Education

Taxpayers’ Costs to Support Higher Education: A Comparison of Public, Private Not-for-Profit, And Private For-Profit Institutions

Robert J. Shapiro and Nam D. Pham

September 2010

Taxpayers’ Costs to Support Higher Education: A Comparison of Public, Private Not-for-Profit, and Private For-Profit Institutions1
Robert J. Shapiro and Nam D. Pham

I.

Introduction and Summary of Findings

The role of private for-profit institutions of higher education has expanded greatly in recent years. Demand for post-secondary education is up, especially for the career-focused curricula of most private for-profit colleges, universities and institutes. Further, the spread of Internet technologies creates new and highly-efficient channels for online learning, which private for-profit institutions have adopted more quickly than public and private not-for-profit colleges and universities. In addition, recent federal regulation of higher education tied to access to G.I. Bill and other federal student assistance has induced many private for-profit institutions to raise their standards and accreditation levels. The rapid expansion of these schools, however, also has raised questions about fast-rising expenditures for federal grants and loans to students attending for-profit institutions. This analysis examines all forms of federal, state and local government support across the three classes of higher education institutions – public, private not-for-profit, and the private forprofit institutions – and the three categories of four-year, two-year and less-than-two-year institutions. This analysis shows that concerns about disproportionate assistance to private forprofit colleges, universities and institutes are misplaced.  Private for-profit institutions and their students receive less than 30 percent of the support per-student from all levels of government provided to public institutions and their students, and less than 48 percent of the support per-student received by

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In that post, he directed economic policy for the Commerce Department and oversaw the nation’s major statistical agencies, including the Census Bureau before and during the 2000 decennial census. Prior to that, he was co-founder and Vice President of the Progressive Policy Institute, Legislative Director for Senator Daniel P. Moynihan, and Associate Editor of U.S. News & World Report. Dr. Shapiro also served as the principal economic advisor to Governor Bill Clinton in his 1991-1992 presidential campaign, and senior economic advisor to Vice President Albert Gore, Jr. and Senator John Kerry in their presidential campaigns. In the 2008 campaign, he advised the campaign and transition of Barack Obama. Dr. Shapiro has been a Fellow of Harvard University, the Brookings Institution, and the National Bureau of Economic Research. He holds a Ph.D. and M.A. from Harvard University, a M.Sc. from the London School of Economics and Political Science, and an A.B. from the University of Chicago. He is widely published in scholarly and popular journals, and his most recent book is Futurecast: How Superpowers, Populations and Globalization Will Change the Way You Live and Work, St. Martins Press: 2008. Nam D. Pham is the founder and president of NDP Group, LLC, an economics consulting firm that specializes in assessing complex issues in finance, industrial organization and international trade. Clients of NDP Group include U.S. and foreign corporations, financial institutions, federal and local governments, trade associations and multi-national organizations. Prior to founding NDP Group in 2000, Dr. Pham was Vice President at Scudder Kemper Investments in Boston, where he was responsible for research, asset allocations and currency hedges for Scudder 's global and international bond funds. Before that, he was Chief Economist of the Asia Region for Standard & Poor 's DRI in Boston. Dr. Pham 's has more than a decade of experience in multinational organizations and government agencies in Washington D.C. This tenure includes posts as an economist at the World Bank and a consultant to the Department of Commerce and the Federal Trade Commission. In addition, Dr. Pham has been an adjunct professor at the George Washington University, where he has taught undergraduate and graduate courses in monetary economics, international trade and finance, macroeconomics and microeconomics. Dr. Pham earned a Ph.D. in economics from the George Washington University with concentrations in international trade and finance, economic development and applied microeconomics, a M.A. from Georgetown University and a B.A. from the University of Maryland. 66