In April 2012, Senators Tom Harkin and Kay Hagan introduced a Senate bill to prohibit colleges from using federal education dollars for advertising or marketing. In March 2013 they reintroduced the bill. The Senate committee on Health, Education, Labor and Pensions reported that ▪ Fifteen of the largest for-profit education companies received 86% of their revenues from federal student aid programs—such as the G.I. Bill and Pell grants. ▪ In Fiscal Year 2009, these for-profit education companies spent $3.7 billion dollars, or 23% of their budgets, on advertising, marketing and recruitment, which was often very aggressive and deceptive. (a) What were the total revenues of those fifteen for-profit colleges in fiscal year 2009? (b) How much did those colleges receive in Federal student aid in fiscal year 2009? (c) How much of the money they spent on advertising, marketing and recruitment could be considered as coming from the Federal government?
In April 2012, Senators Tom Harkin and Kay Hagan introduced a Senate bill to prohibit
colleges from using federal education dollars for advertising or marketing. In March
2013 they reintroduced the bill. The Senate committee on Health, Education, Labor and
Pensions reported that
▪ Fifteen of the largest for-profit education companies received 86% of their
revenues from federal student aid programs—such as the G.I. Bill and Pell grants.
▪ In Fiscal Year 2009, these for-profit education companies spent $3.7 billion
dollars, or 23% of their budgets, on advertising, marketing and recruitment,
which was often very aggressive and deceptive.
(a) What were the total revenues of those fifteen for-profit colleges in fiscal year 2009?
(b) How much did those colleges receive in Federal student aid in fiscal year 2009?
(c) How much of the money they spent on advertising, marketing and recruitment could
be considered as coming from the Federal government?
In short:-
- In the year 2009, these companies spent $3.7 billion or 23% of their budget for advertising, marketing and recruitment.
- Fifteen of the largest for-profit education companies received 86% of their
revenues from federal student aid programs
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