Lifelong Learners: Beware Of For-Profit Colleges

According to a Forbes Magazine report, the Kentucky Attorney General’s Office recently filed a consumer protection lawsuit against for-profit Spencerian College, which operates campuses in Lexington and Louisville, alleging that the school deliberately misrepresented job-placement statistics to potential students. This is just the latest in a series of negative reports, stories, judicial actions, and congressional inquiries regarding the for-profit college industry.

In 2010, Sen. Tom Harkin, of Iowa, issued a scathing report that found that for-profit colleges delivered huge profits to their shareholders but little education to the adult students who attended these institutions. Harkin, who oversees the Senate Committee on Health, Education, Labor and Pensions (HELP committee), spent two years examining the operations of 30 for-profit colleges and found that of 1.1 million students who had enrolled at these institutions, better than 50 percent had dropped out within two years.

The committee also found that 42.1 percent of the money spent by these colleges was on marketing or paying shareholders back a profit. Only 17.2 percent was spent on instruction. Among the big corporate owners of for-profit colleges are Goldman Sachs, the Apollo Group, and other private equity firms, according to the committee.

In 2012, this same Senate committee found that for-profit colleges were particularly aggressive in their recruiting efforts of active U.S. military personnel. One for-profit college, Bridgepoint Education's Ashford University, employed 1,700 recruiters but just one job-placement counselor. Bridgepoint was the third-largest recipient of military students' tuition-assistance funds.

Finally, students who attended for-profit colleges ended up defaulting on their student loans in much higher numbers compared with students who took out loans at traditional four-year colleges. For example, 26 percent of students at for-profit schools who took out between $5,000 and $10,000 in student loans ended up defaulting, compared with 7 percent at four-year schools. And 16 percent of for-profit students taking out between $10,000 and $20,000 in loans ended up defaulting, compared with 2 percent who took out that much money at traditional four-year schools.

All of these findings should compel adults to closely examine the for-profit college market. Instead, they should explore both nonprofit private colleges and public institutions. Often small private colleges have great deals for adult students and large public universities have a wide variety of programs and they receive subsidies that can keep costs down. However, when looking at for-profit colleges, remember the old adage, “If it seems too good to be true, it probably is.” 

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commented 2017-02-03 05:08:11 -0500 · Flag
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