The For-Profit Education Reboot

As traditional four-year colleges continue to face enrollment declines, rising tuition, and public skepticism about return on investment, a familiar player is reemerging in the American education landscape: for-profit and proprietary education.

Now in his second term, President Donald Trump has doubled down on his agenda to dismantle the U.S. Department of Education, elevate career training, and redirect federal resources toward trade-based learning. Against this backdrop, the conditions are ripe for a resurgence of for-profit education models, particularly those aligned with workforce development and microcredentialing.

At stake is a critical question: Can the nation expand access to skills-based education without repeating the exploitative patterns that plagued for-profit schools during their peak?

A History of Boom, Bust, and Scrutiny

The for-profit education sector has experienced repeated cycles of expansion, controversy, and contraction.

• Post-WWII Surge: Fueled by the GI Bill, proprietary schools mushroomed to serve returning veterans with vocational training. These schools became synonymous with short-term, job-focused learning.

• 1972 Higher Education Act Reauthorization: Opened federal student aid to for-profits, prompting aggressive growth and attracting investors.

• 1990s–2000s Peak: Companies like the University of Phoenix, Corinthian Colleges, and ITT Tech expanded rapidly, often serving working adults, single parents, and veterans. Online education fueled further enrollment increases.

• 2010–2016 Collapse: Government investigations revealed widespread fraud, poor graduation outcomes, and deceptive practices. In response, the Obama administration instituted new oversight rules, including:

  • Gainful Employment Rule

  • Borrower Defense to Repayment

  • Crackdowns on accreditors like ACICS

Many for-profits shuttered. Public trust plummeted. Enrollments dropped by over 50%.

The Trump Administration’s Deregulatory Wave – and Its Continuation in Term Two

During his first term, President Trump and then-Secretary of Education Betsy DeVos rolled back nearly every federal regulation that had constrained the for-profit sector. In his second term, Trump has gone further—launching efforts to sunset the Department of Education entirely and transfer its responsibilities to the states.

Key moves across both terms include:

• Repeal of Gainful Employment Rule (2019): Removed accountability for programs failing to provide adequate earnings-to-debt ratios.

• Weakening Borrower Defense Protections: Made it more difficult for defrauded students to have loans discharged, even in cases of proven institutional misconduct.

• Restoration of ACICS: Reaccredited a body that had previously lost federal recognition due to its failure to police fraudulent institutions.

• Executive Order to Eliminate the Department of Education (2025): Still in legal dispute, this order has already decentralized significant regulatory authority and gutted enforcement budgets.

• Expansion of Federal Incentives for Trade Schools: Trump’s second-term policy includes redirecting portions of Pell Grants and federal workforce dollars toward short-term training programs—many of which are operated by for-profit providers.

These actions have rekindled investor interest in the for-profit model and opened the door for new players in the postsecondary education market.

Why the Climate Is Ripe for a For-Profit Revival

Disenchantment with Traditional Higher Education

College enrollment in the U.S. has declined for over a decade, dropping by nearly 15% since 2010. Many families are questioning whether $100,000+ degrees are worth the debt—especially when entry-level wages haven’t kept pace.

Workforce Demand and Skills Gaps

Sectors like advanced manufacturing, healthcare tech, logistics, and construction are facing massive shortages. The Biden-era CHIPS and Science Act has only intensified the need for fast, skills-based training—something traditional institutions are often too slow to deliver.

Rise of Alternative Credentialing

Credentialing is fragmenting: from bootcamps and nanodegrees to short-stack certificates. Many of these are being delivered by private firms—some for-profit, some hybrid public-private partnerships.

Shift to “Work-First” Education

Trump’s messaging consistently highlights “skills over degrees,” with federal speeches and campaign rallies framing liberal arts education as “ideological indoctrination” and “a waste of taxpayer money.” This framing is being used to justify diverting funds from traditional colleges to career-focused programs.

The Risks of Deregulated Expansion

The lessons of the 2010s loom large. Critics warn that without robust oversight, the return of for-profit education could expose a new generation of students to:

• High Tuition, Low Value: For-profits have historically charged significantly more than public colleges while delivering worse outcomes.

• Aggressive Recruiting of Vulnerable Populations: First-gen students, veterans, and low-income learners are often targeted with misleading marketing and false promises.

• Questionable Quality: Many institutions spend more on marketing than instruction, with minimal investment in faculty or student support.

• Debt Without Degrees: The for-profit sector has long led all higher ed sectors in student loan default rates.

Even newer for-profit ventures like coding bootcamps and ISA-based schools have come under criticism for opaque financial terms and underdelivering on job placement.

What’s Next: Guardrails or Groundhog Day?

To move forward responsibly, policymakers and education leaders must learn from the past while recognizing the legitimate need for innovation and workforce alignment.

Policy Recommendations:

1. Modernize Accreditation: Mandate outcome-focused accreditation metrics. Require public reporting of graduation, employment, and earnings data across all institutions—regardless of tax status.

2. Restore and Update Gainful Employment Standards: Tie federal financial aid to measurable employment outcomes for all career-training programs.

3. Establish a National Outcomes Dashboard: Create a federal database of real-world student outcomes, allowing families to compare costs, employment, and debt levels across programs.

4. Support Public-Private Partnerships with Guardrails: Encourage collaboration between community colleges and reputable for-profits, with public accountability and shared oversight.

5. Enforce Consumer Protections: Prohibit deceptive advertising, mandate clear cost disclosures, and increase funding for the Federal Trade Commission and state attorneys general to investigate complaints.

6. Prioritize Equity: Ensure that pathways for working adults, BIPOC learners, and low-income students are not limited to lower-quality or exploitative programs.

Conclusion

The second Trump administration’s aggressive push toward deregulation and trade-focused education is bringing for-profit models back into the spotlight. While the need for flexible, workforce-aligned learning is real, the question remains: Can we create a future where for-profit education provides value and accountability—not just enrollment and revenue?

The answer will depend on whether lawmakers, accreditors, and institutions can create a system where outcomes matter more than profit, and students—not shareholders—come first.

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