Pell Grants Fuel Growth Of For-Profit Colleges

February 14th, 2010

For-Profit Colleges are growing rapidly and now serve 6% of all undergraduates. But these colleges include about 20% of all those students receiving federal Pell grants for low income students. Pell grant recipients make up about 50% of enrollment at proprietary institutions, a larger share than at other types of colleges. The University of Phoenix received 657 million dollars in Pell grant revenue in 2008-2009.  Kaplan College got 202 million. (Source, Chronicle of Higher Education, January 8,2010 page A4).

These colleges are flexible on when and how students can enroll. Some spend up to a third of the tuition received to recruit students. For- profit student persistence and completion rates vary, but tend to be in the higher ranges for broad access colleges. Student recruitment costs are high , so retention is essential for expanding profits.

One Response

  1. I would imagine that student retention is not that hard, because Pell grant requirements pretty much leave it up to the school to certify that students are making satisfactory academic progress. How rigorous are the standards of a school that heavily depends on retention?

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