• September 1, 2014

In Partisan Hearing, Democrats Attack Proprietary Colleges for Profiting While Students Fail

More than half of students attending the nation's largest for-profit colleges withdraw within two years, a new report by Senate Democrats reveals.

The report, which is based on data collected from 16 for-profit companies, is the latest bad news for a sector that is under intense federal scrutiny and has spent millions of dollars fighting a rule that could put many of its programs out of business. It shows that proprietary colleges are reaping record profits even though a majority of their students are leaving their institutions without a certificate or a degree.

Democrats released the report Thursday at a hearing that alternated between policy debate and partisan bickering. In an opening statement, Sen. Tom Harkin of Iowa, the chairman of the education committee, called the report's findings "disturbing."

"For students enrolling in for-profit schools, graduation with a degree is a possibility, but debt without a diploma is a probability," said Harkin, who requested the data from 30 for-profit colleges as part of a continuing investigation into the sector.

Sen. Michael B. Enzi of Wyoming, the top Republican on the committee, acknowledged the sector's shortcomings, but he said it was "naïve" of Democrats "to think that these problems are limited to just the for-profit sector." The senator argued, more forcefully than he has in past hearings, that Democrats were discriminating against for-profits, ignoring nonprofits "with the same record."

Mr. Enzi said he had decided not to invite witnesses to Thursday's hearing because of "hostile treatment" his witnesses had received in the committee's first two hearings on for-profit colleges.

Thursday's hearing came a day after supporters of for-profit colleges descended on the Capitol to argue against a proposal that would cut off federal aid to programs whose students have high debt levels and low loan-repayment rates. More than 2,000 students attended the rally, including Tina Teeple, a student at All State Career School in Baltimore who is studying medical assisting and medical billing. She said she was worried that a few bad actors were "going to make it so that nobody has the opportunity in the future."

"If we want to go to proprietary schools, that should be our own choice," Ms. Teeple said.

Debt but No Degree

According to the Democrats' report, 57 percent of students who entered for-profit colleges during the 2008-9 academic year have withdrawn, many after 20 weeks or less of instruction. Over the past three years, almost two million students have left for-profit colleges without a credential, many with debt that could take years to repay. The typical full-time student spent between $8,800 and $11,300 on their education, the report estimates.

Meanwhile, the 16 largest companies earned $2.7-billion in profit in 2009 alone, reporting, margins ranging from 16 percent to 37 percent, according to the report.

Much of that profit comes from taxpayers, with federal dollars—including aid to veterans and unemployed workers—accounting for 87 percent of revenues at 14 of the companies.

Harris N. Miller, the president of the Association of Public Sector Colleges and Universities, said the report's findings were "logically inconsistent" with accrediting standards and graduation-rate data reported by the Department of Education. One of the nation's two largest national accreditors requires for-profit colleges to have a retention rate of 75 percent; the other requires a graduation rate of 65 percent. Meanwhile, data reported by the National Center for Education Statistics shows that for-profits accounted for 8 percent of students in 2007, but they awarded 15 percent of the credentials.

"The hypothesis that these schools recruited and turned over so many students in no way syncs with that data," Mr. Miller said in a conference call with reporters.

The report's findings seem to have strengthened Democrats' resolve to crack down on for-profits, convincing Mr. Harkin that the sector's problems are indeed "systemic," a word he used repeatedly during the hearing. He reiterated his promise to offer legislation to better regulate the sector, arguing that the system "cries out for some kind of fixing."

"They've figured out how to be profitable even when students are not successful," he argued at the end of the hearing. "There is irrefutable evidence that something has gone wrong with this industry."

But Mr. Harkin said he still needs more information about the sector and will not offer legislation until next year, after the midterm elections. Its chances of passing hinge on the outcome of that election. If Republicans regain control of the U.S. House of Representatives, as many polls and political experts project that they will, passing a bill could be difficult. If they also reclaim the Senate, which appears less likely, it would probably be impossible.

A Partisan Divide

The partisan divide over for-profit colleges was on full display at Thursday's hearings, with Republicans accusing Democrats of being anti-capitalist and classist, and Democrats responding with surprise and indignation.

The hearing began routinely enough, with testimony from four witnesses: an American Indian student who said she had been misled by a for-profit college; a for-profit recruiter turned career-services adviser who blew the whistle on colleagues who were manipulating job-placement statistics; and two advocates for students and consumers.

First up was Arnold Mitchem, president of the Council for Economic Opportunity in Education, a lobby group for federal TRIO programs. He spoke of the "inequities inherent in the relationship between low-income students and for-profit colleges," and called for safeguards to protect low-income students.

"On one side of the table, we have a poorly informed customer, and on the other we have a business with sophisticated, state-of-the-art marketing techniques," he said, calling that "a cocktail for abuse."

He was followed by Kathleen Bittel, a career-services adviser for Education Management Corporation's Art Institute Online, who said she was putting her career on the line by testifying before the committee. Ms. Bittel, who wrote to members of Congress in mid-September detailing abuses she saw at the job, described the "many tricks and sleight of hands" that her colleagues used to inflate their job-placement rates. She encouraged the committee to "take a good, hard look" at the employment numbers colleges are reporting.

EDMC responded with a letter to lawmakers saying an internal investigation "found no support for Ms. Bittel's claims of undue pressure ... to meet placement goals or falsely verify graduates' employment." It accused Ms. Bittel of refusing to cooperate with the institute's investigation. In questioning by the committee, she said she had provided extensive information but refused to name names.

The committee then heard from Lauren Asher, the president of the Institute for College Access and Success, a California-based group that supports expanded federal oversight of for-profit colleges, and Danielle Johnson, a Kaplan University nursing student who said recruiters for the college had lied to her about where she could do her clinical training.

The hearing began to devolve into political theater during the question-and-answer session, when Sen. Richard Burr, Republican of North Carolina, accused Democrats of undertaking a "witch hunt" against for-profits. Al Franken, Democrat of Minnesota, responded feistily, saying, "I feel like my motives have been impugned."

At one point, Sen. John McCain, Republican of Arizona, noted with glee that Lanny Davis, a prominent Democrat who served under President Bill Clinton, is working as a lobbyist representing for-profit colleges.

"I think he's an advocate for nasty for-profits," Mr. McCain said with sarcasm.

He accused Democrats of characterizing open-enrollment colleges, which serve large numbers of low-income and minority students, as inherently "bad," and elite institutions, like Harvard University, as "good."

"It has the uncomfortable feel of disparate class and racial treatment, which should make liberals uncomfortable," he said.

"It's one of the rare moments in my political career that I find myself in complete agreement with Lanny Davis," he added.

Sen. McCain suggested that things would be different if Republicans reclaim the Senate, saying, "hopefully in January we will have a different agenda for this committee."

Mr. Harkin expressed surprise that the hearing had become so partisan and said he hoped Mr. McCain wasn't implying that Republicans would drop the investigation.

"Is he saying that if Republicans take over the Senate, they won't do anything about the for-profit sector, that they can just keep going on as if nothing is wrong?" Mr. Harkin asked. "I hope that's not the case."

Meanwhile, Mr. Harkin doesn't show any signs of letting up. The next hearing on for-profit colleges is scheduled for early December.

Kevin Kiley contributed to this report.

Comments

1. getting_real - October 01, 2010 at 08:47 am

x

2. getting_real - October 01, 2010 at 09:16 am

(Apologies for the prior "x".)
The most discouraging part of this hearing, and any Congressional hearing on which you know the substance, is that these are theater, not fact finding missions. The witnesses seem to be selected for what they do not know (or their clear agenda, as with Eismann and Asher), and there is no attempt to learn anything new. All speeches are written before the hearing begins. All minds are closed before the speeches are written.

Some of the more humerous moments in the hearing:

Senator Casey's understanding that schools may receive Pell grants over multiple semesters after a student withdraws (false), and the unwillingess of anyone in the room to correct him knowing that a correction would reduce the drama.
Senator Harkin's umbrage that a school would withold an official transcript until a student's fees are paid (which nearly every school in the country (public, non-profit and fp) does)).
Senator Harkin's thinking that $50K is an outrageous amount of debt for an undergraduate education. Is he so in a bubble that he doesn't realize that many schools cost $30-50K PER YEAR and that students have to take on substantially more debt because they don't have a bank account like his to pay for schooling? He should talk to a few of the interns roaming about the building (and if they don't have debt, do they know how much their parents paid for their education?).
The entire panel's misunderstanding of graduation rates.
Al Franken's clear disappointment that he lost the opportunity to be downright nasty to yet another witness. (Although we still got to see his staffers laughing behind him nearly every time he spoke. That office must be a riot.)
Ms. Bittel's extreme disapointment that U.S. Senators did not stay in town after the session was adjourned given that she flew into town. And her need to state this repeatedly.
I have not read the entire report yet, but does Senator Harkin explain why the Committee requested information on 30 schools but issued a report on only 16? Would including the other 14 have skewed the results in a way his office did not favor?

3. gplm2000 - October 01, 2010 at 09:38 am

Despite the theatrics, much of what was said by DEMs is true. For-profits offer a low quality education for a high price. Most of their appeal is to minority, low-income students who are not prepared for college work at a degree-granting 4yr state university. A degree from a for-profit is virtually worthless in the eyes of academia or business. Given the high percentage of military students, it may be the only org. that willingly accepts the degrees.

ARTICLE: "He spoke of the "inequities inherent in the relationship between low-income students and for-profit colleges," and called for safeguards to protect low-income students." Not really. There is plenty of guidance available for this group of minorities, if they want to use it. Unfortunately, they don't listen to those who know.

4. mkant69 - October 01, 2010 at 09:40 am

The tables on page 5 of Senator Harkin's report are not cohort-based. As such, programs that last more than a year, such as Associate's degree programs and Bachelor's degree programs, have graduation rates that are "diluted" by large numbers of students still in school. The figures for Certificate programs suffer from a similar (but less severe) problem; since the colleges are open enrollment with students starting throughout the year, many students will still be in progress at the end of the year.

It would be interesting to see similar statistics for traditional colleges. Since community colleges have a much lower graduation rate than for-profit 2-year colleges, they would undoubtedly fare much worse than for-profit colleges under this style of analysis.

The report also makes the same errors about "churn" that Eisman did. For-profit colleges are not like traditional colleges that have a single class of students starting in September and finishing in May, but rather have students starting and finishing every month of the year. There certainly is some churn, but the method used in this report to calculate it grossly exaggerates the totals.

5. cwinton - October 01, 2010 at 09:55 am

The dirty little secret the for profits all want to keep under wraps is that their business plan is to profit at the taxpayer's expense. Their demand for comparison with the not for profit sector (which largely operates under a completely different paradigm) is simply an attempt to mask this particular aspect of their operations. It baffles me why any politician, regardless of political affiliation, unless under some kind of presumed obligation produced via lobbying, would not want to see these pirates brought to heel. It is disappointing to see people who wrap themselves in the claim of fiscal responsibility refusing to address the abuses so evident in this particular "industry" (a misnomer if there ever was one).

6. tdr75 - October 01, 2010 at 10:16 am

The saddest thing is that this should not be a partisan issue at all. They should be objectively looking at ALL colleges and universities of all types and examining practices.

Graduation rates of

7. betterschools - October 01, 2010 at 10:17 am

Our senators, Harkin among the leading, are such liars. I fail to understand why we vote them in. For those who have been following the factual trail, here is a new dimension added yesterday by Mark Kantrowitz.

1. Of students who graduate with more than $50,000 in debt,
33.6% are at public colleges, 54.3% are at non-profit
colleges and 12.0% are at for-profit colleges.

2. Of students who graduate with less than $5,000 in debt
(including no debt), 83.3% are at public colleges, 11.8%
are at non-profit colleges and 4.9% are at for-profit
colleges.

3. Of students who graduate with excessive debt relative to
the degree or certificate received, 33.8% are at public
colleges, 25.5% are at non-profit colleges and 40.7% are
at for-profit colleges. (The distribution of borrowers
overall is 69.4% at public colleges, 17.1% at non-profit
colleges and 13.5% at for-profit colleges.)

4. 22.0% of graduates from for-profit colleges graduated
with excessive debt, compared with 10.9% of graduates
from non-profit colleges and 3.6% of graduates from
public colleges.

5. Student loan debt at graduation is greater at for-profit
colleges than at non-profit colleges and greater at
non-profit colleges than at public colleges even after
controlling for differences in out-of-pocket cost.

The paper can be found at
http://www.finaid.org/educators/20100929debtdistribution.pdf

Nice job, Mark, of helping us get clear on relevant issues. Anyone who understand these issues deeply sees that the for-profit/non-profit distinction and taxpayer cost claims are red herring. The real issues lie with the increased proportion of the population going to college and debt levels and management skills.


8. tdr75 - October 01, 2010 at 10:20 am

My previous comment got cut off for some reason...

In a nutshell I said that

1) Graduation rates are

9. tdr75 - October 01, 2010 at 10:21 am

Forget it. Chronicle...fix your submission issues. I'm done.

10. diabolical_machine - October 01, 2010 at 10:39 am

A problem I have with the report is that there is no comparison to other educational institutions outside of the for profit sector. How can we single those institutions out without an equal comparison? How do we know if high withdrawal rates are limited to for profits vs. a problem with the entire industry?

Until we get those numbers as well for a fair comparison this is comparing apples to nothing.

I'd also like to know how the other 14 schools compared. I understand the 16 represent the largest institutions in the respective categories, but if they asked for 30 schools to provide data, why didn't they include all 30 schools in the analysis? In fact, for some numbers they only chose to reference 14 of the 16. If all 30 schools were included and the %'s were averaged out would it not have been so "alarming"?

11. a_voice - October 01, 2010 at 11:03 am

Any policy discussion singling out a specific group is obviously politically motivated. If the genuine interest is to protect taxpayers from abuse, we should look at institutions across the board, as others have suggested here.

12. applesap - October 01, 2010 at 01:48 pm

It is definitely elitist and racist. People with mid-level BAs refuse to sit across from a low-income person of color and associate their level of education with them. I know, because I had to get over that before I could continue teaching part-time at a for-profit university.

In the end, it comes down to giving everyone a chance. Community colleges cannot handle the burden of retraining an entire society. Most for-profit colleges are not giving out degrees in the classic arts and sciences or rocket science. They're mostly nursing, criminal justice, organizational psychology, business, administration, etc. It gives people a chance to change careers and make something of themselves and give them a little self-esteem.

The downside is that since the colleges are for-profit, they do pressure people, I'm sure, into enrolling. However, most of those "dropouts" are people who would never have made it and they're in and out for a small amount of debt. Those who can make it through a couple of years and drop out are probably no different than those who go to a trad. community college or even a four-year university anyway. People who want to regulate this are "unspeakingly" saying that certain people just "can't cut it" and they have to be protected from their choices that, for a minute, they thought they could do something with their lives.

I have seen students who a four-year state school wouldn't let on the property re-tool their lives, succeed and get themselves out of the place they're in. It happens, it's worth it. It's technical school, re-packaged and re-sold at a higher price -- in a society where, yes, your business acumen, your ability to manage people and your ability to heal people are way the heck more useful than snottery and liberal arts degrees. There's always been a hierarchy between trade school, community college and university. The real elephant in the room is that it's like Syndrome in the Incredibles said: "When everyone is special, no one will be."

Are there abuses, yes? Do they need a little regulation? Yes. But until this becomes a debate about the quality of curriculum -- which for-profit universities have some of the best teachers in the world working for them -- the entire higher education "racket" should be addressed, not just for-profit schools being barred from competing. The curriculum argument is something the elitists or Frontline can't quite get a foothold on.

The ethics I've encountered in the public universities is questionable, at best, and when you sign your name on a dotted line for debt, debt is debt. A little regulation, yes. An uproar, no.

13. dburton - October 01, 2010 at 02:19 pm

Saddly, the discussion isn't about helping the student fund and obtain a relevant education that prepares them for a career and a bright future.

Political bandwagoning by poiticians is common but in this case it not only harms students but harms our nation's future. For the most part, these politicians are trained attorneys who know how to think and be logical in their assessment--they have just chosen not to.

14. annon1234 - October 01, 2010 at 05:23 pm

The other reason they make a lot of money is that they pay their faculty half or less of the wages they'd get working for public or private non-profit colleges/universities. (I was offered less than half of the median split for wages in my field but told they were competitive for my field - umm OK competitive with whom???, I guess other for profits.) A huge number of the faculty are adjuncts with no benefits... It is not uncommon for adjuncts to be paid between $1400 and 2400 per course. The only stakeholders who profit from the for profits are the stockholders. The students and most of their employees lose out. Probably top management does OK salary wise but certain the people who do the lion's share of the work do not.

15. davh7278 - October 01, 2010 at 05:23 pm

For profits have problems, period. By their very nature they want to, well, turn a profit. But students get left in the dust. If you believe otherwise read this http://www.countercurrents.org/lendman220910.htm. Every student deserves better than what most for-profits are giving them.

16. betterschools - October 01, 2010 at 05:32 pm

I sense a real sea change here. Last spring, most CHE readers jumped on the "Let's trash the for-profits" bandwagon. A few added "aint it awful" anecdotes, true or invented.

Gradually, we are recognizing the complexity of these issues. As we do, Senator Harkin looks evermore the sniveling B-level actor, trading pseudo-tears for votes. Shame on him.

I see good news going forward. Harkin and others who approached this agenda irrationally will have been too clever by half. The factual floodgates are opening. Trying as he is to prevent it, the Senator will not be able to prevent a full and impartial examination of the contributions and liabilities of all systems of higher education, including meaningful bases of comparison and interpretation. (Did anyone inform the emotional Senator that the "compared to what" question is foundational in evaluation science?)

For these reasons, we should congratulate the Senator . . . but with our left hand.

17. annon1234 - October 01, 2010 at 05:32 pm

#7 "better schools" there are two ways to present those stats - one is the % of students who graduate with this kind of debt then break it down by sector OR take each sector and look at the percent of their students who graduate with this kind of debt. I'd bet those numbers aren't the same. I'd like to see both numbers. Do you know which set are being used here? It does look like that students in the for profits, on average, graduate with more debt even though they make up a smaller number of the students with that kind of debt (no doubt because there are fewer students enrolled in for profits than in the other kinds of institutions).

Also if we could look at the amount of debt carried by students who never graduate... those numbers would be informative too. We also need to look at % of students where someone else (but not family) pays for their education (military, job) and their debt and separate these students out from the self/family pay students and their debt.

Statistics are complicated and what we can take from any given report depends so much on how the numbers were analyzed.

18. integrity299 - October 01, 2010 at 05:40 pm

The Art Institutes (EDMC) used to be run by a group of competent and caring trustees when it was a publicly-held company. It was an amazing place to teach. We used to spend all of our time in faculty meetings discussing the best way to teach, refining our courses and working together...the Camelot of teaching. Compared to state universities where I'd have to wait 4 months to get a new pair of scissors and 2 years for a computer, it was amazing to have whatever I asked for on my desk the next morning, no questions asked. It was once focused entirely on undergraduate education with vast resources dedicated solely to supporting student development (the latest computers, software, equipment)...something you might never see at a research institution, state university or community college.

As a faculty member, imagine a place with no research requirements, no publishing quotas, no tenure battles...just the pure love of teaching. With no illusion of faculty governance or tenure, the lunatics don't run the asylum. It used to be an incredibly well-run system.

Then, the worst thing you can imagine happened. The company was taken private by...(wait for it)...Goldman Sachs. What was once a shining example of what can be a great model for education, quickly deteriorated.

I resigned in the middle of the worst possible economic climate-- without another position lined up --because of the ethical dilemma with the things I was ordered to do. Some of the abuses I personally witnessed include:

- If parents/students complained loud enough or threatened to sue over grades, the faculty member was required to change them. I was ordered to change grades so students could continue to meet the "B" average required to keep a state scholarship program. This has become the culture and all the students know exactly how to get their grades changed.

- Students were automatically passed from one course to the next. One student retook every class he failed over and over until he raised it to a "D". He graduated with a 1.12 out of 4. He was required to show a portfolio to a faculty jury in order to receive a diploma, and failed this requirement three times (the maximum number allowed). The department chairman looked at him--in front of all the faculty and the students waiting for their turn to go before the jury--and announced, "I'm going to just give him his degree because we've done everything we can for him here and, besides, he owes the Art Institute a lot of money."

- A non-verbal autistic student was enrolled whose parents were promised by both the recruiters and the dept. chairman that the school could give him a college degree. The parents were willing to pay any amount of money and no loan was involved. He simply had to show a 'disability' letter in every class excusing him on grounds of his illness from doing any work. He personally took eight required classes from me that were not taught by any other faculty member and never passed a single one. After five years of sitting silently in classes...never turning in a single piece of paper or passing a single class...he was "given" an associates' degree by the dept. chairman.

The relentless drive for profits means that schools keep churning out graduates in fields where there are no jobs...EDMC is famous for this. There are more people in school right now studying certain design disciplines, than there are currently practicing in the field. No one in the senate hearings has focused on the demand for certain degrees as part of the equation for paying back student loans.

The for-profits teach what they can effectively market, whatever is in demand...video game design, animation, graphic design...not tempered in any way with the number of graduates the market can absorb. The creative fields are some of the most brutally competitive fields in the world and notoriously low-paying. It's not the job of any institutions to regulate the amount of graduates competing for jobs...but lying to potential students is where the line has to be drawn.

The students are sold a bill of goods with promises of "a graduate with an XYZ degree can expect to make $45,000 a year". The reality is that one of the brightest animation graduates is an assistant manager at my bank, and design graduates are still working behind the counter at Kinko's and at the Apple store in the mall ten years after graduating. Part of the reason the default rate is so high is because graduates are paying off $65,000 in school loans with their $10/hour jobs.

Does anyone, besides me, see any parallels to the Milgram experiments in for-profit recruiting?

19. betterschools - October 01, 2010 at 06:57 pm

@annon1234,

I agree that it is complex and potentially misleading . . . and this is only one layer. My motivation in presenting the above (#7) was to deflect the irrational emotionality that has characterized these discussions and add yet another small layer of new analysis that I found interesting.

I don't expect anyone to accept my view without corroboration but if you will permit me a provisional observation based on crunching the available numbers over the past six months, it looks to me like the for-profits have, ceterus paribus (the difficult part to get to because there is so much unfounded passion), a slightly higher default rate that can be accounted for by the fact that they do a marginally better job of enrolling students at and perhaps below the ATB margin. However, (assuming it is fact for moment) there is another perspective. Within this segment that a non-profit might say fails ATB tests, are a significant number of successes, individuals whom no one else would give a chance, literally, and who end up succeeding. AS a society, we need to assign a value to that segment and factor it into the larger model.

At a higher level, there is no doubt that statistics related to loan value, defaults, and meaningful work upon graduation are worsening across all sectors. The economy is only one explanation. Publics, for example, have added dozens of degrees for which there are no jobs but it will take you 5 years on average to graduate.

Last year (2009-10, the most recent data) average for-profit tuition (12% market share) was $14,174 per student per year. Publics (70% market share) charged $7,020 (in state) and $18,548 (out of state). Private non-profits (18% market share) charged $26,273. Tuition for many private elites exceeds $50,000 per student per year. Per student annual taxpayer costs range from a few thousand for the for-profits to more than $40,000 for the elites. Publics fall in the $16-18,000 range. This year, publics are increasing tuition 10-17%, across the board. They are increasing many hidden fees much more. Everything is interactive.

Of course, Harkin is not asking the questions you and I are asking. He appears to have reached his conclusions long before the hearings began and I have seen documents showing that this "1-2 punch" strategy was launched by the administration last year and made to look like it was evolving from grass roots. I have no respect for elected officials who pursue political agendas to the blatant exclusion of relevant facts.

You can drill down on this question by locating Kantrowitz's and several other papers here.

http://www.intered.com/for-profit-regulation

20. mikpap - October 02, 2010 at 08:25 am

People who believe there's any significant academic difference between for-profit and traditional education are in denial. Pick any university in the country and you'll find that many students do not graduate and that many of these folks leave with debt. The difference is that at traditional schools this attrition is viewed as a mark of excellence---- a vetting or weeding out. Anybody who's been to college has experienced this philosophy. In fact, most big schools have their "wwed out" courses. This whole hearing thing is a witch hunt and Tom Harkin is beginning to look a little more foolish and a little less well-meaning. Let's stop differentiating between traditional and for-profit and fix some real problems that are pervasive in all of higher education.

21. trendisnotdestiny - October 02, 2010 at 09:54 am

There should also be a measure related to the biggest percentage gain of indebted students at these levels since the for-profit, non-profit and public colleges....

The rates of increased debt over the last 2, 5, 10 years to see where the most egregious abuses are occuring; then integrate whether students secured a degree..... We need to identify the "sweet spot" of the market using growth rates as an indicator as this is what wall street will be evaluating....

22. amy_l - October 02, 2010 at 02:00 pm

"If we want to go to proprietary schools, that should be our own choice," Ms. Teeple said.

Of course. I certainly wouldn't question the right of for-profits to exist and students to attend them. What I question is the use of tax dollars to support the whole thing. We would be much better off putting those tax dollars into reviving our community colleges. They're non-profit, publicly controlled (so we have some power over how our tax money is being used), and usually tied to a larger regents system that helps maintain academic quality. Why don't we just say NO student loans or Pell grants to students attending for-profits unless the student can show that his/her local community college did not offer the program desired or did not have space available?

23. svining - October 03, 2010 at 07:51 am

The answer to this problem is so easy even the idiots in Congress should be able to figure it out.

Stop funding all higher ed; both for-profit and not-for-profit.

If people can't afford it, then take out non-government guaranteed loans if they can qualify.

Demand will right-size, prices will go down and those who don't have what it takes to be successful in college, won't try it only to end up with $20-30,000 in debt for their efforts.

The next generation will be much better off if we took this approach.

24. betterschools - October 04, 2010 at 11:26 am

@svining,

As appealing as your approach is, we have made a societal decision that it is in our interest to support higher education for our citizens. I think that case is relatively easy to make on broad economic terms although in some cases the benefits are not as certain or linear as they have been represented. All of the messiness that we are writing about has been created by two things. (a) Financial aid was initially envisioned as a support for seat time-on-task, not outcomes. This made sense in an era that had no online education and virtually all of the market consisted of 17-21 year old non-working students (half the market now). Of course, all of these demographics have changed. (b) Politicians being the type who seldom know what they don't know and possessing a surfeit of unwarranted self-confidence, have mucked things up over the years in their efforts to "fix" various problems that have emerged. Believe it or not, there was no federal aid to higher education in the early 1960's. The question was a debate topic at that time.

When you conduct as SWOT analysis on the condition of higher education, as I have every year since 1995, you begin to see that most of the important questions do not pertain to type of control. For most dependent variables of interest (graduation rates, meaningful employment, all-in cost to degree, opportunity costs of delays, relative positional change of graduate in society (e.g., welfare recipient first-generation college student becoming a $28K Dental Assistant vs. son of wealthy attorney becoming an attorney), the within-type variance is greater than the between-type variance. This tells social scientists that the politicians think they have their hand on the throttle when, in fact, they have their foot on the brakes. Nothing new, of course, but they are tromping on our lawn this time.

If I had a simple solution, I would offer it. The best I can do is continue calling for an across-the-board study that will produce meaningful comparisons that might lead to, at least, some solutions.

25. gplm2000 - October 04, 2010 at 12:28 pm

For-profit schools are not good schools. There sole purpose is to make a profit by appealing to those who can't qualify for admission to four-year colleges. Mostly minorities. The taxpayer funds their operations, especially the military, through programs that demand little accountability. It is a good way to make money and many companies do it well. Maybe someday the college education "pointy heads" will wakeup and realize that government actions are responsible for most of our problems, not private profit-making enterprises.

26. profitgrad - October 14, 2010 at 12:06 pm

As a for-profit graduate, my comment is not about funding or having a ton of debt when I graduated. I was fortunate enough to have my tuition paid for in full by parents who sacrificed to allow me the opportunity for a college education. Where the for-profit failed was that it lied and misled students like myself to believe they were fully accredited when they were not. The reality of for-profit education is that they purposefully and intentionally misled me, my parents and other students to believe our credits would transfer to other non-profit institutions and that employers would value the education we received. Sorry to say, that was not the case. I want Congress to shut these institutions down and not allow them to continue to prey on unknowing students who don't know that their degress are worthless and provide no value in the workplace. This is a not a Republican nor Democrat issue. This is an issue of integrity and honesty. Republicans want to protect these for-profits because they know their sons and daughters are not attending these scam schools. As long as the stock holds up by these Wall Street held corporations, no one cares the outcome or the impact of these worthless degrees to their students and their families. To Republicans, this is just a way to make money off of these people. Take away taxpayer money and there is no incentive to keep these for-profits operating. In retrospect, a community college would have been a great place to start my college education instead of believing the hype and the marketing pitch of for-profit education. It's about time that someone had the guts to start looking at this scam segment of our education system and to rein them in, if not shut it down entirely.

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