Susan Dynarski, writing for the Upshot, explains why investors are suddenly bullish on for-profit colleges in “With Trump, investors see profits again in for-profit colleges.”
Under the Obama administration, for-profit colleges faced mounting pressures to improve their performance. While they enrolled a minority of students, they accounted for nearly half of student loan defaults at the depths of the recession.
With the election of Donald J. Trump, however, “[s]tock prices of the companies still running for-profit colleges rose sharply,” explains Dynarski. “Investors may be expecting that a Trump administration will use a lighter touch in overseeing for-profits, giving them greater latitude to maximize profits.”
Last week, President-elect Trump agreed to pay $25 million to settle a series of lawsuits against the for-profit Trump University he ran. The suits, which were filed by former students, alleged fraud; trials were expected to begin this month.
Susan Dynarski is a professor of public policy at the Ford School, professor of education at the School of Education, and professor of economics at the Department of Economics. She serves as co-director of the Ford School's Education Policy Initiative, which engages in rigorous, policy-relevant research to improve educational outcomes and reduce disparities.