Can Public Investment in Community Colleges Draw Adult Learners Away From For-Profits?

This study investigates whether public investment in community colleges can shift adult learners away from for-profit institutions. Using FAFSA data from 2008 to 2021, the researcher analyzes student college preferences and enrollment behaviors before and after federal TAACCCT grants awarded $3–5 million to community colleges. The findings show a 5% reduction in the probability that community college applicants also apply to for-profits and a 5% enrollment shift toward community colleges among dual applicants. Overall, TAACCCT funding increased community college enrollments by 3 percentage points, with particularly notable gains among adult, certificate-seeking, and Pell-eligible students.

Full Citation and Link to Article

Haygood, Ryan. Do For‑Profit Colleges Expand Opportunities in Higher Education? Evidence from Campus Closures. Yale University Department of Economics Working Paper, November 30, 2023; revised May 10, 2025. Available at SSRN: https://ssrn.com/abstract=5012450 or http://dx.doi.org/10.2139/ssrn.5012450

Extended Summary

Central Research Question

This study addresses whether public investment in workforce-aligned programs at community colleges can shift adult learners away from for-profit colleges. Specifically, it evaluates the impact of the Trade Adjustment Assistance Community College and Career Training (TAACCCT) grant program, which awarded $2 billion to over half of all U.S. community colleges between 2011 and 2014. The central question is whether these institutional grants led to changes in FAFSA application behavior and enrollment patterns, diverting students—especially adult and non-traditional learners—from the for-profit sector to community colleges.

Previous Literature

Prior literature has established that community colleges and for-profit institutions compete for a similar demographic: non-traditional students who are older, lower-income, often caregivers, and frequently seeking short-term, occupational credentials. For-profit colleges have been known for their flexible schedules, targeted advertising, and streamlined enrollment processes, which appeal to adults. However, they also tend to charge higher tuition and leave students with more debt and lower labor market returns compared to community colleges.

Previous studies (Cellini 2009; Goodman and Volz 2020; Acton 2021) have shown that public funding for community colleges—such as bond measures, tuition subsidies, or sanctions against for-profits—can influence student enrollment choices. However, most of these studies measure aggregate changes in enrollment and do not examine whether institutional investments like TAACCCT directly influenced student college preferences at the point of aid application.

Data

The analysis uses FAFSA data from 2008 to 2021, which provides a rare opportunity to observe revealed preferences in student college applications. Applicants can list up to 10 institutions when applying for federal financial aid, allowing the study to track both intention and enrollment. This dataset includes over 250,000–400,000 FAFSA applications annually from students considering both for-profit and community colleges. The FAFSA data includes demographics, age, Pell eligibility, dependent status, credential goals, and the institutions to which students sent their financial aid information.

To better assess racial disparities—since FAFSA does not collect race/ethnicity data—the study uses a model to predict race/ethnicity based on ZIP code, high school, and surname, following the method developed by Monarrez and Matsudaira (2023).

Methods

The study employs a difference-in-differences (DiD) research design to compare changes in application and enrollment behavior before and after institutions received TAACCCT grants. Treatment institutions are community colleges that received TAACCCT funding between 2011 and 2014. The comparison group consists of similar community colleges that never received TAACCCT funds.

A stacked DiD approach is used to account for the staggered timing of treatment across four grant rounds. The analysis estimates treatment effects separately by round and aggregates them, ensuring robustness to heterogeneity in treatment effects. An event-study model is also used to track how outcomes evolved in each year relative to the year before treatment.

Key outcomes include:

• Total FAFSA applications

• FAFSA applications listing only community colleges

• FAFSA applications listing both community and for-profit colleges

• Enrollment outcomes for students who applied to both sectors

• Changes in student demographics post-treatment

Robustness checks include alternate estimators that adjust for heterogeneity in funding dosage (e.g., institutions that received multiple grants), falsification tests using unrelated institutional variables (e.g., tuition, appropriations), and analysis of exposure to for-profit college closures during the study period.

Findings / Size Effects

The findings suggest that targeted public investment in community colleges can shift student preferences and enrollment decisions away from the for-profit sector.

Key findings include:

1. Shift in FAFSA Application Behavior

   
   

   • TAACCCT had no significant impact on total FAFSA applications overall.

   • However, the number of applications listing only a community college (singleton applications) increased by 5 percentage points.

   • Simultaneously, applications listing both community and for-profit colleges (co-listings) decreased by 2.9 percentage points. This represents a 29% reduction from the baseline of 340 co-listings per college, equating to about 98 fewer co-listings per institution.

   
   

2. Enrollment Effects

   
   

   • Overall aided enrollment increased by 3 percentage points post-TAACCCT, or approximately 50 additional students per college.

   • Enrollment among singleton FAFSA applicants increased by 5.6 percentage points, a 10% increase from the baseline (about 77 additional students per college).

   • Among applicants who listed both a community and a for-profit college, community college enrollment rose by 5–7 percentage points, while enrollment in for-profits declined by 6 percentage points. This translates to a net shift of approximately 18 students per college choosing community colleges over for-profits.

   
   

3. Demographic Shifts

   
   

   • The proportion of enrolled students over the age of 25 rose by 1.6 percentage points.

   • Enrollment of Pell-eligible students increased by 0.8 percentage points.

   • Among co-listing applicants, the remaining pool post-TAACCCT was more heavily skewed toward those with a stronger prior preference for for-profit colleges, suggesting TAACCCT was most effective at attracting students on the margin between the two sectors.

   
   

4. Timing and Persistence

   
   

   • The diversion effects became more pronounced in later post-treatment years, indicating a persistent, rather than transitory, shift in student behavior.

   • Enrollment gains were most notable in the first two years after grant funding and tapered off slightly, although preference effects continued to grow.

   
   

5. Robustness and Sensitivity Checks

   
   

   • Pre-treatment trends between treated and control colleges were parallel, supporting causal inference.

   • No significant differences were found between treated and control colleges in terms of exposure to for-profit college closures or unrelated institutional factors like tuition and local appropriations.

   • Additional modeling accounting for cumulative funding doses confirmed the direction and magnitude of main findings.

   
   

Conclusion

This study provides strong evidence that targeted federal investments in community college workforce programs—such as the TAACCCT initiative—can shift student preferences and enrollment away from the for-profit college sector. Even relatively modest institutional investments of $3–5 million led to significant and sustained changes in student application and enrollment patterns.

By increasing the attractiveness of community colleges for non-traditional learners, especially adults and those seeking short-term occupational credentials, TAACCCT grants helped community colleges become more competitive alternatives to for-profits. These results are particularly important in light of concerns about the debt burden and labor market outcomes associated with for-profit education.

The study contributes to the broader literature on higher education policy by highlighting the effectiveness of institutional grants—distinct from tuition subsidies or regulatory sanctions—in shaping student behavior. As the federal government renews interest in community college funding through programs like the Strengthening Community Colleges Training Grants, these findings suggest that relatively targeted investments can have a meaningful impact on enrollment equity and institutional competitiveness. Future research should continue to examine the long-term effects of such investments on student completion and labor market outcomes, especially for historically underserved populations.