center for Educational Freedom also supports for-profit higher education.{{cite news|url=https://www.washingtonpost.com/posteverything/wp/2015/01/13/even-for-profit-universities-are-better-than-americas-terrible-community-colleges/|title=Even for-profit universities are better than America's terrible community colleges|author=Neal McCluskey|date=January 13, 2015|newspaper=Washington Post|access-date=June 14, 2015}}{{cite web|url=http://www.stripes.com/opinion/how-for-profits-beat-community-colleges-1.324621 |access-date=January 19, 2015 |url-status=dead |archive-url=https://web.archive.org/web/20150120151645/http://www.stripes.com/opinion/how-for-profits-beat-community-colleges-1.324621 |archive-date=January 20, 2015|title=How for-profits beat community colleges|website=Stars and Stripes|last1=McCluskey|first1=Neal|date=January 19, 2015 }}

According to A.J. Angulo, for-profit higher education in the U.S. was the subject of government scrutiny from the mid-1980s to the 2010s.

In August 2010, the GAO reported on an investigation that randomly sampled student-recruiting practices of several for-profit institutions. Investigators posing as prospective students documented deceptive recruiting practices, including misleading information about costs and potential future earnings. They also reported that some recruiters urged them to provide false information on applications for financial aid.Daniel de Vise and Paul Kane, [https://www.washingtonpost.com/wp-dyn/content/article/2010/08/04/AR2010080403816.html GAO: 15 for-profit colleges used deceptive recruiting tactics], The Washington Post, August 5, 2010 Out of the fifteen sampled, all had engaged in deceptive practices, improperly promising unrealistically high pay for graduating students, and four engaged in outright fraud, per a GAO report released at a hearing of the Health, Education, Labor and Pensions Committee on August 4, 2010.{{cite web|url=http://www.gao.gov/products/GAO-10-948T|title=U.S. GAO – For-Profit Colleges: Undercover Testing Finds Colleges Encouraged Fraud and Engaged in Deceptive and Questionable Marketing Practices|date=August 4, 2010 |publisher=Gao.gov|access-date=June 14, 2015}}

In 2014, a criminal investigation of Corinthian Colleges was initiated.{{cite news|url=https://www.latimes.com/business/la-fi-corinthian-colleges-20140814-story.html|title=Corinthian Colleges tells investors it is facing a criminal probe|author=Los Angeles Times|date=August 13, 2014|work=Los Angeles Times|access-date=June 14, 2015}} Until 2015, The U.S. Attorney General and at least eleven states maintained an $11 billion lawsuit against Education Management Corporation.{{cite news|url=http://www.post-gazette.com/local/city/2014/05/06/Judge-says-lawsuit-against-Education-Management-can-continue/stories/201405060222|title=Judge says lawsuit against Education Management can continue|work=Pittsburgh Post-Gazette|access-date=June 14, 2015|date=May 6, 2014}} The U.S. Consumer Financial Protection Bureau also has a suit against ITT Educational Services, parent company of ITT Tech.{{cite web|url=http://www.republicreport.org/wp-content/uploads/2014/02/cfpb_complaint_ITT.pdf |title=Consumer Financial Protection Bureau v. ITT Educational Services, Inc. |publisher=Republicreport.org |access-date=July 4, 2015}}{{cite web|url=http://www.consumerfinance.gov/newsroom/cfpb-sues-for-profit-college-chain-itt-for-predatory-lending/|title=CFPB Sues For-Profit College Chain ITT For Predatory Lending|work=Consumer Financial Protection Bureau|date=February 26, 2014 |access-date=June 14, 2015}} In 2016, Alejandro Amor, the founder of FastTrain, was sentenced to eight years in federal prison for fraud.{{cite news|url=https://www.npr.org/sections/ed/2016/05/12/477655591/jail-time-for-a-for-profit-college-founder|newspaper=npr.org|title=As Feds Crack Down On For-Profit College, A Founder Heads To Prison For Fraud : NPR Ed : NPR|access-date=February 18, 2017}}

Debate over federal public policy regarding for profit higher education has been an ongoing issue since the late 1960s.{{Cite journal|last=Hartle|first=Terry|date=1997|title=Public Policy and Higher Education|url=http://www.jstor.org/stable/974336|journal=Public Administration Review|volume=37| issue = 2|pages=196–201|doi=10.2307/974336|jstor=974336}} In 2015, the Obama administration introduced numerous legislation aimed at allowing students to make informed decisions about attending colleges and universities that were within their budget.{{Cite web|title=College Affordability and Completion: Ensuring a Pathway to Opportunity {{!}} U.S. Department of Education|url=https://www.ed.gov/college|access-date=2021-07-19|website=www.ed.gov}} The American Graduation Initiative was legislation introduced by the Obama administration to increased academic progress requirements for financial aid to ensure that students finish their education. The administration also introduced America's College Promise (ACP) which was intended to support the American Graduation Initiative, make higher education more accessible and build the economy.{{Cite journal|last=Palmadessa|first=Allison L.|date=January 2017|title=America's College Promise: Situating President Obama's Initiative in the History of Federal Higher Education Aid and Access Policy|url=http://journals.sagepub.com/doi/10.1177/0091552116673710|journal=Community College Review|language=en|volume=45|issue=1|pages=52–70|doi=10.1177/0091552116673710|s2cid=151460109|issn=0091-5521}} The ACP was intended to spend $61 billion to make the first 2 years of community college free for students. This legislation was not passed during the Obama administration but has been re-introduced to the Senate in 2021 under the Biden administration.{{Cite web|title=Baldwin, Levin, Murray, Scott Reintroduce Legislation to Provide Two Free Years of Community College {{!}} U.S. Senator Tammy Baldwin of Wisconsin|url=https://www.baldwin.senate.gov/press-releases/americas-college-promise-act-2021|access-date=2021-07-20|website=www.baldwin.senate.gov|date=April 27, 2021 |language=en}}

The U.S. Department of Education (DoED) proposed "gainful employment regulations" would provide more transparency and accountability to institutions that offer professional and technical training. According to DoED, this regulation is an attempt to "protect borrowers and taxpayers."{{cite press release |author= |title= Obama Administration Announces Final Rules to Protect Students from Poor-Performing Career College Programs |url= http://www.ed.gov/news/press-releases/obama-administration-announces-final-rules-protect-students-poor-performing-care|publisher= United States Department of Education |date= October 30, 2014 |access-date=January 16, 2015}} In his 2015 budget proposal, President Obama recommended greater regulation of for-profit education, including a closure of the loophole that exempted GI Bill money from being used in the 90–10 formula.{{cite web|url=https://www.insidehighered.com/news/2015/02/03/obama-seeks-boost-higher-education-spending-and-proposes-some-loan-reforms-have|title=Obama seeks to boost higher education spending and proposes some loan reforms that have bipartisan appeal|publisher=InsideHigherEd.com|access-date=June 14, 2015}}

The Trump administration revoked regulations aimed at protecting students from predatory practices by for-profit colleges, reversing the rules adopted during the Obama administration.Kevin McCoy, [https://www.usatoday.com/story/money/2018/08/10/trump-administration-scrap-rules-protect-students-predatory-profit-colleges/956334002/ Trump administration plans to drop Obama-era rule aimed at abuses by for-profit colleges], USA Today (August 10, 2018).Jeffrey R. Young, [https://www.edsurge.com/news/2020-12-04-how-for-profit-colleges-benefited-from-trump-administration-policies "How For-Profit Colleges Benefited From Trump Administration Policies"], EdSurge (December 4, 2020).Lauren Camera, [https://www.usnews.com/news/education-news/articles/2017-07-10/trump-administration-begins-rewriting-for-profit-regulations "Trump Administration Begins Rewriting For-Profit Regulations"], U.S. News & World Report (July 10, 2017). In 2019, Trump's Secretary of Education Betsy DeVos issued a complete final repeal of the 2014 "gainful employment rule" (a regulation that never came into effect, but would have cut federal funding from colleges whose graduates consistently had high debt compared to their incomes). The repeal was effective July 1, 2020.Andrew Kreighbaum, [https://www.insidehighered.com/quicktakes/2019/07/02/devos-issues-final-repeal-gainful-employment "DeVos Issues Final Repeal of Gainful Employment"], InsideHigherEd (July 2, 2019).[https://www.usatoday.com/story/money/2019/06/28/trump-department-education-devos-remove-gainful-employment-rule/1601251001/ The Trump administration is repealing an Obama-era policy of policing for-profit colleges], Associated Press (June 28, 2019). DeVos was also a vocal opponent of "borrower defense to repayment" applications, claims from recipients of federal student loan who sought loan forgiveness on the grounds that they were defrauded or misled by their colleges.Lilah Burke, [https://www.insidehighered.com/quicktakes/2021/03/22/devos-gave-staff-12-minutes-process-borrower-defense-claims "DeVos Gave Staff 12 Minutes to Process Borrower-Defense Claims"], InsideHigherEd (March 22, 2021).Stacy Cowley, [https://www.nytimes.com/2021/03/19/business/student-loan-forgiveness-betsy-devos.html], New York Times (March 19, 2021). DeVos derided the program as a "free money" giveaway to borrowers; during her tenure as secretary of education, department staff were given only about 12 minutes to process each application, some of which ran to hundreds of pages.

In August 2017, DeVos instituted policies to loosen regulations on for-profit colleges. In September 2017, the Trump administration proposed to remove conflict of interest rules between VA officials and for-profit colleges.{{cite news|url=https://www.nytimes.com/2017/09/29/business/veterans-affairs-ethics.html|title=Veterans Agency Seeks to Scrap Ethics Law on For-Profit Colleges|first1=Patricia|last1=Cohen|date=September 29, 2017|access-date=January 1, 2018|newspaper=The New York Times}} In March 2018, the House Subcommittee on Labor, Health and Human Services, Education and Related Agencies began reviewing problems related to for-profit colleges and student loan debt.{{Cite web | url=https://www.courthousenews.com/house-panel-takes-up-oversight-of-for-profit-schools |title = House Panel Takes up Oversight of For-Profit Schools|date = March 12, 2019}} Lobbyists for the for-profit higher education industry took several steps to stop regulation and to fight against transparency and accountability.{{cite web|url=https://www.insidehighered.com/quicktakes/2014/11/07/profit-groups-sue-block-gainful-employment-rules|title=For-Profit Groups Sue to Block Gainful Employment Rules |publisher=Insidehighered.com|access-date=June 14, 2015}} They also supported at least two lawsuits to squash gainful employment regulations.{{cite web |url=http://www.career.org/news-and-media/press-releases/upload/APSCU-v-Duncan-DDC-2014-11-06-Plaintiff-s-Complaint.pdf |title=Association of Private Sector Colleges and Universities v. Arne Duncan |publisher=Career.org |access-date=July 4, 2015 |archive-url=https://web.archive.org/web/20150329192846/http://www.career.org/news-and-media/press-releases/upload/APSCU-v-Duncan-DDC-2014-11-06-Plaintiff-s-Complaint.pdf |archive-date=March 29, 2015 |url-status=dead }}{{cite web|url=http://www.foxbusiness.com/markets/2014/11/07/for-profit-colleges-file-lawsuit-to-halt-new-obama-administration-regulations/|title=For-profit colleges file lawsuit to halt new Obama administration regulations|work=Fox Business|date=November 7, 2014 |access-date=June 14, 2015}}{{cite web |url=http://www.apscu.org/news-and-media/press-releases/upload/APSCU-v-Duncan-DDC-2015-02-06-Plaintiff-s-Motion-for-Summary-Judgment2.pdf |title=Association of Private Sector Colleges and Universities v. Arne Duncan |publisher=Apscu.org |access-date=July 4, 2015 |archive-url=https://web.archive.org/web/20150209223722/http://www.apscu.org/news-and-media/press-releases/upload/APSCU-v-Duncan-DDC-2015-02-06-Plaintiff-s-Motion-for-Summary-Judgment2.pdf |archive-date=February 9, 2015 |url-status=dead }}

• Career college
• Diploma mill
• For-profit colleges in the United States
• Higher education in the United States
• List of for-profit universities and colleges
• List of unaccredited institutions of higher education
• Neoliberalism
• Online program manager
• Privatization in the United States
• Proprietary colleges
• Student debt
• For-Profit Online University, a 2013 Adult Swim television special that is a mock infomercial for a for-profit university

{{Reflist}}

• Bennett, Daniel L., Adam R. Lucchesi, and Richard K. Vedder. "For-Profit Higher Education: Growth, Innovation and Regulation." (Center for College Affordability and Productivity, 2010). [https://files.eric.ed.gov/fulltext/ED536282.pdf online]
• Hentschke, Guilbert C., Vicente M. Lechuga, and William G. Tierney, eds. For-profit colleges and universities: Their markets, regulation, performance, and place in higher education (Taylor & Francis, 2023).
• Hodgman, Matthew R. "Understanding for-profit higher education in the United States through history, criticism, and public policy: A brief sector landscape synopsis." Journal of Educational Issues 4.2 (2018): 1–14. [https://files.eric.ed.gov/fulltext/EJ1186532.pdf online]

{{Schools}}

Category:School types

Category:Higher education in the United States

Category:Education policy in the United States