Failed schools: Congress must fix the for-profit college industry
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The Senate education committee's scorching report on the for-profit college industry came as no surprise.
Although much of the problem had been described at public hearings and in preliminary releases, the findings issued Monday still paint a disturbing picture of taxpayer-dependent, profit-driven schools that promise too much, deliver too little and leave students -- many of them without degrees -- too deep in debt.
Sen. Tom Harkin, the Iowa Democrat who chairs the Senate Committee on Health, Education, Labor and Pensions and who led the two-year inquiry, concluded, "These practices are not the exception -- they are the norm. They are systemic throughout the industry, with very few individual exceptions."
Among the 30 for-profits covered in the report were the University of Phoenix, Strayer University, Kaplan and Pittsburgh-based Education Management, or EDMC, which runs 107 sites including The Art Institutes, Argosy University and Brown Mackie College.
The Association of Private Sector Colleges and Universities, which represents the industry, said the report was part of "a flawed process that has unfairly targeted private-sector schools and their students."
Given the public testimony and the information in the concluding 5,000-page document, it's hard to see how that is possible:
• Federal taxpayers send $32 billion a year in aid to the colleges, yet more than half of the students who enrolled in 2008-09 left within a median of four months without getting a degree or diploma. For most of the colleges, this federal money accounts for more than 80 percent of total revenue.
• Since publicly traded companies or private equity firms own the colleges that enroll three-quarters of these students, making a profit is a high priority. The 30 companies allotted 22.4 percent of revenue to marketing and recruiting, 19.4 percent to profit and only 17.2 percent to instruction. At the same time, some executives at the companies collect million-dollar salaries.
• Students at for-profit colleges account for 13 percent of total U.S. college enrollment, but 47 percent of all student loan defaults. Ninety-six percent of these students carry loans, while only 13 percent of community college students borrow.
• The for-profit schools were also faulted for aggressive marketing and deceptive recruitment practices. The report said recruiters were told to avoid giving direct answers about costs and remind students that government aid would mean they'd have little to pay themselves. Many students learned too late that their credits would not transfer to another college or make them eligible for the professional license they were seeking.
In theory, there is nothing wrong with private companies offering college educations. In practice, the drive for profit has produced an industry wracked with abuse and failure. Neither the students nor the federal aid system is getting its money's worth.
It's a shame that this subject has become one more issue in which congressional Democrats and Republicans are split, with the former calling for reform and the latter shielding the for-profit colleges. But good education and effective use of federal student aid should transcend the political debate.
With this report as a foundation, Congress must set new regulations to fix the industry, or else withdraw the federal dollars that support the for-profit colleges' bottom line.
First Published August 5, 2012 12:00 am