Black students are overrepresented at for-profit colleges and take out loans to attend these institutions at higher rates, according to a new report by the Institute for College Access & Success.
The report, released today, draws on data from the U.S. Department of Education to flesh out trends in for-profit college enrollments and student borrowing. It also references qualitative interviews with a dozen Black alumni of for-profit colleges to better understand how some students perceive their programs. The focus group included six undergraduates and six graduate students.
“We wanted to know more about what made them choose to attend a for-profit college over other options, whether or not they found their programs affordable, and whether or not they were ultimately satisfied with the educational experiences they received,” said Lydia Franz, senior policy associate for accountability at TICAS and lead author of the report.
The analysis of Education Department data found that Black students made up 24 percent of undergraduates at for-profit colleges in 2023, compared to 13 percent at colleges and universities over all. The share of Black undergraduates at for-profit colleges has been double the share of Black students enrolled in higher ed writ large for a decade. In a similar vein, Black students accounted for 24 percent of graduate student enrollments at for-profit institutions but just 11 percent of total graduate student enrollment nationwide.
Franz said for-profit institutions tend to market themselves as flexible, which appeals to students balancing jobs, childcare and other responsibilities. These colleges are also known for targeting marketing campaigns at Black prospective students in an effort to “access financial aid dollars,” she added.
Most focus group participants said their college delivered on offering flexibility but also reported that, in hindsight, they’d choose a different college if they could and cautioned other students to do their research before enrolling. Some said their programs provided helpful exposure to their fields, while others expressed frustration with a lack of supports and career services.
“I wish I would have known or researched whether their programs were successful at placing people at specific jobs within [their] community,” one undergraduate in the focus group said. “I wish I would have just realized that just because it says it on the paper, it doesn’t mean it’s real.”
The report emphasized that Black students in for-profit programs too often find themselves in debt. The data showed that 91 percent of Black students in for-profit bachelor’s degree programs took on debt, compared to 81 percent at public institutions. For master’s programs, 83 percent of Black students took out loans compared to fewer than two-thirds at public universities. Black students pursuing bachelor’s degrees at for-profit colleges also took on a larger amount of debt on average: $31,850, compared to those at public and private nonprofit institutions, who borrowed $22,450 and $25,187, respectively. Levels of debt for Black graduate students were comparable at for-profit and public colleges, with private nonprofit colleges outpacing them both.
Black graduates also leave for-profit colleges with worse debt-to-earnings ratios on average than graduates of other types of institutions for both bachelor’s and master’s degree programs, according to the report. The differences are particularly stark among institutions with majority Black student populations. At for-profit colleges with student bodies that are over 50 percent Black, alumni put a larger share of their earnings toward repaying loans each month—about 13 percent for bachelor’s degrees and over 11 percent for master’s degrees—compared to alumni of other types of Black-majority colleges. For example, bachelor’s degree graduates of nonprofit institutions with over half Black students put slightly more than 7 percent of their earnings toward loans.
Leaders of for-profit colleges sometimes argue they’re providing access to higher education for underrepresented communities, including large numbers of Black students, so penalizing the institutions for poor outcomes would hurt these students, Franz said. But she argued that providing access doesn’t mean these institutions are necessarily serving Black students well.
“Students who attend these for-profit colleges that are serving large portions of Black students, their loan repayment outcomes and their debt-to-income measure is materially different than at a public institution serving a similar student body,” such as historically Black colleges and universities, Franz said.
A Call for More Oversight
The report calls on state lawmakers to step in, arguing that the federal government isn’t equipped to offer proper oversight of for-profit colleges right now, given cuts to the U.S. Department of Education and the Consumer Financial Protection Bureau and with major changes to federal student loans underway. For example, the report recommends that state leaders enforce state consumer protection laws as they relate to for-profit colleges to crack down on deceptive practices and collect and publicize data on these institutions’ advertising expenditures and student outcomes.
Jordan Wicker, senior vice president of legislative and regulatory affairs at Career Education Colleges and Universities, an organization that represents for-profit institutions, said he supports oversight if it’s equally applied to all types of institutions.
Wicker said he’s proud that his member institutions serve so many Black students. He also pointed out that most students at for-profit colleges are earning associate degrees and certificates, so they’re not represented in the report’s data. A Burning Glass Institute study showed that for-profit graduation rates outpaced community colleges’, he pointed out, though he acknowledged those degrees come at a higher cost because for-profit colleges rely heavily on tuition and fees to provide their programs rather than state funding.
He emphasized that most students at for-profits, including high shares of Black students, come from low-income backgrounds, so they’re more likely to take out student loans.
“There is borrowing in the sector, and there’s higher borrowing in some segments of the sector, but to attribute that to bad action or predatoriness is a leap,” he said.
Wicker also argued that online, hybrid and in-person for-profit programs shouldn’t be lumped together, because online programs across sectors face unique challenges. He said a higher share of bachelor’s and graduate degrees in the for-profit sector are provided online compared to associate degree and certificate programs, which are more often hybrid or in person.
Franz acknowledged that not all for-profit colleges are bad actors.
“Not every for-profit college is the same [or] follows the same kind of playbook, engages in the same predatory targeting of Black students,” she said. But there are now “decades of trends showing that, on average, students who are attending for-profit programs are struggling with these issues of debt and repayment. That raises an alarm bell for me.”
