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February 17, 2010, 8:23 am

The Chronicle of Higher Education has a series of articles on the virtues of private, for-profit education as offered by the University of Phoenix, DeVry, and similar institutions. Such private-sector, market-driven outfits are “nimble,” much more so than their stodgy public-sector, nonprofit ancestors.

As Chronicle veteran Stephen Burd says, in effect, “wait, what?”

The Chronicle fails to note that all of that “personal attention” doesn’t pay off for many of their students. In fact, less than one third of first-time, full-time students who attend the University of Phoenix graduate within six years…. The Chronicle articles fails to acknowledge that some of the largest publicly-traded for-profit higher education companies have in recent years come under intense scrutiny from federal and state regulators and have faced numerous lawsuits by former employees, shareholders, and students over allegations that they have engaged in misleading recruiting and admissions tactics to inflate their enrollment numbers. With all of the glowing praise for the University of Phoenix throughout the package, one would expect that there would at least be some mention of the $78.5 million settlement that the university’s owners reached recently in a False Claims lawsuit that accused the institution of routinely violating a federal law that aims to prevent schools from aggressively recruiting unqualified students.

Such concerns have prompted the U.S. Department of Education to start a process of rewriting its student aid regulations to strengthen a federal ban on colleges compensating recruiters based on their success in enrolling students. Department officials are also planning to add teeth to the rules requiring for-profit colleges to show that graduates are finding “gainful employment” in their fields of study and to regulations that forbid schools from willfully misleading prospective students. Incredibly, the Chronicle articles make no mention of the Education Department’s efforts. The Chronicle has dutifully reported on the recently completed negotiated rulemaking sessions on these topics — so this omission is absolutely mind-boggling. In a package of stories that runs nearly 7,000 words, the federal government’s concerns about many of these institutions certainly merit attention.

Finding evidence that students are not always being well-served is not that difficult. For example, Corinthian Colleges recently announced that nine of its Everest College campuses have 2008 cohort default rates exceeding 25 percent, including two topping 30 percent. In other words, an alarming number of the schools’ former students who entered repayment on their federal student loans during the 2008 fiscal year defaulted on them within two years. Moreover, Corinthian expects that 56 to 58 percent of the private loan funds that the company provides to high-risk students with sub-prime credit records will eventually end up in default.

This doesn’t make the Chronicle sound fair and balanced.



Title from DeVry’s ad campaign for their new “don’t get pwned” motto slogan.

This post thanks to an email tip.

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