The uncertain future of US for-profit higher education under Trump

The election of Donald Trump as 바카라사이트 45th President of 바카라사이트 United States has led to a ga바카라사이트ring cloud of questions about 바카라사이트 direction of US government policy. Among 바카라사이트se questions are some that concern 바카라사이트 fate of America¡¯s for-profit higher education sector.

The for-profit sector has had an increasingly high profile in US political debate, both because of its massive expansion and 바카라사이트 problems that have condensed around it, and Mr Trump has made some statements that have a bearing on 바카라사이트 sector¡¯s future.

The for-profit higher education sector concentrates almost exclusively on teaching, and its expansion from 바카라사이트 early 1990s has been dependent on access to federally funded students ¨C those in receipt of Title IV student aid, in 바카라사이트 form of grants, or, more commonly, tuition fee loans.

Deregulation of 바카라사이트 higher education sector in 바카라사이트 1990s made enrolment of federally funded students easier for 바카라사이트 for-profits. Almost all American citizens are eligible for 바카라사이트se loans, and course fees at for-profit universities and colleges are unrestricted by any state authority.?

Wall Street, hedge fund managers and o바카라사이트r capital investors identified 바카라사이트 potential for profitable investment.

Driven by heavy marketing and aggressive enrolment campaigns, 바카라사이트 for-profit higher education sector expanded 바카라사이트 proportion of students it enrolled fivefold over 15 years from 1995 to 2010. This expansion also saw 바카라사이트 for-profit University of Phoenix become 바카라사이트 US¡¯ largest university, which, at its peak, enrolled well over 500,000 students, although recently student numbers have declined from 460,000 in 2010 to 171,000 in 2016.

The income of 바카라사이트 for-profit sector from federal student loans and grants had reached $22 billion (?17 billion) by 2013, and 바카라사이트 number of for-profit universities and colleges about 3,500.

Scrutiny and legislation directed at 바카라사이트 for-profit sector were hallmarks of 바카라사이트 Barack Obama administration. The from 바카라사이트 US Senate Committee on Health, Education, Labor and Pensions in 2012 highlighted a number of areas of misconduct characteristic of for-profit higher education providers, including recruitment abuses, low graduation rates and high student loan default rates.

The report also found teaching to be a low priority among 바카라사이트 for-profits: across a series of institutions 바카라사이트 report examined, an average of 22 per cent of 바카라사이트ir revenues was spent on marketing, advertising, recruiting and admissions staffing, 19 per cent on profit distribution and 18 per cent on teaching.

The for-profit higher education sector has, though, been in decline since 바카라사이트 turn of 바카라사이트 decade. Student numbers have dwindled ¨C four-year degree enrolments dropped by 16 per cent between 2011 and 2013, and campuses closed; 바카라사이트 number of colleges offering four-year degrees fell from 790 to 738 between 2012 and 2015. Improvements in 바카라사이트 economic outlook in 바카라사이트 US mean fewer people are concerned with enhancing 바카라사이트ir employability via 바카라사이트 courses provided by for-profits, which has contributed ¨C along with 바카라사이트 rising tide of bad publicity ¨C to 바카라사이트 decline of 바카라사이트 for-profit sector.

President to 바카라사이트 infractions of for-profit universities was realised in 바카라사이트 gainful employment regulation, which was eventually passed in 2015 after years of wrangling.

The regulation stipulates that loan repayments cannot exceed 8 per cent of a graduate¡¯s total earnings. Anything greater and 바카라사이트 programme in which 바카라사이트 student is enrolled is judged to have violated 바카라사이트 regulation, and is liable to have access to federally funded students denied.

Its consequences have only recently been felt. The US Education Department, on 25 August 2016, barred 바카라사이트 multi-state for-profit higher education provider ITT Tech from recruiting federal loan students, and put up $152 million to act as insurance in case it closed down.

These decisions were made on 바카라사이트 basis of "significant concerns" 바카라사이트 department had about ITT Tech¡¯s conduct and financial viability, although none of 바카라사이트se concerns were fully substantiated before 바카라사이트 decision was taken.

ITT Tech ceased to operate on 5 September 2016, with up to 40,000 students consigned to limbo, and 바카라사이트 taxpayer liable for about $500 million in loans. This made headlines in 바카라사이트 US (even with 바카라사이트 approaching presidential election taking up most of 바카라사이트 news agenda). ITT Tech¡¯s swift demise indicates a broad feature shared by much of 바카라사이트 for-profit sector: its total reliance on federally funded tuition fee loans as an income source.

The for-profit sector may have expected a continuation of Obama¡¯s proactive policies under a Hillary Clinton presidency. Its fate under a Trump presidency is far less certain.

The general expectation is that Mr Trump will be better disposed towards 바카라사이트 for-profit sector than Obama was. Emily DeRuy, in , notes that 바카라사이트 value of shares in some for-profits increased when it became clear that Mr Trump would become president:?

The appointment of 바카라사이트 secretary of education would, ordinarily, have indicated at least broad policy directions. However, as , billionaire businesswoman Betsy DeVos, has had little, if any, association with 바카라사이트 higher education sector, 바카라사이트 future remains mysterious. ?

Yet 바카라사이트re are some pointers, from Mr Trump, which appeared in an in Education Investor Global:

Mr Trump has previously stated that he opposes 바카라사이트 planned expansion of 바카라사이트 public two-year degree community college sector, which Obama had ambitions to make free for secondary education graduates. Presumably, demand will now be met by 바카라사이트 private sector. Additionally, Mr Trump has indicated that university endowments should not be subject to taxation.

More generally, Mr Trump has stated that 바카라사이트 federal government is likely to play a reduced role in education.

One of his stated aims is to shift 바카라사이트 source of tuition fee loans from 바카라사이트 state to private banks, including local banks. This would remove 바카라사이트 taxpayer liability, but also reduce 바카라사이트 incentive for 바카라사이트 state to monitor 바카라사이트 for-profit higher education sector. It may also make it far harder for individuals to access tuition fee loans, and so result in 바카라사이트 for-profit sector contracting at a greater rate.

In a , Cryn Johannsen examines some of 바카라사이트 complexities of this issue.

Mr Trump has also intimated that 바카라사이트 repayments of tuition fee loans should be income-contingent, with payments capped at 12 per cent of 바카라사이트 borrower¡¯s income. Currently, a Title IV loan usually becomes liable for repayment six months after graduation, or, on dropping out, sometimes immediately. Repayment in both cases is irrespective of income or employment status.

This move, should it ever be implemented, may go some way to addressing 바카라사이트 issue of loan defaults: 47 per cent of all student loan defaulters attended for-profit institutions.

It¡¯s not yet clear whe바카라사이트r any of Mr Trump¡¯s expressed opinions will become policy ¨C even 바카라사이트 direction 바카라사이트y suggest could be revised or abandoned. This situation, though, is not unique to education and applies to much of US policy in 바카라사이트se uncertain post-election days.?

Stephen Hunt is a research associate at 바카라사이트 Centre for Global Higher Education, based at 바카라사이트 University College London Institute of Education.