- U.S. colleges’ spending on advertising fell by about $423 million from 2013 to 2017, which new research largely attributes to closures and other downsizing within for-profit institutions, which heavily invested in these areas.
- As enrollment declined among for-profits, so did their advertising allocations, albeit with a slight lag, according to a report published by the Brookings Institution that examines college ad spending over the last two decades.
- The findings illustrate the outsized efforts for-profit schools took to entice students. Many for-profits have been accused of predatory recruitment of low-income and veteran students.
The report’s authors identify a correlation between a decade-long surge in for-profit enrollment and ad spending in the early 2000s.
For-profit institutions tried to boost advertising to save their bruised reputations amid heightened scrutiny of the sector between 2010 and 2013, the researchers hypothesized. The period included the high-profile closures of several for-profit chains, they note, which contributed to the subsequent decrease in spending.
The analysis is based on a conservative estimate of colleges’ spending, the authors explain, using federal enrollment data and information on colleges’ finances collected by Kantar Media, a market research company. They only looked at degree-granting institutions and spending within the 100 largest media markets in the U.S.
They in part wanted to determine whether for-profit’s outreach strategies were motivated by the allowances of their for-profit status, or whether other institutional factors played a role.
Enrollment at degree-granting for-profits reached a high of more than 2 million students in 2010, plummeting to 1.1 million by 2017. Overall ad spending in higher ed peaked at roughly $1.2 billion in 2013 and then dropped to a little more than $730 million by 2017.
For-profits account for the bulk of ad spending in the sector.
In 2014, the earliest year for which data was available by institution type, for-profits spent more on advertising ($551 million) than private nonprofit colleges and publics combined ($505 million).
By 2017, for-profits had scaled back their advertising to a little more than half of what they were spending in 2014. Private nonprofit and public school spending remained relatively steady during that time.
But Stephanie Riegg Cellini, a co-author of the report and a professor of public policy and economics at George Washington University, noted that as of 2017, for-profits continued to serve the smallest share of students but dropped the most on advertising.
Degree-granting for-profits accounted for 40% of all higher ed advertising spending in 2017, but enrolled only 6% of students. Six of the top 10 spenders that year were for-profits, led by the University of Phoenix, which spent $76 million — about $629 per student.
Some for-profits have been accused of aggressively targeting low-income students, as well as veterans, whose educational benefits do not count toward limits on how much revenue these schools can draw from federal aid.
Many programs have also been criticized for leaving students with high amounts of debt and limited ability to pay it off. This led the Obama administration to institute “gainful employment” regulations in 2014 that cracked down on institutions that left their students with high levels of debt but a low salary. U.S. Secretary of Education Betsy DeVos repealed the rule last year, arguing it was unfairly directed toward for-profit colleges.
Most of colleges’ ad spending as of 2017 was on TV, at nearly $413 million. Outdoor ads followed at $124 million and internet ads at $113 million. Internet ads encompass website banner ads, but it is unclear in the data whether social media is included in that total, said Latika Chaudhary, an associate economics professor at the Naval Postgraduate School, in California, and one of the report’s authors.
Additional research could look at whether for-profits’ tactics diverted students from quality academic programs at private nonprofit colleges or publics to for-profit colleges that had poor outcomes, Chaudhary said.
“We don’t want to interpret more advertisements as bad thinking, it just depends on what they put in those ads,” Chaudhary said.