Teaching for Dollars: The Facts About For-Profit Schools

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Nothing opens career doors or increases earning potential like a college education. Gone are the days when a high school diploma was enough to get a decent paying job; some sort of higher learning is practically a requirement these days for every vocation that doesn’t involve wearing a paper hat or cleaning up bodily fluids.


But a traditional four-year university may not be for everyone—emotionally, professionally, or financially. Not everyone can afford it, and not every career requires it. Beyond exclusive, private Ivy League universities, large state schools, and public community colleges, a new option has arisen in the past few decades—the for-profit school. Where traditional colleges and universities are entities whose mission is to provide an education and not make money, for-profit schools are businesses that profit through providing educational services. They are a booming business, now comprising about three thousand different institutions and educating 12 percent of college students in America, according to the Association of Private Sector Colleges & Universities. Many students look to these schools, which include familiar names like DeVry, ITT Tech, University of Phoenix, Kaplan University, and the Art Institutes, as a better alternative to traditional colleges for students of varying educational and financial backgrounds, where they can get vocational certificates or degrees in anything from bartending to cosmetology to video game design. However, there are some troubling facts about these institutions that any prospective student should know.


Their Credentials Are Suspicious
For-profit vocational schools don’t have the same level of accreditation as traditional nonprofit schools. Most for-profit schools boast “national accreditation,” often granted by organizations whose entire purpose is to “certify” for-profit schools. Traditional colleges and universities have regional accreditation, which signifies tougher academic standards and more selective admission criteria. Because of these differences in accreditation, credits from for-profit schools rarely transfer to traditional nonprofit colleges and universities. Also, instructors at for-profit colleges aren’t the tenured academics found at nonprofit universities; they’re often just employees of the company that runs the school, with little more experience in their field than the average working professional.


The Costs Are Significantly Higher
A report by the Government Accountability Office (GAO) found that for-profit schools charged significantly higher tuition rates for comparable degrees and programs at public and community colleges. A massage therapy program at a for-profit school in California cost $14,487, while the same certificate cost only $520 at a local college; an associate’s degree in respiratory therapy in Pennsylvania cost $38,995 at a for-profit college, and only $2,952 at a public school. The GAO found that of five for-profit colleges it surveyed, the cost of an associate’s degree was six to thirteen times higher than the same degree from public college.


They Exist to Enrich Shareholders, Not Enrich Students’ Lives
At traditional nonprofit schools, students’ tuition goes toward the good of the school—to pay for libraries, computer labs, athletic facilities, attracting top tenured professors, and other resources that benefit the students. For-profit colleges are privately run businesses whose mission is to make money and maximize profits. The tuition students pay goes mostly toward the exorbitant salaries of the CEOs of the companies that own the schools, as well as toward paying shareholder dividends.


The Federal Government Foots the Bill
According to research, 92 percent of students at for-profit college receive federal student loans, compared with 27 percent of students at public colleges. Eighty-seven percent of the schools’ income comes directly from the government. They get the money up front, while the students are stuck with the student loans for years afterward, regardless of whether or not their degree helps them get a job. Federal student loan debt is the hardest debt to erase—it’s not cleared by bankruptcy—so recipients are on the hook for the rest of their lives, subject to wage and Social Security payment garnishment.


Deceptive Marketing Tactics Are Common
Admissions representatives promise job placement assistance, transferable credits, high salaries, and anything else that will convince students to register. The GAO found countless instances of admissions consultants’ lying about the school’s accreditations, graduation rate or graduates’ career placement, misleading applicants about the cost of tuition, coaching applicants through the entrance exams, encouraging students to hide financial assets in order to secure more federal aid, urging students to take out more loans than necessary, and lying about the permanence of student loan debt. Admissions reps have admitted in congressional testimonies to saying anything that would convince a student to enroll, regardless of the truth.    


Their Graduates Aren’t Doing So Well
According to some for-profit schools, a fashion graduate who works at a chain retail store as a sales associate is said to be “working in her field.” Congressional hearings have revealed that 57 percent of students who started their study in the 2008–2009 academic year dropped out. Only about 38 percent of for-profit college students ever graduate, compared with 64 percent of nonprofit students. For-profit students represent about 44 percent of student-loan defaulters, defaulting at four times the rate of nonprofit college students


The Government Is Cracking Down
In response to what it views as fleecing vulnerable students and trapping them in mountains of debt, the federal government, led by Sen. Tom Harkin (D-IA), is considering legislation to prevent these institutions from deceiving students about the usefulness of the degrees they offer and forcing them to be honest about their graduation and dropout rates, future career and salary prospects, and true cost of tuition, as well as disclosing students’ debt loads.


Employers Know the Truth
Most businesses and other educational institutions do not regard for-profit colleges (or their graduates) highly, since these schools’ lackluster criteria for admission and the dismal academic standards are well known. In addition, many degrees these schools offer ostensibly “prepare” students for entry-level jobs that don’t even require degrees in the first place.


A bevy of options are available for people who want to better their lives and provide for their families, but many students are discovering that for-profit colleges simply aren’t all they’re cracked up to be. Before enrolling at a college that puts profits before people, be sure that you know what you’re getting—and what you’re not.



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