A New Classification Scheme for For-Profit Institutions. Fact Sheet

For-profit institutions are more visible today among policymakers, researchers, and investors, due in large part to the sharp rise in the number of students attending them over the last decade. From 2000 to 2009, enrollment in the for-profit sector tripled while enrollment in the public and not-for-profit sectors increased by less than 25 percent. By 2009, for-profits made up 43 percent of all postsecondary institutions in the United States and enrolled nearly 10 percent of all undergraduate students. Clearly, it is crucial to understand this sector and the ways in which for-profits contribute to educating students. For-profits are often quite different from their counterparts in other sectors. For example, they are smaller in size, less likely to offer degrees, and more likely to be located in metropolitan areas than institutions in other sectors. Most (90 percent) of for-profits have less than 1,000 students, a majority (62 percent) are non-degree granting, and most (86 percent) are located in metropolitan areas. Students attending for-profits are more likely than students in other sectors to be older, female, non-White, independent, and first in their family to attend college. Yet there is also wide variation within the for-profit sector, from small cosmetology schools to local campuses specializing in business or technology to online universities offering a wide range of degrees. Capturing this diversity is essential to understanding the sector--and one way to do so is a classification scheme that can be used to compare institutions and the students they serve. Many classification schemes have been used to group postsecondary institutions, usually based solely on institutional characteristics such as size, degree programs, and student demographics. While the characteristics used in existing classification schemes are acceptable for the public and private not-for-profit sectors, they do not capture the uniqueness of for-profit institutions, causing the sector to be treated as monolithic and broad strokes are used to describe for-profit institutions and students. A multifaceted framework to reflect the diversity in the for-profit sector is needed. To that end, this report describes a new classification scheme solely for the for-profit sector that includes criteria that are different than those used in existing schemes--the markets that for-profits operate in, institutional specialization, and the ways in which students engage for-profits. (Contains 4 figures.) [For the main report, "A New Classification Scheme for For-Profit Institutions," see ED534614.]