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Enrollment falling at for-profit colleges
Big change » After years of explosive growth, for-profit higher education is shrinking fast.

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"You look at California, there’s almost 400,000 on the waiting list of the community college system," Gunderson said. "So they’re not going there. The community colleges are loaded to the brim."

Gunderson says that by forcing for-profits to end their open-enrollment practices, Washington is jeopardizing the president’s goal for the United States to regain its status as the world leader in higher education attainment. Once the economy recovers and students are more confident an investment in education will pay off with a job, he predicts enrollment will grow again.

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Robert Shireman, — a former Department of Education official whose reputation as a foe of the for-profit sector was so fierce that the leading companies’ stock prices all surged the day he announced his departure in 2010 — isn’t quite persuaded for-profit colleges have changed their stripes.

"We still need to watch the sector carefully because there are such strong incentives to over-promise and under-deliver," Shireman said. But he’s glad to see students apparently more aware of the risks, and to see the shift in focus at for-profits, whom he agrees have a role to play in the system.

"I would much rather see the University of Phoenix improve its quality than shut down," he said.

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