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Karl Frisch

Karl Frisch

Posted: September 8, 2010 02:13 PM

With summer nearly over, the nation's college campuses are bustling once again.

For many students however, the rites of passage associated with higher education won't be rushing a sorority, winning the big game or planning a spring break trip to Florida.

No, looking back, a growing number of students will regale their children with horror stories about being ripped off by a for-profit college.

Of late, the U.S. Senate's Health, Education, Labor, and Pension Committee has been investigating the booming multi-billion dollar for-profit college industry -- think Kaplan University or DeVry for example. What it has found thus far is not pretty.

According to a report released by the committee earlier this summer, some major players in the field are spending about as much on marketing and recruitment as they are on educating students. Those numbers are worse at exclusively online for-profit institutions.

So, just what type of marketing and recruitment is all of that money buying?

An undercover investigation by the non-partisan Government Accountability Office (GAO) this summer found that of fifteen for-profit colleges tested, four encouraged undercover applicants to "falsify their financial aid forms to qualify for federal aid" while all fifteen "made deceptive or otherwise questionable statements."

"Fictitious prospective" applicants that filled out online forms indicating their interest were met with a barrage of aggressive phone calls at all hours of the day and night with one GAO applicant receiving "more than 180 phone calls in a month."

One GAO investigator was actually offered a $14,000 massage therapy certificate and told it was "a good value" despite the fact that the same certificate cost only $520 at a local community college.

These hardball recruitment tactics work out quite nicely for the bottom lines of these big corporations but students end up paying a hefty price far more life-changing than the degrees or certificates they may end up receiving.

Take for example, the recently reported case of Michelle Zuver. After finishing a for-profit college program she was left $86,000 in debt, all for a degree in criminal justice that is not even recognized by many police agencies. Sadly, Zuver is not the only student left buried in debt and unable to pursue the career promised by her for-profit education. Many more share her story.

These marketing and recruitment activities along with the troubling lack of quality are funded in large part by taxpayers.

Up to 90 percent of the money for-profit colleges bring in each year is in the form of federal student aid dollars. In fact, University of Phoenix -- the Wall-Mart of for-profit colleges -- saw at least 86 percent of its $3.77 billion in revenue last year paid by taxpayers. These shocking percentages are likely even larger because the figures do not include federal funds from other programs like the G.I. Bill.

Numbers like these should make conservatives lose their tea in anger but it is Republicans who have shown little interest in solving this problem. During Senate hearings on the matter, GOP members of the upper chamber demonstrated an interest only in providing political cover for the for-profit industry and some softball questions for its mouthpieces.

And why would they care? After all, it was the Bush administration that created the regulatory environment that encouraged these for-profit institutions to go for broke pillaging the system in the first place.

When the for-profit college industry is offering prospective students certificates and degrees that are too-often useless after badgering them into signing up for federal student loans that they may never be able to repay, the broken system cries out for fixing.

This is about real people trying to better their lives with an education and the for-profit college industry is taking many of them for a ride.

Unfortunately, Republicans in the Senate have yet to step up and join their Democratic colleagues and the Obama administration in seriously addressing the problem.

Perhaps these GOP Senators are enrolled in a special online course in "creative problem avoidance" at University of Phoenix. Luckily for us, the certificates are likely worthless.

Karl Frisch is a syndicated columnist and progressive political communications consultant. He can be reached at KarlFrisch.com. You can also follow him on Twitter, Facebook and YouTube or sign-up to receive his columns by email.

 

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06:37 AM on 09/14/2010
Painting all for profits in the same negative light is simplistic nonsense. Many of them provide worthwhile degrees and graduates are repaying thier debts per DOE standards. Please don't tell me the underfunded system of government colleges is offering something of better quality when most of them feature classrooms with 100 students in them.
05:39 PM on 09/13/2010
What I don't understand is why there is this vendetta towards for-profit schools, when under certain conditions infractions can be found against non profits;no college is perfect. As far as making money, the only revenue they get are from financing student loans unlike at non profits that do indeed profit from endowments, government subsidies and other revenue generating endeavors. In terms of quality, Univ. of Phoenix is accredited by the Higher Learning Commission that accredits hundreds of non profits that holds all of its accredited schools to the same standard. In addition, thousands of students graduate from so-called top tier colleges who become far more in debt than Univ. of Phoenix graduates and are unable to find work. Frault can be fund in all colleges, but it is unfair to single out a few without identifying others just because there are them who have something personal so-called for profits.
03:31 PM on 09/09/2010
i just want to say that i went to a for-profit school for my associates degree. Initially i was shocked at the cost, it was definitely more expensive than the local community college. But I was working two jobs and wanted to take my classes late night. The for-profit school that i choose was perfect for me because it let me take classes when i wanted to, and the high cost included my books, online tutors, and supplemental learning materials. This was covered by financial aid, where at the community college, only tuition was immediately covered and anything else I had to pay out-of-pocket and hope that I would have financial aid money left over to cover the cost of books, parking, student id, etc. At the for-profit school, once i registered for my classes, they just sent me the books i needed and i didn't have to worry about anything but passing my classes. The system worked for me, and a found a full-time job once i graduated in 2006.
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08:59 AM on 09/09/2010
Why single out for-profit schools? Let's hold all institutes of high education to the same standards. The only reason for-profit schools are more expensive is because they are not subsidized by tax payers. When you calculate the true cost of education at non-profit schools, guess what? They are not significantly less expensive than for-profits.

You want horror stories about education? My alma mater (a non-profit state school) recently slashed budgets and laid off faculty across several colleges, despite spending millions on a new football coach and wasting hundreds of thousands of dollars switching athletic gear in order to recruit the son of a famous basketball player. In the midst of all this, the University's president gave himself a pay raise, making him one of the highest paid in the nation.

That kind of nonsense does not happen at the for-profit where I work. We do not have an athletic program. We do not have social fraternities or sororities. We focus solely on education, and we do an excellent job of delivering. Ninety-percent of our students find work in their field within six months of graduating, making an average of $40k. Those are stats to make any non-profit school jealous.
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RobParker
11:11 PM on 09/08/2010
it's a huge problem that needs to be addressed.
for the short term, let's ban for-profits from receiving federal $$.
especially where those programs fail to meet acceptable accreditation standards.

this apparently is not a GOP issue.
with democrats in control of the presidency and the legislature, we have seen no relief.
09:08 PM on 11/02/2010
No, the problem is the GOP is supporting these for-profits. Wall Street needs the revenue to keep the stock rising and the lobbyists are supporting them on behalf of the for-profits. Thank goodness, finally, an administration is investigating the scams, fraudulent activities and out-right lies of the for-profit schools.
11:03 PM on 09/08/2010
Karl, I've not had time to review any of your previous work, but I'm hoping this is not par for the course. This article is a rehash of other articles already published and contains multiple half truths that are often associated with a witch hunt. And as we know, witch hunts are guaranteed to find witches. Let's start with the main theme - that non-profits aren't needed. Do you propose telling those 2 million people attending those schools they can't go to college? Many of their degrees are not offered at traditional schools or in the convenient, flexible way that for-profits allow. They just can't leave their children at home unattended while they saunter off to football party U. They're often working, married adults with children who went to poor public schools and never had real chances to attend and complete college. People of that same demographic who attend local community colleges and state universities require the same amounts of financial aid. I see from your background you attended community college. I say, “Kudos to you” for coming from that background and becoming a success. But, now that you are a success, don't you think it would be unfair for you to take away the same chance at a college education away from others? These for-profits are definitely not without their flaws, but they are getting better, and this poorly educated country needs them now more than ever.