By

Anna Bates

The privatization of higher education that started during the Reagan administration reached new heights in the 1990s and 2000s with an explosion of for-profit colleges.  At a time when unemployment rates are running high, the economy flagging and working class Americans has fewer resources than ever to cover their basic needs, promises of easy access to college degrees appeal strongly to many.  In recent years, for-profit enterprises such as the University of Phoenix and Capella University seem to answer many needs for hopeful Americans. With dwindling career options for people without college degrees in a market where all jobs are scarce, unemployed and underemployed Americans are flocking to these schools, which have proven highly successful for the companies that organize them. 

For-profit colleges are formed by profit-seeking corporations and individuals.  Since the goal of these schools is to generate profits, academic standards are not emphasized.  Because their faculty consists of privately contracted adjuncts, there are no benefits to pay.  And since they operate mostly online, there are no student services to provide.  Though seemingly convenient, this stripped-down educational model maximizes profit at the expense of the entire tax-paying population, who funded these students' financial aid packages.

Clever marketing cancels the facts that these colleges usually have lower admission standards than public and private colleges and universities, and that the degrees they offer do not carry the public clout as degrees from other schools.  Students applying to these colleges often do not know that they are entering a school that is not publically supported, and that has no connection to not-for-profit (e.g. colleges connected to churches and colleges funded with various endowments and other entities) schools.  Titles such as Springfield College (Missouri) and Southern States University sound similar to Springfield College (Massachusetts) and University of the South.  Students also do not realize that the schools might not be regionally accredited (although some are) and that the course credits they accumulate at those schools might not transfer to other colleges.

For-profit colleges promise availability, flexibility and affordability.  Since many of them operate wholly or mostly on-line, students do not need to travel to attend classes.  Because many of them offer condensed classes, degrees can be earned in as little as 6 months for an Associate's degree and a year to eighteen months for a Bachelor's degree.  

These apparent conveniences are costly for many students, though.  Students with mediocre computer skills, particularly students who have not attended college recently, frequently flail trying to keep pace with demanding on-line courses.  Students are often expected to locate their books and other course materials within days of the time they register.  Students unaccustomed to online ordering sometimes begin later than other students in the course. Some students also struggle to make financial arrangements to pay for expensive books not covered by student financial aid.

Once in an online course, a studen6t may find that they cannot keep pace with the class, which crams materials taught traditionally in a 16 week term into three or four weeks.  The drop-out and failure rates at for profit colleges are higher than at other schools.

Applicants at for-profit colleges are advised to tap any and all available financial aid resources as quickly as possible Students are often encouraged to maximize their student loan debt quickly in the interest of getting a fast degree.

There have been efforts to regulate for-profit schools.  In August 2010, the Government Accountability Office substantiated shady recruitment practices, such as advising students to lie on their financial aid applications.  Some schools also made bogus promises to students of high salaries after completing their degrees.  Other allegations included these schools' failure to explain how much more expensive they were than local publicly funded colleges. 

The default rate on student loans used at for-profit colleges is much higher than at other schools.  Liberal Senator Tom Harkin, a Democrat from Iowa and chairman of the Health, Education, Labor and Pensions Committee, held some hearings in 2010 wherein he accused for-profits schools of misusing taxpayer-funded student loans. This also attracted the attention of short-seller Steve Eisman, who warned the Senate in June 2011 that students from for-profit schools would default on $275 billion of loans in the next decade without new Department of Education regulations.

Some regulation has followed.  The Education Department has proposed penalizing for-profits whose students graduate with more debt than they can afford.  Congress started a series of hearings in 2011 on whether federal aid to for-profits benefits anyone other than the colleges.

Another less publicized issue is the inclusion of for-profit educational services into the curricula of private and publically funded colleges.  For-profit companies offer educational services ranging from testing to piecework tutorials (this would be another article about the exploitation of desperate un- and underemployed faculty).  They contract with colleges and universities, even some with union representation (!), to offer introductory level courses (History 101, etc...), claiming it frees faculty to focus on more specialized offerings.

What can adults who want to continue or begin their college educations at a school with flexible schedules and course offerings do?  They can begin shopping in their own backyards.  Local community colleges and state universities now offer on-line and evening classes.  They have done this for decades.  And despite what the advertisements from for-profit colleges say they were innovators in this filed.  If a student approaches a for-profit college, they should ask specific questions about how much their degree will cost, and whether credits from that college will transfer to other schools.  Students, prospective students and students who have already racked up huge financial aid debts can support legislation to regulate for-profit schools.  Socialists can keep their eyes on the future, and know that education at all levels is a basic human necessity that should be supported by everyone.

Sources:

www.CollegeBoard.org

http://advocacy.collegeboard.org/college-affordability-financial-aid/trends-higher-education

http://advocacy.collegeboard.org/sites/default/files/Trends_Webcast_Presentation.ppt#256,1,Slide 1 great number of cost, debt, etc

http://money.cnn.com/2011/04/21/markets/profit_education_eisman/index.htm

http://campusprogress.org/articles/for_profit_colleges_and_allies_make_last_stand_to_block_common_sense_rule/

http://www.washingtontimes.com/news/2011/apr/20/report-for-profit-colleges-defraud-students/

http://www.huffingtonpost.com/2011/02/08/for-profit-college-recruiters-documents_n_820337.html

http://www.businessweek.com/news/2011-04-07/for-profit-colleges-face-state-crackdowns-as-u-s-rules-delayed.html

http://articles.latimes.com/2011/feb/06/business/la-fi-for-profit-colleges-20110206

http://online.wsj.com/article/SB10001424052748704407804575425830335709738.html

http://www.usnews.com/education/online-education/articles/2011/02/07/the-partisan-battle-over-for-profit-education