Where do students go when for-Profit colleges lose federal aid?

We examine the effects of federal sanctions imposed on for- profit institutions in the 1990s. Using county-level variation in the timing and magnitude of sanctions linked to student loan default rates, we estimate that sanctioned for- profits experience a 68 percent decrease in annual enrollment following sanction receipt. Enrollment losses due to for- profit sanctions are 60- 70 percent offset by increased enrollment within local community colleges, where students are less likely to default on federal student loans. Conversely, for- profit sanctions decrease enrollment in local unsanctioned for- profit competitors, likely due to improved information about local options and reputational spillovers. Overall, market enrollment declines by 2 percent.