Students at for-profit schools draw disproportionate share of federal aid

Print More

Students at private, for-profit schools receive a disproportionate portion of federal financial aid when compared to their share of post-secondary enrollment in Connecticut.

Data illustrating the disparity was recently released by Federal Student Aid, an office of the U.S. Department of Education.

For example, while Connecticut for-profit, or “proprietary” post-secondary schools enrolled only 11.4 percent of students in the 2013-14 school year, they received 21.0 percent of federal student financial aid. This pattern has remained fairly consistent over the past several years.

Connecticut post-secondary education loans, grants and campus-based aid
Percentages by school type of Title IV programs
School Type 2010-11 2011-12 2012-13 2013-14 2014-15
Private 40.02% 40.74% 40.86% 41.58% 42.62%
Public 38.10% 38.30% 37.99% 37.47% 37.95%
Proprietary 21.88% 20.96% 21.15% 20.95% 19.43%
Federal Student Aid

The U.S. education department divides post-secondary education into three categories: private, public and proprietary.

A public institution is predominantly funded by government; a private, non-profit operates independently of an ownership structure; and proprietary institutions operate as businesses, receiving fees from each student they enroll.

Connie Fraser, spokesperson for the Connecticut Office of Higher Education, said proprietary schools tend to enroll lower-income individuals who take out large amounts of loans to finance their educations.

Despite costing less than private, non-profit institutions, proprietary schools generally do not have their own resources, like campus-based scholarship funds or endowments to provide aid to students.

Nonetheless, Fraser said students are drawn to proprietary schools that advertise career-ready programs and schedules tailored to meet student needs.

Federal Student Aid ensures that all eligible individuals can receive financial assistance for post-secondary education. Post-secondary education is usually classified under Title IV of the Higher Education Act (HEA) of 1965, which authorizes federal student aid programs such as federal grants, loans and work-study programs.

Financial aid in Connecticut allows proprietary schools to receive up to 90 percent of their revenue from the federal student aid programs, according to the Final Higher Education Certificate report by the legislative Program Review and Investigations Committee.

In the 2013-14 school year, 51.1 percent of students pursuing post-secondary education were enrolled in public schools, but only 37.5 percent of student financial aid went to those students.

Meanwhile 37.5 percent of students who attended private, non-profit post-secondary schools in 2013-14 received a slightly disproportionate 41.6 percent of student financial aid.

While Connecticut appears to give an almost equal proportion of financial aid to students who attend private and public schools, the state actually ranks third in the nation for the smallest difference between federal student aid percentages over the past five fiscal years. Vermont ranked first.

Unsurprisingly, students of private schools receive a higher percentage of federal loans than those at public schools. Students at public institutions get a higher percentage of federal grants than those at private schools.

Since private schools receive less money from state and local governments, they usually cost the same whether a student lives in or outside of the state. This cost is often higher than the cost of attending a public school in your state.

Check our work: The GitHub repository containing our work is available here. We encourage you to look over our calculations and expand upon our analysis.


What do you think?