The Rise and Fall of For-Profit Higher Education

Abstract

The rise of for-profit higher education has been remarkable. According to the Department of Education (DOE),between 1990 and 2010 enrollments at for-profit colleges increased by 600%. Nearly 2 million students -- 12%of all post secondary students -- were enrolled by the end of that period. As the enrollment numbers began torise in the 1990s, publicly traded companies emerged, consolidating the industry through buyouts until only afew corporations -- including Corinthian College -- dominated the industry. Over two decades Corinthian became a favorite of investors. The corporation had dramatically increased in size to 110,000 students and one hundred campuses. Then, just as dramatically, Corinthian collapsed. A stock that had once traded as high as thirty-three dollars had declined to two cents by the summer of 2014. The collapse occurred when the DOE suspended Corinthian from the federal student aid program -- the lifeblood of for-profits.