The Shame of For Profit Colleges

The Chronicle of Higher Ed has an excellent article on the Senate report on for-profit colleges. Data stolen from the article: 
  • More than half of the 1.1 million students who in 2008-9 were enrolled in colleges owned by the examined companies had withdrawn by mid-2010.
  • In 2010 the for-profit colleges examined employed 35,202 recruiters, compared with 3,512 career-services staff and 12,452 support-services staff, which amounts to more than two recruiters for every student-service employee and 10 recruiters for every career-services staff member.
  • Colleges owned by a company that is traded on a major stock exchange had 2008-9 withdrawal rates nine percentage points higher than the privately held companies examined. Among the 15 publicly traded companies, 55 percent of students departed without a degree, compared with 46 percent of students at the 15 privately held companies.
  • In the 2009 fiscal year, the colleges examined spent:
      $4.2-billion (22.7 percent of all revenue) on marketing, advertising, recruiting, and admissions staffing.
      $3.6-billion (19.4 percent of all revenue) on profit.
      $3.2-billion (17.2 percent of all revenue) on instruction.
  • 96 percent of students at for-profit colleges take out student loans, compared with 13 percent of community-college students, 48 percent of students at four-year public colleges, and 57 percent of students at four-year private nonprofit colleges.

In case you were wondering, here's a list of for-profit universities and colleges

4 thoughts on “The Shame of For Profit Colleges

  1. Internal company documents examined by the investigation reveal that decisions to increase tuition at for-profit colleges were driven by profit goals rather than increasing costs of instruction.
    Internal company documents reveal that decisions by the American Civil Liberties Union to file lawsuits were driven by concerns about civil liberties rather than national security.
    Internal company documents reveal that that decisions by the National Rifle Association to oppose the gun ban were driven by concerns about the rights to own rifles, rather than concerns about potential victims of crimes.
    It’s right there in the name!
    What happens if this investigation of for-profits spreads! Next they’ll be telling me that Kelloggs is just trying to sell me cereal, and doesn’t actually care if I eat it with a bowl of fruit as part of a “well balanced breakfast”!

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  2. But, I presume that we still want Kellogs to make our cereal rather than having cereal making function taken over by a company that wants to provide us a well-balanced breakfast?
    The problem I see with the for-profit model of college education isn’t that they would make decisions for profit, but that with the infusion of government subsidies, the for-profit model that Kellogs follows fails. Kelloggs goal to sell cereal (and profit) is supposed to work the best (of our alternative choices) because they figure out how to make the cereal I want to buy. If someone else is buying that cereal for me, the model is skewed and results in odd outcomes.
    (Note that this is the issue I see with vouchers for public education, health care, health insurance, and free tickets given out to Olympic sponsors, too).

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  3. Maybe a better analogy, then, is the (largely Republican) attempts to prevent people who receive food stamps from using them to buy soda, potato chips, and other junk foods.
    Part of the report focused on “aggressive recruiting tactics” and a “boiler-room sales atmosphere.” I would want to hear more about that. Are they engaging in illegal techniques to trick people? If so, then that’s a problem.
    But if the concern is only that they spent more on advertising than on education, then how is it different than a 2-liter bottle of Coca Cola that they make for a penny, advertise for a quarter, sell for dollar, and otherwise has no societal value?

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  4. Ragtime, there are a number of lawsuits pending against for profits which have “taught” people to be lab techs, and other skilled professions in the medical field. Apparently a lot of these “colleges” have people to teach the material but don’t actually have any agreements with any hospitals or facilities where people can do the practicum part of the degree and in a lot of states you can’t be licensed without the practicum — so the degree is worthless since it will never lead to a license to actually be a lab tech or what have you. That, to me, does seem like tricking people, vulnerable people who don’t deserve to be lied to and stolen from.
    There’s also the problem of these schools accepting all comers, when they know that there’s actually no way that the functionally illiterate guy is ever actually going to be able to write the term paper. Then, they either give him the credits without teaching him anything (which is a problem if someone subsequently hires him based on the degree) or they look the other way if he actually pays someone else to take the on-line courses for him (which is also a problem if he then gets fired from the job where they expected him to actually have those skills).
    Also, a lot of these schools offer degrees in things like criminology and firefighting and apparently clueless people think they have to have this degree in order to be a firefighter or a policeman, when in point of fact all you need to be able to do is pass the test. They teach them skills that they will actually acquire later at the police academy or the firefighter’s academy for free but charge them for this upfront.

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