College Guide

Blog

July 30, 2012 6:23 PM How Are the For-Profits Doing?

By Daniel Luzer

A recent report produced by the Senate’s Health Education Labor and Pensions (HELP) committee indicates widespread abuses in the for-profit education industry.

In particular, the report noted that:

Federal taxpayers are investing billions of dollars a year, $32 billion in the most recent year, in companies that operate for-profit colleges. Yet, more than half of the students who enrolled in those colleges in 2008-9 left without a degree or diploma within a median of 4 months.

In addition, it’s not just federal taxpayers who suffer under this particular business model. The report also notes that,

Ninety-six percent of for-profit students take out student loans, according to the most recent U.S. Department of Education data. In comparison, 13 percent of students at community colleges, 48 percent at 4-year public, and 57 percent at 4-year private non-profit colleges borrow money to pay for school.

This isn’t exactly new information. The HELP chair, Iowa Senator Tom Harkin, has long been a critic of for-profit education.

The report also documents questionable recruiting practices at for-profit colleges Harkin explained that the final report documents that abusive practices, like recruiting unqualified people, delivering classes of questionable rigor, and offering limited career services “are not the exception — they are the norm. They are systemic throughout the industry, with very few individual exceptions.”

Republicans on the Senate committee said that the investigation was biased and criticized Harkin for not looking into abuses by regular colleges.

That is, of course, rather like saying that the cancer study failed to address the rapidly increasingly incidents of heart disease, but whatever you want to try.

Interestingly, the report also indicated that online programs were less likely to produce degrees than classroom-based courses. Apparently 64 percent of student in online programs dropped out without a degree. The dropout rate for students attending campus programs is only 46 percent.

Daniel Luzer is the news editor at Governing Magazine and former web editor of the Washington Monthly. Find him on Twitter: @Daniel_Luzer

Comments

  • Patrick Shane on July 31, 2012 3:22 PM:

    Student debt is stunting the growth of the economy.

    Student loans have increased by 275% over past decade. As the next generation graduates from college, they are plagued by insurmountable debt that places demands on their income, limiting their ability to spend their earnings in ways that stimulate the economy.

    http://www.youtube.com/watch?v=mRA9ndc1pCM