For-Profit Colleges Charging More While Doing Less For Poorest

Bloomberg:

s state budget cuts lock students out of community-college classrooms or force them to stand in class, for-profit colleges are attracting hundreds of thousands of poor and minority students, charging up to 10 times as much for the same degree.

The industry, including Washington Post Co.'s Kaplan University, has tripled enrollment to 1.8 million in the past decade by pouring billions of dollars into marketing and recruiting, offering flexible online classes and outfitting more-modern campuses while states slash funding for community colleges. As much as 90 percent of revenue at each for-profit college comes from federal student aid.

Read the whole story: Bloomberg

Comments

[m1jones]

05:43 PM on 01/03/2011

The first thing you need to do to indicate your readiness for college is not to go to a for-profit college - no matter how great their ads are. Very promising young people who were sucked in by promises of getting super jobs after college (something a non-profit college would never suggest) and are now making meager wages while they are faced with moutainous college debt. Education like healthcare should not be a profit-making enterprise.

[RK Johnston]

06:52 AM on 01/03/2011

Considering that a for-profit EduCorp (Bridgeport) is title sponsor for the Holiday Bowl here in San Diego (which featured the University of Washington taking on the University of Nebraska (and winning 19-7))?

Is that really where their money needs to go, rather than improving course quality and sticking to their promises?

No, thank you--I'll just finish up and get my degree at CSU-San Marcos (shooting for LCSW/MSW).

--RKJ
--RKJ

[bryanzth]

12:01 AM on 01/03/2011

Pell Grant Money.

It COULD go to Community Colleges, which goes to a People-based system for their own education. Instead, it goes to a for-profit university/institute that does not educate the people. Therefore, Pell Grant Money ought to stop going to other than traditional public colleges/universities. Not even to private traditional colleges. You know?

BZ.

[Deep77]

04:24 PM on 01/03/2011

To be fair, many private traditional colleges, especially the ones with the big endowments, make it a policy to make sure no student is turned away because of financial reasons. But I agree there needs to be a stricter policy on for-profit colleges, because students are not seen as students but rather as customers.

[m1jones]

05:48 PM on 01/03/2011

Private traditional colleges and universities are responsible for some of the best educations and research in this country and fundamental to a healthy economy and national security. Pell grants should go only to non-profits. All excellent private universities are non-profits - MIT, Caltech, Harvard, Stanford, Yale, etc., etc. In addition, there are many excellent and formerly excellent public universities like the University of California. UC is in deep trouble because many of its highest administrators have treated the university as a profit-providing center for their own privileged lifestyles. This is also sadly true of many public employees who enjoy salaries and benefits far beyond their counterparts in private business.

[Longtimeliberal]

11:59 AM on 01/02/2011

Another privatization sceme! Private schools should not get govt subsidies or at the least only one semester at a time and payment should be tied to outcome. The real waste in our system is corporate welfare from the military to schools. Privatization has cost us plenty with no accountability on the other end.

[socialjustice4achange]

12:39 PM on 01/02/2011

The schools do not get government subsidies. The students do. Independent accrediting agencies say that these schools are doing what they should be doing in the process of delivering "education". Students take out loans and choose where to spend the loan money. The non-profit schools help the students decide that they are the most deserving of potential recipient institutions. Unfortunately, they do this by over-promising about the results of the education. They do it by over-promising about the treatment that students will receive while engaging in classes. And the over-promising has, until very recently, been encouraged by a for-profit structure that offers bonuses to recruiters to get the signatures on the bottom line.
New gainful employment provisions of loan policies impacting student loans are targeted specifically at for-profits. This is probably an unfair over-reaction. A more appropriate response should be to pull accreditation of institutions that engage in over-promising at the recruitment end. But that cannot happen while the accrediting agencies are independent of government control. Now try to introduce government control over independent accrediting agencies in a republican house of representatives. This probably will not happen.

[bryanzth]

12:03 AM on 01/03/2011

The students do not get it from the government directly, with healthy guidelines for how to use it. The students are only a channel through which the for profits get the money, and it is essential to keep the victim quiet whilst drawing off the life giving blookd. Seriously.

BZ.

[Rita R]

09:58 PM on 01/02/2011

Correct! So I suggest "pay for performance." While I was going through divorce, there was an interesting case being adjudicated while I was waiting in the courtroom for mine to be heard. A woman was demanding from her ex: tuition, fees, and living expenses for her son, who had been a full time undergraduate for 6 years. The judge allowed that the father had paid his part for 4 years, and had, from supoena, the son's grade and enrollment records. Seems the lad was having a really good time in school, having dropped or failed 80% of his courses, and total lack of employment the entire 6 years. The judge's verdict was wonderful, in my estimation. "Young man, you are now on the 'pay for performance plan' which means each of your parents will reimburse you 1/3 the cost of tuition and fees for each course you pass with a grade of C or better. You are on your own for living and commuting expenses."

Only 23% of the "for profit" flexible college enrollees complete their degrees at these corporate run institution. I suggest that all college education loans go onto the same "pay for performance" plan.

[bryanzth]

12:05 AM on 01/03/2011

I'm for that. But let me add:

When I was in private school, and a classroom got out of hand, everyone got detentions.

And since some private schools are getting out of hand, all private schools need to be "cut off". That would cause the good guys to reel in the bad ones. I hope. ;0)

BZ.

[Blizzard2010]

11:06 AM on 01/02/2011

Profit is baaad...

[CPAwADD]

08:50 PM on 01/02/2011

No but in this circumstance for profit is not performing as well as not for profit.

[m1jones]

05:55 PM on 01/03/2011

Profit is a good motivation and planning tool in some areas and not in others. Profit-making has been disastrous in healthcare and big pharma. Profit-making would be disastrous in Social Security because profits are inherently insecure! Profits are also out of place in education and prisons. Let's not ruin what remains of our higher educational system and pre-college non-profit educational institutions (which train some of our most wealth-creating people like Mark Zuckerberg and Bill Gates) by making then profit centers. We will ruin them just like we did our healthcare system. When banks administered college loans, rates were higher and there was less money available for student loans. By putting the loans back into a government agency, Obama has fulfilled one of his campaign promises and more students can get the money they need to get an education. But we should not make public monies available for shyster institutions which promise the moon to prospective students and deliver zilch to graduates. I know people who graduated from the California Culinary Academy in San Francisco and are working as bus boys and girls, making the same money they would get without a degree. Those misled kids are loaded with debt and a virtually worthless degree. We owe our children a fair deal on education.

[Lee Manns]

10:12 AM on 01/02/2011

Unbridled capitalism run amok.

[yohuntsy2]

09:04 AM on 01/02/2011

One myth is that our nation has public and private sector employers who cannot fill positions because of an unskilled population. Unfortunately, those positions are very few. Another myth is that if more people went to college, took on massive debt, and our nation's population was better educated and skilled, that in itself would create more jobs. That's pure malarkey. Another myth is that if you go to college and obtain more education and skills, you have a guaranteed edge against the less educated for positions that require your skills. But as we have seen, employers will go overseas to hire a foreign worker with the same skills and education as your own, pay them a lower wage, and leave you unemployed. If there was really a great need in this country for more skilled, higher educated people from within this country, a need that would require the employers to pay money to fulfill, that need could be met with no colleges and universities in existence. Employers and prospective employees would find a way to fufill that need through on the job training and self study. Colleges and universities are money making, debt creating, institutions that in themselves offer nothing to society. Their instruments and instuctors should be in the private sector, where employees would encounter them while on the job. For areas in the liberal arts etc., that provide no instruments, just instructors, that learning can be accessed anywhere, anytime and for free.

[buckfalcon]

09:34 AM on 01/02/2011

Hallelujah. I totally agree. Unless you are learning a specific skill (medicine, accounting, engineering, etc.) most education is largely useless, and as you so correctly stated, can be acquired for free.

What people want from an education is a guarantee - if I do this, then this other thing will happen. Sorry, life doesn't work that way.

And finally, most of the people I know that are truly wealthy (multi, multi millions in the monetary sense) have less than a high school education.

[ZiloRS]

01:26 PM on 01/02/2011

Umm.."useless"? Wow...I've never heard someone call education useless. That's just...astounding..

[joemac1114]

01:55 PM on 01/02/2011

Education is useless? That is absolutely amazing. College is supposed to be about learning how to think, education for a specific skill can be done on the job, training people to think and solve problems are the skills employers are clamoring for from educational institutions. And colleges and universities are the places that teach these skills.
Of course I think it is important to note that most republicans don't appear to want folks to learn how to think, as this would have a serious detrimental effect on their election chances.

[m1jones]

06:12 PM on 01/03/2011

Yoguntsy2 - Your argument depends upon what kind of education people get - what it's cost is, and how much it is worth in income during their working years, compared with what people make without an education. IGOOD education represents the best investment you can make. 5 per cent of the people with college degrees are currently unemployed compared with the national average of 10%. Success depends on what and where you study. We need to make sure that America provides good education to students to prepare them for productive lives and good jobs. Private sector schools are excellent if they are non-profit. This is increasinly not the case, as even large public institutions like UC are dependent on partnerships with corporations to fund medical research. The curriculum at large, famous institutions, like MIT, Caltech, Standford, Harvard, and Yale, are always impacted by large donors. There are strings attached to all donations, of one sort or another. Employers with the highest technical requirements hire the best people no matter where they come from. It's great for America to have those really smart, well-educated foreigners come here and create jobs for our smart people. Our best technical and engineering schools admit the most talented students from around the world. Employers hire the best scientists and engineers for the job. It's very different from sending low-skilled jobs to Bangladesh or India. Highly skilled foreign engineers come here and help create jobs for Americans!

[buckfalcon]

08:51 AM on 01/02/2011

Fools and their money are soon parted. Instead of whining, why not look at this as an opportunity for learning and growth - and personal accountability (i.e. i chose to attend one of these schools - it was a stupid mistake. I wont do something like this again).

[CrispixCaw]

03:56 PM on 01/03/2011

"Fools and their money are soon parted."

Big powerful giant piles of money, that abuse and mistreat the least fortunate among us, have nothing to do with personal accountability of the victim. If you'd like to argue for personal responsibility for the thieves (the ones who part with the money), at least I won't be filled with sadness from the disingenuous chairman-Mao style tactics.

You blame the victim because you believe in a 'just world fallacy'?

What's really sad is you think they'll get a 'again' moment. They won't, they're screwed. The debt cannot be discharged. $15,000+ in debt, no college degree, nothing to show for it. But hey, friendly chat and a hand-shake 'Buck Falcon' is here to cheer you up. Thanks for the great advice Fred Rodgers, when's the next trolley departing for make-believe-land?

[Rita R]

02:09 AM on 01/02/2011

Does anyone else hear the sound of yet another bubble popping? It's called default on student loans -- federal and private bank ones alike -- being piled up with yet another corporate short-term profit racket. This time, we can look to and thank these "flexible" for-profit colleges. In that corporate game the mantra has been "just get them to commit to enroll." Whether or not the potential student is capable of handling college level coursework is immaterial. Forget typical college board tests and other qualifiers...just enroll and we'll show you how to get student loans!

Erm....does anyone else hear the same tune with a different verse as was played to lure hoards into sub-prime mortgages? You should. Student loans are bundled and sold just like mortgages. Second verse, same as the first....

[Josh RageLyfe]

03:18 AM on 01/02/2011

well played. fanned.

[RedRat]

10:05 PM on 01/01/2011

Well key here is "for profit" education. Do they have any obligation to do anything for the poor? In our market driven economy and mindset, the answer is a resounding NO! They are in it to make money by education, not give away something for nothing.

That many people chose these types of educational institutions is worrisome since their costs far outweigh the benefits. Who you gonna pick for a job, a graduate from one of the Ivy league schools, state supported schools or Kaplan or one of the other for-profit schools? The only thing the for-profit graduate brings to the table is the willingness to work for less.

[OSCPJ]

09:07 PM on 01/01/2011

They have always been called "Public" or "Private".  I understand the plan with a new word for the Progressives.


Kind of like, "Illegal Immigrant" being offensive and making everyone call them, "Undocumented Workers".  I was born in the US, I have a Social Security card. 


Does that make me a "Documented Worker"?  Or does that make me an "American Citizen"?


Pick your words Progressives.  It works in your circles, put your circles will never elect a President or control a Senate Seat.  Independents need to be on your side.  Games like this don't help the Independents. 

[Arts4u]

09:44 PM on 01/01/2011

People need to get over the hostility about labels....I know for the fact that there is much cross-over between the various labels in terms of beliefs.

[dporterdvd]

06:24 PM on 01/01/2011

Colleges are also failing to inform students about where the best jobs will be when they graduate. Students need more career counseling.These are difficult times to figure the best career choice. Many corporate accounting jobs and lawyer jobs are being outsourced to India where lawyers and accountants work for American corporations for one tenth of what Americans work for. If I was just graduating from high school, I would probably learn how to be a plumber or electrician and then I would move to english speaking New Zealand and make over $100,000.00 per year because they have a shortage of plumbers and electricians. If I didn't want to leave the U.S., I would probably go into a 2 year program to become an x-ray technician and make close to $100,000.00 in the U.S.

[OSCPJ]

09:09 PM on 01/01/2011

Are colleges failing them by not informing them where the best jobs are?  Or are the students failing to research for themselves?

Easy to alwasy blame someone else. 

But if you are going to take on debt, and devout 4+ years to college, at what point should YOU the individual be responsible for YOUR Future? 

[dporterdvd]

09:36 PM on 01/01/2011

Good point.

[Arts4u]

09:42 PM on 01/01/2011

Come on, you're being a little ridiculous... the problem is that so many different types of jobs are being outsourced right now, it's hard to tell which direction to go in. Who can honestly tell anyone with any certainty what jobs will be available in this country four years from now?

[RedRat]

10:22 PM on 01/01/2011

If indeed plumbers and electricians make $100K a year, how could the average person afford their services. This means they have to charge considerably over $50/hr. Wow. No wonder most tend to avoid professional help. BTW, I would not count on that x-ray technician continuing to get $100K a year. These high salaries almost guarantee outsourcing. Even today, those reading CAT scans are already in Asia, very little is done locally. There is no reason a machine like that cannot be even run remotely from Asia.

[dporterdvd]

12:57 AM on 01/02/2011

My dentist spent 10 minutes replacing a crown and his dental assistant spent 10 minutes cleaning my teeth. Even with dental insurance, my out of pocket expense was $560.00. Ouch.
Last time I had to call a plumber it cost me about $200.00 and I'm pretty sure he worked less than 2 hours. Yikes. I really couldn't afford it but I have to have water. That's why I wish I was a plumber. I agree with you about x-ray techs. Anything that can be outsourced is going to bring the pay rates down. The reason plumbers and electricians make so much money in New Zealand is there is a severe shortage there and they can get away with high rates.

[BlueSkyPilot]

03:35 PM on 01/01/2011

Education, Health Care, National Defense.
These should not be profit driven enterprises!

[WFWS]

04:44 PM on 01/01/2011

I might add JUSTICE to that. Putting the profit motive in our prison system has turned prisons into revolving door profit machines, with convict labor and off the charts recidivism. What incentive does a for profit company have to keep prisoners from coming back when they are paid for each prisoner? The record of for profit prisons is dismal, brutal, and probably illegal, except that the Supreme Court refuses to hear many cases about this.

[LibertyRoy]

06:05 PM on 01/01/2011

Nothing is as successful (financially) when profit is disallowed as when profit is allowed. People do not like investing their money in things with a negative return. Can agree that financial concerns are not everything in those categories, but if one goes socialist on them, just be aware it will be less efficient.

[madame48]

06:47 PM on 01/01/2011

"goes socialist? give me a blessed break, do you folks have no other mindset?...my library...an insitution important to our early leaders, is "socialist"...as in SOCIETY, like the civization we should have. or would you rather live as islands of individuals not in any way altruistic. Even some bats are altruistic, in that if they return with no food, others in the small group will share , instinct that it will be them needing help the next time, are Tbaggers not as altruistic as bats?

[socialjustice4achange]

03:35 PM on 01/01/2011

Some of the statistics used in this article are deliberately designed to shock. Take, for instance, the claim that the profit made by for-profit schools has tripled since 1998. Of course it has. Internet usage, which is the primary for-profit delivery mode, is up twenty-fold or more since 1998. Naturally there is more profit in it. And for students who will not risk walking across a crowded parking lot to take a seat in a crowded classroom, the prospect of improving their educational credentials from home is a real positive. The community colleges have been increasing distance learning but within bounds. Many of the distance classes offered by City Colleges of Chicago, for instance, are the same Gen Ed classes that went to online prior to 2005. In a tax-based institution, there isn't as much room for new innovations and new offerings as there is in the private sector. And then the Congress cutting the Obama budget for Community Colleges to 1/10 of what it was proposed to be leaves community colleges with a shrinking source of revenue as tax bases fall. Community college is a bargain. But it is a bargain that the Republican congress is taking away from the poor. For-profits are stepping in to fill a huge gap. Put the blame for this on the "congress of no" where it belongs.

[BlueSkyPilot]

03:50 PM on 01/01/2011

What are you trying to say?

[socialjustice4achange]

10:43 AM on 01/02/2011

I'm trying to say that community colleges aren't likely to be the solution to educating America that everyone hopes they will be. I'm trying to say that they are faced with overcrowding and lack of resources at the same time. I'm trying to say that they do not offer "direct-to-the-workplace" kinds of courses that seem to be what everyone wants them to produce. I'm trying to say that they are under tremendous pressure to be an educational panacea but will fail to achieve this. I'm trying to say that education funding formulas based on real estate values will never serve the poor. I'm trying to say that the "we hate all taxes" approach taken by too much of our "leadership" will, over the long run, crush community colleges. I should be trying to say that income tax funding is a better formulation for offsetting poverty than property tax funding. I'm trying to say that institutions that serve the poor are stuck with too slow a rate of curriculum change.
Thanks for Asking!

[m1jones]

06:27 PM on 01/03/2011

Republicans have uniformly tried to dismantle education in order to create an ill-informed group of voters who will believe any thing they here. Ronald Reagan began this with the University of California as Governmor of California in the late 1960's and early 1970's. He was so successful with business and myth making that he was elected President for two terms during which Republicans began to dismantle American education. The results include Tea Party candidates who run on being know-nothings and a strong anti-intellectual strain and opposition to fact-based information. The cost of education has been going up exponentially, and public education has been going down in quality since the early 1970's. That's why we are so subject to economic disparity and unemployment. America and democracy cannot thrive without an educated populace. Corporations become powerful by controlling who gets well educated and seeing that the mass of voters are so ignorant and unable to distinguish fact from propaganda that they can be influenced by false news sources. That's the situation we are facing.

[madame48]

06:49 PM on 01/01/2011

We must put the heat on them to stop the gouging of students...I have seen it from way too close up....stop the apathy...get loud

[rmonroe]

03:12 PM on 01/01/2011

What a country, we take advantage of our poor and helpless by offering them pipe dreams at $465 a credit hour but all they end up with is a big bill they can't afford to pay at the end. The rich will do anything to take from the poor. They know these people can not default on their loans or file bankruptcy so they basically own them once they are through with college and can't find a job. Most will end up worse off from when they started. The American Dream has become a scam. Sad.

[BlueSkyPilot]

03:53 PM on 01/01/2011

Glenn Beck University. No thought required. Accepted in all fascist institutions!
Pay your tuition, Buy your Gold and Food insurance with one easy government guaranteed loan.

[LibertyRoy]

06:07 PM on 01/01/2011

Maybe the poor are poor at least partially due to the fact they fall for these sc.ams more than the non-poor. Making poor decisions is not a way to get out of poverty.