Choosing a college isn’t easy. You’re thinking about fit, location, if the school is strong in the area of study you want to pursue, the school’s cost and rate of acceptance, among many other things. Getting into the school of your choice has become increasingly difficult as more people are pursing higher education than ever before. It’s because of this higher demand in the industry that for profit education has experienced a sizable boom in recent years. But at whose expense?
On July 30th of this year, the Senate’s Health, Education, Labor and Pensions Committee, released an enlightening report on the machinations and statistics of for profit colleges. Entitled, For Profit Higher Education: The Failure to Safeguard the Federal Investment and Ensure Student Success, the report is filled with valuable information for prospective, current and past students of profit colleges. Focus is placed on what motivates for these schools and the results those motivations yield. The results showed that overwhelmingly, these publicly traded or private equity firm owned colleges fail to act in the best interest of students.
As it turns out, for profit colleges aren’t in the business of producing quality education, they are in the business of making money. The incentive of these businesses is to attract investors and provide a good return on that investment. Currently, there is no incentive system in place that links the school’s financial successes or failures to student performance. As a result, students at for profit colleges are less likely to graduate with a degree, more likely to leave with debt (and higher debt than other colleges), and will be offered little job placement assistance. Furthermore, for profit schools spend massive amounts of money on recruitment, lobbying and executive compensation, while spending relatively little on academic progress.
Here is what the Senate’s report has to say about for profit colleges and student loans: “…for-profit colleges also ask students with modest financial resources to take a big risk by enrolling in high-tuition schools. As a result of high tuition, students must take on significant student loan debt to attend school. When students withdraw, as hundreds of thousands do each year, they are left with high monthly payments but without a commensurate increase in earning power from new training and skills.” In 2009, 96% of for profit college student took out student loans, the number is significantly lower for public and private school students.
It’s really a shame because for profit colleges are equipped to offer a valuable service. Campuses are located conveniently and/or online and they offer schedule flexibility for working adults; they have the potential to help a lot of people with mobility and schedule restrictions to obtain degrees. If only they were using that capacity. Hopefully things will change in the future but until they do, students need to know the risks of enrolling in these schools. They should also be aware that if they’re already struggling with debt, there are resources available to help them breathe freely again.