IDEAS home Printed from https://ideas.repec.org/a/pal/easeco/v49y2023i2d10.1057_s41302-023-00236-3.html
   My bibliography  Save this article

Unbundling For-Profit Higher Education: Relaxing the 90/10 Revenue Constraint

Author

Listed:
  • Zachary G. Davis

    (Alex G. McKenna School of Business, Economics, and Government, Saint Vincent College)

Abstract

In 2008, congress passed the Higher Education Opportunity Act. This act relaxed the 90/10 rule requiring for-profit institutions to earn at least 10 percent of their revenue from non-Title IV funds by revoking eligibility after 2 years of non-compliance instead of 1 year. To comply with the 90/10 rule, for-profit institutions bundle campuses together. Unbundling the campuses doubles the number of 1-year violations though the number of 2-year violations remains the same. For-profit institutions receive almost one billion dollars, or about 4.5 percent, more federal aid under the 2-year violation rule than the 1-year violation rule.

Suggested Citation

  • Zachary G. Davis, 2023. "Unbundling For-Profit Higher Education: Relaxing the 90/10 Revenue Constraint," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 49(2), pages 176-200, April.
    • Handle: RePEc:pal:easeco:v:49:y:2023:i:2:d:10.1057_s41302-023-00236-3
    DOI: 10.1057/s41302-023-00236-3
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1057/s41302-023-00236-3
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1057/s41302-023-00236-3?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. David J. Deming & Claudia Goldin & Lawrence F. Katz, 2012. "The For-Profit Postsecondary School Sector: Nimble Critters or Agile Predators?," Journal of Economic Perspectives, American Economic Association, vol. 26(1), pages 139-164, Winter.
    2. Joselynn Hawkins Fountain, 2019. "The Effect of the Gainful Employment Regulatory Uncertainty on Student Enrollment at For-Profit Institutions of Higher Education," Research in Higher Education, Springer;Association for Institutional Research, vol. 60(8), pages 1065-1089, December.
    3. Stephanie Riegg Cellini, 2010. "Financial aid and for-profit colleges: Does aid encourage entry?," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 29(3), pages 526-552.
    4. Sakellaris, Plutarchos & Spilimbergo, Antonio, 2000. "Business cycles and investment in human capital: international evidence on higher education," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 52(1), pages 221-256, June.
    5. Stephanie Riegg Cellini & Claudia Goldin, 2014. "Does Federal Student Aid Raise Tuition? New Evidence on For-Profit Colleges," American Economic Journal: Economic Policy, American Economic Association, vol. 6(4), pages 174-206, November.
    6. David N. DeJong & Beth F. Ingram, 2001. "The Cyclical Behavior of Skill Acquisition," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 4(3), pages 536-561, July.
    7. Gilpin, Gregory A. & Saunders, Joseph & Stoddard, Christiana, 2015. "Why has for-profit colleges’ share of higher education expanded so rapidly? Estimating the responsiveness to labor market changes," Economics of Education Review, Elsevier, vol. 45(C), pages 53-63.
    8. Stephanie Riegg Cellini, 2009. "Crowded Colleges and College Crowd-Out: The Impact of Public Subsidies on the Two-Year College Market," American Economic Journal: Economic Policy, American Economic Association, vol. 1(2), pages 1-30, August.
    9. Dellas, Harris & Koubi, Vally, 2003. "Business cycles and schooling," European Journal of Political Economy, Elsevier, vol. 19(4), pages 843-859, November.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jacqmin, Julien, 2014. "The Emergence of For-Profit Higher Education Institutions," MPRA Paper 59299, University Library of Munich, Germany.
    2. Stephanie R. Cellini & Rajeev Darolia & Lesley J. Turner, 2020. "Where Do Students Go When For-Profit Colleges Lose Federal Aid?," American Economic Journal: Economic Policy, American Economic Association, vol. 12(2), pages 46-83, May.
    3. Stephanie Riegg Cellini & Rajeev Darolia, 2017. "High Costs, Low Resources, and Missing Information: Explaining Student Borrowing in the For-Profit Sector," The ANNALS of the American Academy of Political and Social Science, , vol. 671(1), pages 92-112, May.
    4. Cellini, Stephanie Riegg & Chaudhary, Latika, 2014. "The labor market returns to a for-profit college education," Economics of Education Review, Elsevier, vol. 43(C), pages 125-140.
    5. Matthew Baird & Michael S. Kofoed & Trey Miller & Jennie Wenger, 2022. "Veteran Educators or For‐Profiteers? Tuition Responses to Changes in the Post‐9/11 GI Bill," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 41(4), pages 1012-1039, September.
    6. Sarena Goodman & Alice Henriques Volz, 2020. "Attendance Spillovers between Public and For-Profit Colleges: Evidence from Statewide Variation in Appropriations for Higher Education," Education Finance and Policy, MIT Press, vol. 15(3), pages 428-456, Summer.
    7. Andrew Foote & Michel Grosz, 2020. "The Effect of Local Labor Market Downturns on Postsecondary Enrollment and Program Choice," Education Finance and Policy, MIT Press, vol. 15(4), pages 593-622, Fall.
    8. Darolia, Rajeev, 2013. "Integrity versus access? The effect of federal financial aid availability on postsecondary enrollment," Journal of Public Economics, Elsevier, vol. 106(C), pages 101-114.
    9. Rajeev Darolia, 2013. "Student Loan Repayment and College Accountability," Consumer Finance Institute discussion papers 13-5, Federal Reserve Bank of Philadelphia.
    10. Juan Esteban Carranza & María Marta Ferreyra & Ana Maria Gazmuri, 2023. "The Dynamic Market for Short-Cycle Higher Education Programs," Borradores de Economia 1265, Banco de la Republica de Colombia.
    11. Luis Armona & Rajashri Chakrabarti & Michael F. Lovenheim, 2018. "How Does For-profit College Attendance Affect Student Loans, Defaults and Labor Market Outcomes?," NBER Working Papers 25042, National Bureau of Economic Research, Inc.
    12. Sara Ayllón & Natalia Nollenberger, 2021. "The Unequal Opportunity For Skills Acquisition During The Great Recession In Europe," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 67(2), pages 289-316, June.
    13. Armona, Luis & Chakrabarti, Rajashri & Lovenheim, Michael F., 2022. "Student debt and default: The role of for-profit colleges," Journal of Financial Economics, Elsevier, vol. 144(1), pages 67-92.
    14. Barbara Sadaba & Sunčica Vujič & Sofia Maier, 2020. "Cyclicality of Schooling: New Evidence from Unobserved Components Models," Staff Working Papers 20-38, Bank of Canada.
    15. Sadaba, Barbara & Vujić, Sunčica & Maier, Sofia, 2024. "Characterizing the schooling cycle," Economic Modelling, Elsevier, vol. 132(C).
    16. Diana Alessandrini & Stephen Kosempel & Thanasis Stengos, 2012. "The Business Cycle Human Capital Accumulation Nexus and its Effect on Labor Supply Volatility," Working Paper series 62_12, Rimini Centre for Economic Analysis.
    17. Adam Looney & Constantine Yannelis, 2015. "A Crisis in Student Loans? How Changes in the Characteristics of Borrowers and in the Institutions They Attended Contributed to Rising Loan Defaults," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 46(2 (Fall)), pages 1-89.
    18. Rajeev Darolia, 2015. "Messengers of Bad News or Bad Apples? Student Debt and College Accountability," Education Finance and Policy, MIT Press, vol. 10(2), pages 277-299, March.
    19. Keith Blackburn & Dimitrios Varvarigos, 2008. "Human capital accumulation and output growth in a stochastic environment," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 36(3), pages 435-452, September.
    20. Fabio Méndez & Facundo Sepúlveda, 2012. "The Cyclicality of Skill Acquisition: Evidence from Panel Data," American Economic Journal: Macroeconomics, American Economic Association, vol. 4(3), pages 128-152, July.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pal:easeco:v:49:y:2023:i:2:d:10.1057_s41302-023-00236-3. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.palgrave-journals.com/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.