Over the last three decades, private college and university enrollment in the United States has rapidly grown in response to needs that are unmet by public schools. It appears this trend will continue. Whether it is the difficulty of obtaining admission to certain higher education institutions or the desire to go to a religious school, the needs of the nation’s high school graduates have created a growing demand for private higher education. In particular, the limited number of student slots available in public higher education and the increasing number of college-ready citizens create a demand more easily met by private schools than public. The recent enrollment growth in private higher education has not taken place in the predominantly nonprofit elite American schools, such as Harvard or Vanderbilt. Instead, this growth is occurring in for-profit colleges and universities, such as Phoenix. These for-profit schools do not have the tax-exempt status of public schools and non-profit schools but are run as businesses.

In America, for-profit schools have risen as viable competition to public higher education. Compared with public institutions, for-profit universities and colleges are more efficient and more stable in their funding in times of economic crisis. When jobs become scarce, people who have been laid off look for ways into available employment. Jobs that remain available during economic recessions usually require post-high school degrees. This can mean a huge increase in college enrollment immediately following an economic crisis. Due to their efficiency, for-profit schools are capable of rapidly increasing the number of students they can teach at a given time. For public schools, economic recession tends to decrease enrollment because the government lacks extra funds for professors, administrators, and
building maintenance.

Ultimately, the for-profit private sector's lack of government funding can be both a benefit and burden for the school. On the one hand, a for-profit private institution must generate more of its own budget than a public one. On the other hand, for-profit schools' freedom from certain government regulations allows them to respond to market forces more quickly to meet student demand. The flexibility has the potential to produce excellent results, presenting one of the major advantages of for-profit schools.

At this time, this flexibility comes with potential costs beyond the financial burden. The sensitivity to market forces resulting from limited government funding provides a threat to quality. For instance, the number of Latin American students who enrolled in college increased rapidly in the last few decades. A significant amount of the enrollment occurred in for-profit schools. When these institutions opened doors to massive numbers of new students, finding enough qualified teachers became very difficult. As a result, teachers with lower qualifications were hired, and many students found themselves being taught by instructors who had four-year and even two-year degrees, rather than the Masters and Doctoral degrees held by instructors at public universities and elite private schools. Educational experts argue that such hiring practices ultimately lead to poorer quality training, and that this particularly affects groups of people who are most likely to enroll in for-profit private schools. In the words of Dr. Alicia Alvarez, a Harvard education policy researcher, “The Latin American community now has many college graduates who struggle to perform in the workplace due to no fault of their own, but rather the poor quality of their instruction.”

At the same time, there is a consensus among education policy makers and industry leaders that for-profit schools do serve a purpose. They have many perceived successes in fields that lead directly to a job, such as cosmetology and automotive repair. Alex Janne, a consultant for the Westing Institute, a Los Angeles think tank that focuses on vocational training issues, praises profit-driven private schools on this front. According to Janne, “For-profit education has really given a boost to vocational training. We’ve seen increased opportunities. Students from any background can easily enter these schools and get all kinds of job skills.” At the same time, these schools often make weak contributions to traditional, research-oriented academics, compared to public schools. In an official statement, a member of the United States House and Senate Task Force on Education lamented “If only this kind of school limited itself to job training. Unfortunately, many of these upstart schools hand out low-quality course credits in psychology, literature, math, and other academic fields.”

Today, education experts and policy makers seem to agree that while for-profit schools have had some success, there is much room for improvement in their policies. While these schools may increase access to higher education for nontraditional and underserved populations, their tuition costs for students can be very high. Fees could be characterized as unreasonable; they average five times those of public community colleges, and are consistently higher than even the most expensive public universities.  Consequently, fees from for-profit schools can leave students with considerable debt without necessarily leading them to new employment that allows for easy repayment. There is concern that these costs indirectly affect taxpayers in spite of the lack of direct government funding; In the United States alone, for-profit institutions consume almost a quarter of government aid for low-income scholars in the form of billions of dollars in government-backed student loans. Ultimately, in spite of their advantages, for-profit schools have yet to earn full respectability in the eyes of experts or the public. In the words of Susan McHale, the retired director of the National Council of Private Colleges, “Our more profit-driven schools are striving for balance between maximizing revenue and fostering greater social good. It’s on ongoing struggle, and they have a lot of work ahead of them.”