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

Sophie McGuinness ()
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Sophie McGuinness: Department of Educational Leadership and Policy Studies Florida State University Tallahassee, FL 32306

Education Finance and Policy, 2026, vol. 21, issue 1, 1-23

Abstract: Leveraging a historically large investment in workforce credentialing programs at public community colleges, I test whether funding awarded to half of U.S. community colleges led to increased enrollment and substitution away from for-profit colleges. I use Free Application for Federal Student Aid (FAFSA) data to observe the revealed college preferences of students at open-access institutions. I find that a fifth of all for-profit college enrollees filed a FAFSA to a community college. Grant funding of $3–5 million per institution caused community colleges to capture enrollments from the for-profit sector, as evidenced by a 5 percent reduction in the probability that community college applicants also apply to a for-profit college, and a 5 percent trade-off in favor of community college enrollment among applicants who continue to apply to both sectors. Results provide evidence that federal investment in community colleges increases community college market power and selection away from competitors.

Date: 2026
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https://doi.org/10.1162/edfp.a.21

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